EXHIBIT 10.1
[White & Case Draft 3/8/94]
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$250,000,000
CREDIT AGREEMENT
among
AMETEK, INC.,
VARIOUS LENDING INSTITUTIONS,
BANK OF MONTREAL,
CORESTATES BANK, N.A.,
and
PNC BANK, NATIONAL ASSOCIATION,
as CO-AGENTS,
and
THE CHASE MANHATTAN BANK, N.A.,
AS ADMINISTRATIVE AGENT
_____________________________
Dated as of March __, 1994
_____________________________
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit.................. 1
1.01 Loan Commitments............................ 1
1.02 Minimum Borrowing Amounts, etc.............. 2
1.03 Notice of Borrowing......................... 3
1.04 Disbursement of Funds....................... 4
1.05 Notes....................................... 5
1.06 Conversions................................. 6
1.07 Pro Rata Borrowings......................... 6
1.08 Interest.................................... 6
1.09 Interest Periods............................ 7
1.10 Increased Costs, Illegality, etc............ 9
1.11 Compensation................................ 12
1.12 Change of Lending Office.................... 13
1.13 Replacement of Banks........................ 13
1.14 Limitation on Additional Amounts, etc....... 14
SECTION 2. Letters of Credit........................... 15
2.01 Letters of Credit........................... 15
2.02 Letter of Credit Participations............. 18
2.03 Letter of Credit Requests; Notices of
Issuance.................................. 21
2.04 Agreement to Repay Letter of Credit
Drawings.................................. 21
2.05 Increased Costs............................. 22
2.06 Indemnification............................. 23
SECTION 3. Fees; Commitments........................... 24
3.01 Fees........................................ 24
3.02 Voluntary Reduction of Commitments.......... 25
3.03 Mandatory Adjustments of Commitments........ 25
SECTION 4. Payments.................................... 26
4.01 Voluntary Prepayments....................... 26
4.02 Mandatory Prepayments....................... 27
(A) Requirements........................... 27
(B) Application............................ 30
4.03 Method and Place of Payment................. 30
4.04 Net Payments................................ 31
(i)
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SECTION 5. Conditions Precedent........................ 33
5.01 Conditions Precedent to Initial Borrowing
Date...................................... 33
(a) Effectiveness; Notes................... 33
(b) Officer's Certificate.................. 33
(c) Corporate Documents; Proceedings;
Officers' Certificates............... 34
(d) Opinions of Counsel.................... 34
(e) Existing Indebtedness.................. 35
(f) Approvals.............................. 36
(g) Pledge Agreement....................... 36
(h) Subsidiary Guaranty.................... 36
(i) Security Agreement..................... 37
(j) Mortgages; Title Insurance; Surveys;
etc.................................. 38
(k) Solvency Certificate................... 39
(l) Insurance Policies..................... 39
(m) Plans; etc............................. 39
(n) Environmental Surveys.................. 40
(o) Payment of Fees........................ 40
(p) Adverse Change......................... 40
(q) Litigation............................. 41
(r) Accounts Receivable and Inventory
Report............................... 41
(s) Borrowing Base Certificate............. 41
(t) Issuance of Senior Notes............... 41
5.02 Conditions Precedent to All Credit Events... 42
SECTION 6. Representations, Warranties and
Agreements................................ 43
6.01 Corporate Status............................ 43
6.02 Corporate Power and Authority............... 43
6.03 No Violation................................ 44
6.04 Litigation.................................. 44
6.05 Use of Proceeds............................. 44
6.06 Governmental Approvals...................... 45
6.07 Investment Company Act...................... 45
6.08 Public Utility Holding Company Act.......... 45
6.09 True and Complete Disclosure................ 46
6.10 Representations and Warranties in Other
Agreements................................ 46
6.11 Financial Condition; Financial Statements... 46
6.12 Security Interests.......................... 48
6.13 Tax Returns and Payments.................... 49
6.14 Compliance with ERISA....................... 49
(ii)
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6.15 Subsidiaries................................ 51
6.16 Patents, etc................................ 51
6.17 Compliance with Statutes; Environmental
Matters, etc.............................. 51
6.18 Properties.................................. 52
6.19 Labor Relations; Collective Bargaining
Agreements................................ 53
6.20 Indebtedness................................ 53
6.21 Restrictions on Subsidiaries................ 54
6.22 Transaction................................. 54
6.23 Insurance................................... 54
SECTION 7. Affirmative Covenants....................... 55
7.01 Information Covenants....................... 55
(a) Annual Financial Statements............ 55
(b) Quarterly Financial Statements......... 56
(c) Budgets; etc........................... 56
(d) Officer's Certificates................. 57
(e) Notice of Default or Litigation........ 57
(f) Auditors' Reports...................... 58
(g) Environmental Matters.................. 58
(h) Other Information...................... 59
(i) Borrowing Base Certificates............ 60
7.02 Books, Records and Inspections.............. 60
7.03 Payment of Taxes............................ 60
7.04 Corporate Franchises........................ 61
7.05 Compliance with Statutes, Environmental
Laws, etc................................. 61
7.06 ERISA....................................... 62
7.07 Good Repair................................. 63
7.08 End of Fiscal Years; Fiscal Quarters........ 64
7.09 Interest Rate Protection.................... 64
7.10 Maintenance of Property; Insurance.......... 64
7.11 Additional Security; Further Assurances..... 65
7.12 Performance of Obligations.................. 66
7.13 Use of Proceeds............................. 66
7.14 Ownership of Subsidiaries................... 66
7.15 Common Stock Repurchase..................... 66
7.16 Foreign Subsidiaries Security............... 67
7.17 Senior Notes Change of Control.............. 68
SECTION 8. Negative Covenants.......................... 68
8.01 Consolidation, Merger, Sale or Purchase
of Assets, etc............................ 68
8.02 Liens....................................... 74
(iii)
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8.03 Indebtedness................................ 76
8.04 Capital Expenditures........................ 79
8.05 Advances, Investments and Loans............. 80
8.06 Dividends, etc.............................. 83
8.07 Transactions with Affiliates................ 84
8.08 Changes in Business......................... 85
8.09 Fixed Charge Coverage Ratio................. 85
8.10 Leverage Ratio.............................. 85
8.11 Interest Coverage Ratio..................... 86
8.12 Limitation on Voluntary Payments and
Modifications of Indebtedness;
Modification of Certificate of
Incorporation............................. 86
8.13 Limitations on Issuance of Capital Stock.... 87
8.14 Limitation on Restrictions Affecting
Subsidiaries.............................. 87
8.15 Limitation on the Creation of
Subsidiaries.............................. 88
SECTION 9. Events of Default........................... 89
9.01 Payments.................................... 89
9.02 Representations, etc........................ 89
9.03 Covenants................................... 89
9.04 Default Under Other Agreements.............. 89
9.05 Bankruptcy, etc............................. 90
9.06 ERISA....................................... 90
9.07 Security Documents.......................... 91
9.08 Subsidiary Guaranty......................... 91
9.09 Judgments................................... 92
9.10 Change of Control........................... 92
SECTION 10. Definitions................................. 93
SECTION 11. The Administrative Agent, Co-Agents,
etc.......................................131
11.01 Appointment.................................131
11.02 Delegation of Duties........................131
11.03 Exculpatory Provisions......................132
11.04 Reliance by Administrative Agent,
Co-Agents, etc............................132
11.05 Notice of Default...........................133
11.06 Non-Reliance on Administrative Agent,
Co-Agents and Other Banks.................133
11.07 Indemnification.............................134
11.08 Individual Capacity.........................135
11.09 Resignation; Successors.....................135
(iv)
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11.10 Holders.....................................136
SECTION 12. Miscellaneous...............................136
12.01 Payment of Expenses, etc....................136
12.02 Right of Setoff.............................138
12.03 Notices.....................................138
12.04 Benefit of Agreement........................138
12.05 No Waiver; Remedies Cumulative..............141
12.06 Payments Pro Rata...........................141
12.07 Calculations; Computations..................142
12.08 GOVERNING LAW; SUBMISSION TO
JURISDICTION; VENUE; TRIAL BY JURY........143
12.09 Counterparts................................144
12.10 Effectiveness...............................144
12.11 Headings Descriptive........................144
12.12 Amendment or Waiver.........................144
12.13 Survival....................................146
12.14 Domicile of Loans...........................146
12.15 Confidentiality.............................146
12.16 Collateral Release..........................147
(v)
SCHEDULE I - Commitments
SCHEDULE II - Real Property
SCHEDULE III - Insurance
SCHEDULE IV - Existing Letters of Credit
SCHEDULE V - Projections
SCHEDULE VI - Subsidiaries
SCHEDULE VII - Collective Bargaining Agreements
SCHEDULE VIII - Permitted Existing Indebtedness
SCHEDULE IX - Permitted Liens
SCHEDULE X - Permitted Existing Investments
EXHIBIT A-1 - Notice of Borrowing
EXHIBIT A-2 - Notice of Prepayment
EXHIBIT B-1 - Term Note
EXHIBIT B-2 - Revolving Note
EXHIBIT C - Officers' Certificate
EXHIBIT D-1 - Opinion of Stroock & Stroock & Lavan
EXHIBIT D-2 - Opinion of White & Case
EXHIBIT E - Pledge Agreement
EXHIBIT F - Subsidiary Guaranty
EXHIBIT G - Security Agreement
EXHIBIT H - Solvency Certificate
EXHIBIT I - Borrowing Base Certificate
EXHIBIT J - Intercompany Note
EXHIBIT K - Subordination Provisions
EXHIBIT L - Assignment Agreement
(vi)
CREDIT AGREEMENT, dated as of March __, 1994, among AMETEK, INC., a
Delaware corporation (the "Borrower"), the lending institutions listed from time
to time on Schedule I hereto (each a "Bank" and, collectively, the "Banks"),
BANK OF MONTREAL, CORESTATES BANK, N.A. and PNC BANK, NATIONAL ASSOCIATION, as
Co-Agents (each a "Co-Agent" and, collectively, the "Co-Agents"), and THE CHASE
MANHATTAN BANK, N.A., as administrative agent (in such capacity, and together
with its successors in such capacity, the "Administrative Agent") for the Banks.
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 10 are used herein as so defined.
W I T N E S S E T H :
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WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrower the credit
facilities provided for herein.
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 Loan Commitments. Subject to and upon the terms and conditions
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herein set forth, each Bank severally agrees to make a loan or loans to the
Borrower, which loans shall be drawn, to the extent such Bank has a commitment
under such Facility, under the Term Loan Facility and the Revolving Credit
Facility, as set forth below:
(a) Loans under the Term Loan Facility (each a "Term Loan" and,
collectively, the "Term Loans") (i) may be incurred by the Borrower
pursuant to not more than three drawings, which may occur at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Term Loan Availability Termination Date, (ii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and maintained
as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided
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that (x) no Eurodollar Loans may be incurred (including as a result of a
conversion) prior to the Syndication Date and (y) all Term Loans made by
all Banks pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, consist entirely
of Term Loans of the same Type and (iii) shall not exceed in aggregate
principal amount for any Bank at the time of incurrence thereof the
remaining Term Loan Commitment, if any, of such Bank at such time (before
giving effect to any reductions on such date pursuant to Section 3.03(c)(i)
or (ii)). Once repaid, Term Loans borrowed hereunder may not be
reborrowed.
(b) Loans under the Revolving Credit Facility (each a "Revolving
Loan" and, collectively, the "Revolving Loans") (i) may be incurred by the
Borrower at any time and from time to time on and after the Initial
Borrowing Date and prior to the Revolving Credit Facility Maturity Date,
(ii) except as hereinafter provided, may, at the option of the Borrower,
be incurred and maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that (x) all Revolving Loans made by all Banks
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pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of Revolving Loans of the same Type and
(y) no Eurodollar Loans may be incurred prior to the Syndication Date,
(iii) may be repaid and reborrowed in accordance with the provisions
hereof, (iv) shall not exceed in aggregate principal amount for any Bank at
any time outstanding the amount which, when combined with such Bank's
Percentage of the Letter of Credit Outstandings at such time, equals the
Revolving Commitment of such Bank at such time and (v) shall not exceed in
aggregate principal amount for all Banks at any time outstanding the amount
which, when added to the aggregate amount of Letter of Credit Outstandings
at such time, equals the lesser of (x) the Borrowing Base then in effect
and (y) the Total Revolving Commitment at such time. Notwithstanding
anything to the contrary contained herein, no Revolving Loan may be
incurred by the Borrower the proceeds of which shall be used to finance all
or any portion of any Common Stock Repurchase prior to the date on which
the Total Term Loan Commitment is terminated in its entirety in accordance
with Section 3.03(c).
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
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of each Borrowing under a Facility shall not be less than the Minimum Borrowing
Amount for such Facility. More than one Borrowing may be incurred on any day,
provided that at no time shall there be outstanding more than 12 Borrowings of
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Eurodollar Loans in the aggregate.
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1.03 Notice of Borrowing. (a) The Loans to be incurred by the
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Borrower on the Initial Borrowing Date shall be set forth in a written notice
(or telephonic notice promptly confirmed in writing) delivered by the Borrower
to the Administrative Agent at its Notice Office no later than 12:00 Noon (New
York time) on the Business Day immediately prior to the Initial Borrowing Date.
Whenever the Borrower desires to incur Loans after the Initial Borrowing Date,
it shall give the Administrative Agent at its Notice Office, written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Eurodollar
Loans prior to 12:00 Noon (New York time) on the third Business Day preceding
the date of the proposed Borrowing and written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Base Rate Loans to be made
hereunder prior to 10:00 A.M. (New York time) on the date of the proposed
Borrowing. Each of the foregoing notices (each a "Notice of Borrowing") shall
be irrevocable, and, in the case of each written notice and each confirmation of
telephonic notice, shall be in the form of Exhibit A-1, appropriately completed
to specify (i) the Facility pursuant to which Loans are to be incurred, (ii) the
aggregate principal amount of the Loans to be incurred, (iii) the date of
incurrence (which shall be a Business Day), (iv) whether the respective
incurrence shall consist of Base Rate Loans or, to the extent otherwise
permitted, Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be
initially applicable thereto and (v) if Revolving Loans are to be incurred, the
aggregate principal amount of such Revolving Loans, if any, to be used to
finance a Common Stock Repurchase. The Administrative Agent shall promptly give
each Bank written notice (or telephonic notice promptly confirmed in writing)
of each proposed Borrowing, of the proportionate share thereof of each Bank and
of the other matters covered by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent or the respective Letter of Credit Issuer (in the case of
the issuance of Letters of Credit), as the case may be, may act prior to receipt
of written confirmation without liability upon the basis of such telephonic
notice, reasonably believed by the Administrative Agent or such Letter of Credit
Issuer, as the case may be, in good faith to be from an Authorized Officer of
the Borrower as a person entitled to give telephonic notices under this
Agreement on behalf of such Borrower. In each such case the Borrower hereby
waives the right to dispute the Administrative Agent's record of the terms of
any such telephonic notice.
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1.04 Disbursement of Funds. (a) Subject to the terms and conditions
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hereinafter provided, each Bank will make available its pro rata share, if any,
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of each Borrowing requested to be made on the date specified in a Notice of
Borrowing in the manner provided below by no later than 1:00 P.M. (New York
time) on such date, but, in the case of a Borrowing of Base Rate Loans, only to
the extent that such Bank has received a notice from the Administrative Agent of
such proposed Borrowing. All amounts shall be made available to the
Administrative Agent in Dollars and immediately available funds at the Payment
Office and the Administrative Agent promptly will, on the date specified in such
Notice of Borrowing, make available to the Borrower by depositing to its account
at the Payment Office the aggregate of the amounts so made available by the
Banks by the time specified in the preceding sentence in the type of funds
received. Unless the Administrative Agent shall have been notified by any Bank
prior to the date of Borrowing that such Bank does not intend to make available
to the Administrative Agent its portion, if any, of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Bank has
made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Bank and the
Administrative Agent has made available same to the Borrower, the Administrative
Agent shall be entitled to recover such corresponding amount from such Bank. If
such Bank does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the Borrower, and the Borrower shall pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to
recover from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if to be paid by such Bank, the customary rate set
by the Administrative Agent for the correction of errors among banks for each
day during the period consisting of the first three Business Days following such
date of availability and thereafter at the Base Rate or (y) if to be paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
Section 1.08, for the respective Loans.
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(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder to make Loans or to prejudice
any rights which the Borrower may have against any Bank as a result of any
default by such Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
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and interest on, the Loans made to it by each Bank shall be evidenced (i) if
Term Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1 with blanks appropriately completed in
conformity herewith (each a "Term Note" and collectively the "Term Notes") and
(ii) if Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and collectively the
"Revolving Notes").
(b) The Term Note, if any, issued to each Bank shall (i) be payable
to the order of such Bank and be dated the Initial Borrowing Date, (ii) be in a
stated principal amount equal to the Term Loan Commitment of such Bank and be
payable in the principal amount of the Term Loans evidenced thereby, (iii)
mature on the Final Maturity Date, (iv) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (v) be subject to man-
datory repayment as provided in Section 4.02 and (vi) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) The Revolving Note, if any, issued to each Bank shall (i) be
payable to the order of such Bank and be dated the Initial Borrowing Date, (ii)
be in a stated principal amount equal to the Revolving Commitment of such Bank
and be payable in the principal amount of the Revolving Loans evidenced thereby,
(iii) mature on the Revolving Credit Facility Maturity Date, (iv) bear interest
as provided in the appropriate clause of Section 1.08 in respect of the Base
Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (v) be
subject to mandatory repayment as provided in Section 4.02 and (vi) be entitled
to the benefits of this Agreement and the other Credit Documents.
(d) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby and the last date
-5-
or dates on which interest has been paid in respect of the Loans evidenced
thereby. Failure to make any such notation shall not affect the Borrower's
obligations in respect of such Loans, or affect the validity of such transfer by
any Bank of such Note.
1.06 Conversions. The Borrower shall have the option to convert on
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any Business Day occurring on and after the Syndication Date, all or a portion
at least equal to the applicable Minimum Borrowing Amount of the outstanding
principal amount of the Loans owing pursuant to a single Facility into a
Borrowing or Borrowings pursuant to such Facility of another Type of Loan,
provided that (i) except as provided in Section 1.10(b), Eurodollar Loans may be
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converted into Loans of another Type only on the last day of an Interest Period
applicable thereto and no partial conversion of a Borrowing of Eurodollar Loans
shall reduce the outstanding principal amount of the Loans pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
Loans may only be converted into Eurodollar Loans if no Default or Event of
Default is in existence on the date of the conversion and (iii) Borrowings of
Eurodollar Loans resulting from this Section 1.06 shall be limited in number as
provided in Section 1.02. Each such conversion shall be effected by the
Borrower by giving the Administrative Agent at its Notice Office, prior to 12:00
Noon (New York time), at least three Business Days or, in the case of a
conversion into Base Rate Loans, prior to 10:00 A.M. (New York time) on the same
Business Day, prior written notice (or telephonic notice promptly confirmed in
writing) (each a "Notice of Conversion") specifying the Loans to be so
converted, the Type of Loans to be converted into and, if to be converted into a
Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Bank prompt notice of any
such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans shall be made from
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the Banks pro rata on the basis of their Term Loan Commitments or Revolving
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Commitments, as the case may be. It is understood that no Bank shall be
responsible for any default by any other Bank in its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans provided to be
made by it hereunder, regardless of the failure of any other Bank to fulfill its
commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
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Loan shall bear interest from and including
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the date of the Borrowing thereof until maturity (whether by acceleration or
otherwise) at a rate per annum which shall at all times be the Base Rate in
effect from time to time plus the Applicable Base Rate Margin.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from and including the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at all
times be the relevant Eurodollar Rate plus the Applicable Eurodollar Margin.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the Base Rate in effect from time to time plus the sum of (i) 2% and (ii) the
Applicable Base Rate Margin, provided that no Loan shall bear interest after
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maturity (whether by acceleration or otherwise) at a rate per annum less than
2% plus the rate of interest applicable thereto at maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable in arrears (i) in respect of each Base Rate Loan, quarterly on the last
Business Day of each calendar quarter, (ii) in respect of each Eurodollar Loan,
on the last day of each Interest Period applicable thereto and, in the case of
an Interest Period of six months, on the date occurring three months after the
first day of such Interest Period and (iii) in respect of each Loan, on any
prepayment (on the amount prepaid), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrower and the Banks thereof.
1.09 Interest Periods. At the time the Borrower gives a Notice of
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Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans (in the
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case of any subsequent Interest Period), it shall have the right to elect by
giving the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of the Interest Period applicable to such Borrowing, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six month period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar Loans
shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period expires;
(ii) if any Interest Period applicable to a Borrowing of Eurodollar
Loans begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period applicable to
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a Borrowing of Eurodollar Loans would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the
next preceding Business Day;
(iv) no Interest Period in respect of any Borrowing of Loans under any
Facility shall extend beyond the respective Maturity Date for such Loans
under such Facility;
(v) no Interest Period may be elected at any time when a Default or
Event of Default is then in existence;
(vi) no Interest Period with respect to any Borrowing of Term Loans
shall extend beyond any date upon which a Scheduled Repayment is required
to be made, if, after giving effect to the selection of such Interest
Period, the aggregate principal amount of Term Loans maintained as
Eurodollar Loans with Interest Periods ending after such date would exceed
the aggregate
-8-
principal amount of Term Loans permitted to be outstanding after such
Scheduled Repayment; and
(vii) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period.
If upon the expiration of any Interest Period, the Borrower has failed to elect
a new Interest Period to be applicable to the respective Borrowing of Eurodollar
Loans as provided above, or is unable to elect a new Interest Period as a result
of clause (v) above, the Borrower shall be deemed to have elected to convert
such Borrowing into a Borrowing of Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in
---------------------------------
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Bank shall have determined (which determin-
ation shall, absent manifest error, be final and conclusive and binding upon all
parties hereto):
(i) on any date for determining the Eurodollar Rate for any Interest
Period that, by reason of any changes arising after the date of this
Agreement affecting the London interbank Eurodollar market, adequate and
fair means do not exist for ascertaining generally the applicable interest
rate on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate of taxes or similar charges) because of (x) any change since
the date of this Agreement in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the force of
law) or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline,
order or request (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding reserves
referred to in Section 1.10(d)) and/or (y) other circumstances adversely
affecting the London interbank Eurodollar market or the position of such
Bank in such market; or
-9-
(iii) at any time, that the making or continuance of any Eurodollar Loan
has become unlawful by compliance by such Bank in good faith with any law,
governmental rule, regulation, guideline or order (or would conflict with
any such governmental rule, regulation, guideline or order not having the
force of law but with which such Bank customarily complies even though the
failure to comply therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring after the date of this
Agreement which adversely affects the London interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and (except in the case of clause (i)) to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the Banks
that the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred shall
be deemed rescinded by such Borrower, (y) in the case of clause (ii) above, the
Borrower shall, subject to the provisions of Section 1.14 (to the extent
applicable), pay to such Bank, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its reasonable discretion
shall determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts receivable hereunder and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii),
shall) either (i) if the affected Eurodollar Loan is then being made pursuant
to a Borrowing, cancel said Borrowing by giving the Administrative Agent
telephonic notice (confirmed promptly in writing) thereof on the same date that
the Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii),
or (ii) if the affected Eurodollar Loan is then
-10-
outstanding, upon at least three Business Days' notice to the Administrative
Agent, require the affected Bank to convert each such Eurodollar Loan into a
Base Rate Loan (which conversion, in the case of the circumstances described in
Section 1.10(a)(iii), shall occur no later than the last day of the Interest
Period then applicable to such Eurodollar Loan (or such earlier date as shall be
required by applicable law)); provided that if more than one Bank is affected at
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any time, then all affected Banks must be treated the same pursuant to this
Section 1.10(b).
(c) If any Bank determines at any time that the adoption or
effectiveness after the Effective Date of any applicable law, rule or regulation
regarding capital adequacy, or any change therein after the Effective Date, or
any change after the Effective Date in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or actual compliance by such
Bank with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of increasing the costs to such Bank to a
level above that, or reducing the rate of return on such Bank's capital or
assets as a consequence of its commitments or obligations hereunder to a level
below that, which such Bank could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy), then from time to time, upon written
demand by such Bank (with a copy to the Administrative Agent), the Borrower
shall, subject to the provisions of Section 1.14 (to the extent applicable), pay
to such Bank such additional amount or amounts as will compensate such Bank for
such increased costs or reduction. Each Bank, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower, which notice shall set forth the
basis of the calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 1.10(c) upon receipt of such
notice.
(d) In the event that any Bank shall determine (which determination
shall, absent manifest error, be final and conclusive and binding on all parties
hereto) at any time that by reason of Regulation D such Bank is required to
maintain reserves in respect of Eurocurrency loans or liabilities during any
period that it has a Eurodollar Loan outstanding,
-11-
then such Bank shall promptly notify the Borrower and the Administrative Agent
by written notice (or telephonic notice promptly confirmed in writing)
specifying the additional amounts required to indemnify such Bank against the
cost of maintaining such reserves (such written notice to provide a computation
of such additional amounts) and the Borrower shall, subject to the provisions of
Section 1.14 (to the extent applicable), directly pay to such Bank such
specified amounts as additional interest at the time that it is otherwise
required to pay interest in respect of such Eurodollar Loan or, if later, on
demand.
1.11 Compensation. The Borrower shall, subject to the provisions of
------------
Section 1.14 (to the extent applicable), compensate each Bank, upon its written
request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans to the Borrower) which such Bank may sustain:
(i) if for any reason (other than a default or error by such Bank or
the Administrative Agent) a Borrowing of Eurodollar Loans does not occur
on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to Section 1.10(a));
(ii) if any repayment or conversion of any of its Eurodollar Loans
occurs on a date which is not the last day of an Interest Period applicable
thereto;
(iii) if any prepayment of any of its Eurodollar Loans is not made on
any date specified in a notice of prepayment given by the Borrower; or
(iv) as a consequence of (x) any other default by the Borrower to
repay its Eurodollar Loans when required by the terms of this Agreement or
(y) an election made pursuant to Section 1.10(b).
Calculation of all amounts payable to a Bank with respect to Eurodollar Loans
under this Section 1.11 shall be made as though that Bank had actually funded
its relevant Eurodollar Loan through the purchase of a Eurodollar deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Eurodollar Loan, having a maturity comparable to the relevant Interest Period
and through the transfer of
-12-
such Eurodollar deposit from an offshore office of that Bank to a domestic
office of that Bank in the United States of America (or if such Bank has no
offshore office, from an offshore office of the Administrative Agent to the
domestic office of the Administrative Agent); provided, however, that each Bank
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may fund each of its Eurodollar Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 1.10(d), 2.05 or 4.04 with respect to such Bank, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office of such Bank
for any Loans or Letters of Credit affected by such event, provided that such
--------
designation is made on such terms that such Bank or its respective lend-ing
offices suffer no economic, legal or regulatory disadvantage, with the object
of avoiding the consequence of the event giving rise to the operation of any
such Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.05 or 4.04.
1.13 Replacement of Banks. (x) Upon the occurrence of any event
--------------------
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c),
Section 1.10(d), Section 2.05 or Section 4.04 with respect to any Bank which
results in such Bank charging to the Borrower increased costs which are material
in amount and are in excess of those being generally charged by the other Banks
or (y) as provided in Section 12.12(b) in the case of certain refusals by a Bank
to consent to certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Banks, the
Borrower shall have the right, if no Default or Event of Default then exists or
will exist immediately after giving effect to the respective replacement and, in
the case of a Bank described in clause (x) above, such Bank has not withdrawn
its request for such compensation or changed its applicable lending office with
the effect of eliminating or substantially decreasing (to a level which is not
material) such increased cost, to replace such Bank (the "Replaced Bank") with
one or more other Eligible Assignee or Assignees (collectively, the
"Replacement Bank") reasonably acceptable to the Administrative Agent and, if
the Revolving Commitment of any Replaced Bank is to be replaced with a Revolving
Commitment provided by the
-13-
Replacement Bank, reasonably acceptable to each Letter of Credit Issuer;
provided that (i) at the time of any replacement pursuant to this Section 1.13,
- --------
the Replacement Bank shall enter into one or more Assignment Agreements pursuant
to Section 12.04(b) (and with all fees payable pursuant to said Section 12.04(b)
to be paid by the Replacement Bank) pursuant to which the Replacement Bank shall
acquire all of the Commitments and outstanding Loans of, and participations in
Letters of Credit by, the Replaced Bank and, in connection therewith, shall pay
to (x) the Replaced Bank in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Bank, (B) an amount equal to all Unpaid Drawings that have
been funded by (and not reimbursed to) such Replaced Bank, together with all
then unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01 and (y) the respective Letter of Credit Issuer an amount equal
to such Replaced Bank's Percentage (for this purpose, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Bank) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) with respect to any Letter of Credit issued
by such Letter of Credit Issuer to the extent such amount was not theretofore
funded by such Replaced Bank, and (ii) all obligations of the Borrower owing to
the Replaced Bank (other than those specifically described in clause (i) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Bank concurrently with such
replacement. Upon the execution of the respective Assignment Agreements, the
payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes executed by the Borrower, (x) the Replacement Bank
shall become a Bank hereunder and the Replaced Bank shall cease to constitute a
Bank hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04 and,
12.01), which shall survive as to such Replaced Bank and (y) the Percentages of
the Banks shall be automatically adjusted at such time to give effect to such
replacement.
1.14 Limitation on Additional Amounts, etc. Notwithstanding
--------------------------------------
anything to the contrary contained in Sections 1.10, 1.11, 2.05 or 4.04 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated to
pay an
-14-
amount under any such respective Section within 120 days after the later of (x)
the date the Bank incurs the respective increased costs, taxes, loss, expense
or liability, reduction in amounts received or receivable or reduction in return
on capital or (y) the date such Bank has actual knowledge of its incurrence of
the respective increased costs, taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction in return on capital, then such Bank
shall only be entitled to be compensated for such amount by the Borrower
pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the case may be, to the
extent the costs, taxes, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital are incurred or
suffered on or after the date which occurs 120 days prior to such Bank giving
notice to the Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the case may be. Each
Bank, in determining additional amounts owing under Sections 1.10, 1.11, 2.05 or
4.04, will act reasonably and in good faith, provided that such Bank's deter-
--------
mination of such additional amounts so owing shall, absent manifest error, be
final and conclusive and binding on all parties hereto. This Section 1.14 shall
have no applicability to any Section of this Agreement other than said Sections
1.10, 1.11, 2.05 and 4.04.
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Initial Borrowing Date and
prior to the Revolving Credit Facility Maturity Date to issue, and subject to
the terms and conditions herein set forth, such Letter of Credit Issuer hereby
agrees to issue from time to time, (x) for the account of the Borrower on a
standby basis and in support of insurance obligations, workers compensation or
bonding obligations in respect of taxes, licenses and similar requirements, in
each case of the Borrower, any of its Subsidiaries or any Permitted Joint
Venture, and other obligations (as specified in the respective Letter of Credit
Request and consented to by the Administrative Agent and the respective Letter
of Credit Issuer) of the Borrower, any of its Subsidiaries and/or any Permitted
Joint Venture, an irrevocable standby letter of credit so requested by the
Borrower in a form customarily used by such Letter of Credit Issuer or in such
other form as may be approved by such Letter of Credit Issuer and the
Administrative Agent (each such standby letter of credit, a "Standby Letter of
Credit" and collec-
-15-
tively, the "Standby Letters of Credit"), and (y) for the account of the
Borrower and for the benefit of sellers of goods to the Borrower, any of its
Subsidiaries or any Permitted Joint Venture, an irrevocable documentary letter
of credit in a form customarily used by such Letter of Credit Issuer or in such
other form as may be approved by such Letter of Credit Issuer and the
Administrative Agent in support of commercial transactions of the Borrower, any
of its Subsidiaries or any Permitted Joint Venture, as the case may be, entered
into in the ordinary course of its business (each such documentary letter of
credit, a "Trade Letter of Credit" and collectively, the "Trade Letters of
Credit" and together with the Standby Letters of Credit, the "Letters of
Credit"). Notwithstanding the foregoing, no Letter of Credit Issuer shall be
obligated to issue any Letter of Credit at a time when a Bank Default exists
unless such Letter of Credit Issuer has entered into arrangements satisfactory
to it and the Borrower to eliminate such Letter of Credit Issuer's risk with
respect to the participation in Letters of Credit of the Bank which is the
subject of the Bank Default, including by cash collateralizing such Bank's
Percentage of the Letter of Credit Outstandings.
(b) Schedule IV hereto contains a description of all letters of
credit issued by PNC prior to the Initial Borrowing Date in support of
obligations of the Borrower and/or its Subsidiaries and which remain outstanding
on the Initial Borrowing Date. Each such letter of credit, including any
extension thereof, issued by PNC and listed on such Schedule IV (each an
"Existing Letter of Credit") shall remain outstanding on and after the Initial
Borrowing Date and constitute a "Letter of Credit" for all purposes of this
Agreement, and shall be deemed issued for purposes of Section 2.02(a) on the
Initial Borrowing Date.
(c) Notwithstanding the foregoing,
(i) no Letter of Credit shall be issued the Stated Amount of
which, when added to the Letter of Credit Outstandings at such time, would
exceed either (x) $30,000,000, or (y) when added to the aggregate princi-
pal amount of all Revolving Loans then outstanding, the lesser of (A) the
Total Revolving Commitment at such time and (B) the Borrowing Base at such
time;
(ii) each Letter of Credit shall by its terms terminate on or
before the earlier of (x)(A) in the case of Standby Letters of Credit, the
date which occurs 18 months after such Standby Letter of Credit's date of
-16-
issuance (subject to extension provisions acceptable to the Administrative
Agent and the respective Letter of Credit Issuer) and (B) in the case of
Trade Letters of Credit, the date which occurs 180 days after such Trade
Letter of Credit's date of issuance and (y) the third Business Day
preceding the Revolving Credit Facility Maturity Date;
(iii) each Standby Letter of Credit shall be denominated in
Dollars;
(iv) each Trade Letter of Credit shall be denominated in Dollars
or an Approved Alternate Currency, provided that no Trade Letter of Credit
--------
denominated in an Approved Alternate Currency shall be issued by any Letter
of Credit Issuer if the Stated Amount of such Trade Letter of Credit, when
added to the Letter of Credit Outstandings at such time in respect of Trade
Letters of Credit denominated in Approved Alternate Currencies, would
exceed $5,000,000;
(v) no Standby Letter of Credit shall have a Stated Amount of less
than $100,000 unless otherwise agreed to by the respective Letter of Credit
Issuer;
(vi) no Trade Letter of Credit shall have a Stated Amount of less
than $10,000 unless otherwise agreed to by the respective Letter of Credit
Issuer;
(vii) no Letter of Credit shall be issued by any Letter of Credit
Issuer after it has received a written notice from the Borrower, the
Administrative Agent or the Required Banks stating that a Default or Event
of Default has occurred and is continuing until such time as such Letter of
Credit Issuer shall have received a written notice of (x) rescission of
such notice from the party or parties originally delivering such notice or
(y) the waiver of such Default or Event of Default by the Required Banks;
and
(viii) no Letter of Credit shall be issued in support of any
obligation of any Permitted Joint Venture the Stated Amount of which, when
added to the sum of (x) the Joint Venture Letter of Credit Outstandings at
such time and (y) the aggregate outstanding principal amount of all Joint
Venture Investments, would exceed $30,000,000.
In connection with the issuance of any Letter of Credit, the respective Letter
of Credit Issuer may request from the
-17-
Administrative Agent a determination in accordance with Section 12.07(c)(y) as
to the Stated Amount of any Letter of Credit and of the principal amount of
Unpaid Drawings, in each case to the extent denominated in a currency other than
Dollars, and such Letter of Credit Issuer shall be entitled to rely on such
information provided by the Administrative Agent.
2.02 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by a Letter of Credit Issuer of any Letter of Credit, the respective
Letter of Credit Issuer shall be deemed to have sold and transferred to each
other Bank with a Revolving Commitment (each such other Bank, in its capacity
under this Section 2.02, a "Participating Bank"), and each such Participating
Bank shall be deemed irrevocably and unconditionally to have purchased and re-
ceived from such Letter of Credit Issuer, without recourse or warranty, an
undivided interest and participation, to the extent of such Participating Bank's
Percentage, in such Letter of Credit, each substitute letter of credit, each
drawing made thereunder and the obligations of the Borrower under this Agreement
with respect thereto, and any security therefor or guaranty pertaining thereto
(although L/C Fees will be paid directly to the Administrative Agent for the
ratable account of the Participating Banks as provided in Section 3.01(b) and
the Participating Banks shall have no right to receive any portion of any L/C
Facing Fees). Upon any change in the Revolving Commitments of the Banks
pursuant to Section 12.04, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.02 to reflect the
new Percentages of the assignor and assignee Bank.
(b) In determining whether to pay under any Letter of Credit, the
respective Letter of Credit Issuer issuing same shall have no obligation
relative to any other Bank other than to confirm that any documents required to
be delivered under such Letter of Credit have been delivered and that they
appear to comply on their face with the requirements of such Letter of Credit.
Any action taken or omitted to be taken by a Letter of Credit Issuer under or in
connection with any Letter of Credit issued by it if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for such
Letter of Credit Issuer any resulting liability to the Borrower or any Bank.
(c) In the event that a Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and
-18-
the Borrower shall not have reimbursed such amount in full to such Letter of
Credit Issuer pursuant to Section 2.04(a), such Letter of Credit Issuer shall
promptly notify the Administrative Agent and after receipt of such notice, the
Administrative Agent will notify each Participating Bank of such failure, and
each Participating Bank shall promptly and unconditionally pay to the
Administrative Agent for the account of such Letter of Credit Issuer, the amount
of such Participating Bank's Percentage of such unreimbursed payment in lawful
money of the United States of America and in same day funds; provided, however,
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that no Participating Bank shall be obligated to pay to the Administrative Agent
for the account of such Letter of Credit Issuer its Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer. If the Administrative Agent so notifies, prior to 11:00 A.M. (New York
time) on any Business Day, any Participating Bank required to fund a payment
under a Letter of Credit, such Participating Bank shall make available to the
Administrative Agent for the account of such Letter of Credit Issuer such
Participating Bank's Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participating Bank shall not
have so made its Percentage of the amount of such payment available to the
Administrative Agent for the account of such Letter of Credit Issuer, such
Participating Bank agrees to pay to the Administrative Agent for the account of
such Letter of Credit Issuer, forthwith on demand, such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent for the account of such Letter of Credit Issuer at
the overnight Federal Funds Rate. The failure of any Participating Bank to make
available to the Administrative Agent for the account of the respective Letter
of Credit Issuer its Percentage of any payment under any Letter of Credit shall
not relieve any other Participating Bank of its obligation hereunder to make
available to the Administrative Agent for the account of such Letter of Credit
Issuer its Percentage of any payment under any Letter of Credit on the date
required, as specified above, but no Participating Bank shall be responsible for
the failure of any other Participating Bank to make available to the
Administrative Agent, such other Participating Bank's Percentage of any such
payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such
-19-
Letter of Credit Issuer any payments from the Participating Banks pursuant to
clause (c) above, such Letter of Credit Issuer shall pay to the Administrative
Agent and the Administrative Agent shall promptly pay to each Participating
Bank which has paid its Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participating Bank's share (based upon the proportionate
aggregate amount originally funded by such Participating Bank to the aggregate
amount funded by all Participating Banks) of the principal amount of such
reimbursement and of interest reimbursed thereon accruing from and after the
date of the purchase of the respective participations.
(e) The obligations of the Participating Banks to make payments to
the Administrative Agent for the account of any Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any of
the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower, any of its Subsidiaries or any Permitted Joint Venture
may have at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, any Co-Agent, any
Letter of Credit Issuer, any Bank, or any other Person, whether in con-
nection with this Agreement, any Letter of Credit, the transactions
contemplated herein (including the Transaction) or any unrelated
transactions (including any underlying transaction between the Borrower,
any of its Subsidiaries or any Permitted Joint Venture and the beneficiary
named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
-20-
(v) the occurrence of any Default or Event of Default.
2.03 Letter of Credit Requests; Notices of Issuance. (a) Whenever
-----------------------------------------------
it desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the respective Letter of Credit Issuer written notice
(including by way of telecopier) thereof prior to 1:00 P.M. (New York time) at
least three Business Days (or such shorter period as may be acceptable to such
Letter of Credit Issuer) prior to the proposed date (which shall be a Business
Day) of issuance (each a "Letter of Credit Request"), which Letter of Credit
Request shall include an application for the Letter of Credit and any other
documents that such Letter of Credit Issuer customarily requires in connection
therewith. The Administrative Agent shall promptly notify each Bank with a
Revolving Commitment of each Letter of Credit Request.
(b) The delivery of each Letter of Credit Request shall be deemed a
representation and warranty by the Borrower that such Letter of Credit as
requested in such Letter of Credit Request may be issued in accordance with and
will not violate the requirements of Section 2.01(c). Each Letter of Credit
Issuer shall, on the date of each issuance of a Letter of Credit by it, give the
Administrative Agent, each Bank with a Revolving Commitment and the Borrower
written notice of the issuance of such Letter of Credit, accompanied by a copy
to the Administrative Agent of the Letter of Credit or Letters of Credit issued
by it.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse each respective Letter of Credit Issuer, by making
payment to the Administrative Agent for the account of such Letter of Credit
Issuer in Dollars in immediately available funds at the Payment Office, for any
payment or disbursement made by such Letter of Credit Issuer under any Letter of
Credit issued by it (each such amount so paid or disbursed until reimbursed, an
"Unpaid Drawing") immediately after, and in any event on the date of, notice
from such Letter of Credit Issuer of such payment or disbursement with interest
on the amount so paid or disbursed by such Letter of Credit Issuer, to the
extent not reimbursed prior to 1:00 P.M. (New York time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
not including the date such Letter of Credit Issuer is reimbursed therefor at a
rate per annum which shall be the Applicable Base Rate Margin plus the Base Rate
as in effect from time to time (plus an additional 2% per annum if not
reimbursed by the third Business Day after the date of
-21-
notice of such payment or disbursement), such interest to be payable on demand.
Notwithstanding the foregoing, to the extent that a Letter of Credit Issuer of a
Trade Letter of Credit denominated in an Approved Alternate Currency has agreed
in writing to such arrangement at the time of the issuance of such Trade Letter
of Credit, the Borrower shall reimburse any drawing thereunder in the currency
in which such Trade Letter of Credit is denominated; provided, that (x) if any
--------
such drawing is made at a time when there exists an Event of Default or (y) if
such reimbursement is not made by the close of business two Business Days after
the Borrower has received notice of such drawing, then, in either such case,
such reimbursement shall instead be made in Dollars and in immediately available
funds.
(b) The Borrower's obligation under this Section 2.04 to reimburse
each respective Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower, any of its Subsidiaries or any Permitted
Joint Venture may have or have had against such Letter of Credit Issuer, the
Administrative Agent, any Co-Agent or any Bank, including, without limitation,
any defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing or any
amendment or waiver or any consent to or departure from a Letter of Credit or
any other circumstance whatsoever in making or failing to make payment under a
Letter of Credit; provided, however, that the Borrower shall not be obligated to
-------- -------
reimburse a Letter of Credit Issuer for any wrongful payment made by such Letter
of Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Letter
of Credit Issuer.
2.05 Increased Costs. If at any time after the Effective Date, the
---------------
adoption or effectiveness of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or actual compliance by any Letter of
Credit Issuer or any Participating Bank with any request or directive (whether
or not having the force of law) by any such authority, central bank or
comparable agency shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar
-22-
requirement against Letters of Credit issued by any Letter of Credit Issuer or
any Participating Bank's participation therein, or (ii) impose on any Letter of
Credit Issuer or any Participating Bank any other conditions affecting this
Agreement, any Letter of Credit or any Participating Bank's participation
therein; and the result of any of the foregoing is to increase the cost to any
such Letter of Credit Issuer or any such Participating Bank of issuing,
maintaining or participating in any Letter of Credit, or to reduce the amount of
any sum received or receivable by any such Letter of Credit Issuer or such
Participating Bank hereunder, then, upon demand to the Borrower by such Letter
of Credit Issuer or such Participating Bank (a copy of which notice shall be
sent by such Letter of Credit Issuer or such Participating Bank to the
Administrative Agent), the Borrower shall, subject to Section 1.14 (to the
extent applicable), pay to such Letter of Credit Issuer or such Participating
Bank such additional amount or amounts as will compensate such Letter of Credit
Issuer or such Participating Bank for such increased costs or reduction. A
certificate shall be submitted to the Borrower by a Letter of Credit Issuer or
such Participating Bank, as the case may be (a copy of which certificate shall
be sent by such Letter of Credit Issuer or such Participating Bank to the
Administrative Agent), setting forth the basis for the determination of such
additional amount or amounts necessary to compensate such Letter of Credit
Issuer or such Participating Bank as aforesaid, although the failure to deliver
any such certificate shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section 2.05.
2.06 Indemnification. In addition to its other obligations under
---------------
this Section 2, the Borrower hereby agrees to protect, indemnify and hold
harmless each Letter of Credit Issuer (and their respective officers, directors,
employees, representatives and agents) from and against any and all claims,
damages, losses, liabilities, costs and expenses (including reasonable
attorneys' fees) whatsoever which may be incurred by such Letter of Credit
Issuer (or which may be claimed against such Letter of Credit Issuer by any
Person whatsoever) by reason of or in connection with (i) the issuance or a
transfer of, or payment or failure to pay under, any Letter of Credit issued by
such Letter of Credit Issuer and (ii) involvement of such Letter of Credit
Issuer in any suit, investigation, proceeding, inquiry or action as a
consequence, direct or indirect, of such Letter of Credit Issuer's issuance of a
Letter of Credit or any other event or transaction related thereto; provided,
--------
however, that the Borrower shall not be required to indemnify any Letter of
- -------
-23-
Credit Issuer for any claims, damages, losses, liabilities, costs or expenses to
the extent, but only to the extent, caused by the willful misconduct or gross
negligence of such Letter of Credit Issuer.
SECTION 3. Fees; Commitments.
-----------------
3.01 Fees. (a) The Borrower agrees to pay to the Administrative
----
Agent a commitment commission ("Commitment Commission") for the account of each
Bank for the period from and including the Effective Date to but not including
the date the Total Commitment has been terminated, computed at a rate for each
day equal to 3/8 of 1% per annum on the daily average of such Bank's Aggregate
Unutilized Commitment. Accrued Commitment Commission shall be due and payable
in arrears on the Initial Borrowing Date and, thereafter, quarterly in arrears
on the last Business Day of each calendar quarter and on the date upon which the
Total Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of the Banks pro rata on the basis of their respective Percentages, a
--- ----
fee in respect of each Letter of Credit (the "L/C Fee") in an amount equal to
the Applicable Eurodollar Margin in respect of Revolving Loans on the average
daily Stated Amount of such Letter of Credit. Accrued L/C Fees shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
and on the date upon which the Total Revolving Commitment shall be terminated.
(c) The Borrower agrees to pay to the Administrative Agent for the
account of each respective Letter of Credit Issuer a fee in respect of each
Letter of Credit issued by it (the "L/C Facing Fee") computed at the rate of 1/4
of 1% per annum on the average daily Stated Amount of such Letter of Credit.
Accrued L/C Facing Fees shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter and on the date upon which the Total
Revolving Commitment shall be terminated.
(d) The Borrower hereby agrees to pay to each respective Letter of
Credit Issuer upon each issuance of, drawing under and/or amendment of, a Letter
of Credit issued by it such amount as shall at the time of such issuance,
drawing and/or amendment equal the administrative charge which such Letter of
Credit Issuer is customarily charging at such time for issuances of, drawings
under and/or amendments of letters of credit issued by it.
-24-
(e) The Borrower shall pay to the Administrative Agent (x) on the
Initial Borrowing Date for its own account and/or for distribution to the Co-
Agents and/or the Banks such fees as heretofore agreed in writing by the
Borrower and the Administrative Agent and (y) for the account of the
Administrative Agent, such other fees as may be agreed to in writing from time
to time between the Borrower and the Administrative Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07.
3.02 Voluntary Reduction of Commitments. Upon at least three
----------------------------------
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, without premium or penalty, to terminate, in part or in
whole, (i) the unutilized portion of the Total Term Loan Commitment or (ii) the
Total Unutilized Revolving Commitment; provided that (x) any such termination
--------
shall apply to proportionately and permanently reduce the Term Loan Commitment
or Revolving Commitment, as the case may be, of each of the Banks with a Term
Loan Commitment or Revolving Commitment, as the case may be, and (y) any partial
reduction pursuant to this sentence shall be in the amount of at least
$5,000,000.
3.03 Mandatory Adjustments of Commitments. (a) The Total Commitment
------------------------------------
(and the Term Loan Commitment and Revolving Commitment of each Bank) shall be
terminated on the Expiration Date unless the Initial Borrowing Date has occurred
on or before such date.
(b) The Total Revolving Commitment (and the Revolving Commitment of
each Bank) shall terminate on the earlier of (x) the date on which a Change of
Control occurs and (y) the Revolving Credit Facility Maturity Date.
(c) The Total Term Loan Commitment shall (i) be reduced on each date
on which Term Loans are incurred (after giving effect to the incurrence of Term
Loans on such date), in an amount equal to the aggregate principal amount of
Term Loans incurred on such date and (ii) terminate in its entirety on the Term
Loan Availability Termination Date after giving effect to any incurrence of Term
Loans on such date.
(d) Prior to the Intermediate Target Date, the Total Revolving
Commitment shall be reduced at the time any
-25-
mandatory repayment of the Term Loans would be required pursuant to Section
4.02(A)(c), (d), (e), (g), (h) or (i) if Term Loans were then outstanding in the
amount, if any, by which the amount of such required repayment (determined as if
an unlimited amount of Term Loans were then outstanding) exceeds the aggregate
amount of Term Loans then actually outstanding; provided, however, that no
-------- -------
reduction to the Total Revolving Commitment pursuant to this clause (d) as a
result of the obligation to repay Term Loans set forth in Sections
4.02(A)(c),(d),(e),(g),(h) or (i) (after giving effect to all prior or
concurrent reductions thereto) shall reduce the Total Revolving Commitment to an
amount less than $100,000,000.
(e) Each reduction of the Total Term Loan Commitment or the Total
Revolving Commitment pursuant to this Section 3.03 shall apply proportionately
to the Term Loan Commitment or Revolving Commitment, as the case may be, of each
Bank with such a Commitment.
SECTION 4. Payments.
--------
4.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay Loans in whole or in part, without penalty or fee except as otherwise
provided in this Agreement, at any time and from time to time on the following
terms and conditions: (i) the Borrower shall give the Administrative Agent at
the Notice Office written notice (or telephonic notice promptly confirmed in
writing) (each such notice, a "Notice of Prepayment") of its intent to prepay
Loans, whether such Loans are Term Loans or Revolving Loans, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which such Eurodollar Loans were made, which Notice of Prepayment
shall be substantially in the form of Exhibit A-2 and shall be given by the
Borrower prior to 12:00 Noon (New York time) at least three Business Days prior
to the date of such prepayment, which Notice of Prepayment shall promptly be
transmitted by the Administrative Agent to each of the Banks; (ii) each partial
prepayment of any Borrowing shall be in an aggregate principal amount of at
least $5,000,000, provided that no partial prepayment of Eurodollar Loans shall
--------
reduce the aggregate principal amount of Eurodollar Loans outstanding pursuant
to a Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto; (iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; (iv) Eurodollar Loans may
--- ----
be designated for prepayment pursuant to this Section 4.01 only on the last day
of the Interest Period
-26-
applicable thereto; and (v) each prepayment of Term Loans pursuant to this
Section 4.01 shall be applied to reduce the then remaining Scheduled Repayments
on a pro rata basis (based upon the then remaining principal amount of each such
--- ----
Scheduled Repayment).
4.02 Mandatory Prepayments.
---------------------
(A) Requirements:
------------
(a) If on any date the sum of (x) the aggregate outstanding principal
amount of Revolving Loans (after giving effect to all other repayments thereof
on such date) plus (y) the Letter of Credit Outstandings on such date, exceeds
the Total Revolving Commitment as then in effect, the Borrower shall repay on
such date the principal of Revolving Loans in an aggregate amount equal to such
excess. If, after giving effect to the prepayment of all outstanding Revolving
Loans, the aggregate amount of Letter of Credit Outstandings exceeds the Total
Revolving Commitment then in effect, the Borrower shall pay to the
Administrative Agent an amount in cash and/or Cash Equivalents (satisfactory to
the Administrative Agent) equal to such excess (up to a maximum amount equal to
the Letter of Credit Outstandings at such time) and the Administrative Agent
shall hold such payment as security for the Obligations of the Borrower in a
cash collateral account created pursuant to an agreement to be entered into in
form and substance satisfactory to the Administrative Agent (which shall permit
certain investments in Cash Equivalents satisfactory to the Administrative
Agent, until the proceeds are applied to the Obligations) (a "Cash Collateral
Account").
(b) On each date set forth below, the Borrower shall be required to
repay the principal amount of Term Loans as is set forth opposite such date
(each a "Scheduled Repayment"):
Date Amount
---- ------
May 31, 1994 $2,975,000
November 30, 1994 8,925,000
May 31, 1995 8,925,000
November 30, 1995 8,925,000
May 31, 1996 8,925,000
November 30, 1996 8,925,000
May 31, 1997 8,925,000
November 30, 1997 8,925,000
May 31, 1998 8,925,000
-27-
November 30, 1998 8,925,000
May 31, 1999 8,925,000
November 30, 1999 8,925,000
May 31, 2000 8,925,000
November 30, 2000 8,925,000
Final Maturity Date 6,000,000
(c) Subject to and in accordance with Section 4.02(B), on or prior to
the third Business Day after the date of receipt by the Borrower and/or any of
its Subsidiaries of the Cash Proceeds of any Asset Sale, an amount equal to 75%
of the Net Cash Proceeds of such Asset Sale shall be applied to the prepayment
of the outstanding principal amount of the Loans, provided that to the extent no
--------
Default or Event of Default then exists, such Net Cash Proceeds shall not be
required to be so applied if the Borrower has delivered a Reinvestment Notice to
the Administrative Agent on or prior to the third Business Day after the date of
receipt of such Cash Proceeds to the extent of the Anticipated Reinvestment
Amount specified in such Reinvestment Notice.
(d) Subject to and in accordance with Section 4.02(B), on or prior to
the third Business Day after the date of the receipt by the Borrower and/or any
of its Subsidiaries of the proceeds of any incurrence after the Initial
Borrowing Date of Indebtedness (other than Indebtedness permitted by Section
8.03 as such Section is in effect on the Effective Date), an amount equal to 75%
of the Net Debt Issuance Proceeds of such incurrence shall be applied to the
prepayment of the outstanding principal amount of Loans.
(e) Subject to and in accordance with Section 4.02(B), on or prior to
the third Business Day after the date of the receipt by the Borrower and/or any
of its Subsidiaries of proceeds from the issuance, after the Initial Borrowing
Date, of equity (other than issuances of Common Stock to employees, officers and
directors of the Borrower and its Subsidiaries pursuant to the Stock Option
Plans), an amount equal to 50% of the Net Equity Issuance Proceeds of any such
issuance shall be applied to the prepayment of the outstanding principal amount
of Loans.
(f) Subject to and in accordance with Section 4.02(B), on or prior to
the 90th day after the last day of each fiscal year of the Borrower (commencing
on the date which is not more than 90 days after the Borrower's fiscal year
ending December 31, 1994), 75% of Excess Cash Flow for the Excess Cash Flow
Period last ended shall be applied to the prepayment of the outstanding
principal amount of Loans.
-28-
(g) Subject to and in accordance with Section 4.02(B), on or prior to
the third Business Day after the date of the receipt thereof by the Borrower
and/or any of its Subsidiaries of a Pension Plan Refund, an amount equal to 75%
of such Pension Plan Refund shall be applied to the prepayment of the
outstanding principal amount of Loans, provided that to the extent no Default
--------
or Event of Default then exists, any such Pension Plan Refund shall not be
required to be so applied if the Borrower has delivered a Reinvestment Notice to
the Administrative Agent on or prior to the third Business Day after the date of
receipt of such Pension Plan Refund to the extent of the Anticipated
Reinvestment Amount specified in such Reinvestment Notice.
(h) Subject to and in accordance with Section 4.02(B), on or prior to
the third Business Day after the date of receipt thereof by the Borrower and/or
any of its Subsidiaries of any Insurance Proceeds from any Recovery Event, the
Net Insurance Proceeds of which are in excess of $500,000 (it being understood
that if such amount exceeds $500,000, then the entire amount and not just the
portion in excess of $500,000 shall be subject to mandatory prepayment as
provided in this Section 4.02(A)(h)), an amount equal to 75% of the Net
Insurance Proceeds from such Recovery Event shall be applied to the prepayment
of the outstanding principal amount of Loans, provided that to the extent no
--------
Default or Event of Default then exists, any such Net Insurance Proceeds shall
not be required to be so applied if the Borrower has delivered a Reinvestment
Notice to the Administrative Agent on or prior to the third Business Day after
the date of receipt of such Insurance Proceeds to the extent of the Anticipated
Reinvestment Amount specified in such Reinvestment Notice.
(i) Subject to and in accordance with Section 4.02(B), on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the applicable Reinvestment Event shall be applied to the
prepayment of the outstanding principal amount of Loans.
(j) If on any date the sum of (i) the aggregate outstanding principal
amount of Revolving Loans (after giving effect to all other repayments thereof
on such date) plus (ii) the Letter of Credit Outstandings at such time exceeds
the Borrowing Base as then in effect, the Borrower shall repay on such date that
principal amount of Revolving Loans as is equal to such excess. If, after
giving effect to the prepayment of all outstanding Revolving Loans, the
aggregate amount of Letter of Credit Outstandings exceeds the Borrowing Base
then in effect, the Borrower shall pay to the Adminis-
-29-
trative Agent an amount in cash and/or Cash Equivalents (satisfactory to the
Administrative Agent) equal to such excess (up to the aggregate amount of Letter
of Credit Outstandings at such time) and the Administrative Agent shall hold
such payment as security for all Obligations of the Borrower in a Cash
Collateral Account.
(k) On the date a Change of Control occurs, the outstanding principal
amount of the Term Loans shall be due and payable in full.
(B) Application:
-----------
(a) Each mandatory repayment of Loans made pursuant to Sections
4.02(A)(c) through (i), inclusive, shall be applied: (i) first, to prepay the
-----
principal of outstanding Term Loans, which prepayments shall reduce pro rata the
--- ----
then remaining Scheduled Repayments; (ii) second, to prepay the principal of
------
outstanding Revolving Loans; and (iii) third, to cash collateralize Letter of
-----
Credit Outstandings in a Cash Collateral Account.
(b) With respect to each repayment of Loans required by Section
4.02(A), the Borrower may designate the Types of Loans which are to be prepaid
and the specific Borrowing(s) under the affected Facility pursuant to which
made, provided that (i) Eurodollar Loans made pursuant to a specific Facility
--------
may be designated for repayment pursuant to this Section 4.02(B) only on the
last day of an Interest Period applicable thereto unless all Eurodollar Loans
made pursuant to such Facility with Interest Periods ending on such date of
required repayment and all Base Rate Loans made pursuant to such Facility have
been paid in full; (ii) each repayment of any Loans made pursuant to a Borrowing
shall be applied pro rata among such Loans; and (iii) if any repayment of
--- ----
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount for such Eurodollar Loans, such Borrowing shall be
immediately converted into Base Rate Loans. In the absence of a designation by
the Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under Section 1.11.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable account of the Banks entitled thereto, not
later
-30-
than 1:00 P.M. (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the Payment Office. Any payments under this Agreement which are made later
than 1:00 P.M. (New York time) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to pay-
ments of principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder,
------------
under any Note or under any other Credit Document will be made without setoff,
counterclaim or other defense. Except as provided for in Section 4.04(b), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein (but excluding, except as provided in the second succeeding sentence,
any tax imposed on or measured by the net income of a Bank pursuant to the laws
of the jurisdiction in which the principal office or applicable lending office
of such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Bank is located) and all interest, penalties or similar
liabilities with respect thereto (collectively, "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every payment of all amounts
due hereunder, under any Note or under any other Credit Document, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein, in such Note or in such other Credit Document.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, then the Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income of such
Bank pursuant to the laws of the jurisdiction in which the principal office or
applicable lending office of such Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which the
principal office or applicable lending office of such Bank is located and for
any withholding of income or similar taxes imposed by the United States of
America as such Bank
-31-
shall determine are payable by, or withheld from, such Bank in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence. The Borrower will furnish to the Administrative Agent within 45 days
after the date the payment of any Taxes, or any withholding or deduction on
account thereof, is due pursuant to applicable law, certified copies of tax
receipts evidencing such payment by the Borrower. The Borrower will indemnify
and hold harmless the Administrative Agent, each Co-Agent and each Bank, and
reimburse the Administrative Agent, such Co-Agent or such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid or withheld
by the Administrative Agent, such Co-Agent or such Bank.
(b) Each Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees (i) to provide to the Borrower and the Administrative Agent on or prior
to the Initial Borrowing Date two original signed copies of Internal Revenue
Service Form 4224 or Form 1001 certifying to such Bank's entitlement to an
exemption from United States withholding tax with respect to payments to be
made under this Agreement and under any Note and (ii) that, to the extent
legally entitled to do so, (x) with respect to a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 12.04(b)(y)
(unless the respective Bank was already a Bank hereunder immediately prior to
such assignment or transfer), upon the date of such assignment or transfer to
such Bank, and (y) with respect to any Bank which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes (including, without limitation, any assignee or transferee),
from time to time, upon the reasonable request by the Borrower or the
Administrative Agent after the Initial Borrowing Date, such Bank will provide to
each of the Borrower and the Administrative Agent two original signed copies of
Internal Revenue Service Form 4224 or Form 1001 (or any successor forms)
certifying to such Bank's entitlement to an exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note. Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to the immediately succeeding sentence, the Borrower shall
be entitled, to the extent it is required to do so by law, to deduct or withhold
income or other similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder (without
-32-
any obligation to pay the respective Bank additional amounts with respect
thereto) for the account of any Bank which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes and which has not provided to the Borrower such forms
required to be provided to the Borrower by a Bank pursuant to the first
sentence of this Section 4.04(b); provided that if the Borrower shall so deduct
--------
or withhold any such taxes, it shall provide a statement to the Administrative
Agent and such Bank, setting forth the amount of such taxes so deducted or
withheld, the applicable rate and any other information or documentation which
such Bank may reasonably request for assisting such Bank in obtaining any
allowable credits or deductions for the taxes so deducted or withheld in the
jurisdiction or jurisdictions in which such Bank is subject to tax.
Notwithstanding anything to the contrary contained in the preceding sentence and
except as set forth in Section 12.04(b), the Borrower agrees to indemnify each
Bank in the manner set forth in Section 4.04(a) in respect of any amounts
deducted or withheld by it as described in the previous sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of income or similar Taxes.
SECTION 5. Conditions Precedent.
--------------------
5.01 Conditions Precedent to Initial Borrowing Date. The obligation
----------------------------------------------
of each Bank to make any Loans and the obligation of each Letter of Credit
Issuer to issue Letters of Credit, on the Initial Borrowing Date, is subject to
the satisfaction of the following conditions at such time:
(a) Effectiveness; Notes. On or prior to the Initial Borrowing Date
--------------------
(i) the Effective Date shall have occurred as provided in Section 12.10 and
(ii) there shall have been delivered to the Administrative Agent for the
account of each Bank the appropriate Note or Notes executed by the
Borrower, in the amount, maturity and as otherwise provided herein.
(b) Officer's Certificate. On the Initial Borrowing Date, the
---------------------
Administrative Agent shall have received from the Borrower a certificate
dated the Initial Borrowing Date signed on behalf of the Borrower by its
Chief Financial Officer or any other Authorized Officer stating that all
the conditions in Sections 5.01(e), (f) and
-33-
(t) and 5.02(a) have been satisfied on such date with respect to all Credit
Parties.
(c) Corporate Documents; Proceedings; Officers' Certificates. (i)
--------------------------------------------------------
On the Initial Borrowing Date, the Administrative Agent shall have received
from each Credit Party a certificate, dated the Initial Borrowing Date, of
such Credit Party signed by an Authorized Officer of such Credit Party,
substantially in the form of Exhibit C with appropriate insertions,
together with copies of the Certificate of Incorporation and By-Laws of
such Credit Party and the resolutions of such Credit Party referred to in
such certificate and the foregoing shall be satisfactory to the
Administrative Agent.
(ii) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement, the other Credit Documents and
the Transaction Documents shall be satisfactory in form and substance to
the Administrative Agent, and the Administrative Agent shall have received
all information and copies of all certificates, documents and papers, in-
cluding good standing certificates and any other records of corporate
proceedings and governmental approvals, if any, which the Administrative
Agent may have requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.
(iii) On the Initial Borrowing Date, the ownership and capital
structure (including, without limitation, the terms of any capital stock,
options, warrants or other securities issued by the Borrower or any of its
Subsidiaries) of the Borrower and its Subsidiaries shall be in form and
substance reasonably satisfactory to the Administrative Agent and the
Required Banks.
(d) Opinions of Counsel. On the Initial Borrowing Date, the
-------------------
Administrative Agent shall have received an opinion, addressed to each of
the Banks and dated the Initial Borrowing Date, from (i) Stroock & Stroock
& Lavan, counsel to the Credit Parties, substantially in the form of
Exhibit D-1 hereto, which opinion shall cover such other matters incident
to the transactions contemplated herein as the Administrative Agent may
reasonably request, (ii) local counsel to the Credit Parties satisfactory
to the Administrative Agent, which opinions shall cover such matters
incident to the tran-
-34-
sactions contemplated herein as the Administrative Agent may reasonably
request and shall be in form and substance reasonably satisfactory to the
Administrative Agent and (iii) White & Case, special counsel to the Banks,
substantially in the form of Exhibit D-2 hereto.
(e) Existing Indebtedness. (i) On or prior to the Initial Borrowing
---------------------
Date, the Administrative Agent and the Banks shall have received copies of
the Existing Debt Refinancing Documents certified as true and correct by
the Borrower in a certificate signed by an Authorized Officer of the
Borrower, and the Existing Debt Refinancing Documents shall be in full
force and effect and all terms and conditions thereof shall be in form and
substance reasonably satisfactory to the Administrative Agent and the
Required Banks. The Refinancing, including all of the terms and
conditions thereof, shall have been duly approved by the board of directors
and (if required by applicable law) the shareholders of the Borrower and
its Subsidiaries. The representations and warranties set forth in the
Existing Debt Refinancing Documents shall be true and correct in all
material respects as if made on and as of the Initial Borrowing Date,
unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date. Each of the conditions precedent to
consummate the Refinancing as set forth in the Existing Debt Refinancing
Documents shall have been satisfied, and not waived, to the reasonable
satisfaction of the Administrative Agent. The Administrative Agent shall
be reasonably satisfied that the aggregate amount of the funds available to
the Borrower shall be sufficient to consummate the Refinancing, to pay all
fees, commissions and expenses payable in connection with the Refinancing
and to consummate the other transactions contemplated by the Documents.
The Refinancing shall have been consummated in accordance with the
Existing Debt Refinancing Documents and all applicable laws. On the
Initial Borrowing Date and after giving effect to the Refinancing neither
the Borrower nor any of its Subsidiaries shall have any further obligations
with respect to the Existing Bank Facility, any issue of Existing Term
Debt or any agreements pursuant to which such Existing Term Debt was
purchased or issued or any agreement pursuant to which any Existing Letter
of Credit was originally issued.
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(ii) On the Initial Borrowing Date and concurrently with the
incurrence of the Loans on such date, each of the creditors in respect of
the Existing Debt to be repaid pursuant to the Refinancing shall have term-
inated and released any and all security interests in and liens on the
capital stock of, and assets owned by, the Borrower and its Subsidiaries
and shall have released the Borrower and its Subsidiaries from any guar-
antees entered in connection with such Existing Debt, and the
Administrative Agent shall have received all such releases as may have been
reasonably requested by the Administrative Agent, which releases shall be
in form and substance reasonably satisfactory to the Administrative Agent.
(f) Approvals. On the Initial Borrowing Date, all necessary
---------
governmental and third party approvals (including, without limitation, the
approval of the shareholders of the Borrower and its Subsidiaries to the
extent required) required in connection with the Transaction and the other
transactions contemplated by this Agreement and the other Documents and
otherwise referred to herein or therein shall have been obtained and remain
in effect, and all applicable waiting periods shall have expired without
any action being taken by any competent authority which restrains, prevents
or imposes, in the reasonable judgment of the Required Banks or the
Administrative Agent, materially adverse conditions upon the consummation
of the Transaction or the other transactions contemplated by the
respective Documents.
(g) Pledge Agreement. On the Initial Borrowing Date, the Borrower
----------------
and each Subsidiary Guarantor shall have duly authorized, executed and
delivered a Pledge Agreement substantially in the form of Exhibit E (as
modified, supplemented or amended from time to time, in accordance with the
terms hereof and thereof, the "Pledge Agreement"), and shall have delivered
to the Collateral Agent, as pledgee thereunder, all the Pledged Securities
referred to therein then owned by the Borrower and each Subsidiary
Guarantor, (x) endorsed in blank in the case of promissory notes and (y)
together with executed and undated stock powers, in the case of capital
stock, and the Pledge Agreement shall be in full force and effect.
(h) Subsidiary Guaranty. On the Initial Borrowing Date, each
-------------------
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Guaranty in the form of
-36-
Exhibit F (as modified, supplemented or amended from time to time in
accordance with the terms hereof and thereof, the "Subsidiary Guaranty"),
and the Subsidiary Guaranty shall be in full force and effect.
(i) Security Agreement. On the Initial Borrowing Date, the Borrower
------------------
and each Subsidiary Guarantor shall have duly authorized, executed and
delivered a Security Agreement substantially in the form of Exhibit G (as
modified, supplemented or amended from time to time in accordance with the
terms hereof and thereof, the "Security Agreement"), covering all of the
present and future Security Agreement Collateral, together with:
(A) executed copies of Financing Statements (Form UCC-1) or
appropriate local equivalent in appropriate form for filing under the
UCC or appropriate local equivalent of each jurisdiction as may be
necessary to perfect the security interests purported to be created
by the Security Agreement and capable of being perfected by the filing
of such Financing Statements or appropriate local equivalent;
(B) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, each of recent date listing all
effective financing statements that name any Credit Party as debtor
and that are filed in the jurisdictions referred to in clause (A),
together with copies of such financing statements (none of which shall
cover the Collateral except (x) those with respect to which
appropriate termination statements executed by the secured party
thereunder have been delivered to the Administrative Agent and (y) to
the extent evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by
the Security Agreement; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security
Agreement have been taken.
-37-
(j) Mortgages; Title Insurance; Surveys; etc. (i) On the Initial Borrowing
-----------------------------------------
Date, the Collateral Agent shall have received fully executed counterparts
of deeds of trust, mortgages and similar documents in each case in form and
substance satisfactory to the Collateral Agent (as amended, modified or
supplemented from time to time in accordance with the terms hereof and
thereof, each a "Mortgage" and collectively the "Mortgages") covering all
the Mortgaged Properties, and arrangements reasonably satisfactory to the
Collateral Agent shall be in place to provide that counterparts of such
Mortgages shall be recorded on the Initial Borrowing Date in all places to
the extent necessary or desirable, in the judgment of the Collateral Agent,
effectively to create a valid and enforceable first priority Lien, subject
only to Permitted Encumbrances, on each such Mortgaged Property in favor of
the Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Secured Creditors.
(ii) The Collateral Agent shall have received mortgagee title
insurance policies (or binding commitments to issue such title insurance
policies) issued by title insurers satisfactory to the Collateral Agent
(the "Mortgage Policies") in amounts satisfactory to the Collateral Agent
and assuring the Collateral Agent that the Mortgages are valid and
enforceable first priority mortgage Liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances except Permitted
Encumbrances. Such Mortgage Policies shall be in form and substance
satisfactory to the Collateral Agent and shall include an endorsement for
future advances (to the extent available in the respective jurisdiction
of each Mortgaged Property) under this Agreement, the Notes and the
Mortgages, and for any other matter that the Collateral Agent in its
discretion may reasonably request, shall not include an exception for
mechanics' liens, and shall provide for affirmative insurance and such
reinsurance (including direct access agreements) as the Collateral Agent in
its discretion may request.
(iii) The Collateral Agent shall have also received surveys in form and
substance satisfactory to the Collateral Agent of each Mortgaged Property
designated as "owned" on Schedule II hereto to the extent such surveys are
determined by the Collateral Agent to be reasonably available, dated a
recent date acceptable to the Collateral Agent, certified and in a manner
satisfactory to
-38-
the Collateral Agent, by a licensed professional surveyor satisfactory to
the Collateral Agent. The Collateral Agent shall also have received such
estoppel letters as may have been requested by the Collateral Agent, which
letters shall be in form and substance satisfactory to the Collateral
Agent.
(k) Solvency Certificate. On the Initial Borrowing Date, the
--------------------
Administrative Agent shall have received from the Chief Financial Officer
of the Borrower a certificate in the form of Exhibit H, expressing opin-
ions of value and other appropriate factual information regarding the
solvency of each of the Borrower and the Borrower and its Subsidiaries
taken as a whole.
(l) Insurance Policies. On the Initial Borrowing Date, the
------------------
Administrative Agent shall have received evidence (including, without
limitation, certificates with respect to each insurance policy listed on
Schedule III) of insurance complying with the requirements of Section 7.10
for the business and properties of the Borrower and its Subsidiaries, in
form and substance reasonably satisfactory to the Administrative Agent and
the Required Banks and, with respect to all casualty insurance, naming the
Collateral Agent on behalf of the Secured Creditors, as mortgagee/secured
party and loss payee and with respect to all liability policies, naming the
Collateral Agent, the Administrative Agent, the Co-Agents and each Bank as
an additional insured, and in all cases stating that such insurance shall
not be cancelled or materially revised without at least 30 days' prior
written notice by the insurer to the Collateral Agent.
(m) Plans; etc. On or prior to the Initial Borrowing Date, there
-----------
shall have been made available to the Administrative Agent and its counsel
copies (which copies may be made available to the Banks), certified as true
and correct by the Borrower in a certificate signed by an Authorized
Officer of the Borrower, of (a) any Plans, and for each such Plan (x) that
is a "single-employer plan" (as defined in Section 4001(a)(15) of ERISA)
the most recently completed actuarial valuation prepared therefor by such
Plan's regular enrolled actuary and the Schedule B, "Actuarial Information"
to the IRS Form 5500 (Annual Report) most recently filed with the Internal
Revenue Service and (y) that is a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA), each of the documents referred to in clause
-39-
(x) either in the possession of any Credit Party or available on request
from the sponsor or trustees of such Plan, (b) any collective bargaining
agreements or any other similar agreement or arrangements covering the
employees of the Borrower or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements"), (c) any material agreements (or the
forms thereof) with members of, or with respect to, the management of the
Borrower or any of its Subsidiaries (collectively, the "Management
Agreements"), (d) any material employment agreements entered into by the
Borrower or any of its Subsidiaries with its employees (collectively, the
"Employment Agreements"), (e) all agreements entered into by the Borrower
or any of its Subsidiaries governing the terms and relative rights of its
capital stock and any agreements entered into by shareholders relating to
any such entity with respect to their capital stock, (collectively, the
"Shareholders' Agreements"), (f) all agreements evidencing or relating to
the Permitted Existing Indebtedness (collectively, the "Permitted Existing
Indebtedness Agreements") and (g) tax sharing, tax allocation and other
similar agreements, if any, entered into by the Borrowing and/or any of its
Subsidiaries (collectively, the "Tax Sharing Agreements"), all of which
Plans, Collective Bargaining Agreements, Management Agreements, Employment
Agreements, Shareholders' Agreements, Permitted Existing Indebtedness
Agreements and Tax Sharing Agreements shall be in form and substance
reasonably satisfactory to the Administrative Agent.
(n) Environmental Surveys. On or before the Initial Borrowing Date,
---------------------
the Administrative Agent shall have received environmental surveys and
audits requested by it from environmental consultants, which surveys and
audits shall be reasonably satisfactory to the Administrative Agent, in
form and substance, and the results of which shall be reasonably
satisfactory to the Administrative Agent and the Required Banks.
(o) Payment of Fees. On or prior to the Initial Borrowing Date, all
---------------
costs, fees and expenses, and all other compensation contemplated by this
Agreement, due to the Administrative Agent, any Co-Agent or the Banks
(including, without limitation, legal fees and expenses) shall have been
paid by the Borrower to the extent due.
(p) Adverse Change. From November 17, 1993 to the Initial Borrowing
--------------
Date, except in connection with the
-40-
Transaction and the other matters disclosed in the Press Release, nothing
shall have occurred (and neither the Borrower, the Required Banks, the
Administrative Agent nor any Co-Agent shall have become aware of any facts
or conditions not previously known) which the Borrower, the Required Banks
or the Administrative Agent shall determine (i) has, or is reasonably
likely to have, a material adverse effect on the rights or remedies of the
Banks or the Administrative Agent, or on the ability of any Credit Party to
perform its obligations to the Banks or the Administrative Agent under this
Agreement or any other Credit Document or (ii) has, or could reasonably be
expected to have, a Material Adverse Effect.
(q) Litigation. No litigation by any entity (private or
----------
governmental) shall be pending or threatened on the Initial Borrowing Date
(a) with respect to this Agreement or any other Credit Document, or (b)
which, except as disclosed to the Administrative Agent and the Banks in
writing prior to the Effective Date, the Administrative Agent or the
Required Banks shall determine could reasonably be expected to have a
Material Adverse Effect.
(r) Accounts Receivable and Inventory Report. The results of any
----------------------------------------
review by the Administrative Agent of the accounts receivable and inventory
of the Borrower and its Subsidiaries shall be reasonably satisfactory to
the Administrative Agent.
(s) Borrowing Base Certificate. On the Initial Borrowing Date, the
--------------------------
Borrower shall have delivered to the Administrative Agent the initial
Borrowing Base Certificate.
(t) Issuance of Senior Notes. On or prior to the Initial Borrowing
------------------------
Date, (i) the Borrower shall have received gross cash proceeds in an
aggregate principal amount of $150,000,000 from the issuance by the
Borrower of a like principal amount of the Senior Notes (it being
understood that such cash proceeds shall include all amounts directly
applied to pay underwriting and placement commissions and discounts and
related fees) and (ii) the Banks shall have received true and correct
copies of the Senior Note Documents certified as such in a certificate
signed by an Authorized Officer of the Borrower, each of which shall be in
full force and effect, and all terms and conditions of the Senior Notes and
the Senior Note Documents (including, without
-41-
limitation, interest rates, maturities, amortization schedules, covenants,
redemption provisions, defaults and remedies with respect thereto) shall be
in form and substance satisfactory to the Administrative Agent and the
Required Banks, it being understood and agreed that the Senior Notes shall
be unguaranteed and unsecured obligations of the Borrower.
5.02 Conditions Precedent to All Credit Events. The obligation of
-----------------------------------------
each Bank to make any Loans and the obligation of each Letter of Credit Issuer
to issue Letters of Credit (including, without limitation, Loans made and
Letters of Credit issued on the Initial Borrowing Date) is subject, at the time
of each such Credit Event, to the satisfaction of the following conditions at
such time:
(a) At the time of each Credit Event and also after giving effect
thereto (i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit
Documents in effect at such time shall be true and correct in all material
respects with the same effect as though such representations and warranties
had been made on and as of the date of such Credit Event (except to the
extent any representation or warranty is expressly made as of a specific
date, in which case such representation and warranty shall be true and
correct in all material respects as of such date).
(b) The Administrative Agent shall have received a Notice of
Borrowing with respect to such Borrowing meeting the requirements of
Section 1.03(a) and/or the Administrative Agent and the respective Letter
of Credit Issuer shall have received a Letter of Credit Request for such
issuance of a Letter of Credit meeting the requirements of Section 2.03, as
the case may be.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Banks that all of the
applicable conditions specified in Section 5.01 (with respect to the Initial
Borrowing Date only) and in this Section 5.02 are then satisfied. All of the
certificates, legal opinions and other documents and papers referred to in
Section 5.01 and this Section 5.02, unless otherwise specified, shall be
delivered to the Administrative Agent at its Notice Office for the account of
each of the Banks and, except for the Notes, in sufficient counterparts or
copies for each of the Banks and
-42-
shall be reasonably satisfactory in form and substance to the Administrative
Agent.
SECTION 6. Representations, Warranties and Agreements. In order to
-------------------------------------------
induce the Banks to enter into this Agreement and to make the Loans and
participate in Letters of Credit and each Letter of Credit Issuer to issue
Letters of Credit as provided for herein, the Borrower makes the following
representations and warranties to, and agreements with, the Banks and each
Letter of Credit Issuer, in each case after giving effect to the Transaction,
all of which shall survive the execution and delivery of this Agreement and the
making of the Loans and the issuance of Letters of Credit (with the occurrence
of each Credit Event being deemed to constitute a representation and warranty
that the matters specified in this Section 6 are true and correct in all mate-
rial respects on and as of the date of each Credit Event, except to the extent
that any representation or warranty is expressly made as of a specific date, in
which case such representation or warranty shall be true and correct in all
material respects as of such specific date):
6.01 Corporate Status. (i) Each of the Borrower and its
----------------
Subsidiaries is a duly incorporated, validly existing corporation and, in the
case of those entities incorporated in the United States, in good standing under
the laws of the jurisdiction of its organization and has the corporate power and
authority to own all property and assets owned by it, to lease all property and
assets held under lease by it and to transact the business in which it is
engaged and presently proposes to engage and (ii) each of the Credit Parties has
duly qualified and is authorized to do business and, with respect to
jurisdictions within the United States, is in good standing in all jurisdictions
where it is required to be so qualified, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms.
-43-
6.03 No Violation. Neither the execution, delivery and performance
------------
by any Credit Party of the Documents to which it is a party nor compliance with
the terms and provisions thereof, nor the consummation of the transactions
contemplated therein (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Security
Documents) result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of any Credit Party
pursuant to the terms of any indenture, mortgage, deed of trust, agreement or
other instrument to which any Credit Party is a party or by which it or any of
its property or assets are bound or to which it may be subject, including
without limitation any Permitted Existing Indebtedness Agreements, or (iii)
will violate any provision of the Certificate of Incorporation or By-Laws of any
Credit Party.
6.04 Litigation. There are no actions, suits or proceedings pending
----------
or, to the best knowledge of the Borrower, threatened with respect to the
Borrower or any of its Subsidiaries (i) that could reasonably be expected to
have a Material Adverse Effect or (ii) that could have a material adverse effect
on the rights or remedies of the Administrative Agent or the Banks or on the
ability of any Credit Party to perform its obligations to them hereunder and
under the other Credit Documents to which it is, or will be, a party.
6.05 Use of Proceeds. (a) The proceeds of all Term Loans shall be
---------------
utilized (i) to finance, in part, (x) the Refinancing and (y) the Common Stock
Repurchase, and (ii) to pay fees and expenses relating to the Transaction.
(b) The proceeds of Revolving Loans shall be utilized for general
corporate purposes of the Borrower and its Subsidiaries, provided that (i) up
--------
to, but no more than, $75,000,000 of the proceeds of the Revolving Loans may be
utilized on the Initial Borrowing Date and (ii) the proceeds of Revolving Loans
may be utilized after the Initial Borrowing Date and on or prior to the second
anniversary of the Initial Borrowing Date for the purpose described in clause
(a)(i)(y) above, provided that (x) the Total Term Loan Commitment has been
--------
terminated in its entirety pursuant to Section 3.03(c) and (y) up to, but no
more than, an amount equal to (1) $150,000,000 less (2) the sum of (A) the
-44-
aggregate principal amount of Term Loans incurred and utilized for Common Stock
Repurchases theretofore made up to and including the date upon which the Total
Term Loan Commitment terminated in its entirety pursuant to Section 3.03(c) and
(B) the amount of the reduction, if any, of the Total Term Loan Commitment
pursuant to Section 3.03(c)(ii), may be utilized for such purpose.
(c) No part of the proceeds of any Revolving Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock, except proceeds of Revolving Loans used
in connection with the Common Stock Repurchase to the extent permitted pursuant
to Section 6.05(b). No more than 25% of the assets of the Borrower and its
Subsidiaries subject on the Initial Borrowing Date to the restrictions set forth
in Section 8.01 and/or 8.02 constitute Margin Stock. Neither the making of any
Loan hereunder, nor the use of the proceeds thereof, will violate the provisions
of Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.
6.06 Governmental Approvals. No order, consent, approval, license,
----------------------
authorization, or validation of, or filing, recording or registration with
(except (i) as shall have been obtained or made prior to the Initial Borrowing
Date or, with respect to any Common Stock Repurchase, prior to the date of the
consummation of such Common Stock Repurchase and (ii) UCC and other "security
interest perfection" filings and/or mortgage recordings contemplated by this
Agreement in respect of the Collateral), or exemption by, any foreign or
domestic governmental body or authority, or any subdivision thereof, is required
to authorize or is required in connection with (i) the execution, delivery and
performance of any Document or (ii) the legality, validity, binding effect or
enforceability of any Document.
6.07 Investment Company Act. No Credit Party is an "investment
----------------------
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
6.08 Public Utility Holding Company Act. No Credit Party is a
----------------------------------
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
-45-
6.09 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) heretofore or contemporaneously furnished in writing by or on behalf
of the Borrower or any of its Subsidiaries to the Administrative Agent or any
Bank (including, without limitation, all information contained in the
Documents) for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished in writing by or on behalf of the Bor-
rower or any of its Subsidiaries to any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided. The projections
(including the Projections) and pro forma financial information contained in
--- -----
such materials are based on good faith estimates and assumptions believed by the
Borrower to be reasonable at the time made, it being recognized by the Banks
that such projections (including the Projections) as to future events are not to
be viewed as facts and accordingly are not covered by the first sentence of this
Section 6.09, and that actual results during the period or periods covered by
any such projections may differ from the projected results in any material or
other respect. There is no fact known to the Borrower or any of its Subsidi-
aries which has, or could reasonably be expected to have, a Material Adverse
Effect which has not been disclosed herein or in such other documents,
certificates and statements furnished to the Banks for use in connection with
the transactions contemplated hereby.
6.10 Representations and Warranties in Other Agreements. All
--------------------------------------------------
representations and warranties made by any Credit Party and set forth in the
Transaction Documents shall be true and correct on the Initial Borrowing Date in
all material respects as though such representations and warranties were being
made on and as of such date, unless stated to relate to a specific earlier date,
in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date.
6.11 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Initial Borrowing Date on a pro forma basis after giving effect to the
--- -----
Transaction and all Indebtedness incurred, and to be incurred, and Liens
created and to be created, by each Credit Party in connection therewith, with
respect to each of the Borrower and the Borrower and its Subsidiaries taken as a
whole, (x) the sum of its or their
-46-
assets, at a fair valuation, will exceed its or their debts, (y) it or they will
not have incurred nor intended to, nor believes that it or they will, incur
debts beyond its or their ability to pay such debts as such debts mature and (z)
it and they will have sufficient capital with which to conduct its or their
businesses. For purposes of this Section 6.11(a), "debt" means any liability on
a claim, and "claim" means (i) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii)
right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.
(b) The consolidated balance sheet of the Borrower and its
Subsidiaries at December 31, 1993 and the related consolidated statements of
operations and cash flows of the Borrower and its Subsidiaries for the fiscal
year ended as of said date, which have been audited by Ernst & Young, indepen-
dent certified public accountants, and the unaudited pro forma (after giving
--- -----
effect to the Transaction and the related financing thereof) condensed
consolidated balance sheet of the Borrower and its Subsidiaries as at December
31, 1993, copies of which have heretofore been furnished to each Bank, present
fairly in all material respects the consolidated financial position of the
Borrower and its Subsidiaries at the date of said statements and the
consolidated results of their operations and cash flows for the period covered
thereby (or, in the case of the unaudited pro forma condensed consolidated
--- -----
balance sheet, present a good faith estimate of the consolidated pro forma
--- -----
financial condition of the Borrower and its Subsidiaries at the date thereof).
All such financial statements (other than the aforesaid pro forma balance
--- -----
sheet) have been prepared in accordance with GAAP in all material respects
except to the extent provided in the notes to said financial statements.
(c) Except for the Transaction and the other matters disclosed in the
Press Release, nothing has occurred since December 31, 1993, that has had or
could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the pro forma financial statements
--- -----
described in Section 6.11(b), there are as of the Initial Borrowing Date (and
after giving effect to any Credit Events made on such date), no liabilities or
obligations (excluding current obligations incurred in the ordin-
-47-
ary course of business) with respect to the Borrower or any of its Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent or otherwise
and whether or not due), and the Borrower does not know of any basis for the
assertion against the Borrower or any of its Subsidiaries of any such liability
or obligation, which has or could be reasonably expected to have a Material
Adverse Effect.
(e) On and as of the Effective Date, the financial projections (the
"Projections") set forth in Schedule V hereto and previously delivered to the
Administrative Agent and the Banks have been prepared on a basis consistent with
the financial statements referred to in Section 6.11(b) (other than as set forth
or presented in such Projections), and there are no statements or conclusions in
any of the Projections which are based upon or include information known to the
Borrower to be misleading in any material respect or which fail to take into
account material information regarding the matters reported therein. On the
Initial Borrowing Date, the Borrower believes that the Projections are reason-
able and attainable subject, however, to the qualifications concerning the
Projections noted in the penultimate sentence of Section 6.09.
6.12 Security Interests. (a) The Pledge Agreement creates, as
------------------
security for the obligations purported to be secured thereby, a valid and
enforceable perfected security interest in and Lien on all of the Pledged
Securities described therein, superior to and prior to the rights of all third
Persons and subject to no other Liens, in favor of the Collateral Agent for the
benefit of the Secured Creditors. No filings, registrations or recordings are
required in order to perfect, or maintain the perfection or priority of, the
security interests created under the Pledge Agreement.
(b) The provisions of the Security Agreement are effective to create
in favor of the Collateral Agent for the benefit of the Secured Creditors a
legal, valid and enforceable security interest in all right, title and interest
of the Credit Parties party thereto in the Security Agreement Collateral
described therein, and the Security Agreement creates a fully perfected first
lien on, and security interest in, all right, title and interest of the Credit
Parties, in all of the Security Agreement Collateral described therein, which
Collateral is subject to no other Liens other than Liens permitted under Section
8.02. The recordation of the Assignment of Security Interest in United States
Trademarks and Patents in the United States Patent and Trademark Office together
with filings on Form UCC-1 made
-48-
pursuant to the Security Agreement will be effective, under federal law, to
perfect the security interest granted to the Collateral Agent in the United
States trademarks and patents covered by the Security Agreement and the filing
of the Assignment of Security Interest in United States Copyrights in the United
States Copyright Office together with filings on Form UCC-1 made pursuant to the
Security Agreement will be effective under federal law to perfect the security
interest granted to the Collateral Agent in the United States copyrights
covered by the Security Agreement. Each Credit Party has good and marketable
title to all Security Agreement Collateral described therein, free and clear of
all Liens except those described above in this clause (b).
(c) The Mortgages create, as security for the obligations purported
to be secured thereby, a valid and enforceable perfected security interest in
and mortgage lien on all of the Mortgaged Properties in favor of the Collateral
Agent for the benefit of the Secured Creditors, superior to and prior to the
rights of all third Persons (except that the Mortgaged Properties may be subject
to the Permitted Encumbrances related thereto) and subject to no other Liens
(other than Liens permitted under Section 8.02). Each Credit Party has good and
legal title or a valid leasehold interest, as the case may be, to the Mortgaged
Properties owned or leased by such Credit Party, free and clear of all Liens
except those described in the first sentence of this subsection (c).
6.13 Tax Returns and Payments. Each of the Borrower and its
------------------------
Subsidiaries has filed all federal income tax returns and all other tax returns,
domestic and foreign, required to be filed by it and has paid all taxes and
assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith and for which adequate
reserves have been established in accordance with GAAP. The Borrower and each
of its Subsidiaries has paid, or has provided adequate reserves (in the good
faith judgment of the management of such Person) for the payment of, all
federal, state and foreign income taxes applicable for all prior fiscal years
and for the current fiscal year to the date hereof.
6.14 Compliance with ERISA. (a) Each Plan (other than any
---------------------
multiemployer plan as defined in section 4001(a)(3) of ERISA (a "Multiemployer
Plan")) currently maintained or contributed to by (or to which there is an
obligation to contribute of) any Credit Party or any of its Subsidiaries or any
ERISA Affiliate is in material compliance with ERISA and the Code; no Reportable
Event has occurred with respect to
-49-
any such Plan; as of December 31, 1993, no such Plan has an Unfunded Current
Liability in excess of $6,000,000 individually and with respect to all such
Plans in the aggregate, in excess of $15,000,000; no such Plan has an Unfunded
Current Liability which either individually or when added to the aggregate
amount of Unfunded Current Liabilities with respect to all other Plans, has or
could be reasonably expected to have a Material Adverse Effect; no such Plan has
an accumulated or waived funding deficiency or permitted decreases in its
funding standard account or has applied for an extension of any amortization
period within the meaning of Section 412 of the Code; all contributions required
to be made with respect to any Plan currently maintained or contributed to by
(or to which there is an obligation to contribute of) any Credit Party or any of
its Subsidiaries or any ERISA Affiliate and any Foreign Pension Plan have been
timely made; neither the Borrower nor any of its Subsidiaries nor any of their
ERISA Affiliates has incurred any material liability to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 4062, 4063, 4064 or 4069 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code, or expects to incur any liability
(including any indirect, contingent, or secondary liability) under any of the
foregoing Sections with respect to any Plan; no proceedings have been instituted
to terminate or appoint a trustee to administer any such Plan; no condition
exists which presents a material risk to the Borrower or any of its Subsidiaries
or any of their ERISA Affiliates of incurring such a material liability to or on
account of any Plan pursuant to the foregoing provisions of ERISA and the Code;
as of the Initial Borrowing Date, no Plan is a Multiemployer Plan; neither the
Borrower nor any of its Subsidiaries nor any ERISA Affiliate has incurred any
liability under Section 515 of ERISA with respect to any Multiemployer Plan;
neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has
incurred or expects to incur any material liability under Sections 4201, 4204 or
4212 of ERISA; to the best knowledge of the Borrower, any of its Subsidiaries or
any ERISA Affiliate, no Multiemployer Plan is insolvent or in reorganization nor
is any Multiemployer Plan reasonably expected to be in reorganization or
terminated; no lien imposed under the Code or ERISA on the assets of the
Borrower or any of its Subsidiaries or any ERISA Affiliate exists or is likely
to arise on account of any Plan; and the Borrower and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) the obli-
-50-
gations with respect to which could reasonably be expected to have a material
adverse effect on the ability of the Borrower to perform its obligations under
this Agreement.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where re-
quired, in good standing with applicable regulatory authorities. Neither the
Borrower nor any of its Subsidiaries has incurred any material obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan, determined as of the end of the Borrower's most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
6.15 Subsidiaries. Schedule VI hereto lists each Subsidiary of the
------------
Borrower, and the direct and indirect ownership interest of the Borrower
therein, in each case as of the Initial Borrowing Date. On the Initial
Borrowing Date, the corporations listed on Schedule VI are the only Subsidi-
aries of the Borrower.
6.16 Patents, etc. The Borrower and each of its Subsidiaries owns or
-------------
holds a valid license to use all material patents, trademarks, servicemarks,
trade names, copyrights, licenses, technology, know-how and formulas and other
rights that are necessary for the operation of their respective businesses as
presently conducted.
6.17 Compliance with Statutes; Environmental Matters, etc. (a) Each
-----------------------------------------------------
Credit Party is in compliance, in all material respects, with all applicable
material statutes, regulations and orders of, and all applicable material res-
trictions imposed by, all governmental bodies, domestic or foreign, in respect
of the conduct of its business and the ownership of its property (including
applicable Environmental Laws).
(b) No Credit Party is liable for any material penalties, fines or
forfeitures for failure to comply with any of the foregoing referenced in clause
(a) above. All material licenses, permits, registrations or approvals required
for the business of any Credit Party, as conducted as of the Initial Borrowing
Date, under any Environmental Law have been secured or have been timely applied
for and each
-51-
Credit Party is in substantial compliance therewith. No Credit Party is in any
material respect in noncompliance with, breach of or default under any
applicable writ, order, judgment, injunction, or decree to which such Credit
Party is a party or which would affect the ability of such Credit Party to
operate any Real Property and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both, would constitute a
material noncompliance, breach of or default thereunder. As of the Initial
Borrowing Date there are no material Environmental Claims pending or, to the
best knowledge after due inquiry of the Borrower, threatened, against the
Borrower or any of its Subsidiaries or any Real Property owned or operated at
any time by the Borrower or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences on any such Real Property or, to the
best knowledge after due inquiry of the Borrower, on any property adjacent to
any such Real Property that could reasonably be expected (i) to form the basis
of a material Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property, or (ii) to cause such Real Property to
be subject to any restrictions on the ownership, occupancy, use or trans-
ferability of such Real Property under any Environmental Law.
(c) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by the Borrower or any of its Subsidiaries except for quantities
used or stored at any such Real Properties in material compliance with all
applicable Environmental Laws and required in connection with the normal
operation, use and maintenance of such Real Property ("Permitted Materials") or
(ii) Released on any such Real Property where such occurrence or event could
reasonably be expected to give rise to a material Environmental Claim or to
violate any Environmental Law. There are not now and never have been any
underground storage tanks located on any Real Property owned or operated by the
Borrower or any of its Subsidiaries which are not in compliance with all
Environmental Laws.
6.18 Properties. Each Credit Party has good and legal title to all
----------
properties owned by it and valid and subsisting leasehold interests in all
properties leased by it, in each case, including all property reflected in the
financial statements referred to in Section 6.11(b) (except as sold or
otherwise disposed of since the date of the December 31, 1993 financial
statements in the ordinary course of business or as otherwise permitted by this
Agreement) free and clear of all Liens, other than Liens permitted by Section
-52-
8.02. Schedule II contains a true and complete list of each Real Property owned
and each Real Property leased by the Borrower and its Subsidiaries on the
Effective Date and the type of interest therein held by such Person.
6.19 Labor Relations; Collective Bargaining Agreements. (a) Set
--------------------------------------------------
forth on Schedule VII hereto is a list and description (including dates of
termination) of all Collective Bargaining Agreements between or applicable to
any Credit Party and any union, labor organization or other bargaining agent in
respect of the employees of any Credit Party on the Effective Date.
(b) No Credit Party is engaged in any unfair labor practice that is
reasonably likely to have a Material Adverse Effect. There is (i) no unfair
labor practice complaint pending against any Credit Party or, to the best
knowledge of any Credit Party, threatened against it, before the National Labor
Relations Board, and no grievance proceeding or arbitration proceeding arising
out of or under any Collective Bargaining Agreement is now pending against any
Credit Party or, to the best knowledge of any Credit Party, threatened against
it, (ii) no strike, labor dispute, slowdown or stoppage is pending against any
Credit Party or, to the best knowledge of any Credit Party, threatened against
it and (iii) to the best knowledge of each Credit Party, no union representation
question exists with respect to the employees of such Credit Party, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not reasonably be likely to have
a Material Adverse Effect.
6.20 Indebtedness. Schedule VIII sets forth a true and complete list
------------
of (x) all Indebtedness (other than the Loans, the Letters of Credit and the
Senior Notes) of the Borrower and each of its Subsidiaries outstanding as of the
Initial Borrowing Date and which is to remain outstanding after the Initial
Borrowing Date and after giving effect to the Transaction and (y) all agreements
existing on the Initial Borrowing Date and which are to remain outstanding after
the Initial Borrowing Date and after giving effect to the Transaction pursuant
to which the Borrower or any of its Subsidiaries is entitled to incur
Indebtedness (other than the Loans, the Letters of Credit and the Senior Notes)
(whether or not any condition to such incurrence could be met) (collectively, as
in effect and outstanding on the Initial Borrowing Date and without giving
effect to any extension, renewal or refinancing thereof, the "Permitted Existing
Indebtedness"), in each case showing the aggregate
-53-
principal amount thereof as of the Effective Date and the name of the respective
borrower and any other entity which directly or indirectly guaranteed such debt.
6.21 Restrictions on Subsidiaries. There are no restrictions on the
----------------------------
Borrower or any of its Subsidiaries which prohibit or otherwise restrict (i) the
transfer of cash or other assets (x) between the Borrower and any of its
Subsidiaries or (y) between any Subsidiaries of the Borrower or (ii) the
ability of any Credit Party or any of its Subsidiaries to grant security
interests to the Banks in their respective assets, other than prohibitions or
restrictions existing under or by reason of (a) this Agreement or the other
Credit Documents, (b) applicable law, (c) customary non-assignment provisions
entered into in the ordinary course of business and consistent with past
practices, (d) purchase money obligations for property acquired in the ordinary
course of business, so long as such obligations are permitted under this
Agreement, (e) Liens permitted under Section 8.02 and any documents or
instruments governing the terms of any Indebtedness or other obligations secured
by any such Liens, provided that such prohibitions or restrictions apply only to
the assets subject to such Liens or (f) the documents or instruments governing
the terms of any Permitted Foreign Subsidiary WC Debt permitted to be incurred
pursuant to Section 8.03(h) to the extent restricting dividends or other cash
distributions by a Foreign Subsidiary to the Borrower or any other Subsidiary of
the Borrower.
6.22 Transaction. At the time of consummation of each element of the
-----------
Transaction, such element shall have been consummated in accordance with the
terms of the respective Documents and all applicable laws. At the time of
consummation of each element of the Transaction, all consents and approvals of,
and filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities and other third parties
required in order to make or consummate such element of the Transaction shall
have been obtained, given, filed or taken and are or will be in full force and
effect (or effective judicial relief with respect thereto shall have been ob-
tained).
6.23 Insurance. Set forth on Schedule III hereto is a true and
---------
correct summary of all property, casualty and liability insurance carried by the
Borrower and its Subsidiaries on and as of the Initial Borrowing Date.
-54-
SECTION 7. Affirmative Covenants. The Borrower hereto covenants and
---------------------
agrees that on the Effective Date and thereafter for so long as this Agreement
is in effect and until the Commitments have terminated, no Letters of Credit are
outstanding and the Loans, Unpaid Drawings together with interest, Fees and all
other Obligations incurred hereunder are paid in full:
7.01 Information Covenants. The Borrower will furnish to each Bank:
---------------------
(a) Annual Financial Statements. As soon as available and in any
---------------------------
event within 105 days after the close of each fiscal year of the Borrower,
the consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year and the related consolidated statements of
income and cash flows for such fiscal year, together with a summary of
sales and profits by operating units prepared consistently with past
practices and procedures and in form reasonably satisfactory to the
Administrative Agent for such fiscal year, setting forth for such fiscal
year, in comparative form, (x) for each of such consolidated financial
statements and such summary the corresponding figures for the preceding
fiscal year, and (y) prior to the Target Date, for such consolidated
financial statements the corresponding figures for such fiscal year as set
forth in the respective budget delivered pursuant to Section 7.01(c); all
of which shall be (I) in the case of such consolidated financial statements
and such summary, certified by the Chief Financial Officer of the Borrower
to the effect that such statements and summary fairly present in all
material respects the financial condition of the Borrower and its
Subsidiaries, or such operating units, as the case may be, as of the dates
indicated and the results of their operations and changes in their cash
flows for the periods indicated, and (II) in the case of such consolidated
financial statements, audited by Ernst & Young (or other independent
certified public accountants of recognized national standing acceptable to
the Required Banks) whose opinion shall not be qualified as to the scope of
audit or as to the status of the Borrower together with its Subsidiaries as
a going concern, together with a certificate of the accounting firm
referred to above stating that in the course of its regular audit of the
business of the Borrower and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
has
-55-
obtained no knowledge of any Default or Event of Default (insofar as they
relate to accounting or financial matters) which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the
nature thereof.
(b) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 60 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Borrower, the consolidated
balance sheet of the Borrower and its Subsidiaries, as at the end of such
quarterly period and the related consolidated statements of income and cash
flows for such quarterly period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly period, together with a
summary of sales and profits by operating units prepared consistently with
past practices and procedures and in form reasonably satisfactory to the
Administrative Agent for such quarterly period and for the elapsed portion
of the fiscal year ended with the last day of such quarterly period, and
setting forth, in comparative form, (x) for each of such consolidated
financial statements and such summary, the corresponding figures for the
related periods in the prior fiscal year and (y) prior to the Target Date,
for such consolidated financial statements, the corresponding figures for
such quarterly accounting period as set forth in the respective budget
delivered pursuant to Section 7.01(c) as updated to such quarterly period;
all of which shall be in reasonable detail and certified by the Chief
Financial Officer or other Senior Financial Officer of the Borrower to the
effect that they fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the dates indicated
and the results of their operations and changes in their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-
end audit adjustments.
(c) Budgets; etc. Prior to the Target Date, (i) as soon as available
-------------
but in no event later than 50 days after the commencement of each fiscal
year of the Borrower, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income and sources
and uses of cash and balance sheets) prepared by the Borrower, for each of
the twelve months of such fiscal year, in reasonable detail and setting
forth, with appropriate discussion, the princi-
-56-
pal assumptions upon which such budgets are based and a statement by the
Chief Financial Officer or other Senior Financial Officer of the Borrower
to the effect that, to the best of such officer's knowledge, the budget is
a reasonable estimate for the period covered thereby and (ii) as soon as
available but in no event later than 50 days after the commencement of each
of the last three quarterly accounting periods in each fiscal year of the
Borrower, an update of the respective budget delivered for such fiscal year
pursuant to clause (c)(i) in a form relating to such annual budget and
reasonably satisfactory to the Administrative Agent, prepared by the Bor-
rower in reasonable detail and certified by the Chief Financial Officer or
other Senior Financial Officer of the Borrower.
(d) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Section 7.01(a) and (b), a certificate
of the Borrower signed by its Chief Financial Officer or, in the case of
any certificate delivered with financial statements delivered pursuant to
Section 7.01(b), any other Senior Financial Officer, to the effect that no
Default or Event of Default exists or, if any Default or Event of Default
does exist, specifying the nature and extent thereof, which certificate
shall set forth the calculations required to establish whether the
Borrower and its Subsidiaries were in compliance with the provisions of
Sections 8.01-8.06, inclusive and Sections 8.09-8.11, inclusive, as at the
end of such fiscal quarter or year, as the case may be. In addition, at
the time of the delivery of the financial statements provided for in
Section 7.01(a), the Borrower shall deliver a certificate of the Chief
Financial Officer of the Borrower setting forth the amount of, and
calculations required to establish the amount of, Excess Cash Flow, for the
respective Excess Cash Flow Period.
(e) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within five Business Days after an Authorized Officer of the Borrower
obtains knowledge thereof, notice of (x) the occurrence of any event which
constitutes a Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what action the
Borrower or its respective Subsidiary proposes to take with respect
thereto and (y) the commencement of, or threat of, or any significant
development in any litigation or governmental proceeding pending against
the Borrower or
-57-
any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or a material adverse effect on the ability of any
Credit Party to perform its obligations hereunder or under any other Credit
Document.
(f) Auditors' Reports. Promptly upon receipt thereof, a copy of any
-----------------
letter submitted to any Credit Party or any Material Subsidiary of the
Borrower by its independent accountants with respect to any material
weakness as to internal control noted by such independent accountants in
connection with any audit made by them of the books of such Credit Party or
such Material Subsidiary.
(g) Environmental Matters. Promptly upon, and in any event within
---------------------
five Business Days after, an Authorized Officer or any environmental
compliance officer of the Borrower obtains knowledge thereof, notice of any
of the following matters:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned or
operated at any time by the Borrower or any of its Subsidiaries that
is or could reasonably be likely to result in a liability in excess of
$250,000;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated at any time by the Borrower or any of its
Subsidiaries that (a) results in noncompliance by the Borrower or such
Subsidiary with any applicable Environmental Law, or (b) could
reasonably be anticipated to form the basis of an Environmental Claim
against the Borrower or such Subsidiary or any such Real Property that
is or could reasonably be likely to result in a liability in excess of
$250,000;
(iii) any condition or occurrence on any Real Property owned or
operated at any time by the Borrower or any of its Subsidiaries that
could reasonably be anticipated to cause such Real Property to be
subject to any restrictions on the ownership, occupancy, use or
transferability by the Borrower or any of
-58-
its Subsidiaries of such Real Property under any Environmental Law;
and
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated at any time by the Borrower or any of its
Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and the response thereto of the Borrower or such Subsidiary. In addition,
the Borrower will provide the Banks with copies of all material written
communications between the Borrower or any of its Subsidiaries and any
government or governmental agency relating to Environmental Laws, all com-
munications between the Borrower or any of its Subsidiaries and any Person
relating to Environmental Claims, and such detailed reports of any
Environmental Claim, in each case as may reasonably be requested in writing
from time to time by the Administrative Agent or the Required Banks.
(h) Other Information. (i) Promptly upon transmission thereof,
-----------------
copies of any filings and registrations with, and reports to, the SEC by
any Credit Party or any of their respective Subsidiaries, copies of all
press releases, copies of all financial statements, proxy statements,
notices and reports that any Credit Party or any of its Subsidiaries shall
send to the holders (or any trustee, agent or other representative
therefor) of the Senior Notes or any other Indebtedness of any Credit Party
or any of their respective Subsidiaries pursuant to the terms governing
such Indebtedness (in each case, to the extent not theretofore delivered to
the Banks pursuant to this Agreement) and copies of all written
presentations and reports generally sent to analysts by any Credit Party or
any of their respective Subsidiaries, (ii) promptly and in any event within
five Business Days after receipt thereof, a copy of the annual and
quarterly statements furnished to the Borrower with respect to its
Permitted Existing Investments listed as Items 1, 2 and [__] on Schedule X
hereto, and (iii) with reasonable promptness, such other information or
documents (financial or otherwise) as the Administrative Agent on its own
behalf or on behalf of
-59-
the Required Banks may reasonably request from time to time.
(i) Borrowing Base Certificates. (i) On the Initial Borrowing Date
---------------------------
and (ii) no later than 12:00 Noon (New York time) on the twenty-fifth day
of each calendar quarter, a borrowing base certificate of the Borrower
substantially in the form of Exhibit I (each a "Borrowing Base
Certificate"), with respect to the Eligible Receivables and Eligible
Inventory of the Borrower and its Subsidiaries as of (x) in the case of
clause (i), the last day of the month immediately preceding the Initial
Borrowing Date (after giving effect to the transactions contemplated hereby
and by the other Credit Documents) and (y) in the case of clause (ii), the
last day of the immediately preceding calendar quarter, and in all such
cases, certified by the Chief Financial Officer or other Senior Financial
Officer of the Borrower.
7.02 Books, Records and Inspections. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with GAAP (or, in the case of
any Foreign Subsidiary, in accordance with local accounting standards) and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit, upon notice to the Chief Financial Officer or any other
Authorized Officer of the Borrower, officers and designated representatives of
the Administrative Agent, any Co-Agent or any Bank to visit and inspect any of
the properties or assets of the Borrower and any of its Subsidiaries in
whomsoever's possession, and to examine the books of account and other financial
and operating records (including, without limitation, any "letters of material
weakness" submitted by independent accountants) of the Borrower and any of its
Subsidiaries and discuss the affairs, finances and accounts of the Borrower and
any of its Subsidiaries with, and be advised as to the same by, the officers and
independent accountants of the Borrower or such Subsidiary, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent, any Co-Agent or any Bank may request.
7.03 Payment of Taxes. The Borrower will, and will cause each of its
----------------
Subsidiaries to, pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties
-60-
belonging to it, prior to the date on which penalties attach thereto, and all
lawful claims which, if unpaid, might become a Lien not otherwise permitted
under Section 8.02(a) or charge upon any properties of the Borrower or any of
its Subsidiaries, provided that neither the Borrower nor any of its
--------
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves (in the good faith judgment of the management of
such Person) with respect thereto in accordance with GAAP.
7.04 Corporate Franchises. The Borrower will, and will cause each of
--------------------
its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence, rights, franchises,
intellectual property and authority to do business, provided that any
--------
transaction permitted by Section 8.01 will not constitute a breach of this
Section 7.04.
7.05 Compliance with Statutes, Environmental Laws, etc. (a) The
--------------------------------------------------
Borrower will, and will cause each of its Subsidiaries to, comply, in all
material respects, with all applicable material statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable Environmental Laws). The Borrower will
promptly pay or cause to be paid all costs and expenses incurred in such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to any Environmental Laws. Neither the
Borrower nor any of its Subsidiaries will generate, use, treat, store, Release
or dispose of, or permit the generation, use, treatment, storage, Release or
disposal of Hazardous Materials on any Real Property now or hereafter owned by
the Borrower or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property, except
for Permitted Materials. If required to do so under any applicable
Environmental Law, each Credit Party agrees to undertake, and agrees to cause
each of its Subsidiaries to undertake, any cleanup, removal, remedial or other
action necessary to remove and clean up any Hazardous Materials from any Real
Property in accordance with the requirements of all applicable Environmental
Laws and in accordance with orders and directives of all governmental
authorities; provided that no Credit Party nor any of their Subsidiaries shall
--------
be required to take any such action where same is being contested by
appropriate legal proceedings in good faith by such Credit Party or such
Subsidiary.
-61-
(b) At the request of the Administrative Agent or the Required Banks,
at any time and from time to time (i) after an Event of Default has occurred and
is continuing, (ii) after the Banks receive notice under Section 7.01(g) of any
event for which notice is required to be delivered for any such Real Property,
(iii) after the acquisition of any Real Property by the Borrower or any of its
Subsidiaries subsequent to the Initial Borrowing Date, provided that if any such
--------
newly acquired property is not contiguous with any Mortgaged Property, then such
request will be limited to such newly acquired Real Property or (iv) if required
by law, the Borrower will provide, at the Borrower's sole cost and expense, an
environmental site assessment report concerning any Real Property owned,
operated or leased by the Borrower or any of its Subsidiaries, prepared by an
environmental consulting firm approved by the Administrative Agent, indicating
the presence or absence of any actual or threatened noncompliance with
Environmental Laws and permits required thereunder or presence or absence of
any Release of Hazardous Materials and the potential cost of any removal or
remedial action in connection with any Hazardous Materials on such Real
Property. If the Borrower fails to provide the same within 60 days after any
such request therefor made by the Administrative Agent or the Required Banks,
the Administrative Agent may order the same, and the Borrower shall grant and
hereby grants to the Administrative Agent, the Co-Agents and the Banks and their
agents access to such Real Property at all reasonable times and specifically
grants the Administrative Agent, the Co-Agents and the Banks an irrevocable
nonexclusive license, subject to the rights of tenants, to undertake such an
assessment all at the Borrower's sole expense.
7.06 ERISA. As soon as possible and, in any event, within 10 days
-----
after any Credit Party or any of its Subsidiaries or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Borrower
will deliver to each of the Banks a certificate of the Borrower signed by its
Chief Financial Officer or another Senior Financial Officer setting forth
details as to such occurrence and the action, if any, which such Credit Party,
such Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by such Credit Party, such Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred; that an accumulated funding deficiency has been incurred or
an application may be or has been made to the Secretary of the Treasury for a
waiver or modifi-
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cation of the minimum funding standard (including any required installment
payments) or an extension of any amortization period under Section 412 of the
Code with respect to a Plan; that a contribution required to be made to a Plan
or Foreign Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a lien has arisen on the assets of a Credit Party or any of its
Subsidiaries or any ERISA Affiliate under ERISA or the Code with respect to a
Plan; that proceedings may be or have been instituted to terminate or appoint a
trustee to administer a Plan; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that any
Credit Party, any of its Subsidiaries or any ERISA Affiliate will or may incur
any liability (including any indirect, contingent or secondary liability) to or
on account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under
Section 401(a)(29), 4971 or 4975 of the Code or Section 409 or 502(i) or 502(l)
of ERISA; or that any Credit Party or any of its Subsidiaries may incur any
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 or ERISA) or any employee
pension benefit plan (as defined in Section 3(2) of ERISA) which liability could
reasonably be expected to have a material adverse effect on the ability of the
Borrower to perform its obligations under this Agreement. At the request of any
Bank, the Borrower will deliver to such Bank a complete copy of the Internal
Revenue Service Annual Report (Form 5500) of each Plan (other than a
Multiemployer Plan) required to be filed with the Internal Revenue Service. In
addition to any certificates or notices delivered to the Banks pursuant to the
first sentence hereof, copies of any notices received by any Credit Party or any
of its Subsidiaries or any ERISA Affiliate with respect to any Plan or Foreign
Pension Plan which notice threatens, refers to or pertains to any material
liability or any potential material liability of any such party, shall be
delivered to the Banks no later than 10 days after the date such notice has been
received by such Credit Party or such Subsidiary or the ERISA Affiliate, as
applicable.
7.07 Good Repair. The Borrower will, and will cause each of its
-----------
Subsidiaries to, ensure that its properties and equipment used or useful in its
business in whomsoever's possession they may be, are kept in good repair,
working order and condition, normal wear and tear excepted and, sub-
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ject to Section 8.04, that from time to time there are made to such properties
and equipment all needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto, to the extent and
in the manner customary for companies in similar businesses.
7.08 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
------------------------------------
financial reporting purposes, cause (i) each of its fiscal years to end on
December 31 of each year and (ii) each of its fiscal quarters to end on March
31, June 30, September 30 and December 31 of each year.
7.09 Interest Rate Protection. The Borrower shall, no later than 30
------------------------
days following the Initial Borrowing Date, enter into and thereafter maintain
(to the extent permitted by applicable law) Interest Rate Protection Agree-
ments, reasonably satisfactory to the Administrative Agent, with a term of at
least three years, establishing a fixed or maximum interest rate reasonably
acceptable to the Administrative Agent for an aggregate notional amount equal
to at least 50% of the aggregate outstanding principal amount of the Term Loans
from time to time.
7.10 Maintenance of Property; Insurance. The Borrower will, and will
----------------------------------
cause each of its Subsidiaries to, at all times maintain in full force and
effect insurance in such amounts, covering such risks and liabilities and with
such deductibles or self-insured retentions as are in accordance with normal
industry practice and all applicable laws. At any time that insurance at the
levels described in Schedule III is not being maintained by the Borrower and its
Subsidiaries, the Borrower will notify the Administrative Agent in writing
thereof and, if thereafter notified by the Administrative Agent to do so, the
Borrower will obtain insurance at such levels at least equal to those set forth
in Schedule III to the extent then generally available or otherwise as are
acceptable to the Administrative Agent. The Borrower will furnish on the
Initial Borrowing Date and annually thereafter to the Administrative Agent a
summary of the insurance carried in respect of the Borrower and its Subsidi-
aries and their assets together with certificates of insurance and other
evidence of such insurance, if any, naming the Collateral Agent as
mortgagee/secured party and/or loss payee in respect of any casualty loss
policies and naming the Collateral Agent, the Administrative Agent, the Co-
Agents and each of the Banks as an additional insured with respect to any
liability policy and stating that such insurance shall not be cancelled or
materially revised without at least 30
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days' prior written notice by the insurer to the Collateral Agent.
7.11 Additional Security; Further Assurances. (a) Prior to the
---------------------------------------
Target Date, as and to the extent requested from time to time by the
Administrative Agent or the Required Banks, the Borrower will, and will cause
each of its Domestic Subsidiaries to, grant to the Collateral Agent, for the
benefit of the Secured Creditors, security interests and mortgages in such
assets and properties of the Borrower or its Subsidiaries acquired after the
Initial Borrowing Date and not otherwise covered by the original Security
Documents, other than assets encumbered by Liens permitted by Section 8.02(i)
(collectively, the "Additional Security Documents"). Such security interests
and mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Administrative Agent and shall
constitute valid and enforceable perfected security interests superior to and
prior to the rights of all third Persons and subject to no other Liens except as
are permitted by Section 8.02 at the time of perfection thereof. The Additional
Security Documents or other instruments related thereto shall be duly recorded
or filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the Collateral Agent for the
benefit of the Secured Creditors, required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable in
connection therewith shall have been paid in full.
(b) Prior to the Target Date, the Borrower will, and will cause each
of its Subsidiaries to, at its own expense, make, execute, endorse, acknowledge,
file and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, the
Borrower shall, and shall cause each of its Subsidiaries to, cause to be
delivered to the Collateral Agent such opinions of counsel, title insurance,
real estate appraisals and other related documents as may be reasonably
requested by the Collateral Agent to assure themselves that this Section 7.11
has been complied with.
(c) The Borrower agrees that each action required by clauses (a) and
(b) of this Section 7.11 shall be
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completed as soon as possible, but in no event later than 60 days after such
action is requested to be taken by the Administrative Agent or the Required
Banks (or such later date as may be agreed to by the Administrative Agent).
(d) In the event that the Administrative Agent or the Required Banks
at any time after the Effective Date and prior to the Target Date determine in
its or their sole discretion (whether as a result of a position taken by an
applicable bank regulatory agency or official, or otherwise) that real estate
appraisals satisfying the requirements set forth in 12 C.F.R., Part 34-Subpart
C, or any successor or similar statute, rule, regulation, guideline or order
(any such appraisal, a "Required Appraisal") are or were required to be
obtained, or should be obtained, in connection with any Mortgaged Property or
Mortgaged Properties then, within 60 days after receiving written notice thereof
from the Agent or the Required Banks, as the case may be, the Borrower shall
cause such Required Appraisal to be delivered, at the expense of the Borrower,
to the Agent which Required Appraisal, and the respective appraiser, shall be
reasonably satisfactory to the Administrative Agent.
7.12 Performance of Obligations. The Borrower will, and will cause
--------------------------
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non-performance as could not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect.
7.13 Use of Proceeds. All proceeds of the Loans shall be used as
---------------
provided in Section 6.05.
7.14 Ownership of Subsidiaries. The Borrower will, at all times,
-------------------------
maintain, directly or indirectly, ownership of 100% of the capital stock of its
Subsidiaries, except (i) to the extent 100% of the capital stock of any such
Subsidiary is sold, transferred or disposed of in a transaction permitted by
Section 8.01; (ii) any Subsidiary constituting a Permitted Joint Venture; (iii)
AMETEK Hong Kong, as long as the Borrower, at all times, maintains, directly or
indirectly, 98% of the capital stock thereof; and (iv) for directors qualifying
shares.
7.15 Common Stock Repurchase. To the extent that the Borrower makes
-----------------------
any Common Stock Repurchases pursuant to Section 8.06(b):
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(i) Each such Common Stock Repurchase, including all terms and
conditions thereof, shall have been duly approved by the Board of Directors
and (if required by applicable law) the shareholders of the Borrower;
(ii) Each such Common Stock Repurchase shall be consummated in
accordance with all applicable law;
(iii) On or prior to the date of consummation of any such Common Stock
Repurchase, the Borrower shall deliver to the Administrative Agent and the
Banks copies, certified as true and correct by an Authorized Officer of
the Borrower, of all Common Stock Repurchase Documents, if any, in
connection with such Common Stock Repurchase, all of which shall be in form
and substance reasonably satisfactory to the Administrative Agent; and
(iv) On each of the Term Loan Availability Termination Date and the
first and second anniversary of the Initial Borrowing Date, the Borrower
shall give written notice to the Administrative Agent and the Banks as to
the aggregate amount spent by the Borrower in respect of all Common Stock
Repurchases made up to and including such date.
7.16 Foreign Subsidiaries Security. If following a change in the
-----------------------------
relevant sections of the Code but prior to the Target Date, the regulations and
rules promulgated thereunder and any rulings issued thereunder and at the
reasonable request of the Administrative Agent or the Required Banks, counsel
for the Borrower acceptable to the Administrative Agent and the Required Banks
does not within 30 days after such request deliver a written opinion, in form
and substance satisfactory to the Administrative Agent and the Required Banks,
with respect to any Foreign Subsidiary that (i) a pledge of more than 65% of the
total combined voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote, (ii) the entering into by such Foreign Subsidiary
of a guaranty in substantially the form of the Subsidiary Guaranty or (iii) the
entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement, in any case would cause the
earnings of such Foreign Subsidiary to be treated as a deemed dividend to such
Foreign Subsidiary's United States parent, then (x) in the case of a failure to
deliver the opinion described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock not theretofore pledged pursuant to the
Pledge Agreement shall be pledged to the Collateral Agent for the benefit of the
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Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
in substantially similar form, if needed), (y) in the case of a failure to
deliver the opinion described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver a guaranty (each a "Foreign Subsidiary Guaranty" and,
collectively, the "Foreign Subsidiary Guarantees") of the Obligations of the
Borrower under the Credit Documents and the obligations of the Borrower under
any Interest Rate Protection Agreements with a Bank or an affiliate of a Bank
and (z) in the case of a failure to deliver the opinion described in clause
(iii) above, such Foreign Subsidiary shall execute and deliver security
documentation granting the Secured Creditors a first priority perfected security
interest in all of such Foreign Subsidiaries' assets which shall be
substantially similar to the Security Documents already executed and delivered
by the Credit Parties, in each case with all documents delivered pursuant to
this Section 7.16 to be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Banks.
7.17 Senior Notes Change of Control. Upon the occurrence of any
------------------------------
Change of Control, if an offer to repurchase the Senior Notes is required to be
made as a result of such Change of Control, the Borrower will take all actions,
including the giving of notices required thereunder and the setting of the date
for the repurchases of Senior Notes, as is within its power to insure that the
date for payment of the purchase price for all Senior Notes that must be repur-
chased as a result of such Change of Control is no earlier than the date on
which the Loans hereunder become due and payable as a result of such Change of
Control.
SECTION 8. Negative Covenants. The Borrower hereby covenants and
------------------
agrees that on the Effective Date and thereafter for so long as this Agreement
is in effect and until the Commitments have terminated, no Letters of Credit are
outstanding and the Loans, Unpaid Drawings, together with interest, Fees and all
other Obligations incurred hereunder, are paid in full:
8.01 Consolidation, Merger, Sale or Purchase of Assets, etc. The
-------------------------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs, or enter into any transaction of merger or
consolidation, sell or otherwise dispose of (x) all or substantially all of the
assets of the Borrower or of the Borrower and its Subsidiaries taken as a whole
or (y) prior to the Target Date, all, substantially all or any part of its
property or assets (other than inventory in the ordinary course of busi-
-68-
ness), or prior to the Target Date, enter into any partnerships, joint ventures
or sale-leaseback transactions, or prior to the Target Date, purchase, lease or
otherwise acquire (in one transaction or a series of related transactions) all
or any part of the property or assets of any Person (other than purchases or
other acquisitions of inventory, materials and equipment prior to the Target
Date, in the ordinary course of business) or agree to do any of the foregoing at
any future time, except that the following shall be permitted:
(a) Capital Expenditures may be made to the extent permitted pursuant
to Section 8.04;
(b) advances, investments and loans (including Joint Venture
Investments in Permitted Joint Ventures) may be made to the extent
permitted pursuant to Section 8.05;
(c) Dividends may be paid to the extent permitted by Section 8.06;
(d) the Transaction shall be permitted;
(e) the Borrower and its Subsidiaries may lease (as lessee) real or
personal property in the ordinary course of business and otherwise in
compliance with this Agreement so long as such lease does not create
Capitalized Lease Obligations except as otherwise permitted by Section
8.03(b);
(f) each of the Borrower and its Subsidiaries may, in the ordinary
course of business and consistent with past practices, sell, lease (as
lessor) or otherwise dispose of any of its equipment to the extent that (x)
any such sale, lease or disposition shall be in an amount at least equal to
the fair market value thereof (as determined in good faith by senior
management of the Borrower), (y) any such sale shall be solely for cash or
for cash, promissory notes and/or contingent payment obligations of, and/or
equity interests in, the transferee or issuer, provided that the sum of
--------
(A) the aggregate principal amount of promissory notes outstanding at any
time accepted by the Borrower and/or its Subsidiaries from all such sales,
leases and dispositions, (B) the aggregate initial value of all such
contingent payment obligations (as determined in good faith by senior
management of the Borrower) received by the Borrower and/or its
Subsidiaries from all such sales, leases and
-69-
dispositions and (C) the aggregate initial value of all equity securities
(as determined in good faith by senior management of the Borrower) received
by the Borrower and/or any of its Subsidiaries from all such sales, leases
and dispositions shall not exceed (i) prior to the Intermediate Target
Date, $15,000,000 in the aggregate at any time outstanding and (ii) on or
after the Intermediate Target Date but prior to the Target Date,
$20,000,000 in the aggregate at any time outstanding, provided, further,
-------- -------
that any promissory notes and equity interest so accepted by the Borrower
or any Subsidiary Guarantor shall be pledged and promptly delivered to the
Collateral Agent on behalf of the Banks pursuant to the Pledge Agreement
and (z) the aggregate Net Cash Proceeds of all such assets subject to such
sales or other dispositions are applied in accordance with Section
4.02(A)(c) to the extent so required;
(g) the Borrower and its Subsidiaries may, in the ordinary course of
business and consistent with past practices, sell or otherwise dispose of
any of its Real Property to the extent that (w) any such sale or dis-
position shall be in an amount at least equal to the fair market value
thereof (as determined in good faith by senior management of the Borrower),
(x) any such sale shall be solely for cash, or for cash, promissory notes
and/or contingent payment obligations of, and/or equity interests in, the
transferee or issuer, provided that in any fiscal year of the Borrower the
--------
sum of (A) all cash received in such fiscal year by the Borrower and/or its
Subsidiaries from all such sales and dispositions in such fiscal year, (B)
the aggregate initial principal amount of promissory notes accepted in such
fiscal year by the Borrower and/or its Subsidiaries from all such sales and
dispositions in such fiscal year, (C) the aggregate initial value of all
such contingent payment obligations (as determined in good faith by senior
management of the Borrower) received in such fiscal year by the Borrower
and/or its Subsidiaries from all such sales and dispositions in such fiscal
year and (D) the aggregate initial value of all equity securities (as
determined in good faith by senior management of the Borrower) received in
such fiscal year by the Borrower and/or any of its Subsidiaries from all
such sales and dispositions in such fiscal year shall not exceed
$12,000,000 in the aggregate in such fiscal year of the Borrower, provided,
--------
further, that any promissory notes or equity interests so accepted by the
-------
Borrower or any Subsidiary Guarantor shall be pledged and promptly deliv-
-70-
ered to the Collateral Agent on behalf of the Banks pursuant to the Pledge
Agreement, (y) the aggregate initial value of all contingent payment
obligations and equity securities (in each case as determined in good faith
by senior management of the Borrower) received in any fiscal year by the
Borrower and/or any of its Subsidiaries together with the aggregate
initial principal amount of promissory notes accepted in such fiscal year
by the Borrower and/or its Subsidiaries, in connection with all such asset
sales and dispositions consummated (1) after the Effective Date and prior
to the Intermediate Target Date, shall not exceed $3,000,000 in the
aggregate in such fiscal year of the Borrower and (2) on or after the
Intermediate Target Date but prior to the Target Date, shall not exceed
$6,000,000 in the aggregate in such fiscal year of the Borrower and (z)
the aggregate Net Cash Proceeds of all such Real Property subject to such
sales or other dispositions are applied in accordance with Section
4.02(A)(c) to the extent so required;
(h) the Borrower and its Subsidiaries may acquire Reinvestment Assets
with the proceeds from any Reinvestment Event which are not required to be
applied to repay Loans pursuant to Section 4.02(A)(c), (h) or (i) or re-
duce the Total Revolving Commitment pursuant to Section 3.03(d); and
(i) the Borrower and its Subsidiaries may acquire assets constituting
all or substantially all of a business, business unit, division or product
line of any Person not already a Subsidiary of the Borrower or capital
stock of any such Person (including any such acquisition by way of merger
or consolidation) (any such acquisition permitted by this clause (i), a
"Permitted Acquisition"), so long as in the case of any such Permitted
Acquisition (i) the only consideration paid by the Borrower and its
Subsidiaries in respect of such Permitted Acquisition consists of cash,
Common Stock permitted to be issued under Section 8.13, Indebtedness,
secured by Liens permitted by Section 8.02(h), to the extent permitted by
Section 8.03(b), unsecured Indebtedness permitted under Section 8.03(o)
and/or Permitted Earn-Out Debt to the extent permitted by Section 8.03(n),
(ii) no Default or Event of Default then exists (both before and after
giving effect to such Permitted Acquisition), (iii) all representations and
warranties contained herein and in the other Credit Documents shall be true
and correct in all material
-71-
respects with the same effect as though such representations and warranties
had been made on and as of the date of such Permitted Acquisition (both
before and after giving effect thereto), unless stated to relate to a
specific earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date,
(iv) such assets are to be employed in, and/or such Person was at the time
of such acquisition engaged in, the businesses permitted pursuant to
Section 8.08, (v) to the extent that such Permitted Acquisition is of the
capital stock of another Person such Permitted Acquisition must be of 100%
of such capital stock and all of the provisions of Section 8.15 to the
extent applicable shall have been complied with in respect of such
Permitted Acquisition, (vi) the Borrower or such Subsidiary is the
surviving corporation of any Permitted Acquisition structured as a merger
or consolidation, (vii) after giving effect to any Permitted Acquisition,
the aggregate amount paid (including for this purpose all cash
consideration paid, the face amount of all Indebtedness incurred in connec-
tion with such Permitted Acquisition, the Maximum Potential Liability of
all Permitted Earn-Out Debt incurred in connection with such Permitted
Acquisition and, prior to the Intermediate Target Date, the fair market
value (determined as of the proposed date of consummation of such Permitted
Acquisition in good faith by senior management of the Borrower) of any
Common Stock, if any, issued as consideration in connection with such
Permitted Acquisition), in connection with such Permitted Acquisition shall
not exceed the Permitted Acquisition Amount at such time, (viii) after
giving effect to any Permitted Acquisition, the aggregate amount paid
(including for this purpose all cash consideration paid, the face amount of
all Indebtedness incurred in connection with such Permitted Acquisition,
all cash paid in respect of any Permitted Earn-Out Debt incurred in
connection with such Permitted Acquisition and, prior to the Intermediate
Target Date, the fair market value (determined as of the proposed date of
consummation of such Permitted Acquisition in good faith by senior
management of the Borrower) of any Common Stock, if any, issued as
consideration in connection with such Permitted Acquisition), in connection
with such Permitted Acquisition when added to the sum of (A) the aggregate
amount paid (including for this purpose all cash consideration paid, the
face amount of all Indebtedness incurred in connection with each such
Permitted Acquisition and, prior to the
-72-
Intermediate Target Date, the fair market value (determined as of the date
of consummation of each such Permitted Acquisition in good faith by senior
management of the Borrower) of any Common Stock, if any, issued as
consideration in connection with each such Permitted Acquisition) in
connection with all other Permitted Acquisitions consummated in the fiscal
year of the Borrower in which such proposed Permitted Acquisition is to be
consummated plus (B) the aggregate amount of cash paid in the fiscal year
of the Borrower in which such proposed Permitted Acquisition is to be
consummated, in respect of all Permitted Earn-Out Debt incurred at any time
in connection with all other Permitted Acquisitions, shall not exceed
$12,500,000, and (ix) with respect to each Permitted Acquisition, (A) the
Borrower shall have given the Administrative Agent and the Banks at least
10 Business Days' prior written notice of such Permitted Acquisition, (B)
the Borrower in good faith shall believe, based on calculations made by the
Borrower on a pro forma basis (the pro forma adjustments made by the
--- ----- --- -----
Borrower in making the calculations pursuant to this clause (ix)(B) shall
be subject to the reasonable satisfaction of the Administrative Agent and
the Required Banks) after giving effect to the respective Permitted
Acquisition as if such Permitted Acquisition had been consummated on the
date occurring twelve months prior to the last day of the most recently
ended fiscal quarter of the Borrower, that the covenants contained in
Sections 8.09 through 8.11, inclusive, of this Agreement would have been
met for the one-year period ended on the last day of such fiscal quarter,
(C) the Borrower in good faith shall believe, based on calculations made by
the Borrower, on a pro forma basis after giving effect to the respective
--- -----
Permitted Acquisition, that the covenants contained in Sections 8.09
through 8.11, inclusive, will continue to be met for the one-year period
following the date of the consummation of the respective Permitted
Acquisition and (D) the Borrower shall have delivered to the
Administrative Agent an officer's certificate executed by a Senior
Financial Officer of the Borrower, certifying, to the best of his
knowledge, compliance with the requirements of preceding clauses (i)
through (ix) and containing the pro forma calculations required by the
--- -----
preceding clauses (ix)(B) and (ix)(C). The consummation of each Permitted
Acquisition shall be deemed to be a representation and warranty by the
Borrower that all conditions thereto have been satisfied and that same is
permitted in accordance with the terms of this Agreement, which represen-
-73-
tation and warranty shall be deemed to be a representation and warranty
for all purposes hereunder, including, without limitation, Section 5.02
and 9.
To the extent the Required Banks (or all the Banks as shall be required by
Section 12.12) waive the provisions of this Section 8.01 with respect to the
disposition of any Collateral, or any Collateral is disposed of as permitted by
this Section 8.01, (i) such Collateral in each case shall be sold free and clear
of the Liens in favor of the Secured Creditors created by the Security Documents
and (ii) if such Collateral includes all of the capital stock of a Subsidiary
Guarantor, such capital stock shall be released from the Pledge Agreement and
such Subsidiary Guarantor shall be released from the Subsidiary Guaranty; and
the Administrative Agent and the Collateral Agent shall be authorized to take
such actions as the Administrative Agent or the Collateral Agent reasonably
deems appropriate in connection therewith.
8.02 Liens. The Borrower will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to the
Borrower or any of its Subsidiaries) or assign any right to receive income, or
file or permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute, except:
(a) inchoate Liens for taxes not yet due or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Borrower)
have been established in accordance with GAAP;
(b) Liens (other than any Lien imposed by ERISA) in respect of
property or assets of the Borrower or any of its Subsidiaries imposed by
law which were incurred in the ordinary course of business and which do not
secure Indebtedness for borrowed money, such as carriers', warehousemen's
and mechanics' Liens, statutory landlord's Liens, and other similar Liens
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of such property or assets or
materially impair the use thereof
-74-
in the operation of the business of the Borrower or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement or the other
Credit Documents;
(d) Liens on the assets of the Borrower and its Subsidiaries created
prior to, but that will remain outstanding on and after, the Initial
Borrowing Date (after giving effect to the Refinancing) and listed, and the
property subject thereto described on, Schedule IX hereto, without giving
effect to any subsequent extensions or renewals thereof ("Permitted
Liens");
(e) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (x) in connection with workers'
compensation, unemployment insurance and other types of social security,
or (y) to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of
borrowed money), provided that the aggregate amount of cash and the fair
--------
market value of the property encumbered by Liens described in this clause
(y) shall not exceed $1,000,000;
(f) leases or subleases granted to third Persons not interfering with
the ordinary course of business of the Borrower or any of its Subsidiaries;
(g) Permitted Encumbrances;
(h) Liens arising pursuant to purchase money mortgages securing
Indebtedness representing the purchase price (or financing of the purchase
price within 90 days after the respective purchase) of property or other
assets acquired by the Borrower or any of its Subsidiaries after the
Initial Borrowing Date, provided that (i) any such Liens attach only to the
--------
assets so purchased, (ii) the Indebtedness secured by any such Lien does
not exceed 100% of the lesser of the fair market value or the purchase
price of the assets being purchased at the time of the incurrence of such
Indebt-
-75-
edness and (iii) the Indebtedness secured thereby is permitted by Section
8.03(b);
(i) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances on the property of the Borrower or any of
its Subsidiaries arising in the ordinary course of business and not
materially interfering with the conduct of the business of the Borrower or
any such Subsidiary;
(j) Liens on property of the Borrower or any of its Subsidiaries
subject to, and securing only, Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Section 8.03(b),
provided, that such Liens only secure the payment of Indebtedness arising
--------
under such Capitalized Lease Obligation and the Lien encumbering the asset
giving rise to the Capitalized Lease Obligation and the proceeds thereof
does not encumber any other asset of the Borrower or any of its
Subsidiaries;
(k) Liens arising from precautionary UCC (or other similar recording
or notice statutes) financing statement filings regarding operating leases
permitted pursuant to this Agreement; and
(l) Liens upon equipment and machinery of the Borrower securing
Indebtedness to the extent permitted under Section 8.03(m); provided that
--------
such Liens only encumber equipment and machinery located at the Broome
County Facility and do not encumber any other asset of the Borrower or any
of its Subsidiaries; and provided, further, that contemporaneously with the
-------- -------
creation of such Liens, the Secured Creditors have a second priority Lien
on such equipment and machinery located at the Broome County Facility.
8.03 Indebtedness. Prior to the Target Date, the Borrower will not,
------------
and will not permit any of its Subsidiaries to, contract, create, incur, assume
or suffer to exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Indebtedness evidenced by Capitalized Lease Obligations, and
other Indebtedness secured by Liens permitted by Section 8.02(h), of the
Borrower or any of its Subsidiaries so long as (x) all such Capitalized
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Lease Obligations are permitted under Section 8.04, (y) the sum of the
aggregate principal amount of all such Indebtedness outstanding at such
time and the aggregate Capitalized Lease Obligations under all Capital
Leases entered into pursuant to this clause (b) outstanding at such time
does not exceed (i) prior to the Intermediate Target Date, $15,000,000 in
the aggregate at any time outstanding and (ii) on or after the Intermediate
Target Date but prior to the Target Date, $20,000,000 in the aggregate at
any time outstanding and (z) at the time of the incurrence of any such
Indebtedness, such Indebtedness is permitted to be incurred pursuant to the
first paragraph of Section 1008 of the Senior Note Indenture;
(c) Indebtedness under Interest Rate Protection Agreements of the
Borrower to the extent entered into in compliance with Section 7.09;
(d) Permitted Existing Indebtedness, without giving effect to any
extensions, renewals or refinancings thereof;
(e) Indebtedness evidenced by Intercompany Loans to the extent
permitted by Section 8.05(g);
(f) Indebtedness under any Permitted Currency Agreement;
(g) Indebtedness under any Permitted Commodities Agreement;
(h) Indebtedness representing Permitted Foreign Subsidiary WC Debt,
provided that (x) the obligors thereunder are Foreign Subsidiaries and
--------
neither the Borrower nor any Domestic Subsidiary of the Borrower is
obligated (whether directly or indirectly through a guarantee, keep-well
arrangement or otherwise) in respect thereof and (y) the aggregate
principal amount thereof at any one time outstanding shall not exceed
$20,000,000, provided, however, that the aggregate principal amount thereof
-------- -------
at any one time outstanding may exceed $20,000,000 solely by virtue of
changes in the exchange rates (and not as a result of the additional
incurrence of any new Indebtedness) for the currencies in which any such
Permitted Foreign Subsidiary WC Debt is denominated for a period not in
excess of one month after any date upon which it is so determined that the
aggregate principal amount of Permitted Foreign Subsidi-
-77-
ary WC Debt exceeds $20,000,000 as a result solely of such a change in
exchange rates;
(i) Indebtedness of the Borrower evidenced by the Senior Notes
pursuant to the Senior Note Documents, in an aggregate principal amount not
to exceed $150,000,000 (as reduced by any repayments of principal thereof);
(j) On or after the fifth anniversary of the Initial Borrowing Date,
Permitted Refinancing Debt of the Borrower the proceeds of which are used
to refinance the Senior Notes in accordance with Section 8.12;
(k) Indebtedness of the Borrower or any of its Subsidiaries arising
in connection with the entering into of any take-or-pay contract for
supplies, packaging materials or other similar materials entered into in
the ordinary course of business, consistent with the practices of the
Borrower and its Subsidiaries prior to the Effective Date, provided that
--------
the aggregate amount payable under any such take-or-pay contract shall not
exceed $100,000;
(l) Indebtedness of the Borrower consisting of borrowings against the
cash value of the COLI Policies;
(m) Indebtedness of the Borrower evidenced by the Broome County Loan
Documents in an aggregate principal amount not to exceed $2,000,000;
(n) Indebtedness of the Borrower or any of its Subsidiaries which
constitutes Permitted Earn-Out Debt in amounts not to exceed, and in
accordance with, the requirements of Section 8.01(i) and only to the extent
that any such Permitted Earn-Out Debt is paid in full within six months
after the date upon which such Permitted Earn-Out Debt is determinable; and
(o) Additional unsecured Indebtedness of the Borrower and its Domestic
Subsidiaries not otherwise permitted pursuant to this Section 8.03 not
exceeding (for the Borrower and all of its Domestic Subsidiaries) in
aggregate principal amount at any one time outstanding (x) prior to the
Intermediate Target Date, an amount equal to $5,000,000 and (y) on or after
the Intermediate Target Date but prior to the Target Date, an amount equal
to $7,500,000.
-78-
8.04 Capital Expenditures. (a) Prior to the Target Date, the
--------------------
Borrower will not, and will not permit any of its Subsidiaries to, incur Capital
Expenditures except Capital Expenditures made in compliance with this Section
8.04. Subject to clauses (b), (c) and (d) below, during each period indicated
below, Capital Expenditures shall be permitted to be made by the Borrower and
its Subsidiaries in an aggregate amount for all such Persons not in excess of
the corresponding amount set forth below opposite such period:
Period Amount
- ------ -----------
Effective Date through and $43,000,000
including the last day of
the Fiscal Year ending 1994
Fiscal Year ending 1995 $33,000,000
Fiscal Year ending 1996 $33,000,000
Each Fiscal Year ending in $40,000,000
1997, 1998 or 1999
Fiscal Year commencing in 2000 to
and including the
Final Maturity Date $50,000,000
(b) Notwithstanding anything to the contrary contained in clause (a)
above, the Borrower and its Subsidiaries may make additional Capital
Expenditures in any period set forth in clause (a) above (except during the last
such period) in an amount equal to 5% of the amount of Capital Expenditures
permitted to be made by the Borrower and its Subsidiaries in the immediately
succeeding period (without taking into account any increase in the amount
permitted during such period as a result of this clause (b), or clause (c) or
(d) below); provided, however, that the amount of Capital Expenditures permitted
-------- -------
to be made during such immediately succeeding period set forth in clause (a)
above shall be reduced by an amount equal to the amount that the Borrower and
its Subsidiaries expend to make additional Capital Expenditures pursuant to
this clause (b) in the immediately preceding period.
(c) Notwithstanding anything to the contrary contained in clause (a)
above, to the extent Capital Expenditures made by the Borrower and its
Subsidiaries in any period set forth in clause (a) above are less than the
amount set forth for such period in clause (a) above (without taking
-79-
into account any increase in the amount permitted during such period as a result
of clause (b) above, or this clause (c) or clause (d) below but after giving
effect to any reduction in the amount permitted during any such period as a
result of clause (b) above), an amount equal to 100% of such difference may be
carried forward and used by the Borrower and its Subsidiaries to make Capital
Expenditures pursuant to clause (a) in the immediately succeeding fiscal year
(or fiscal period) of the Borrower.
(d) In addition to the Capital Expenditures permitted pursuant to
preceding clauses (a), (b) and (c), the Borrower and its Subsidiaries may make
additional Capital Expenditures as follows: (i) Capital Expenditures
constituting Permitted Acquisitions (ii) Capital Expenditures consisting of the
reinvestment of Net Cash Proceeds of Asset Sales and the reinvestment of Net
Insurance Proceeds of Recovery Events, in each case pursuant to this clause (ii)
to the extent permitted to be so reinvested pursuant to Section 4.02(A)(c) or
(h), as the case may be, and which proceeds are subject to a Reinvestment Notice
with respect to which a Reinvestment Prepayment Date has not occurred at the
time of such Capital Expenditure and (iii) Capital Expenditures in an amount not
in excess of the amount of cash proceeds received by the Borrower constituting a
reimbursement from any of its customers relating to Capital Expenditures
previously made by the Borrower for the benefit of any such customer.
8.05 Advances, Investments and Loans. Prior to the Target Date, the
-------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to any Person, except:
(a) the Transaction shall be permitted;
(b) the Borrower and its Subsidiaries may invest in cash and Cash
Equivalents, and Foreign Subsidiaries may invest in Permitted Foreign
Investments;
(c) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them, if created or acquired in its ordinary course of
business and payable or dischargeable in accordance with its customary
trade terms of the Borrower or such Subsidiary, as the case may be;
-80-
(d) loans and advances to employees for moving and travel expenses and
other similar expenses, in each case incurred in the ordinary course of
business, shall be permitted;
(e) Interest Rate Protection Agreements entered into in compliance
with Section 8.03(c) shall be permitted;
(f) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising
from ordinary business transactions;
(g) the Borrower may make intercompany loans and advances to its
Subsidiaries (other than to the Captive Insurance Subsidiary unless
required by applicable law or required to fund its insurance operations),
and any Subsidiary of the Borrower may make intercompany loans and advances
to any other Subsidiary (other than to the Captive Insurance Subsidiary
unless required by applicable law or required to fund its insurance
operations) of the Borrower or the Borrower (collectively, "Intercompany
Loans"), provided that (i) each such Intercompany Loan shall be evidenced
--------
by an Intercompany Note, (ii) each such Intercompany Note issued to the
Borrower or a Subsidiary Guarantor shall be pledged to the Collateral Agent
pursuant to the Pledge Agreement and (iii) each Intercompany Note
evidencing an Intercompany Loan to the Borrower shall contain the
subordination provisions contained in Exhibit K;
(h) the Borrower and its Subsidiaries may acquire and hold the
capital stock of Wholly-Owned Subsidiaries acquired, created or established
in accordance with Section 8.15;
(i) Permitted Currency Agreements shall be permitted;
(j) Permitted Commodities Agreements shall be permitted;
-81-
(k) the Borrower and its Subsidiaries may effect Permitted
Acquisitions in accordance with the requirements of Section 8.01(i);
(l) the Captive Insurance Subsidiary may invest in Permitted Captive
Insurance Investments;
(m) so long as (x) no Default or Event of Default then exists or
would result therefrom and (y) any such investment is permitted at such
time under the Senior Note Indenture, the Borrower and its Subsidiaries may
make Joint Venture Investments in Permitted Joint Ventures, provided that
--------
the aggregate amount of all Joint Venture Investments at any one time
outstanding shall not exceed $30,000,000 less the Joint Venture Letter of
Credit Outstandings at such time;
(n) the Borrower may continue to own and hold Permitted Existing
Investments, provided that with respect to the Permitted Existing
--------
Investments listed as Items 1 and 2 on Schedule X hereto, the Borrower may
continue to hold such Permitted Existing Investments only so long as (x) at
all times the Fixed Charge Coverage Ratio is equal to or better than the
Performance Target for the then most recently ended Test Period, and (y)
the stated market value (as set forth on the annual or quarterly statements
furnished with respect to such Permitted Existing Investments to the
Borrower and by the Borrower to the Banks pursuant to Section 7.01(h)(ii))
of such Permitted Existing Investment has not decreased by more than 20%
from the stated market value thereof as of the Effective Date as set forth
on Schedule X;
(o) the Borrower may acquire and maintain investments in COLI
Policies; and
(p) the Borrower and its Subsidiaries may make additional advances,
investments and loans not otherwise permitted pursuant to this Section 8.05
(other than advances, investments or loans (1) in or to any Permitted
Joint Venture, (2) in or to the Captive Insurance Subsidiary or (3) of the
type constituting a Permitted Existing Investment), so long as (i) the
aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs thereof) shall not exceed
(x) prior to the Intermediate Target Date, $5,000,000 and (y) on or after
the Intermediate Target Date but prior to the Target
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Date, $7,500,000, and (ii) each such advance, investment or loan is made by
the Borrower or such Subsidiary in or to a Person engaged in the type of
business described in Section 8.08.
8.06 Dividends, etc. The Borrower will not, and will not permit any
---------------
Subsidiary to, declare or pay any dividends or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any warrants for
or options or stock appreciation rights in respect of any of such shares), or
set aside any funds for any of the foregoing purposes and the Borrower will
not, and will not permit any of its Subsidiaries to, purchase or otherwise
acquire for consideration any shares of any class of the capital stock of the
Borrower or any other Subsidiary, as the case may be, now or hereafter
outstanding (or any warrants for or options or stock appreciation rights issued
by such Person in respect of any such shares) (all of the foregoing
"Dividends"), except that:
(a) any Subsidiary of the Borrower or any Permitted Joint Venture may
pay Dividends (x) to the Borrower or to any Wholly-Owned Subsidiary of the
Borrower or (y) to any other investor in such Subsidiary or Permitted Joint
Venture to the extent of such investor's proportionate ownership interest
in such Subsidiary or Permitted Joint Venture;
(b) so long as there shall exist no Default or Event of Default (both
before and after giving effect thereto), (x) on or after the Initial
Borrowing Date and prior to the first anniversary of the Initial Borrowing
Date, the Borrower may effect Common Stock Repurchases pursuant to the
Repurchase Program so long as the Borrower promptly retires any such shares
of Common Stock so repurchased and (y) on or after the first anniversary of
the Initial Borrowing Date and prior to the second anniversary of the
Initial Borrowing Date, the Borrower may effect Common Stock Repurchases
pursuant to the Repurchase Program so long as (A) at the time of any such
Common Stock Repurchase pursuant to this clause (b)(y), the Fixed Charge
Coverage Ratio is equal to or better than the Performance Target for the
then most recently ended Test Period and (B) the
-83-
Borrower promptly retires any such shares of Common Stock so repurchased;
(c) the Borrower may pay cash Dividends in any fiscal quarter to the
holders of Common Stock if and only if (w) no Default or Event of Default
then exists or would result from the payment thereof, (x) the Fixed Charge
Coverage Ratio for the period of the four fiscal quarters most recently
ended (or, if shorter, the period beginning on April 1, 1994 and ending on
the last day of a fiscal quarter ending thereafter), in each case taken as
one accounting period, exceeds 1.1:1, (y) the aggregate amount of all cash
Dividends paid pursuant to this clause (c) in any such fiscal quarter of
the Borrower (including the anticipated Dividend to be made) will not
exceed 25% of the Available Dividend Amount and (z) the aggregate amount of
all cash Dividends paid pursuant to this clause (c) will not at any time
exceed an amount equal to the Available Dividend Amount; and
(d) so long as there shall exist no Default or Event of Default (both
before and after giving effect to the payment thereof), the Borrower may
repurchase or redeem stock appreciation rights issued by the Borrower to
its directors, employees and officers pursuant to the Stock Option Plans.
8.07 Transactions with Affiliates. The Borrower will not, and will
----------------------------
not permit any of its Subsidiaries to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
Affiliate other than on terms and conditions substantially as favorable (or more
favorable) to, the Borrower or such Subsidiary as would be obtainable by, the
Borrower or such Subsidiary at the time in a comparable arm's-length transaction
with a Person other than an Affiliate, except the following shall not be
prohibited: (i) the Transaction, (ii) Dividends permitted by Section 8.06, (iii)
Intercompany Loans, (iv) each of the Borrower and any of its Wholly-Owned
Subsidiaries may, in the ordinary course of its business, transfer inventory to
or among each other, (v) each of the Borrower and any of its Subsidiaries may,
in the ordinary course of its business, charge each other for services provided
to the other, (vi) the Borrower may grant stock options, stock appreciation
rights, restricted stock awards and phantom stock awards to its and its
Subsidiaries' directors in the ordinary course of business, and (vii) the
Borrower and its Subsidiaries may pay reasonable and customary fees to their
-84-
directors who are not also officers or employees of the Borrower or any of its
Subsidiaries.
8.08 Changes in Business. The Borrower will not, and will not permit
-------------------
any of its Subsidiaries to, engage (directly or indirectly) in any business
other than (i) the business in which it is engaged on the Effective Date, (ii)
reasonable extensions thereof and (iii) any other manufacturing business,
including, without limitation, the distribution and/or resale of manufactured
products and other reasonable extensions of the manufacturing business.
8.09 Fixed Charge Coverage Ratio. The Borrower will not permit the
---------------------------
Fixed Charge Coverage Ratio for any Test Period ending at the end of any fiscal
quarter set forth below to be less than the ratio set forth opposite such
quarter below:
Fiscal Quarter Ending Ratio
- --------------------- -----
June 30, 1994 1.0:1
September 30, 1994 1.0:1
December 31, 1994 1.0:1
March 31, 1995 1.0:1
June 30, 1995 1.0:1
September 30, 1995 1.1:1
December 31, 1995 1.1:1
March 31, 1996 1.1:1
June 30, 1996 1.1:1
September 30, 1996 and thereafter 1.2:1
8.10 Leverage Ratio. The Borrower will not permit the ratio of (i)
--------------
Consolidated Indebtedness to (ii) Consolidated Capital Funds as of the last day
of any quarter
-85-
set forth below to be greater than the ratio set forth opposite such quarter
below:
Fiscal Quarter Ending Ratio
- --------------------- -------
June 30, 1994 0.625:1
September 30, 1994 0.625:1
December 31, 1994 0.625:1
March 31, 1995 0.625:1
June 30, 1995 0.625:1
September 30, 1995 0.600:1
December 31, 1995 0.600:1
March 31, 1996 0.600:1
June 30, 1996 0.550:1
September 30, 1996 0.550:1
December 31, 1996 0.550:1
March 31, 1997 0.500:1
June 30, 1997 0.500:1
September 30, 1997 0.500:1
December 31, 1997 and thereafter 0.450:1
8.11 Interest Coverage Ratio. The Borrower will not permit the
-----------------------
Interest Coverage Ratio for any Test Period ending at the end of any fiscal
quarter set forth below to be less than the ratio set forth opposite such
quarter below:
Fiscal Quarter Ending Ratio
- --------------------- ------
June 30, 1994 2.70:1
September 30, 1994 3.0:1
December 31, 1994 3.0:1
March 31, 1995 3.0:1
June 30, 1995 and thereafter 3.5:1
8.12 Limitation on Voluntary Payments and Modifications of
-----------------------------------------------------
Indebtedness; Modification of Certificate of Incorporation. The Borrower will
- ----------------------------------------------------------
not, and will not permit any of its Subsidiaries to: (i) make (or give any
notice in respect of) any voluntary or optional payment or prepayment on or
redemption (including pursuant to any change of control provision) of or
acquisition for value of (including, without limitation, by way of depositing
with the trustee with respect thereto money or securities before due for the
purpose of paying when due), any Senior Notes or any Permitted Refinancing Debt,
provided that after the fifth anniversary of the Initial Borrowing Date, the
Senior Notes may be refinanced with Permitted Refinancing Debt and any Permitted
Refinancing Debt may be refinanced with any other Permitted
-86-
Refinancing Debt, (ii) amend or modify, or permit the amendment or modification
of, any provision of the Senior Note Documents, any Permitted Refinancing Debt
or of any agreement (including, without limitation, any purchase agreement,
indenture, loan agreement or security agreement) relating thereto, or (iii)
amend, modify or change any provision of its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) or By-Laws, except for such amendments to the
Certificate of Incorporation or By-Laws of the Borrower or any of its
Subsidiaries which do not impose any monetary liabilities on the Borrower or any
of its Subsidiaries, as the case may be, or grant any put or similar rights to
any Person and do not otherwise adversely affect any Bank in its capacity as
such.
8.13 Limitations on Issuance of Capital Stock. (a) The Borrower
----------------------------------------
will not permit any of its Subsidiaries to directly or indirectly issue, sell,
assign, pledge or otherwise encumber or dispose of any shares of its capital
stock or other equity securities (or warrants, rights or options to acquire
shares or other equity securities) except (i) pursuant to the Security
Documents, (ii) to qualify directors to the extent required by applicable law,
(iii) in connection with a Permitted Joint Venture to the extent otherwise per-
mitted by the terms of this Agreement or (iv) to the Borrower or a Wholly-Owned
Subsidiary of the Borrower, and then only if such stock or other equity
securities are delivered to the Collateral Agent and pledged pursuant to the
Pledge Agreement.
(b) The Borrower will not issue any shares of its capital stock or
other equity securities (or warrants, rights or options to acquire shares or
other equity securities) except: (i) to qualify directors if required by
applicable law; (ii) issuances of rights or options to purchase shares of Common
Stock to directors, officers and employees of the Borrower pursuant to the Stock
Option Plans and issuances of rights to purchase shares of Common Stock to
shareholders of the Borrower pursuant to the Rights Agreement, in each case so
long as no Event of Default will exist under Section 9.10 as a result thereof;
and (iii) shares of Common Stock where, after giving effect to such issuance, no
Event of Default will exist under Section 9.10 and immediately after such
issuance the Borrower complies with Section 4.02(A)(e).
8.14 Limitation on Restrictions Affecting Subsidiaries. The
-------------------------------------------------
Borrower will not, and will not permit any Subsidiary to, directly, or
indirectly, create or otherwise
-87-
cause or suffer to exist any encumbrance or restriction which prohibits or
limits the ability of the Borrower or any Subsidiary to (a) pay dividends or
make other distributions or pay any Indebtedness owed to any Credit Party or any
Subsidiary thereof, (b) make loans or advances to any Credit Party or any
Subsidiary thereof, (c) transfer any of its properties or assets to any Credit
Party or any Subsidiary thereof or (d) create, incur, assume or suffer to exist
any lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than encumbrances and restrictions arising under (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii) to the
extent restricting the disposition of any property serving as security
therefor, any agreement relating to Indebtedness permitted pursuant to Section
8.03(b) secured by Liens permitted pursuant to Section 8.02(h), (iv) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of any Credit Party or any of its Subsidiaries, (v)
customary restrictions on dispositions of real property interests found in
reciprocal easement agreements of any Credit Party or any of its Subsidiaries or
(vi) the documents or instruments governing the terms of any Permitted Foreign
Subsidiary WC Debt permitted to be incurred pursuant to Section 8.03(h) to the
extent restricting the payment of dividends or other cash distributions by a
Foreign Subsidiary to the Borrower or any other Subsidiary of the Borrower.
8.15 Limitation on the Creation of Subsidiaries. Notwithstanding
------------------------------------------
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any Subsidiary to, establish, create or acquire after the
Effective Date any Material Subsidiary, except the Borrower or any of its
Subsidiaries may create, establish or acquire (x) Permitted Joint Ventures in
accordance with Section 8.05 and the definition thereof and (y) a new Material
Subsidiary of the Borrower which is a Wholly-Owned Subsidiary of the Borrower
provided, that (i) at least 15 Business Days' prior written notice thereof is
given to the Administrative Agent and the Banks, (ii) 100% of the capital stock
of such new Material Subsidiary is pledged pursuant to the Pledge Agreement (65%
in the case of a new Material Subsidiary that is a first-tier Foreign
Subsidiary, 0% in the case of second or lower tier Foreign Subsidiaries) and the
certificates representing such stock, together with stock powers duly executed
in blank, are delivered to the Collateral Agent, (iii) such new Material
Subsidiary (to the extent it is a Domestic Subsidiary) executes a counterpart of
the Subsidiary Guaranty, the Pledge Agreement and the Security Agreement, and
(iv) to the extent requested by the Administrative Agent
-88-
or the Required Banks, such new Material Subsidiary takes all actions required
pursuant to Section 7.11. In addition, each new Material Subsidiary shall
execute and deliver, or cause to be executed and delivered, all other relevant
documentation of the type described in Section 5 as such new Material Subsidiary
would have had to deliver if such new Material Subsidiary were a Credit Party on
the Initial Borrowing Date.
SECTION 9. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of the Loans or any Unpaid Drawing or (ii) default, and
such default shall continue for three or more Business Days, in the payment
when due of any interest on the Loans or Unpaid Drawings or any Fees or any
other amounts owing hereunder or under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or statement
---------------------
made by any Credit Party herein or in any other Credit Document or in any
certificate delivered or required to be delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or
9.03 Covenants. The Borrower shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Sections 7.01(e)(x), 7.08, 7.09, 7.11, 7.15, 7.16 or 8 (other than Sections
8.05, 8.07 or 8.14), or (b) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in Section
9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement and
such default shall continue unremedied for a period of at least 30 days after
notice to the defaulting party by the Administrative Agent or any Bank; or
9.04 Default Under Other Agreements. (a) The Borrower or any of its
------------------------------
Subsidiaries (collectively, the "Designated Parties") shall (i) default in any
payment in respect of any Indebtedness (other than the Obligations) beyond the
period of grace, if any, provided by the instrument or agreement governing such
Indebtedness or (ii) default in the observance or performance of any agreement
or condition relating to any such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating
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thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, any such Indebtedness to become due prior to its stated
maturity; or (b) any such Indebtedness (other than the Obligations) of any
Designated Party shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof, provided that it shall not constitute an Event of
--------
Default pursuant to clause (a) or (b) of this Section 9.04 unless the
outstanding principal amount of any one issue of such Indebtedness exceeds
$3,000,000 or the aggregate amount of all such Indebtedness referred to in
clauses (a) and (b) above exceeds $6,000,000 at any one time; or
9.05 Bankruptcy, etc. Any Designated Party shall commence a
----------------
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy", as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against any
Designated Party and the petition is not controverted within 10 Business Days,
or is not dismissed within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of any Designated Party; or any
Designated Party commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to any Designated Party; or there is commenced against any
Designated Party any such proceeding which remains undismissed for a period of
60 days; or any Designated Party is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or any Designated Party suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or any Designated Party makes a general assignment for
the benefit of creditors; or any Designated Party admits in writing its
inability to pay its debts generally as they become due; or any corporate action
is taken by any Designated Party for the purpose of effecting any of the
foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof or a waiver of such standard
or extension of any
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amortization period is sought or granted under Section 412 of the Code, any Plan
shall have had or is likely to have a trustee appointed to administer such Plan,
any Plan is, shall have been or is likely to be terminated or to be the subject
of termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made to a Plan or a Foreign Pension
Plan has not been timely made, any Designated Party or any ERISA Affiliate has
incurred or is likely to incur a liability to or on account of a Plan under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code, or any Designated Party
or any ERISA Affiliate has incurred or is likely to incur liabilities pursuant
to one or more employee welfare benefit plans (as defined in Section 3(1) of
ERISA) that provide benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or employee pension benefit
plans (as defined in Section 3(2) of ERISA); (b) there shall result from any
event or events described in clause (a) of this Section 9.06, the imposition of
a lien, the granting of a security interest, or a liability or a material risk
of incurring a liability; and (c) which lien, security interest or liability
referred to in clause (b) of this Section 9.06, in the opinion of the Required
Banks, could reasonably be expected to have a Material Adverse Effect; or
9.07 Security Documents. At any time after the execution and
------------------
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 8.02), and subject to no other Liens (except as permitted by Section
8.02), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any cure
or grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
9.08 Subsidiary Guaranty. The Subsidiary Guaranty or any provision
-------------------
thereof shall cease to be in full force and effect, or any Subsidiary Guarantor
thereunder or any Person acting on behalf of such Subsidiary Guarantor shall
deny or disaffirm such Subsidiary Guarantor's obligations under the
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Subsidiary Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiary Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be entered
---------
against the Borrower and/or any of its Subsidiaries involving a liability (not
paid or fully covered by a reputable and solvent insurance company) of
$5,000,000 or more for all such judgments and decrees, and all such judgments
or decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 30 days from the entry thereof; or
9.10 Change of Control. A Change of Control shall have occurred;
-----------------
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent, any Co-Agent or any Bank or the holder of any Note to
enforce its claims against any Credit Party, except as otherwise specifically
provided for in this Agreement (provided that, if an Event of Default specified
--------
in Section 9.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment terminated, whereupon the
Commitment of each Bank shall forthwith terminate immediately and any Commitment
Commission shall forthwith become due and payable without any other notice of
any kind; (ii) declare the principal of and any accrued interest in respect of
all Loans and all obligations owing hereunder (including Unpaid Drawings) to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Credit Party; (iii) enforce, as Collateral Agent (or direct the Collateral
Agent to enforce) any or all of the Liens and security interests created
pursuant to the Security Documents; (iv) terminate any Letter of Credit which
may be terminated in accordance with its terms; and (v) direct the Borrower to
pay (and the Borrower hereby agrees upon receipt of such notice, or upon the
occurrence of any Event of Default specified in Section 9.05, it will pay) to
the Administrative Agent at the Payment Office such additional amounts of cash,
to be held as security for
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the Borrower's reimbursement obligations in respect of Letters of Credit then
outstanding equal to the aggregate Stated Amount of all Letters of Credit then
outstanding.
SECTION 10. Definitions. As used herein, the following terms shall
-----------
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Additional Security Documents" shall have the meaning set forth in
Section 7.11.
"Adjusted Consolidated Current Assets" shall mean, as of any date, the
accounts receivable plus inventory of the Borrower and its Subsidiaries as of
such date.
"Adjusted Consolidated Net Worth" shall mean, as at any date of
determination, without duplication, the sum of (i) Consolidated Net Worth at
such date, (ii) the after tax amount of the Borrower's resizing, restructuring
and other unusual charges recorded for 1993 and the extraordinary charge in the
first fiscal quarter of fiscal year 1994 in connection with the early retirement
of the Existing Debt, which amount shall in no event exceed $48,000,000 and
(iii) the aggregate amount spent by the Borrower in respect of all Common Stock
Repurchases made on and after the Effective Date up to and including such date
of determination.
"Adjusted Consolidated Current Liabilities" shall mean, as of any
date, the accounts payable of the Borrower and its Subsidiaries as of such date.
"Adjusted Working Investment" shall mean Consolidated Current Assets
minus Consolidated Current Liabilities.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affected Company" shall mean with respect to any Reinvestment Event
arising from the receipt of Net Insurance Proceeds from a Recovery Event, the
Borrower or the Subsidiary of the Borrower which owned the assets which are the
subject of such Recovery Event.
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"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all
directors of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 5% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise. For purposes of Section 8.07 of this
Agreement, so long as American Securities Corporation has any representatives on
the Board of Directors of the Borrower or any of its Subsidiaries, American
Securities Corporation shall be deemed to be an Affiliate of the Borrower to the
extent not otherwise meeting the criteria set forth above in the definition of
"Affiliate."
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"Aggregate Unutilized Commitment" with respect to any Bank at any time
shall mean the sum of (x) such Bank's Revolving Commitment at such time less the
sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such Bank and (ii) such Bank's Percentage of the Letter of Credit
Outstandings at such time plus (y) prior to the Term Loan Availability
Termination Date (or such earlier date as of which the Total Term Loan
Commitment has been terminated), such Bank's Term Loan Commitment at such time.
"AMETEK Hong Kong" shall mean AMETEK Hong Kong, a corporation
organized and existing under the laws of Hong Kong.
"Anticipated Reinvestment Amount" shall mean, with respect to any
Reinvestment Event, the amount specified in the Reinvestment Notice with respect
thereto as the amount of the respective Net Cash Proceeds, Pension Plan Refund
or Net Insurance Proceeds, as the case may be, that the Borrower or such
Subsidiary of the Borrower intends to use to restore, purchase, construct or
otherwise acquire Reinvestment Assets or to fund a replacement Plan pursuant to
Section 4980 of the Code, as the case may be.
"Applicable Base Rate Margin" shall mean, at any time during the
relevant Category Period set forth below and
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with respect to any type of Base Rate Loans, the margin set forth below opposite
such relevant Category Period for the relevant type of Base Rate Loans;
provided, however, that notwithstanding anything to the contrary contained
- -------- -------
herein, until the first anniversary of the Initial Borrowing Date, the
Applicable Base Rate Margin shall mean (x) 1.00% for Term Loans and (y) 0.75%
for Revolving Loans:
I. Term Loans:
----------
Applicable Base
Category Period Rate Margin
--------------- ---------------
Category A Period 0%
Category B Period 0.25%
Category C Period 0.50%
Category D Period 0.75%
Category E Period 1.00%
Category F Period 1.25%
II. Revolving Loans:
---------------
Applicable Base
Category Period Rate Margin
--------------- ---------------
Category A Period 0%
Category B Period 0%
Category C Period 0.25%
Category D Period 0.50%
Category E Period 0.75%
Category F Period 1.00%
"Applicable Credit Rating" shall mean the lowest rating level (a
rating level being, e.g. each of BBB-, BBB and BBB+, in the case of S&P)
assigned by each of the Rating Agencies to any of the senior long term unsecured
debt issues of the Borrower. A rating, whether public or private, by a Rating
Agency shall be deemed to be in effect on the date of announcement or
publication by such Rating Agency of such rating or, in the absence of such
announcement or publica-
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tion, on the effective date of such rating and will remain in effect until the
date of announcement or publication of any change in such rating or, in the
absence of such announcement or publication, the effective date of any such
change. In the event the standards for one or more rating levels of a Rating
Agency are revised, or such ratings are designated differently (such as by
changing letter designations to numerical designations) and such Rating Agency
does not state at the time of the designation what the equivalent ratings are,
then the references herein to such rating level or levels shall be changed to
the revised or redesignated rating for which the standards are closest to the
standards at the date hereof for the rating which has been revised or rede-
signated, all as determined by the Required Banks in good faith.
"Applicable Eurodollar Margin" shall mean, at any time during the
relevant Category Period set forth below and with respect to any type of
Eurodollar Loans, the margin set forth below opposite such relevant Category
Period for the relevant type of Eurodollar Loans; provided, however that
-------- -------
notwithstanding anything to the contrary contained herein, until the first day
after the anniversary of the Initial Borrowing Date, the Applicable Eurodollar
Margin shall mean (x) 2.00% for Term Loans and (y) 1.75% for Revolving Loans:
I. Term Loans:
----------
Applicable
Eurodollar
Category Period Margin
--------------- ----------
Category A Period 1.00%
Category B Period 1.25%
Category C Period 1.50%
Category D Period 1.75%
Category E Period 2.00%
Category F Period 2.25%
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II. Revolving Loans:
---------------
Applicable
Eurodollar
Category Period Margin
--------------- ----------
Category A Period 0.75%
Category B Period 1.00%
Category C Period 1.25%
Category D Period 1.50%
Category E Period 1.75%
Category F Period 2.00%
"Approved Alternate Currency" shall mean, with respect to any Trade
Letter of Credit, Canadian Dollars, British Pounds Sterling, Italian Lira,
German Deutsche Marks, Swiss Francs, French Francs, Belgian Francs, Dutch
Guilders, Spanish Pesetas and Japanese Yen, and any other currency other than
Dollars which is approved by the Letter of Credit Issuer in respect of such
Trade Letter of Credit and the Administrative Agent prior to the issuance of
such Trade Letter of Credit.
"Approved Bank" shall have the meaning set forth in the definition of
Cash Equivalents.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person, but
excluding any sale, transfer or other disposition by the Borrower or any of its
Subsidiaries of its capital stock or any other securities issued by it) of the
Borrower or such Subsidiary (other than (w) Joint Venture Investments made
pursuant to Section 8.05(m), (x) sales of investments held pursuant to Section
8.05(b), (d), (e), (g), (i), (j), (l) or (o), (y) any sale, transfer or
disposition of inventory and/or excess, worn, outmoded or obsolete equipment in
the ordinary course of business of the Borrower or such Subsidiary and (z) any
other sale, transfer or disposition of assets generating Net Cash Proceeds from
such transaction in an amount which, when added to the Net Cash Proceeds of all
other Asset Sales consummated pursuant to this clause (z), does not exceed
$1,000,000).
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"Assignment Agreement" shall have the meaning provided in Section
12.04(b).
"Authorized Officer" shall mean, with respect to any Person, the
Chairman of the Board, the President, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, any executive vice president,
any senior vice president, any group vice president, any vice president,
treasurer or secretary of such Person.
"Available Dividend Amount" shall mean $10,000,000, provided that such
amount shall be (i) increased (x) on the date of any payments under Section
4.02(A)(f) by the Remaining Excess Cash Amount for the relevant Excess Cash Flow
Period and (y) on the date of any payment under Section 4.02(A)(e), by an amount
equal to 25% of the Net Equity Issuance Proceeds giving rise to such prepayment
and (ii) decreased by the amount of any Dividends paid pursuant to Section
8.06(c).
"Bank" shall have the meaning provided in the first paragraph of this
Agreement, and shall include any Person which becomes a Bank party to this
Agreement in accordance with Section 12.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 2.02(c) or (ii) a Bank
having notified the Administrative Agent and/or the Borrower that it does not
intend to comply with the obligations under Section 1.01(a) or (b) or under
Section 2.02(c), in the case of either clause (i) or (ii) above as a result of
the appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" shall mean the higher of (i) the Federal Funds Rate plus
1/2 of 1%, or (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
the Agreement.
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"Borrowing" shall mean the incurrence pursuant to a single Facility of
one Type of Loan by the Borrower from all of the Banks having Commitments with
respect to such Facility on a pro rata basis on a given date (or resulting from
--- ----
conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period, provided that Base Rate Loans incurred pursuant to Section
--------
1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, as at any date of which the amount
thereof is being determined, an amount equal to the sum of (i) 85% of Eligible
Receivables and (ii) 50% of Eligible Inventory, each as determined from the
Borrowing Base Certificate most recently delivered pursuant to Section 7.01(i).
"Borrowing Base Certificate" shall have the meaning provided in
Section 7.01(i).
"Broome County Facility" shall mean the manufacturing facility
established by the Borrower in the town of Union, Broome County, New York.
"Broome County Loan Documents" shall mean all documents, instruments
and agreements entered into by the Borrower in connection with its loan from the
New York State Urban Development Corporation under the Expansion, Retention and
Attraction Assistance Program in connection with the establishment by the
Borrower of the Broome County Facility.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking institu-
tions are authorized by law or other governmental actions to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between
banks in Dollar deposits in the London interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities, including
Capitalized Lease Obligations but, in any event, excluding interest capitalized
in accordance with GAAP), by the Borrower and its Subsidiaries during that
period that, in conformity with GAAP, are or are required to be included in the
property, plant or equipment
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reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the consolidated
balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower and its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities in accordance with GAAP.
"Captive Insurance Subsidiary" shall mean AMETEK (Bermuda) Ltd., a
corporation organized and existing under the laws of Bermuda.
"Cash Collateral Account" shall have the meaning provided in Section
4.02(A)(a).
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
--------
States of America is pledged in support thereof) having maturities of not more
than five years from the date of acquisition, (ii) Dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Bank that
is a commercial bank having capital and surplus in excess of $500,000,000 or (y)
any bank whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Moody's is at least P-1 or the equivalent thereof
(any such Bank or bank, an "Approved Bank"), in each case with maturities of not
more than six months from the date of acquisition, (iii) commercial paper issued
by any Approved Bank or by the parent company of any Approved Bank and
commercial paper issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's,
or guaranteed by any industrial company with a long term unsecured debt rating
of at least A or A2, or the equivalent of each thereof, from S&P or Moody's,
as the case may be, and in each case maturing within one year after the date of
acquisition, (iv) any fund or funds investing solely in investments of the type
described in clauses (i) through (iii) above, (v) shares of money market or
mutual or similar funds having assets in excess of $100,000,000 investing solely
in debt securities
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with maturities of less than one year and (vi) debt securities with a rating of
at least A or A2, or the equivalent of each thereof, from S&P or Moody's, as
the case may be, of public companies which (x) are freely tradeable without
restriction on a stock exchange or through a nationally recognized automated
quotation system, (y) are purchased and held as current assets and not for
investment and (z) have a maturity of not more than five years from the issuance
thereof.
"Cash Proceeds" shall mean, with respect to any sale, lease, transfer
or other disposition of assets, the aggregate cash payments in connection
therewith (including any cash received by way of deferred payment pursuant to a
note receivable issued in connection therewith, other than the portion of such
deferred payment constituting interest, and including any amounts received under
any noncompete or similar agreement or as disbursement or withdrawals from any
escrow or similar account established in connection with any such sale, lease,
transfer or other disposition, but, in each such case, only as and when so
received).
"Category A Period" shall mean any period during which at all times
the Credit Rating is A- or above (to the extent that the Credit Rating at the
time of determination is the Applicable Credit Rating assigned by S&P) or A3 or
above (to the extent that the Credit Rating at the time of determination is the
Applicable Credit Rating assigned by Moody's).
"Category B Period" shall mean any period during which at all times
the Credit Rating is BBB+ (to the extent that the Credit Rating at the time of
determination is the Applicable Credit Rating assigned by S&P) or Baa1 (to the
extent that the Credit Rating at the time of determination is the Applicable
Credit Rating assigned by Moody's).
"Category C Period" shall mean any period during which at all times
the Credit Rating is BBB- or above but lower than BBB+ (to the extent that the
Credit Rating at the time of determination is the Applicable Credit Rating
assigned by S&P) or Baa3 or above but lower than Baa1 (to the extent that the
Credit Rating at the time of determination is the Applicable Credit Rating
assigned by Moody's).
"Category D Period" shall mean any period during which at all times
the Credit Rating is BB+ (to the extent that the Credit Rating at the time of
determination is the Applicable Credit Rating assigned by S&P) or Ba1 (to the
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extent that the Credit Rating at the time of determination is the Applicable
Credit Rating assigned by Moody's).
"Category E Period" shall mean any period during which at all times
the Credit Rating is BB- or above but lower than BB+ (to the extent that the
Credit Rating at the time of determination is the Applicable Credit Rating
assigned by S&P) or Ba3 or above but lower than Ba1 (to the extent that the
Credit Rating at the time of determination is the Applicable Credit Rating
assigned by Moody's).
"Category F Period" shall mean any period when there exists no
Category A Period, Category B Period, Category C Period, Category D Period or
Category E Period, including, without limitation, because no Credit Rating has
been assigned by either Rating Agency.
"Category Period" shall mean any of Category A Period, Category B
Period, Category C Period, Category D Period, Category E Period or Category F
Period, as applicable.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time, 42 U.S.C.
(Section) 9601 et seq.
-- ----
"Change of Control" shall mean (i) any "change of control" or similar
event shall occur under any Senior Note Document or any other agreements
governing or evidencing Indebtedness of the Borrower or any of its Subsidiaries
(including, without limitation, Permitted Refinancing Debt, if any) or (ii) any
Person or group (as such term is defined in Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") shall have
acquired, directly or indirectly, beneficial ownership (as such term is defined
in Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
outstanding Voting Stock of the Borrower.
"Chase" shall mean The Chase Manhattan Bank, N.A., and any successor
corporation thereto by merger, consolidation or otherwise.
"Co-Agent" shall have the meaning provided in the first paragraph of
this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
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Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"COLI Policy" shall mean a corporate owned life insurance policy held
by the Borrower with respect to certain of its employees.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
"Collateral Agent" shall mean Chase acting as collateral agent for
the Secured Creditors under the Security Documents.
"Collective Bargaining Agreement" shall have the meaning provided in
Section 5.01(m).
"Commitment" shall mean, with respect to each Bank, such Bank's Term
Loan Commitment and/or Revolving Commitment.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Commodities Agreement" shall mean any forward contract, futures
contract, commodity price swap, option contract or similar agreement or
arrangement, in each case intended to protect the Persons entering into same
from fluctuations in the price of, or shortage of supply of, products or other
materials utilized in the businesses permitted by Section 8.08.
"Common Stock" shall mean the Common Stock, par value $1.00 per share,
of the Borrower.
"Common Stock Repurchase" shall mean, collectively, the repurchase of
Common Stock by the Borrower pursuant to the Repurchase Program.
"Common Stock Repurchase Documents" shall mean each of the documents
relating to the consummation of the Common Stock Repurchase (other than trade
confirmations and similar documents).
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense for such period but only to the extent such
Consolidated Interest Expense is payable in cash for such period.
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"Consolidated Capital Funds" shall mean, as at any date of
determination, the sum of (i) Consolidated Indebtedness outstanding on such date
and (ii) Adjusted Consolidated Net Worth at such date.
"Consolidated EBIT" shall mean, for any period, (A) the sum of,
without duplication, the amounts for such period of (i) the net income (or loss)
of the Borrower and its Subsidiaries, (ii) provisions for taxes based on
income, (iii) Consolidated Interest Expense, and (iv) the amount of any increase
in the Borrower's LIFO reserve (exclusive of any portion thereof attributable to
sales of assets) during such period (and minus any decrease in the Borrower's
LIFO reserve (exclusive of any portion thereof attributable to sales of assets)
during such period) less (B) the amount for such period of gains on sales of
----
assets (excluding sales in the ordinary course of business other than sales of
equipment) and other extraordinary gains, in each case, to the extent included
in determining net income (or loss) for such period, all as determined on a
consolidated basis for the Borrower and its Subsidiaries.
"Consolidated EBITDA" shall mean, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated EBIT, (ii)
depreciation expense, (iii) amortization expense and (iv) other non-cash charges
(excluding any non-cash charges recorded in connection with any restructuring of
the Borrower or any of its Subsidiaries other than the non-cash restructuring
charges recorded on or prior to March 31, 1994 in contemplation of the
Transaction), in the case of each of clauses (ii)-(iv) above to the extent
deducted in determining Consolidated EBIT for such period, all as determined on
a consolidated basis for the Borrower and its Subsidiaries.
"Consolidated Fixed Charges" shall mean, for any period, the sum,
without duplication, of the amounts for such period of (i) Consolidated Cash
Interest Expense, (ii) the payment of all cash income taxes, (iii) Capital
Expenditures paid in cash (other than additional Capital Expenditures made
during such period utilizing the amounts available under Sections 8.04(d)(ii)
and (iii)) and (iv) the scheduled principal amount of all amortization payments
on all Indebtedness other than payments (1) on the Revolving Credit Facility as
a result of the occurrence of the Revolving Credit Facility Maturity Date and
(2) the principal portion of rentals under Capitalized Lease Obligations; all as
determined on a consolidated basis for the Borrower and its Subsidiaries.
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"Consolidated Indebtedness" shall mean all Indebtedness of the
Borrower and its Subsidiaries required to be accounted for as debt in accordance
with GAAP, determined on a consolidated basis, other than Indebtedness evidenced
by Intercompany Notes.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of the Borrower and its Subsidiaries determined on a consolidated
basis with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs (i.e., costs minus benefits) under Interest
----
Rate Protection Agreements, but excluding, however, amortization of deferred
financing costs to the extent included in total interest expense, all as
determined on a consolidated basis, in each case net of the total interest
income (excluding non-cash interest income on investments issued with original
issue discount) of the Borrower and its Subsidiaries for such period, determined
on a consolidated basis.
"Consolidated Net Worth" shall mean, as at any date of determination,
the stockholders' equity of the Borrower (after deducting treasury stock) as
determined in accordance with GAAP and as would be reflected on a consolidated
balance sheet of the Borrower prepared as of such date.
"Contingent Obligations" shall mean as to any Person (i) any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or in-
directly, including, without limitation, any obligation of such Person, whether
or not contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (x) for the purchase or payment of any such primary obligation or (y) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) 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 (d) otherwise to assure or hold harmless
the owner of such primary obligation against loss in respect thereof and (ii)
any Interest Rate Protection Agreement, Currency Agreement and Commodities
Agreement; provided, however, that the
-------- -------
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term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the Security
Documents and the Subsidiary Guaranty.
"Credit Event" shall mean the making of a Loan or the issuance of a
Letter of Credit.
"Credit Party" shall mean each of the Borrower and each Subsidiary
Guarantor.
"Credit Rating" shall mean (i) the Applicable Credit Rating assigned
by each Rating Agency, if such Applicable Credit Ratings are the same or (ii) if
the Applicable Credit Ratings assigned by the Rating Agencies differ, the lower
of the Applicable Credit Ratings assigned by the Rating Agencies.
"Currency Agreement" shall mean any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement designed to protect the Persons entering into same
against fluctuations in currency values.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Deferred Repayment Amount" shall mean, with respect to any
Reinvestment Event, the aggregate amount that (i) would have been applied to
repay the Loans pursuant to Section 4.02(A)(c), (g) or (h) had not the Borrower
delivered a Reinvestment Notice and (ii) is not so applied to repay the Loans as
a result of being designated as an Anticipated Reinvestment Amount in such
Reinvestment Notice so delivered.
"Designated Parties shall have the meaning provided in Section 9.04.
"Dividends" shall have the meaning provided in Section 8.06.
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"Documents" shall mean the Credit Documents and the Transaction
Documents.
"Dollars" and the sign "$" shall mean freely transferable lawful money
of the United States of America.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any state or territory thereof
(other than AMETEK (FSC) Inc.).
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Assignee" shall have the meaning provided in Section
12.04(b).
"Eligible Inventory" shall mean (i) the gross dollar value (determined
on a last in-first out basis) of the inventory of the Borrower and its
Subsidiaries, plus the amount, if positive, by which the gross dollar value of
----
the inventory of the Borrower and its Subsidiaries as determined on a first in-
first out basis exceeds the gross dollar value of such inventory determined on a
last in-first out basis, less (ii) an amount equal to 50% of the gross dollar
----
value (determined on a last in-first out basis or a first in-first out basis, as
the case may be, which basis is consistent with the practices of the Borrower
and its Foreign Subsidiaries prior to the Effective Date) of the inventory of
the Foreign Subsidiaries of the Borrower.
"Eligible Receivables" shall mean the total face amount of the
receivables of the Borrower and its Subsidiaries less (a) the sum of (i)
----
without duplication, (x) any returns, discounts, claims, credit and allowances
of any nature (whether issued, owing, granted or outstanding) and (y) reserves
for any other matter affecting the creditworthiness of account debtors owing
the receivables, (ii) an amount equal to 50% of the otherwise Eligible
Receivables of the Borrower and its Domestic Subsidiaries with account debtors
outside of the United States (such receivables, "Foreign Account Debtor
Receivables") and (iii) an amount equal to 50% of the otherwise Eligible
Receivables of the Foreign Subsidiaries of the Borrower (such receivables,
"Foreign Subsidiary Receivables") plus (b) an amount equal to 100% of the face
----
amount of Foreign Account Debtor Receivables and Foreign Subsidiary Receivables
to the extent supported by a letter of credit in favor of the Borrower or its
respective Subsidiary issued by an Approved Bank, provided that in no
--------
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event shall the sum of (1) the amount of Foreign Account Debtor Receivables and
Foreign Subsidiary Receivables which are not subtracted pursuant to clauses
(a)(ii) and (iii) above plus (2) the amount of Foreign Account Debtor
Receivables and Foreign Subsidiary Receivables added pursuant to clause (b)
above, exceed 100% of the Foreign Account Debtor Receivables and Foreign
Subsidiary Receivables at such time.
"Employment Agreements" shall have the meaning provided in Section
5.01(m).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, guideline, written
policy and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, health, safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, as amended,
33 U.S.C. (Section) 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
-- ----
(Section) 7401 et seq.; the Clean Air Act, 42 U.S.C. (Section) 7401 et seq.;
-- ---- -- ----
the Safe Drinking Water Act, 42 U.S.C. (Section) 3808 et seq.; the Oil
-- ----
Pollution Act of 1990, 33 U.S.C. (Section) 2701 et seq.; the Emergency Planning
-- ----
and the Community Right-to-Know Act of 1986, 42 U.S.C. (Section) 11001 et seq.,
-- ----
the Hazardous Material Transportation Act, 49 U.S.C. (Section) 1801 et seq.;
-- ----
the Occupational Safety and Health Act, 29 U.S.C. (Section) 651 et seq.; and
-- ----
any applicable state and local or foreign counterparts or equivalents.
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"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or any Subsidiary of the Borrower
would be deemed to be a "single employer" within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, the rate determined by the Administrative Agent to be the
arithmetic mean (rounded to the nearest 1/100 of 1%) of the offered quotation to
first-class banks in the London interbank Eurodollar market by each Reference
Bank for Dollar deposits of amounts in same day funds comparable to the
outstanding principal amount of the Eurodollar Loan of such Reference Bank for
which an interest rate is then being determined with maturities comparable to
the Interest Period to be applicable to such Eurodollar Loan, determined as of
10:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period, provided that if one or more of the
--------
Reference Banks fail to provide the Administrative Agent with its aforesaid
rate, then the Eurodollar Rate shall be determined based on the rate or rates
provided to the Administrative Agent by the other Reference Bank or Banks.
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any Excess Cash Flow Period, the
remainder of (A) the sum of (i) Consolidated EBITDA for such period and (ii) the
decrease, if any, in Adjusted Working Investment from the first day to the last
day of such period, minus (B) the sum of (i) the amount of Consolidated Interest
Expense for such period, (ii) the increase, if any, in Adjusted Working
Investment from the first day to the last day of such period, (iii) without
duplication, the amount of all taxes paid or payable in respect of such period,
(iv) the amount of all cash Capital Expenditures for such period (other than (1)
Capital Expen-
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ditures made and financed with Indebtedness and (2) additional Capital
Expenditures made during such period utilizing the amounts available under
Section 8.04(d)), (v) without duplication of clause (iv) above, the amount of
cash expended during such period in respect of Permitted Acquisitions, except to
the extent financed with Indebtedness, (vi) all Third Party Debt Repayments made
during such period, except prepayments of the principal amount of Term Loans
made pursuant to Sections 4.02(A)(c), (d), (e), (f), (g), (h) and/or (i) (to the
extent the source of the repayment was not included in Consolidated EBITDA for
such period) and (vii) non-cash charges added back in a previous period pursuant
to the definition of Consolidated EBITDA to the extent any such charge has
become a cash item in the current period.
"Excess Cash Flow Period" shall mean (i) the period commencing on
April 1, 1994 and ending on the last day of the Borrower's fiscal year ending
December 31, 1994 and (ii) each subsequent fiscal year of the Borrower.
"Existing Bank Facility" shall mean the Amended and Restated Revolving
Credit Agreement, dated as of July 1, 1991, among the Borrower, various lenders
and Chemical Bank, as agent, as the same has been amended, modified or
supplemented to the Initial Borrowing Date.
"Existing Debt" shall mean the Existing Term Debt and the Existing
Bank Facility.
"Existing Debt Refinancing Documents" shall mean each of the documents
and agreements entered into in connection with the Refinancing and in
connection with the release of all guaranties and security with respect to the
Refinancing and any consents required in connection therewith.
"Existing Letters of Credit" shall have the meaning set forth in
Section 2.01.
"Existing Term Debt" shall mean and include each of (i) the Note
Purchase Agreements, dated as of September 1, 1989 in connection with the
issuance of the Borrower's $75,000,000 aggregate principal amount of 9.35%
Senior Notes due September 15, 2004, (ii) the Note Purchase Agreements dated as
of September 1, 1986 in connection with the issuance of the Borrower's
$120,000,000 aggregate principal amount of 8.95% Senior Notes due September 15,
2001 and (iii) the Note Purchase Agreement dated as of July 15, 1992 in
connection with the issuance of the Borrower's $3,600,000 aggregate
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principal amount of 8.05% Senior Secured Notes due July 15, 2004.
"Expiration Date" shall mean March 31, 1994.
"Facility" shall mean any of the two Facilities established under this
Agreement, i.e., the Term Loan Facility and the Revolving Credit Facility.
----
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"Final Maturity Date" shall mean the seventh anniversary of the
Initial Borrowing Date.
"Fixed Charge Coverage Ratio" for any period shall mean the ratio of
(i) Consolidated EBITDA for such period to (ii) Consolidated Fixed Charges for
such period.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or any such Subsidiary residing outside the United States of America, which
plan, fund or other similar program provides, or results in, retirement income,
a deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary Guaranty" shall have the meaning provided in
Section 7.16.
"Foreign Subsidiaries" shall mean each Subsidiary of the Borrower
which is not a Domestic Subsidiary.
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"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Sections 4.02 and 8, including defined terms as used therein, are subject (to
the extent provided therein) to Section 12.07(a).
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is friable, urea formaldehyde
foam insulation, transformers or other equipment that contained or contains,
electric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of similar import,
under any applicable Environmental Law; and (c) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Environmental Law.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person, (iii) the Stated Amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by
any Lien on any property owned by such first Person, whether or not such
indebtedness has been assumed, (v) all Capitalized Lease Obligations of such
Person, (vi) all obligations of such Person to pay a specified purchase price
for goods or services whether or not delivered or accepted, i.e., take-or-pay
----
and similar obligations, and (vii) all Contingent Obligations of such Person,
provided that Indebtedness shall not include trade payables and accrued
- --------
expenses, in each case arising in the ordinary course of business.
"Initial Borrowing Date" shall mean a date, which shall in any event
occur not later than the Expiration Date, upon which the initial Borrowing of
Loans occurs.
"Insurance Proceeds" shall mean, with respect to any Recovery Event,
the aggregate cash payments received by the Borrower or any of its Subsidiaries
in respect of such
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Recovery Event (including any cash payments received in respect of any
condemnation award or the exercise of any power of eminent domain).
"Intercompany Loan" shall have the meaning provided in Section
8.05(g).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit J, evidencing Intercompany Loans.
"Interest Coverage Ratio" for any period shall mean the ratio of (i)
Consolidated EBITDA less the amount of all Capital Expenditures (other than
additional Capital Expenditures made during such period utilizing the amounts
available under Sections 8.04(d)(ii) and (iii)) made by the Borrower or any of
its Subsidiaries, in each case for such period to (ii) Consolidated Cash
Interest Expense for such period.
"Interest Period", with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or any other similar agreement or arrangement designed to hedge the risks for a
Person with respect to, or otherwise manage, interest rates.
"Intermediate Target Date" shall mean the first date upon which both
(i) a Category C Period exists and (ii) no Default or Event of Default exists.
"Joint Venture Investments" shall mean any investment, capital
contribution, advance, loan, or guaranty, or any other investment by the
Borrower or any of its Subsidiaries in a joint venture related to any business
permitted by Section 8.08.
"Joint Venture Letter of Credit Outstandings" shall mean at any time
the aggregate amount of Letter of Credit Outstandings at such time in respect of
Letters of Credit issued on behalf of any Permitted Joint Venture.
"L/C Fee" shall have the meaning provided in Section 3.01(b).
"L/C Facing Fee" shall have the meaning provided in Section 3.01(c).
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"Leasehold" of any Person means all of the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Issuer" shall mean (A) with respect to each Existing
Letter of Credit, PNC, and (B) with respect to all other Letters of Credit, (x)
PNC and (y) with the consent of the Administrative Agent and the Borrower, any
other Bank, to the extent such Bank agrees, in its sole discretion, to become a
Letter of Credit Issuer for the purpose of issuing Letters of Credit pursuant to
Section 2.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit; provided, however, that for purposes of Sections 1.01(b),
-------- -------
2.01(c)(i), 4.02(A)(a) and (j), and 4.02(B)(a), and the definitions of "Joint
Venture Letter of Credit Outstandings" and "Total Unutilized Revolving Commit-
ment," in determining the Letter of Credit Outstandings, the Stated Amount of
any outstanding Trade Letter of Credit denominated in an Approved Alternate
Currency shall be deemed to be an amount equal to 120% of the maximum available
amount to be drawn under such Trade Letter of Credit (regardless of whether any
conditions for drawing could then be met).
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute or any lease in the nature thereof).
"Loan" shall mean each and every Loan made by any Bank hereunder,
including Term Loans and Revolving Loans.
"Management Agreements" shall have the meaning provided in Section
5.01(m).
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"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, properties, assets, liabilities or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole.
"Material Subsidiary" shall mean any Domestic Subsidiary having gross
assets with a fair market value (reasonably determined by senior management of
the Borrower in good faith) of at least $3,000,000 and/or Consolidated EBITDA
for the last four fiscal quarters of at least $750,000 (for purposes of this
definition Consolidated EBITDA shall be calculated for such Subsidiary on a
stand-alone basis notwithstanding anything to the contrary contained in the
definition thereof or in any other definition used in the calculation thereof);
provided, however, that in any event the term Material Subsidiary shall include
- -------- -------
any Domestic Subsidiary which constitutes a "Significant Subsidiary" under and
as defined in the Senior Note Indenture regardless of whether the above
conditions are satisfied.
"Maturity Date" shall mean either the Final Maturity Date or the
Revolving Credit Facility Maturity Date, as appropriate.
"Maximum Potential Liability" with respect to any Permitted Earn-Out
Debt shall mean, as at any date of determination, an amount equal to the sum of
(i) the amount of all cash theretofore paid in respect of such Permitted Earn-
Out Debt plus (ii) the maximum potential liability in respect of such Permitted
----
Earn-Out Debt at such time.
"Minimum Assignment Amount" shall mean, with respect to any
assignment by any Bank of its Loans or Commitments hereunder an amount equal to
$5,000,000, which is not required to be divided pro rata among the Loans or
--- ----
Commitments held by such Bank.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans,
$2,500,000, and (ii) for Eurodollar Loans, $5,000,000.
"Moody's" shall mean Moody's Investors Services, Inc.
"Mortgage" shall have the meaning provided in Section 5.01(j).
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"Mortgage Policies" shall have the meaning provided in Section
5.01(j).
"Mortgaged Properties" shall mean and include (i) all Real Properties
owned or leased by the Borrower or any of its Subsidiaries, to the extent
designated as such on Schedule II hereto and (ii) each Real Property subjected
to a mortgage in favor of the Collateral Agent for the benefit of the Secured
Creditors pursuant to Section 7.11.
"Multiemployer Plan" shall have the meaning provided in Section
6.14(a).
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (a) cash expenses of sale (including,
without limitation, payment of principal, premium and interest on Indebtedness
and other liabilities other than the Loans) and (b) taxes paid or payable as a
result thereof over and above the taxes which would otherwise have been payable
in the absence of such Asset Sale.
"Net Debt Issuance Proceeds" shall mean the cash proceeds (net of
underwriting discounts and commissions, if any, and other reasonable costs
associated therewith) received from the incurrence of Indebtedness.
"Net Equity Issuance Proceeds" shall mean the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) received from the sale of equity.
"Net Insurance Proceeds" shall mean the Insurance Proceeds received by
the Borrower and/or its Subsidiaries with respect to any Recovery Event net of
reasonable costs and expenses associated therewith (including payment of
principal, premium and interest of Indebtedness other than the Loans, required
to be, and which is, repaid under the terms thereof as a result of such Recovery
Event).
"Note" shall mean each Term Note and Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
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"Notice Office" shall mean the office of the Administrative Agent at
One Chase Manhattan Plaza, New York, New York, or such other office as the
Administrative Agent may designate in writing to the Borrower and the Banks from
time to time.
"Notice of Prepayment" shall have the meaning set forth in Section
4.01.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent, the Collateral Agent or any Bank pursuant to the terms
of this Agreement or any other Credit Document.
"Participating Bank" shall have the meaning set forth in Section 2.02.
"Payment Office" shall mean the office of the Administrative Agent at
One Chase Manhattan Plaza, New York, New York or such other office as the
Administrative Agent may designate in writing to the Borrower and the Banks from
time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan Refund" shall mean any cash payments (net of reasonable
costs associated therewith, including income, excise and other taxes payable
thereon) received by the Borrower and/or any of its Subsidiaries from any return
of any surplus assets from any single Plan (other than any such refund the cash
payment received with respect to which, when added to the cash payments received
from all other such refunds from any such Plan in the same fiscal year as such
refund, does not exceed $400,000).
"Percentage" shall mean at any time for each Bank, the percentage
obtained by dividing such Bank's Revolving Commitment by the Total Revolving
Commitment, provided that if the Total Revolving Commitment has been terminated,
--------
the Percentage of each Bank shall be determined by dividing such Bank's
Revolving Commitment immediately prior to such termination by the Total
Revolving Commitment immediately prior to such termination.
"Performance Target" shall mean a ratio of 1.25:1.
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"Permitted Acquisition" shall have the meaning set forth in Section
8.01(i).
"Permitted Acquisition Amount" shall mean at any time an amount which
initially shall be $25,000,000 and which shall be decreased by the sum of (i)
---------
the aggregate amount of cash theretofore expended for all Permitted
Acquisitions, (ii) the aggregate face amount of all Indebtedness incurred in
connection with all Permitted Acquisitions, (iii) the Maximum Potential
Liability at such time of all Permitted Earn-Out Debt previously incurred in
connection with all Permitted Acquisitions and (iv) prior to the Intermediate
Target Date, the aggregate fair market value (determined as of the date of
issuance in good faith by senior management of the Borrower) of Common Stock
issued as consideration in connection with all Permitted Acquisitions.
"Permitted Captive Insurance Investments" shall mean any investments
currently held by the Captive Insurance Subsidiary and any other investment made
by the Captive Insurance Subsidiary in compliance with the applicable laws and
regulations governing the Captive Insurance Subsidiary in its capacity as a
captive insurance entity.
"Permitted Commodities Agreement" shall mean any Commodities Agreement
entered into in the ordinary course of business by the Borrower and/or any of
its Subsidiaries and not for speculative purposes, to the extent consistent with
the practices of the Borrower and its Subsidiaries prior to the Effective Date.
"Permitted Currency Agreement" shall mean any Currency Agreement
entered into in the ordinary course of business by the Borrower or any
Subsidiary of the Borrower and not for speculative purposes, to the extent
consistent with the practices of the Borrower and its Subsidiaries prior to the
Effective Date.
"Permitted Earn-Out Debt" shall mean Indebtedness of the Borrower or
any of its Subsidiaries incurred in connection with a Permitted Acquisition and
in accordance with Section 8.01(i), which Indebtedness is not secured by any
assets of the Borrower or any of its Subsidiaries (including, without
limitation, the assets so acquired) and is only payable by the Borrower and its
Subsidiaries in the event certain future performance goals are achieved with
respect to the assets acquired; provided that such Indebtedness shall only
--------
constitute Permitted Earn-Out Debt to the extent the terms of such Indebtedness
expressly limit the
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maximum potential liability of the Borrower and its Subsidiaries with respect
thereto and all such other terms shall be in form and substance reasonably
satisfactory to the Administrative Agent.
"Permitted Encumbrances" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Administrative Agent in its reasonable
discretion.
"Permitted Existing Indebtedness" shall have the meaning provided in
Section 6.20.
"Permitted Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.01(m).
"Permitted Existing Investments" shall mean the investments held by
the Borrower and its Subsidiaries as of the Effective Date and listed on
Schedule X hereto, but only to the respective date, if any, set forth on such
Schedule X for the liquidation of any such Permitted Existing Investment.
"Permitted Foreign Investments" shall mean, with respect to any
Foreign Subsidiary, (i) government obligations of the country of such Foreign
Subsidiary's organization, in each case with maturities of not greater than one
year and (ii) investments by such Foreign Subsidiary in banks or other financial
institutions that are not otherwise provided for in the definition of Cash
Equivalents to the extent necessitated by commercial trade requirements or due
to a lack of approved bank investment alternatives as individually approved by a
Senior Financial Officer of the Borrower, in each case, with maturities of less
than six months.
"Permitted Foreign Subsidiary WC Debt" shall mean Indebtedness of a
Foreign Subsidiary the proceeds of which are used to finance working capital
requirements of such Foreign Subsidiary, provided that (A) no such Indebtedness
--------
shall be guaranteed by the Borrower or any of its Subsidiaries (other than
other Foreign Subsidiaries), (B) any such Indebtedness shall be non-recourse to
the Borrower and its Subsidiaries (other than other Foreign Subsidiaries) and
(C) no Permitted Foreign Subsidiary WC Debt may be incurred or assumed which
contains any provision in the documents governing or evidencing the same which,
in the reasonable opinion of the Administrative Agent, would permit a default or
event
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of default to occur under such Permitted Foreign Subsidiary WC Debt based upon
the occurrence of a Default or Event of Default under this Agreement unless any
such Event of Default has resulted in an acceleration under this Agreement. It
is understood and agreed that the aggregate Dollar amount of Permitted Foreign
Subsidiary WC Debt outstanding at any time shall be determined at the spot
exchange rate for the currency in question at such time of determination. The
incurrence of Permitted Foreign Subsidiary WC Debt shall be deemed to be a
representation and warranty by the Borrower that all conditions thereto have
been satisfied and that same is permitted in accordance with the terms of this
Agreement, which representation and warranty shall be deemed to be a
representation and warranty for all purposes hereunder, including, without
limitation, Sections 5.02 and 9.
"Permitted Joint Venture" shall mean any Person engaged in business of
the type described in Section 8.08 of which the Borrower shall own, directly or
indirectly, 50% or more, but less than 100%, of the equity and voting interests
and another Person (or group of Persons which acts together in relation to such
Permitted Joint Venture) owns the remaining equity and voting interests.
"Permitted Liens" shall have the meaning provided in Section 8.02(d).
"Permitted Materials" shall have the meaning provided in Section
6.17(b).
"Permitted Refinancing Debt" shall mean Indebtedness incurred by the
Borrower, the proceeds of which are used to refinance the Senior Notes or
previously issued Permitted Refinancing Debt, so long as (i) at the time of
incurrence thereof (both before and after giving effect thereto) no Default or
Event of Default then exists, (ii) the aggregate principal amount of such
Permitted Refinancing Debt does not exceed the aggregate principal amount of
Senior Notes or Permitted Refinancing Debt then outstanding, (iii) the interest
rate on such Permitted Refinancing Debt is no greater than the interest rate on
the Senior Notes or the Permitted Refinancing Debt so refinanced, (iv) the final
maturity of such Permitted Refinancing Debt is no earlier than the final
maturity of the Senior Notes or the Permitted Refinancing Debt so refinanced,
(v) there shall be no scheduled amortization payments on the Permitted
Refinancing Debt prior to March 31, 2004 (vi) no payment or make-whole premium
or any other similar fee is paid in connection with the refinancing of the
Senior Notes or the Permitted
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Refinancing Debt so refinanced except the payment of a premium, if any, up to
the amount set forth in the Senior Note Documents as in effect on the Effective
Date, (vii) no such Permitted Refinancing Debt shall be issued prior to the
fifth anniversary of the Initial Borrowing Date, (viii) concurrently with the
issuance thereof, all proceeds thereof shall be deposited with the trustee for
the payment of all or a portion of the Senior Notes or the Permitted Refinancing
Debt so refinanced and (ix) all of the documents evidencing or governing the
terms of such Permitted Refinancing Debt are delivered to the Banks prior to the
incurrence of the Permitted Refinancing Debt and all of the other terms and
conditions thereof, including the covenants, amortization schedules, interest
rate, redemption provisions, maturity, defaults and remedies are in form and
substance satisfactory to, and approved in writing by, the Administrative Agent
and the Required Banks.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of), any Credit Party or any of its
Subsidiaries or any ERISA Affiliate, and each such plan for the five-year period
immediately following the latest date on which any Credit Party or any such
Subsidiary or any ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.01(g).
"Pledged Securities" shall mean the Pledged Securities as defined in
the Pledge Agreement.
"PNC" shall mean PNC Bank, National Association, and any successor
corporation thereto by merger, consolidation or otherwise.
"Press Release" shall mean that certain press release issued by the
Borrower on November 17, 1993 announcing the Transaction and certain other
matters set forth therein.
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"Prime Lending Rate" shall mean the rate which Chase announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Chase may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Projections" shall have the meaning provided in Section 6.11(e).
"Rating Agencies" shall mean each of S&P and Moody's.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. (Section) 6901 et seq.
-- ----
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any Insurance Proceeds payable by reason of theft, physical
destruction or damage or any other similar event (including as a result of any
condemnation proceeding or the exercise of the power of eminent domain) with
respect to any properties or assets of the Borrower or any of its Subsidiaries.
"Reference Banks" shall mean each of Chase and PNC.
"Refinancing" shall mean (i) the refinancing by the Borrower of, and
the termination by the Borrower of all commitments under, the Existing Bank
Facility, (ii) the repurchase, retirement, defeasance or redemption of each
issue of the Existing Term Debt, (iii) the payment of all loans, accrued
interest, premiums, fees, commissions, expenses and other amounts owing in
connection with the repayments described in clauses (i) and (ii) and the release
of any guaranties or security in connection therewith and (iv) the termination
of all commitments to have additional letters of credit issued under the [PNC]
Agreement, the termination of all obligations of the Borrower thereunder and all
Existing Letters of Credit becoming Letters of Credit issued hereunder pursuant
to Section 2.01(b) hereof.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to
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time in effect and any successor to all or a portion thereof establishing
reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Reinvestment Assets" shall mean, with respect to any Asset Sale or
the receipt of any Net Insurance Proceeds from a Recovery Event, assets to be
employed in, and/or the capital stock of any Person engaged in, the types of
businesses permitted in Section 8.08.
"Reinvestment Event" shall mean the consummation of any Asset Sale,
the receipt of any Pension Plan Refund or the receipt of any Net Insurance
Proceeds from a Recovery Event, in each case to the extent the Borrower has
delivered, in connection therewith, a Reinvestment Notice as permitted by
Section 4.02(A)(c), (g) or (h), as the case may be.
"Reinvestment Notice" shall mean a written notice signed by an
Authorized Officer of the Borrower stating that the Borrower, in good faith,
intends and expects to use (directly or through its Subsidiaries) (i) within a
period of not in excess of 12 months all or a specified portion of the Net Cash
Proceeds of an Asset Sale or the Net Insurance Proceeds of a Recovery Event, as
the case may be, to restore, purchase, construct or otherwise acquire
Reinvestment Assets or (ii) within a period of not in excess of 24 months all or
a specified portion of any Pension Plan Refund to fund a replacement Plan in
accordance with Section 4980 of the Code.
"Reinvestment Prepayment Amount" shall mean with respect to any
Reinvestment Event, the Deferred Repayment Amount relating thereto less, (x) in
connection with any Asset Sale or the receipt of any Net Insurance Proceeds any
amount expended by the Affected Company prior to the Reinvestment Prepayment
Date applicable thereto, in furtherance of the restoration, purchase,
construction or other acquisition of Reinvestment Assets or (y) in connection
with the receipt of any Pension Plan Refund, any amount expended by the Affected
Company prior to the Reinvestment Prepayment Date applicable thereto, in funding
a replacement Plan in accordance with Section 4980 of the Code, provided,
--------
however, in calculating the Reinvestment Prepayment Amount in accordance with
- -------
this clause (y), any such amount expended and deducted from the Reinvestment
Prepayment Amount in connection with any Reinvestment Event shall not be
deducted
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in calculating the Reinvestment Prepayment Amount in connection with any other
Reinvestment Event.
"Reinvestment Prepayment Date" shall mean, with respect to any
Reinvestment Event, the earliest of (i) the date, if any, upon which the
Administrative Agent, on behalf of the Required Banks, shall have delivered a
written termination notice to the Borrower, provided that such notice may only
--------
be given while an Event of Default exists, (ii) the date occurring (x) 12 months
after such Reinvestment Event to the extent resulting from an Asset Sale or the
receipt of Net Insurance Proceeds or (y) 24 months after such Reinvestment Event
to the extent resulting from the receipt of any Pension Plan Refund and (iii)
the date on which the Affected Company shall have determined not to, or shall
have otherwise ceased to, (x) proceed with the restoration, purchase,
construction or other acquisition of Reinvestment Assets in connection with such
Reinvestment Event to the extent resulting from an Asset Sale or the receipt of
Net Insurance Proceeds or (y) proceed with the funding of a replacement Plan in
accordance with Section 4980 of the Code in connection with such Reinvestment
Event to the extent resulting from the receipt of a Pension Plan Refund.
"Release" shall mean disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
releasing, pumping, injecting, depositing, dispersing, migrating and the like,
into or upon land or water or air, or otherwise entering into the indoor or
outdoor environment or into or out of any Real Property, including the movement
of Hazardous Materials through or in the air, soil, surface water, ground water
or property.
"Remaining Excess Cash Amount" for any Excess Cash Flow Period shall
mean an amount, if positive, equal to 25% of the Excess Cash Flow for such
Excess Cash Flow Period.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
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"Repurchase Program" shall mean the repurchase by the Borrower of
shares of Common Stock pursuant to open market and/or privately negotiated
purchases and/or a cash tender offer for aggregate consideration of up to
$150,000,000, in all cases on or prior to the second anniversary of the Initial
Borrowing Date and in accordance with the provisions of Section 8.06(b).
"Required Appraisals" shall have the meaning provided in Section 7.11.
"Required Banks" shall mean Banks whose outstanding Term Loans, Term
Loan Commitments and Revolving Commitments (or, if after the Total Revolving
Commitment has been terminated, outstanding Revolving Loans and an amount equal
to their Percentages of Letter of Credit Outstandings, at such time) constitute
at least a majority of the sum of (i) the total outstanding Term Loans, (ii) the
Total Term Loan Commitment and (iii) the Total Revolving Commitment (or, if
after the Total Revolving Commitment has been terminated, the total outstanding
Revolving Loans and an amount equal to the aggregate Percentages of all Banks of
Letter of Credit Outstandings at such time).
"Revolving Commitment" shall mean, with respect to each Bank, the
amount, if any, set forth opposite such Bank's name in Schedule I hereto
directly below the column entitled "Revolving Commitment", as the same may be
(x) reduced from time to time pursuant to Section 3.02, 3.03 and/or 9 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 12.04.
"Revolving Credit Facility" shall mean the Facility evidenced by the
Total Revolving Commitment.
"Revolving Credit Facility Maturity Date" shall mean the fifth
anniversary of the Initial Borrowing Date.
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Rights Agreement" shall mean the Rights Agreement, dated as of July
26, 1989 between the Borrower and The Chase Manhattan Bank, N.A., as rights
agent thereunder, as amended, modified or supplemented from time to time.
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"S&P" shall mean Standard & Poor's Corporation.
"Scheduled Repayment" shall have the meaning provided in Section
4.02(A)(b).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Security Agreement" shall have the meaning provided in Section
5.01(i).
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreements.
"Security Agreements" shall mean each of (i) the Security Agreement,
and (ii) any other security agreement executed by the Borrower or any of its
Subsidiaries pursuant to Section 7.11.
"Security Documents" shall mean each of the Security Agreements, the
Pledge Agreement, the Mortgages, and after the execution and delivery thereof,
each Additional Security Document.
"Senior Financial Officer" of any Person shall mean the Chief
Financial Officer and any other senior financial officer of such Person
designated as such in writing to the Administrative Agent by the Chief Financial
Officer of such Person.
"Senior Note Documents" shall mean the Senior Notes, the Senior Note
Indenture and all other documents and agreements entered into in connection
therewith.
"Senior Note Indenture" shall mean the Indenture, dated as of March
[__], 1994, among the Borrower and Corestates Bank, N.A., as trustee, as
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Senior Notes" shall mean the $150,000,000 aggregate principal amount
of the Borrower's [___%] Senior Notes due 2006, as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.
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"Shareholders' Agreements" shall have the meaning provided in Section
5.01(m).
"Standby Letter of Credit" shall have the meaning set forth in Section
2.01(a).
"Stated Amount" of each letter of credit (including any Letter of
Credit issued hereunder) shall mean the maximum available to be drawn thereunder
(regardless of whether any conditions for drawing could then be met); provided,
--------
however, for purposes of Sections 2.01(c)(i) and 2.01(c)(viii) the Stated Amount
- -------
of any Trade Letter of Credit denominated in an Approved Alternate Currency
shall be an amount equal to 120% of the maximum available amount to be drawn
thereunder (regardless of whether any conditions for drawing could then be met).
"Stock Option Plans" shall mean the 1981 Employees' Non-Qualified
Stock Option and Stock Appreciation Rights Plan of AMETEK, Inc., as amended; the
1983 Employees' Incentive Stock Option Plan of AMETEK, Inc., as amended; the
1987 Employees' Stock Incentive Plan of AMETEK, Inc., as amended; the 1991 Stock
Incentive Plan of AMETEK, Inc., as amended; and any similar replacement or other
plans which provide for stock options, restricted stock awards, stock
appreciation rights, phantom stock awards and other similar options, awards and
rights established by the Borrower after the Effective Date.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean each of (i) each Domestic Subsidiary
of the Borrower existing on the Initial Borrowing Date and (ii) such other
Subsidiaries of the Borrower that become a Subsidiary Guarantor by executing and
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delivering to the Administrative Agent, a counterpart of the Subsidiary
Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section
5.01(h).
"Syndication Date" shall mean the earlier of (x) the date which is 60
days after the Initial Borrowing Date and (y) the date upon which Chase, as
Administrative Agent, determines in its sole discretion (and notifies the
Borrower) that the primary syndication (and the resulting addition of
institutions as Banks pursuant to Section 12.04) has been completed.
"Target Date" shall mean the first date upon which both (i) a Category
B Period exists and (ii) no Default or Event of Default exists.
"Tax Sharing Agreements" shall have the meaning provided in Section
5.01(m).
"Taxes" shall have the meaning provided in Section 4.04.
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Availability Termination Date" shall mean the date
occurring 90 days after the Initial Borrowing Date.
"Term Loan Commitment" shall mean, with respect to each Bank, the
amount, if any, set forth opposite such Bank's name on Schedule I hereto
directly below the column entitled "Term Loan Commitment" as the same may be (x)
reduced or terminated pursuant to Section 3.02, 3.03 and/or 9 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 12.04.
"Term Loan Facility" shall mean the Facility evidenced by the Total
Term Loan Commitment.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Period" shall mean (i) for any determination made on or prior to
the last day of the fiscal quarter ending on or about December 31, 1994, the
period from April 1, 1994 to the last day of the fiscal quarter of the Borrower
then
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last ended, provided that the first Test Period shall end on the last day of the
--------
fiscal quarter ending on or about June 30, 1994, and (ii) for any determination
made thereafter, the four consecutive fiscal quarters of the Borrower then last
ended.
"Third Party Debt Repayments" shall mean any repayment by the
Borrower or any Subsidiary of principal on Indebtedness of the Borrower or any
Subsidiary, provided that Third Party Debt Repayments shall not include (i) any
--------
repayment on the Revolving Loans except to the extent the Total Revolving
Commitment has been permanently reduced in connection with such repayment, (ii)
any repayment on any other revolving loans of the Borrower or any Subsidiary
other than any such repayment at the final maturity thereof but then only to the
extent such revolving loans have not been replaced or refinanced through a new
loan or credit facility, (iii) any repayment financed through the incurrence of
new Indebtedness (including all repayments of Indebtedness in connection with
the Refinancing), (iv) any repayment of Indebtedness with proceeds of the sale
of assets or issuance of equity and (v) any repayments of Capitalized Lease
Obligations and/or other indebtedness, to the extent in each case described in
this clause (v) deducted in computing Consolidated EBITDA for the applicable
Excess Cash Flow Period.
"Total Commitment" shall mean the sum of the Total Term Loan
Commitment and Total Revolving Commitment.
"Total Revolving Commitment" shall mean the sum of the Revolving
Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean the sum of the Term Loan
Commitments of each of the Banks.
"Total Unutilized Revolving Commitment" shall mean, at any time, the
excess, if any, of (i) the Total Revolving Commitment over (ii) the sum of (x)
the outstanding principal amount of all Revolving Loans plus (y) the Letter of
Credit Outstandings, in each case at such time.
"Trade Letter of Credit" shall have the meaning set forth in Section
2.01(a).
"Transaction" shall mean the consummation of the Refinancing and the
Common Stock Repurchase, the issuance of the Senior Notes, and the incurrence of
Loans and issuance of Letters of Credit, if any, on the Initial Borrowing Date.
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"Transaction Documents" shall mean the Existing Debt Refinancing
Documents, the Common Stock Repurchase Documents (if any) when executed, the
Senior Note Documents, and all other documents and instruments relating to or
effecting the Transaction.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
----
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with Statement of Financial Accounting Standards No. 35, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets allocable
thereto, determined in accordance with Treasury Regulations Section 1.412(c)(2)-
1(c)(1).
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
"Voting Stock" shall mean the shares of capital stock and any other
securities of any Person entitled to vote generally for the election of
directors of such Person or any other securities (including, without limitation,
rights and options), convertible into, exchangeable into or exercisable for, any
of the foregoing (whether or not presently exercisable, convertible or
exchangeable).
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned Sub-
sidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time. For
purposes of this Agreement, AMETEK Hong Kong shall be deemed to be a Wholly-
Owned Subsidiary of the Borrower so long as the Borrower owns, directly or
indirectly, at least 98% of the outstanding capital stock and voting interests
thereof.
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"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, telecopier device, telegraph or cable.
SECTION 11. The Administrative Agent, Co-Agents, etc.
-----------------------------------------
11.01 Appointment. Each Bank hereby irrevocably designates and
-----------
appoints Chase as Administrative Agent (such term as used in this Section 11 to
include Chase in its capacity as Collateral Agent), and each of Bank of
Montreal, Corestates Bank, N.A. and PNC, as a Co-Agent, for such Bank to act as
specified herein and in the other Credit Documents, and each such Bank hereby
irrevocably authorizes Chase as the Administrative Agent, and Bank of Montreal,
Corestates Bank, N.A. and PNC as Co-Agents, for such Bank, to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent or Co-Agents, as the case may be, by the
terms of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Administrative Agent and Co-
Agents each agrees to act as such upon the express conditions contained in this
Section 11. Notwithstanding any provision to the contrary elsewhere in this
Agreement, neither the Administrative Agent nor the Co-Agents shall have any
duties or responsibilities, except those expressly set forth herein or in the
other Credit Documents, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent or any Co-Agent. The provisions of this Section 11 are
solely for the benefit of the Administrative Agent, the Co-Agents and the Banks,
and neither the Borrower nor any of its Subsidiaries shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Administrative Agent and Co-
Agents each shall act solely as agent of the Banks and the Administrative Agent
and Co-Agents each does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for the Borrower or any
of its Subsidiaries.
11.02 Delegation of Duties. The Administrative Agent and Co-Agents
--------------------
each may execute any of its duties under this Agreement or any other Credit
Document by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties.
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The Administrative Agent and Co-Agents each shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Administrative Agent nor
----------------------
any Co-Agent, nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action law-
fully taken or omitted to be taken by it or such Person under or in connection
with this Agreement (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Borrower or
any of its Subsidiaries or any of their respective officers contained in this
Agreement, any other Credit Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent and/or any Co-Agent under or in connection with, this Agreement or any
other Credit Document or for any failure of the Borrower or any of its
Subsidiaries or any of their respective officers to perform its obligations
hereunder or thereunder. Neither the Administrative Agent nor any Co-Agent
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 to inspect the properties, books or records of the
Borrower or any of its Subsidiaries. Neither the Administrative Agent nor any
Co-Agent shall be responsible to any Bank for the effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any Credit Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or in
any financial or other statements, instruments, reports, certificates or any
other documents in connection herewith or therewith furnished or made by the
Administrative Agent and/or any Co-Agent to the Banks or by or on behalf of the
Borrower or any of its Subsidiaries to the Administrative Agent and/or any Co-
Agent or any Bank or be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants or
agreements contained herein or therein or as to the use of the proceeds of the
Loans or of the existence or possible existence of any Default or Event of
Default.
11.04 Reliance by Administrative Agent, Co-Agents, etc. The
-------------------------------------------------
Administrative Agent and the Co-Agents each shall be entitled to rely, and shall
be fully protected in relying,
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upon any note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order 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, without limitation, counsel
to the Credit Parties), independent accountants and other experts selected by
the Administrative Agent and/or any such Co-Agent. The Administrative Agent and
the Co-Agents each shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Banks as it deems appropriate
or 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 and the Co-Agents
each shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance with a
request of the Required Banks, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks.
11.05 Notice of Default. Neither the Administrative Agent nor any
-----------------
Co-Agent shall be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless it has received notice from a Bank
or the Borrower or any other Credit Party referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent or a Co-Agent
receives such a notice, it shall give prompt notice thereof to the Banks. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks, provided
--------
that unless and until the Administrative Agent shall have received such
directions, 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 in the best interests of the Banks.
11.06 Non-Reliance on Administrative Agent, Co-Agents and Other
---------------------------------------------------------
Banks. Each Bank expressly acknowledges that neither the Administrative Agent
nor any Co-Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by the
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Administrative Agent or any Co-Agent hereinafter taken, including any review of
the affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent or any
Co-Agent to any Bank. Each Bank represents to the Administrative Agent and the
Co-Agents that it has, independently and without reliance upon the
Administrative Agent or any Co-Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, assets, operations, property, financial
and other conditions, prospects and creditworthiness of the Credit Parties and
made its own decision to make its Loans, and participate in Letters of Credit,
hereunder and enter into this Agreement. Each Bank also represents that it
will, independently and without reliance upon the Administrative Agent or any
Co-Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Credit Parties. Neither the
Administrative Agent nor any Co-Agent shall have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of any Credit Party which may come into the possession of the
Administrative Agent or such Co-Agent or any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates.
11.07 Indemnification. The Banks agree to indemnify each of the
---------------
Administrative Agent and each Co-Agent in its capacity as such ratably according
to their respective "percentages" as used in determining the Required Banks at
such time (or if the Total Commitment has been terminated and all Loans have
been repaid, their respective "percentages" used in determining the Required
Banks immediately prior to such termination and repayment), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, reasonable expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against the Administrative Agent or such Co-Agent in its capacity as such in any
way relating to or arising out of this Agreement or any other Credit Document,
or any documents
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contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted to be taken by the Administrative Agent or such Co-
Agent under or in connection with any of the foregoing, but only to the extent
that any of the foregoing is not paid by the Borrower or any of its
Subsidiaries, provided that no Bank shall be liable to the Administrative Agent
--------
or any Co-Agent for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence or willful misconduct
of the Administrative Agent or such Co-Agent, as the case may be. If any
indemnity furnished to the Administrative Agent or any Co-Agent for any purpose
shall, in the opinion of the Administrative Agent or such Co-Agent, be
insufficient or become impaired, the Administrative Agent or such Co-Agent may
call for additional indemnity and cease, or not commence, to do the acts indem-
nified against until such additional indemnity is furnished. The agreements in
this Section 11.07 shall survive the payment of all Obligations.
11.08 Individual Capacity. The Administrative Agent and each Co-
-------------------
Agent and their respective affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any of its
Subsidiaries as though the Administrative Agent or such Co-Agent were not the
Administrative Agent or a Co-Agent hereunder. With respect to the Loans made by
it and all Obligations owing to it, the Administrative Agent and each Co-Agent
shall have the same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Administrative Agent or a Co-Agent
and the terms "Required Banks", "Bank" and "Banks" shall include the
Administrative Agent and each Co-Agent in its individual capacity.
11.09 Resignation; Successors. The Administrative Agent and/or each
-----------------------
Co-Agent may resign as the Administrative Agent or a Co-Agent, as the case may
be, upon 20 days' notice to the Banks. To the extent not prohibited by law, the
Administrative Agent shall send a copy of any such resignation notice to the
Borrower. Upon the resignation of the Administrative Agent (including in its
capacity as a Co-Agent), the Required Banks shall appoint from among the Banks a
successor Administrative Agent for the Banks subject to prior approval by the
Borrower (such approval not to be unreasonably withheld), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent"
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shall include such successor agent effective upon its appointment, and the
resigning Administrative Agent's rights, powers and duties as the Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement.
After the retiring Administrative Agent's resignation hereunder as the
Administrative Agent, the provisions of this Section 11 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. In the event no successor
Administrative Agent has been appointed by the end of such 20 day period, the
resignation of the Administrative Agent shall become effective and the Required
Banks shall perform the duties of the Administrative Agent until a successor
Administrative Agent is appointed.
11.10 Holders. The Administrative Agent and the Co-Agents each may
-------
deem and treat the payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment, transfer or
endorsement thereof, as the case may be, shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person or entity
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, or such Note or of any
Note or Notes issued in exchange thereof.
SECTION 12. Miscellaneous.
-------------
12.01 Payment of Expenses, etc. The Borrower agrees to: (i) whether
-------------------------
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, execution and delivery of the Credit Documents and
the documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees
and disbursements of White & Case, any local counsel and any consultants
retained by the Administrative Agent) and in connection with the Administrative
Agent's syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent and each
of the Banks in connection with the enforcement of the Credit Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Administrative Agent
and for each of the Banks); (iii)
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pay and hold each of the Banks harmless from and against any and all present and
future stamp and other similar taxes with respect to the foregoing matters and
save each of the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iv) indemnify the
Administrative Agent, each Co-Agent and each Bank, their respective officers,
directors, employees, representatives and agents (each, an "indemnified
person") from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, regardless of when
any such indemnified matter arises, (a) any investigation, litigation or other
proceeding (whether or not the Administrative Agent, any Co-Agent or any Bank is
a party thereto) related to the entering into and/or performance of any Document
or the use of the proceeds of any Loans or Letter of Credit hereunder or the
Refinancing or any other aspect of the Transaction or the consummation of any
other transactions contemplated in any Document, (b) any settlement entered into
in connection with the foregoing to the extent such settlement has been con-
sented to by the Borrower, which consent shall not be unreasonably withheld or
(c) the actual or alleged presence, generation or Release of Hazardous Materials
on or from, or the transportation of Hazardous Materials to or from, any Real
Property owned or operated at any time by the Borrower or any of its
Subsidiaries, the non-compliance of any such Real Property with foreign,
federal, state and local laws, regulations, and ordinances (including applicable
permits thereunder) applicable to any such Real Property, or any Environmental
Claim with respect to the Borrower or any of its Subsidiaries or any such Real
Property, in each case including, without limitation, the reasonable fees and
disbursements of counsel and other consultants incurred in connection with any
such investigation, litigation, Environmental Claim or any of such Credit
Party's acts, omissions, business, operations or Real Property, or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the indemnified person). To the extent that the undertaking to
indemnify and hold harmless set forth in this Section 12.01 may be unenforceable
because it is violative of any law or public policy as determined by a final
judgment of a court of competent jurisdiction, the Borrower shall make the
maximum contribution to the payment and satisfaction of each of the liabilities
giving rise to claims under the indemnification provisions of this 12.01 which
is permissible under applicable law.
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12.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or any of its Subsidiaries
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of the Borrower or any of its Subsidiaries
against and on account of the Obligations and liabilities of the Borrower or any
of its Subsidiaries to such Bank under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations of
the Borrower purchased by such Bank pursuant to Section 12.06(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such Bank
shall have made any demand hereunder and although said Obligations, liabilities
or claims, or any of them, shall be contingent or unmatured. Each Bank shall
promptly notify the Borrower in writing after exercising any of its rights
pursuant to this Section 12.02.
12.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing and
mailed, telegraphed, telexed, telecopied, cabled or delivered, if to the
Borrower, at the address specified opposite its signature below; if to any Bank,
at its address specified for such Bank specified on Schedule I hereto; if to the
Administrative Agent, at its Notice Office; or, at such other address as shall
be designated by any party in a written notice to the other parties hereto.
All such notices and communications shall be mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, and shall be effective when
received.
12.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that the Borrower may not assign or
--------
transfer any of its rights or obligations hereunder (except as expressly
provided herein) without the prior written consent of the Banks. Each Bank may
at any time grant participations in any of its rights hereunder or under any of
the Notes to a Person that is a commercial bank, other financial
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institution, mutual fund or "Accredited Investor" as such term is defined in
Regulation D of the Securities Act of 1933, as amended, provided that in the
--------
case of any such participation, the participant shall not have any rights under
this Agreement or any of the other Credit Documents (the participant's rights
against such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation, except that the participant shall be
entitled to the benefits of Sections 1.10, 1.11, 2.05, and 4.04 of this
Agreement to the extent that such Bank would be entitled to such benefits if the
participation had not been entered into or sold, and provided further, that no
----------------
Bank shall transfer, grant or assign any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan or Note in
which such participant is participating (it being understood that any waiver of
an installment on, the application of any prepayment or the method of any
application of any prepayment to the amortization of the Term Loans shall not
constitute an extension of the final scheduled maturity date) or reduce the rate
or extend the time of payment of interest or Fees thereon (except in connection
with a waiver of the applicability of any post-default increase in interest
rates), or reduce the principal amount thereof, or increase such participant's
participating interest in any Commitment over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment, or a mandatory prepayment, shall
not constitute a change in the terms of any Commitment and that an increase in
any Commitment shall be permitted without the consent of any participant if such
participant's participation is not increased as a result thereof), (ii) release
all or substantially all of the Collateral (except as expressly provided in the
Credit Documents) or (iii) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement or any other Credit
Document (except as expressly provided herein or therein).
(b) Notwithstanding the foregoing, (x) any Bank may assign all or a
portion of its Loans and/or Commitments and its rights and obligations hereunder
to its parent company and/or any affiliate of such Bank which is at least 50%
owned by such Bank or its parent company or to one or more Banks and (y) any
Bank may assign a portion, in an amount
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equal to at least the Minimum Assignment Amount (or the remaining balance
thereof if less) of its Loans and/or Commitments and its rights and obligations
hereunder to a Person that is a commercial bank, other financial institution,
mutual fund or "Accredited Investor" as such term is defined in Regulation D of
the Securities Act of 1933, as amended (each an "Eligible Assignee") with the
consent of Chase and the Borrower (which consent shall not be unreasonably
withheld), each of which Eligible Assignees to become a party to this Agreement
as a Bank prior to or after the Initial Borrowing Date by executing an
assignment agreement substantially in the form of Exhibit L hereto,
appropriately completed (an "Assignment Agreement") with the assigning Bank,
provided that, in each case, (i) at such time Schedule I shall be deemed to have
- --------
been modified to reflect the Loans and/or Commitments of such new Bank and of
the existing Banks, (ii) if requested by such new Bank or the assigning Bank,
the Borrower shall issue new Notes to such new Bank and to the assigning Bank in
conformity with the requirements of Section 1.05 to the extent needed to reflect
the revised Loans and/or Commitments, and (iii) the Administrative Agent shall
have received at the time of each such assignment from either the assigning or
assignee Bank the payment of a nonrefundable assignment fee of $3,000.
Assignments pursuant to this Section 12.04(b) shall not be required to be pro
---
rata between the Term Loan Commitments and/or outstanding Term Loans and the
- ----
Revolving Commitments. To the extent of any assignment pursuant to this Section
12.04(b), the assigning Bank shall be relieved of its obligations hereunder with
respect to its assigned Loans and/or Commitments. No Bank may assign all or a
portion of its Revolving Commitment to an Eligible Assignee not already a Bank
hereunder unless each Letter of Credit Issuer shall have consented in writing to
such assignment. At the time of each assignment pursuant to this Section
12.04(b) to a Person which is not already a Bank hereunder and which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income taxes, the respective assignee Bank shall, to the
extent legally entitled to do so, provide to the Borrower the forms described in
Section 4.04(b)(ii). Nothing in this Section 12.04(b) shall prevent or prohibit
any Bank from pledging its Loans or Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section 12.04, no
transfer or assignment of the interests or obligations of any Bank hereunder or
any grant of participations therein shall be permitted if such transfer,
assignment
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or grant would require the Borrower to file a registration statement or qualify
an indenture with the SEC or to qualify the Loans under the "Blue Sky" laws of
any State.
(d) Notwithstanding any other provisions of this Section 12.04, any
transfer or assignment of the interests or obligations of any Bank hereunder
shall be subject to such limitations as may be imposed by the Administrative
Agent in its sole discretion.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Administrative Agent, any Co-Agent or any Bank in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between any Credit Party and the Administrative Agent, any Co-
Agent or any Bank shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent, any Co-Agent or any Bank
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, any Co-Agent or the Banks to any other or further action
in any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) Except as otherwise provided by this
-----------------
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations, it
shall, except as otherwise provided in this Agreement, distribute such payment
to the Banks (other than any Bank that has consented in writing to waive its pro
---
rata share of such payment) pro rata based upon their respective shares, if any,
- ---- --- ----
of the Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees,
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of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligations then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations in such amount as shall result in a
proportional participation by all of the Banks in such amount, provided that if
--------
all or any portion of such excess amount is thereafter recovered from such
Bank, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks), provided that, except as otherwise specifically
--------
provided herein, all computations determining compliance with Sections 4.02 and
8, including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the 1993 historical financial statements delivered to the
Banks pursuant to Section 6.11(b).
(b) All computations of interest, Commitment Commission and Fees
hereunder shall be made on the actual number of days elapsed over a year of 360
days.
(c) All determinations of the Stated Amount of Letters of Credit and
of the principal amount of Unpaid Drawings, in each case to the extent
denominated in a currency other than Dollars, shall be made by converting same
into Dollars at (x) in the case of a determination of the Borrower's obligation
to reimburse in Dollars a drawing under a Letter of Credit denominated in a
currency other than Dollars or of each Participating Bank's obligation pursuant
to Section 2.02(c) to pay the amount of such Participating Bank's Percentage of
an unreimbursed payment in respect of any such Letter of Credit, the spot
exchange rate for the currency in question of the respective Letter of Credit
Issuer on the date of such drawing or (y) if the provisions of the foregoing
clause (x) are not applicable, the spot exchange rate for the currency in
question calculated by the Administrative Agent on the last day of the month
preceding the month in which any such determination is being made and
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at such other times as the Administrative Agent elects to make such
determination, it being understood that the Administrative Agent shall have no
obligation to make any such other determinations.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; TRIAL BY
----------------------------------------------------------
JURY. (A) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER
THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT
IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT LACKS JURISDICTION OVER THE
BORROWER. IF FOR ANY REASON THE BORROWER CEASES TO MAINTAIN AN OFFICE IN NEW
YORK CITY, THE BORROWER AGREES TO DESIGNATE, APPOINT AND EMPOWER A DESIGNEE,
APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS
PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE BORROWER, AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE THIRTY DAYS AFTER SUCH
MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE
OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY CREDIT DOCUMENT THAT
SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY BANK OR THE HOLDER OF ANY NOTE
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER
JURISDICTION.
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(B) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. EACH OF THE BORROWER AND EACH BANK IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY COURT OR JURISDICTION, INCLUDING
WITHOUT LIMITATION THOSE REFERRED TO IN CLAUSE (A) ABOVE, IN RESPECT OF ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS.
12.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Effective Date") on which the Borrower, the Administrative Agent,
each Co-Agent and each of the Banks shall have signed a copy hereof (whether
the same or different copies) and shall have delivered the same to the
Administrative Agent at the Notice Office of the Administrative Agent or, in the
case of the Banks, shall have given to the Administrative Agent telephonic
(confirmed in writing), written, telex or telecopy notice (actually received)
at such office that the same has been signed and mailed to it. The
Administrative Agent will give the Borrower and each Bank prompt written notice
of the occurrence of the Effective Date.
12.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Agree-
ment.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any other
-------------------
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower and the Required Banks, provided that no such
--------
change, waiver, discharge or termin-
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ation shall, without the consent of each Bank affected thereby, (i) extend the
final scheduled maturity of any Unpaid Drawing, Loan or Note (it being
understood that any waiver of an installment on, the application of any prepay-
ment or the method of application of any prepayment to the amortization of the
Term Loans shall not constitute an extension of the final scheduled maturity
date), or reduce the rate or extend the time of payment of interest (other than
as a result of waiving the applicability of any post-default increase in
interest rates) thereon or Fees, or reduce the amount thereof, (ii) release all
or substantially all of the Collateral (except as expressly provided in the
Credit Documents), (iii) amend, modify or waive any provision of this Section,
(iv) reduce the percentage specified in the definition of Required Banks (it
being understood that, with the consent of the Required Banks, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Banks on substantially the same basis as an
extension of Loans, Letters of Credit and Revolving Commitments are included on
the Effective Date), or (v) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under any Credit Document (except
as expressly provided herein or therein); provided further, that no such change,
----------------
waiver, discharge or termination shall (w) increase the Commitments of any Bank
over the amount thereof then in effect without the consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any Bank,
and that an increase in the available portion of any Commitment of any Bank
shall not constitute an increase in the Commitment of such Bank), (x) without
the consent of each Letter of Credit Issuer, amend, modify or waive any
provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (y) without the consent of the Administrative Agent or Co-
Agents, respectively, amend, modify or waive any provision of Section 11 as same
applies to such Administrative Agent or Co-Agent or any other provision as same
relates to the rights or obligations of such Administrative Agent or Co-Agent or
(z) without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination of any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 12.12(a),
the
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consent of the Required Banks is obtained but the consent of one or more of such
other Banks whose consent is required is not obtained, then the Borrower shall
have the right to replace each such non-consenting Bank or Banks (so long as all
non-consenting Banks are so replaced) with one or more Replacement Banks
pursuant to Section 1.13 so long as at the time of such replacement, each such
Replacement Bank consents to the proposed change, waiver, discharge or
termination, provided that the Borrower shall not have the right to replace a
Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second proviso
to Section 12.12(a).
(c) Notwithstanding anything to the contrary contained above in this
Section 12.12, the Collateral Agent may enter into amendments to the Security
Documents for the purpose of adding Subsidiaries of the Borrower as parties
thereto, or adding Subsidiaries of the Borrower to the Subsidiary Guaranty, and
Additional Security Documents, guarantees, and other security documentation may
be entered into to satisfy the requirement of Section 7.11, in each case without
the consent of the Required Banks.
12.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Section 1.10, 1.11, 2.05, 2.06, 4.04, 11.07 or 12.01 shall
survive the execution and delivery of this Agreement and the making and
repayment of the Loans and the satisfaction of all other Obligations.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
-----------------
or participations at, to or for the account of any branch office, subsidiary or
affiliate of such Bank, provided that the Borrower shall not be responsible for
--------
costs arising under Section 1.10, 1.11, 2.05, or 4.04 resulting from any such
transfer (other than a transfer pursuant to Section 1.12) to the extent such
costs would not otherwise be applicable to such Bank prior to such transfer.
12.15 Confidentiality. (a) Subject to the provisions of clause (b)
---------------
of this Section 12.15, each Bank agrees that it will use its best efforts not to
disclose without the prior consent of the Borrower (other than to its employees,
auditors, advisors or counsel or to another Bank if the Bank or such Bank's
holding or parent company in its sole discretion determines that any such party
should have access to such information, provided such Persons shall be subject
to the provisions of this Section 12.15 to the same extent as such Bank) any
information with respect to the Borrower or
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any of its Subsidiaries which is now or in the future furnished pursuant to
this Agreement or any other Credit Document and which is designated by the
Borrower in writing as confidential, provided that any Bank may disclose any
--------
such information (a) as has become generally available to the public, (b) as may
be required or appropriate in any report, statement or testimony submitted to
any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or appropriate
in respect to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Bank, (e) to the Administrative Agent or the Collateral Agent and (f) to any
prospective or actual transferee or participant in connection with any
contemplated or actual transfer or participation of any of the Notes or
Commitments or any interest therein by such Bank, provided that such prospective
--------
transferee or participant executes an agreement with such Bank containing
provisions substantially the same as to those contained in this Section.
(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 12.15 to the same extent as such Bank.
12.16 Collateral Release. Notwithstanding anything to the contrary
------------------
contained in this Agreement or the other Credit Documents, on and after the
Target Date, the Collateral shall promptly be released from the terms of the
Security Documents and the Collateral Agent shall, and the Banks hereby
authorize and direct the Collateral Agent to, promptly take such actions as it
deems appropriate and such additional actions as may be reasonably requested by
the Borrower to effectuate the foregoing (and no further assets shall be
required to be pledged pursuant to Section 7.11 or any Security Document),
provided that no Default or Event of Default exists as of such time.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address: AMETEK, INC.
Station Square
Paoli, Pennsylvania 19301
Telephone No.: 215-647-2121 By_______________________
Telecopier No.: 215-647-0211 Name:
Attention: Chief Financial Title:
Officer
THE CHASE MANHATTAN BANK, N.A.,
Individually and
as the Administrative Agent
By________________________
Name:
Title:
BANK OF MONTREAL,
Individually and as a Co-Agent
By________________________
Name:
Title:
CORESTATES BANK, N.A.,
Individually and as a
Co-Agent
By________________________
Name:
Title:
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PNC BANK, NATIONAL ASSOCIATION,
Individually, as a Letter of
Credit Issuer and as a Co-Agent
By_________________________________
Name:
Title:
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SCHEDULE I
----------
COMMITMENTS
-----------
Bank Term Loan Commitment Revolving Commitment
---- -------------------- --------------------
The Chase Manhattan
Bank, N.A.
Bank of Montreal
Corestates Bank, N.A.
PNC Bank, National
Association
------------ ------------
$125,000,000 $125,000,000
============
Bank Addresses
--------------
The Chase Manhattan
Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
Attention: Frank-Paul King
Telephone No.: (212) 552-7063
Telecopier No.: (212) 552-1457
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SCHEDULE I
Page 2
Bank of Montreal
430 Park Avenue
14th Floor
New York, New York 10022
Attention: Kanu Modi
Telephone No.: (212) 605-1663
Telecopier No.: (212) 605-1454
Corestates Bank, N.A.
Philadelphia National Bank
FC1-1-82-25
1345 Chestnut Street
Philadelphia, PA 19101
Attention: Robert Coredell
Telephone No.: (215) 973-3648
Telecopier No.: (215) 973-6745
PNC Bank, National
Association
100 South Broad Street
7th Floor
Philadelphia, PA 19101
Attention: Vicki Randolph-Ziff
Telephone No.: (215) 585-6795
Telecopier No.: (215) 585-5972
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SCHEDULE II
-----------
REAL PROPERTY OWNED OR
LEASED BY THE BORROWER
AND ITS SUBSIDIARIES
ENTITY:
- ------
To be
Location Owned Leased Mortgaged
-------- ----- ------ ---------
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SCHEDULE III
------------
INSURANCE
---------
[TO BE PROVIDED BY THE BORROWER]
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SCHEDULE IV
-----------
EXISTING LETTERS OF CREDIT
--------------------------
[TO BE PROVIDED BY THE BORROWER]
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SCHEDULE V
----------
PROJECTIONS
-----------
[TO BE PROVIDED BY THE BORROWER]
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SCHEDULE VI
-----------
SUBSIDIARIES
------------
ENTITY:
- ------
Type of Number of Percentage
Name of Issuing Corporation Shares Shares Owned
--------------------------- ------- --------- ----------
[TO BE PROVIDED BY BORROWER]
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SCHEDULE VII
------------
COLLECTIVE BARGAINING AGREEMENTS
--------------------------------
[TO BE PROVIDED BY THE BORROWER]
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SCHEDULE VIII
-------------
PERMITTED EXISTING INDEBTEDNESS
-------------------------------
[TO BE PROVIDED BY THE BORROWER]
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SCHEDULE IX
-----------
PERMITTED LIENS
---------------
Secured Party Filing Office Filing # Collateral Termination Date
- --------------- ------------- -------- ---------- ----------------
[TO BE PROVIDED BY THE BORROWER]
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SCHEDULE X
----------
PERMITTED EXISTING INVESTMENTS
------------------------------
Liquidation
Item Market Value Date
---- ------------ -----------
1. [Arbitrage Fund]
2. [Real estate investments]
3. [Others?]
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