<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
Commission file number 1-1969
CERIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-0278528
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8100 34th Avenue South, Minneapolis, Minnesota 55425
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612)853-8100
(Former name, former address and former fiscal year if changed from last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
The number of shares of registrant's Common Stock, par value $.50 per share,
outstanding as of June 30, 1994, was 44,545,485.
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
INDEX
Pages
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations
for the three and six month periods ended
June 30, 1994 and 1993 .............................. 3
Consolidated Balance Sheets as of
June 30, 1994 and December 31, 1993 ................. 4
Consolidated Statements of Cash Flows for the six
month periods ended June 30, 1994 and 1993 .......... 5
Notes to Consolidated Financial Statements .............. 6-8
In the opinion of the Company, the unaudited consolidated
financial statements reflect all adjustments (consisting only of
normal recurring accruals, except as set forth in the notes to
consolidated financial statements) necessary to present fairly
the financial position as of June 30, 1994, and results of
operations for the three and six month periods and cash flows for
the six month periods ended June 30, 1994 and 1993.
The results of operations for the six month period ended
June 30, 1994, are not necessarily indicative of the results to
be expected for the full year.
The consolidated financial statements should be read in
conjunction with the notes to consolidated financial statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................. 9-15
Part II. Other Information
Item 1. Legal Proceedings.................................... 16
Item 4. Submission of Matters to a Vote of Security Holders.. 17
Item 6. Exhibits and Reports on Form 8-K .................... 17-18
Signature ......................................................... 19
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<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS Ceridian Corporation
(Unaudited) and Subsidiaries
For Periods Ended June 30,
Three Months Six Months
1994 1993 1994 1993
(Dollars in millions, except per share data)
<S> <C> <C> <C> <C>
Revenue
Product sales $ 124.3 $ 115.8 $ 236.8 $ 225.5
Services 94.2 110.1 203.0 224.8
Total 218.5 225.9 439.8 450.3
Cost of revenue
Product sales 99.0 94.9 189.3 183.4
Services 44.5 65.0 92.8 128.8
Total 143.5 159.9 282.1 312.2
Gross profit 75.0 66.0 157.7 138.1
Operating expenses
Selling, general and
administrative 46.4 42.8 93.3 85.8
Technical expense 13.5 12.4 26.3 24.6
Other expense (income) 0.1 (0.6) 0.5 (0.6)
Earnings before interest
and taxes 15.0 11.4 37.6 28.3
Interest income 3.2 2.1 5.1 3.7
Interest expense (0.4) (4.1) (0.8) (8.1)
Earnings before income taxes 17.8 9.4 41.9 23.9
Income tax provision 1.4 1.0 3.3 2.6
Net earnings $ 16.4 $ 8.4 $ 38.6 $ 21.3
Preferred stock dividends 3.2 0.0 6.5 0.0
Net earnings available to
common stockholders $ 13.2 $ 8.4 $ 32.1 $ 21.3
Primary earnings per share $ 0.29 $ 0.20 $ 0.70 $ 0.50
Fully diluted earnings per
share $ 0.29 $ 0.20 $ 0.69 $ 0.50
Weighted average common
shares and equivalents
outstanding (000's)
Primary 45,840 42,883 45,716 42,858
Fully diluted 56,224 42,883 56,100 42,858
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
FORM 10-Q
CONSOLIDATED Ceridian Corporation
BALANCE SHEETS (Unaudited) and Subsidiaries
June 30, December 31,
Assets 1994 1993
(In Millions)
<S> <C> <C>
Cash and equivalents $ 128.8 $ 112.4
Short-term investments 63.7 103.4
Trade and other receivables, net 126.8 133.0
Inventories 27.0 30.9
Other current assets 6.7 7.5
Total current assets 353.0 387.2
Investments and advances 29.6 28.2
Property, plant and equipment, net 91.5 88.7
Other noncurrent assets 190.1 111.6
Total assets $ 664.2 $ 615.7
Liabilities And Stockholders' Equity
Current portion of long-term
obligations $ 2.0 $ 3.1
Accounts payable 35.7 40.0
Customer advances and deferred income 74.3 70.5
Accrued taxes 54.0 54.2
Employee compensation and benefits 48.2 44.4
Restructure reserves, current portion 31.0 44.8
Other accrued expenses 72.0 59.4
Total current liabilities 317.2 316.4
Long-term obligations, less current portion 15.5 16.3
Deferred income taxes 8.0 6.4
Restructure reserves, less current portion 74.1 63.2
Other noncurrent liabilities 102.9 102.1
Stockholders' equity 146.5 111.3
Total liabilities and
stockholders' equity $ 664.2 $ 615.7
See notes to consolidated financial statements.
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<PAGE>
</TABLE>
<TABLE>
<CAPTION>
FORM 10-Q
CONSOLIDATED STATEMENTS OF Ceridian Corporation
CASH FLOWS (Unaudited) and Subsidiaries
For Periods Ended June 30,
Six Months
1994 1993
(In Millions)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 38.6 $ 21.3
Adjustments to reconcile earnings (loss)
to net cash provided by (used for)
operating activities:
Depreciation 12.6 12.9
Amortization of deferred assets 1.8 1.5
Restructure reserves:
Reserves utilized (34.7) (39.2)
Net change in working capital items:
Trade and other receivables (5.6) 10.6
Inventories 3.6 9.4
Other current assets 1.6 (1.7)
Accounts payable (4.8) 12.6
Customer advances and deferred income (12.2) 7.9
Other current liabilities 4.3 (14.8)
Other 0.5 3.3
Net cash provided by (used for)
operating activities 5.7 23.8
CASH FLOWS FROM INVESTING ACTIVITIES
Expended for capital assets and software (16.6) (14.9)
Expended for business acquisitions (56.3) --
Short-term investments 39.7 0.8
Proceeds from sales of businesses,
investments and capital assets 33.5 1.2
Other 0.2 --
Net cash provided by (used for)
investing activities 0.5 (12.9)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term debt, net (1.6) (0.4)
Proceeds from sale of 5-1/2% Preferred Stock 15.0 --
Preferred stock dividends (6.5) --
Exercise of stock options and other 3.6 0.6
Net cash provided by (used for)
financing activities 10.5 0.2
Effect of exchange rate changes on cash (0.3) 1.3
NET CASH PROVIDED (USED) 16.4 12.4
Cash and equivalents at beginning of period 112.4 88.4
Cash and equivalents at end of period $ 128.8 $ 100.8
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1994
(Dollars in millions)
(Unaudited)
CASH AND SHORT-TERM INVESTMENTS
The Company has an arrangement with an independent investment manager
to invest its cash in excess of estimated current requirements in
investment-grade fixed income securities which may have final maturities of
up to two years. Investments which are readily convertible to cash within
three months of purchase are classified in the balance sheet as cash
equivalents. Investments with longer maturities are considered available-
for-sale under FAS 115, adopted January 1994, and reported in the balance
sheet as short-term investments. The fair value of short-term investments
is not materially different from their amortized cost, and the amount of
investments expected to be held more than one year beyond the balance sheet
date is not considered material. Net changes in short-term investments,
which are shown as investing cash flows in the Statements of Cash Flows, may
relate to investment decisions by the independent investment manager as well
as to changes in the cash needs of the Company.
COMMITMENTS AND CONTINGENCIES
During second quarter 1994, Ceridian added another intermediate-term
interest rate swap agreement to increase the notional amount of its
outstanding agreements with two financial institutions from $150.0 to
$175.0. The Company also obtained a release from the requirement to cash
collateralize certain of these arrangements . The purpose of these
agreements is to effectively convert a portion of the interest which the
Company earns from deposits held by Employer Services on behalf of payroll
tax filing customers from a floating to a fixed rate basis. The Company
considers the risk of accounting loss through nonperformance under these
agreements to be negligible.
RESTRUCTURE LOSS (GAIN)
During second quarter 1994, the Company recorded restructure gains of
$7.8 from the sale of its TeleMoney Services and related data services
operations and $7.2 from the final settlement of a tax-sharing arrangement
with a former subsidiary. These gains were offset by a provision for costs
related to age discrimination litigation arising out of downsizing actions
taken by the Company in past years (see Part II, Item 1 of this report).
<TABLE>
<CAPTION>
RECEIVABLES
June 30, December 31,
1994 1993
<S> <C> <C>
Trade and Other Receivables, Net:
Trade, less allowance of $6.0 and $5.4 $ 64.3 $ 69.2
Unbilled 58.0 45.5
Other 4.5 18.3
Total $ 126.8 $ 133.0
</TABLE>
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<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1994
(Dollars in millions)
(Unaudited)
INVESTMENTS AND ADVANCES
In May 1994 Ceridian sold its TeleMoney Services and related network
and computer center operations to First Data Resources Inc. and received
$24.3 of net cash proceeds. Under the sale agreement, the Company committed
to use certain data services to be provided by the sold operations on a
take-or-pay basis over a period ending April 30, 1995, to provide temporary
facilities space for certain of the sold operations, and certain other
obligations, which were recorded as restructure reserves. After
consideration of these obligations and the carrying value of net assets
sold, the Company recognized a restructuring gain from the sale of $7.8.
Also in May 1994, Ceridian received the final cash payment of $7.2
under a tax-sharing arrangement with Commercial Credit Company, a former
subsidiary of the Company which was sold in 1986, and its successor, which
was recorded as a restructuring gain.
As described in a Form 8-K filed on July 11, 1994, Ceridian acquired on
June 24, 1994, Tesseract Corporation, a California corporation ("Tesseract")
headquartered in San Francisco, by means of a merger transaction involving
Tesseract and Braemar Acquisition Corp., a wholly-owned subsidiary of the
Company. Tesseract, as the surviving corporation, became a wholly-owned
subsidiary of the Company as a result of the merger. The merger
transaction, which was accounted for as a purchase, resulted in the
recording of $75.6 of goodwill determined by reference to the payments of
$60.0 to the sellers and $1.5 in direct acquisition costs and the net
liabilities of Tesseract, after acquisition adjustments, of $14.1. Included
in the net liabilities of Tesseract were $7.2 of cash balances, which
reduced the net cash outflow for the acquisition, $5.3 of receivables, $1.6
of capital assets, $l6.6 of deferred income, $7.0 of accrued employee
compensation and benefits and $4.8 of other accrued expenses. The goodwill
will be amortized over a 15-year period.
OTHER NONCURRENT ASSETS
June 30, December 31,
1994 1993
Goodwill $ 109.3 $ 35.4
Software 8.3 8.2
Prepaid pension cost 68.8 64.0
Intangibles and other 3.7 4.0
Total $ 190.1 $ 111.6
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<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1994
(Dollars in millions)
(Unaudited)
EARNINGS PER SHARE
For 1994, primary earnings per share is calculated by dividing the net
earnings available to common stockholders by the weighted average of
outstanding common stock and common stock equivalents. Common stock
equivalents represent the outstanding dilutive stock options less the number
assumed repurchased, at the average market price of the Company's stock
during the reporting period, with the proceeds from an assumed exercise of
those options. Fully diluted earnings per share assumes that the Company's
5 1/2% Preferred Stock was converted to common shares at the beginning of
the reporting period. Therefore, the calculation uses net earnings without
reduction for preferred stock dividends divided by weighted average common
shares and common share equivalents plus the additional common shares which
would have resulted from the assumed conversion. The detailed calculation
of these amounts appears in Exhibit 11 elsewhere in this report.
<TABLE>
<CAPTION>
STOCKHOLDERS' EQUITY
June 30, December 31,
1994 1993
<S> <C> <C>
5-1/2% Cumulative Convertible Exchangeable
Preferred Stock, $100 par value
(liquidation preference of $236.0)
Shares issued and outstanding 47,200 $ 4.7 $ 4.7
Common Stock
Par value - $.50
Shares authorized - 100,000,000
Shares issued - 44,629,723 and
44,263,369 22.3 22.1
Shares outstanding - 44,545,485 and
44,181,631
Additional paid-in capital 827.7 824.2
Accumulated deficit (697.7) (729.8)
Foreign currency translation adjustments (2.7) (2.0)
Restricted stock awards (2.1) (2.2)
Pension liability adjustment (4.1) (4.1)
Treasury stock, at cost (84,238 and
81,738 common shares) (1.6) (1.6)
Total stockholders' equity $ 146.5 $ 111.3
</TABLE>
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
For the quarter ended June 30, 1994, Ceridian Corporation (the
"Company") reported net earnings after preferred stock dividends of $13.2
million, or $.29 per fully diluted share of common stock, on revenue of
$218.5 million, compared to net earnings of $8.4 million, or $.20 per common
share, on revenue of $225.9 million for the second quarter 1993. For the
six months ended June 30, 1994, the Company reported net earnings after
preferred stock dividends of $32.1 million, or $.69 per fully diluted share
of common stock, on revenue of $439.8 million, compared to net earnings of
$21.3 million, or $.50 per common share, on revenue of $450.3 million for
the first half of 1993.
The following table sets forth revenue for the Company, its two
industry segments and the businesses that comprise those segments for the
three and six month periods ended June 30, 1994 and June 30, 1993,
respectively:
Periods Ended June 30,
Three Months Six Months
1994 1993 1994 1993
(Dollars in millions)
Information Services Segment
Arbitron Company $ 31.3 $ 46.3 $ 59.7 $ 89.1
Ceridian Employer Services 65.6 52.3 143.0 113.4
Other Services(1) 1.1 5.1 5.7 10.3
Total Information Services 98.0 103.7 208.4 212.8
Defense Electronics Segment
Computing Devices International(2) 120.5 122.2 231.4 237.5
Total Revenue $218.5 $ 225.9 $439.8 $ 450.3
_____________________
(1) Primarily consists of revenue from TeleMoney Services and the
Company's related network and computer center operations, which were sold in
May 1994.
(2) Responsibility for the Company's Business Information Services
operation ("BIS") was transferred to Computing Devices effective January 1,
1994. BIS' results for the 1993 and 1994 periods are included in Computing
Devices' results.
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations (cont.)
The following table sets forth the percentage of the Company's total
revenue by industry segment, the gross profit of each of the Company's
industry segments as a percentage of that segment's revenue, and certain
items in the consolidated statements of operations as a percentage of total
revenue, for the periods indicated.
Periods Ended June 30,
Three Months Six Months
1994 1993 1994 1993
Revenue:
Information Services 44.8% 45.9% 47.4% 47.3%
Defense Electronics 55.2% 54.1% 52.6% 52.7%
Total revenue 100.0% 100.0% 100.0% 100.0%
Gross profit:
Information Services 52.3% 43.7% 53.9% 45.6%
Defense Electronics 19.7% 16.9% 19.6% 17.3%
Total gross profit 34.3% 29.2% 35.9% 30.7%
Operating expenses
Selling, general &
administrative 21.3% 18.9% 21.2% 19.1%
Technical 6.2% 5.5% 6.0% 5.5%
Other expense (income) -- (0.3)% 0.1% (0.1%)
Total operating expenses 27.5% 24.1% 27.3% 24.5%
Earnings before interest
& taxes 6.9% 5.0% 8.5% 6.3%
Interest income (expense) 1.3% (0.9%) 1.0% (1.0%)
Earnings before income
taxes 8.1% 4.1% 9.5% 5.3%
Income tax provision 0.6% 0.4% 0.7% 0.6%
Preferred stock dividends 1.5% -- 1.5% --
Net earnings available to
common stockholders 6.0% 3.7% 7.3% 4.7%
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations (cont.)
Revenue. The decrease in Information Services' revenue in both the
three and six month comparisons was primarily attributable to the
discontinuance of Arbitron's television ratings service, which had provided
$27.0 million of revenue in the first half of 1993. Also contributing to
the decrease were the year-end 1993 transfer from Arbitron to the
Competitive Media Reporting joint venture of contracts with certain
advertising agencies for commercial monitoring services, which decreased
Arbitron's revenue in the six month comparison by about $6.4 million, and
the sale of the Company's TeleMoney Services business in May 1994.
Offsetting most of this revenue decrease was revenue growth of approximately
25% in both the quarterly and year-to-date comparisons in Employer Services
and of approximately 7% in the other aspects of Arbitron's business,
principally its radio ratings service. Somewhat more than half of the
revenue growth in Employer Services related to its payroll tax filing
operations, reflecting both increased fees and increased interest income
primarily as a result of the October 1993 acquisition of the Systems Tax
Service ("STS") tax filing business and a higher percentage of Employer
Services' payroll processing customers electing to also utilize its tax
filing service. The interest income component of the revenue increase
reflected both larger average balances of payroll tax filing deposits in the
first half of 1994 and somewhat higher interest rates in the second quarter
1994. Revenue from Employer Services' payroll processing operations
increased approximately 10% in the three and six month comparisons,
reflecting new customer installations and an increased retention rate for
existing customers. Employer Services' revenue and profitability tend to be
the greatest in the first and fourth quarters of each year because of
customers' year-end reporting requirements and greater tax filing deposit
balances in the first quarter.
On June 24, 1994, the Company acquired Tesseract Corporation
("Tesseract"), which designs, develops, markets and supports integrated
payroll, human resource management and benefits administration software
systems, and provides implementation, consulting, development and on-going
maintenance and support services to its customers. Tesseract's product and
service offerings are expected to complement those of Employer Services, and
its technological expertise and payroll processing software are expected to
facilitate the 1995 introduction by Employer Services of upgraded payroll
processing system software. Tesseract's revenue in 1994 is expected to be
approximately $25 million, but its acquisition is not expected to have a
significant impact on the earnings of the Information Services segment in
either 1994 or 1995.
The decrease in Computing Devices' revenue in the quarterly and year-
to-date comparisons was due to the near completion at year-end 1993 of a
contract to manufacture equipment for Control Data Systems, Inc. and the
July 1993 sale of the Company's Barrios Technology subsidiary, activities
which together had provided $25.9 million of revenue in the first half of
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations (cont.)
1993. Offsetting the bulk of this decrease were increased billings under
the Iris contract to provide a communications system to the Canadian defense
department and modestly increased revenue from Computing Devices' U.S.
operations.
Gross Margin. The most significant factor in the gross margin
improvement in Information Services in the three and six month comparisons
was the discontinuance of Arbitron's unprofitable television ratings service
at the end of 1993. In Employer Services, gross profit increased
essentially in proportion to revenue growth. Gross margins improved in
Employer Services tax filing operations as a result of the acquisition of
STS and the successful consolidation of Ceridian's tax filing activity on
STS' more highly automated system. This improvement was offset by decreased
margins in payroll processing operations, primarily reflecting costs to
establish and equip a national customer service center in anticipation of
the consolidation of significant portions of Employer Services' customer
service operations, and related actions to upgrade communications systems.
The improvement in Computing Devices' gross margin in the three and six
month comparisons was primarily due to reduced revenue from the manufacture
of equipment for Control Data Systems, which had lower gross margins than
most other aspects of Computing Devices' business, actions taken in 1993 to
reduce employment levels in Computing Devices' U.S. operations, and
increased gross margins on the Iris contract during the first six months of
1994. Partially offsetting these improvements was the gross margin decrease
in Computing Devices' U.K. operations, due largely to decreased demand for
the production of an avionics computer.
Operating Expenses. In Information Services, SG&A expenses increased
from 31.4% and 31.0% of revenue in the second quarter and first half of
1993, respectively, to 33.6% and 33.5% of revenue in the second quarter and
first half of 1994, respectively. The primary factor in these percentage
increases was the sizeable decrease in Arbitron's revenue as a result of the
discontinuance of its television ratings service, and the proportionately
smaller decrease in its SG&A expenses. In large measure this reflects the
time required to effect reductions in such expenses given the past
dependence of Arbitron's radio and television services on a common support
structure, and provisions established for certain claims and litigation
involving Arbitron. SG&A expenses in Employer Services decreased as a
percentage of revenue in the three and six month comparisons, but increased
in dollars, particularly selling expense. General expense is expected to
increase in future periods for Employer Services as it begins to amortize
the goodwill arising from the acquisition of Tesseract (see the "Investments
and Advances" note to the financial statements in Part I, Item 1 of this
report). Computing Devices' SG&A expenses increased modestly in dollars and
as a percentage of revenue in the both the quarterly and year-to-date
comparisons. SG&A expenses not attributable to either industry segment also
increased in the second quarter 1994.
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations (cont.)
Technical expense, which includes research and development, product
improvement and bid and proposal costs, was essentially unchanged for the
Information Services segment in the three and six month comparisons.
Technical expense increased in Computing Devices from 4.5% and 4.6% of
revenue in the second quarter and first half of 1993, respectively, to 5.8%
and 5.5% of revenue in the second quarter and first half of 1994,
respectively. This increase was primarily attributable to concept
development efforts intended to attract additional government funding for
product development efforts.
Earnings Before Interest and Taxes. The increase in the Company's
earnings before interest and taxes ("EBIT") from the second quarter and
first half of 1993 to the comparable periods in 1994 was primarily due to
increased EBIT in the Information Services segment, reflecting improvements
in both Employer Services and Arbitron. Information Services' EBIT
increased from 6.0% to 11.9% of revenue in the three month comparison and
from 8.1% to 13.7% of revenue in the six month comparison. Computing
Devices' EBIT increased from 5.4% to 6.7% of revenue in the quarterly
comparison and from 5.5% to 6.4% of revenue in the year-to-date comparison.
Interest Income and Expense and Taxes. The decrease in interest
expense from the first half of 1993 to the first half of 1994 reflected the
redemption at the end of 1993 of $163.5 million in principal amount of the
Company's 8 1/2% Convertible Subordinated Debentures with the majority of
the proceeds of the sale of the Company's 5 1/2% Cumulative Convertible
Exchangeable Preferred Stock ("5 1/2% Preferred Stock"). The increase in
interest income in the quarterly and year-to-date comparisons reflected the
higher balances of cash and short-term investments in the first half of
1994, primarily as a result of the 5 1/2% Preferred Stock offering, and
generally increasing interest rates during the first half of 1994. The
provisions for income taxes for the first half of 1993 and 1994 primarily
represent tax charges related to the Company's international operations.
Financial Condition
The Company's cash and short-term investments decreased from $215.8
million at December 31, 1993 to $192.5 million at June 30, 1994. The
portion of the December 31 balance that represented amounts subject to
restrictions was $22.7 million, while the comparable June 30 figure was $1.2
million. The majority of the restricted cash at year-end 1993 represented
the remaining portion of a customer advance received in connection with
Computing Devices' Iris contract, while the restricted cash at June 30
represented amounts pledged in connection with letters of credit required by
Computing Devices' Canadian subsidiary.
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Financial Condition (cont.)
During the first six months of 1994, operating cash flows provided $5.7
million of cash, after having provided $23.8 million of cash in the first
half of 1993. Net earnings adjusted to a cash basis provided cash of $53.5
million in the first six months of 1994 and $39.0 million in the first six
months of 1993. An increase in working capital utilized $13.1 million of
cash in the 1994 period, while a reduction in working capital provided $24.0
million of cash in the 1993 period. Reflected in cash utilized in the first
half of 1994 in connection with working capital items was a $12.2 million
reduction in customer advances and deferred income, primarily reflecting the
utilization of the last in a series of semiannual customer advances in
connection with Computing Devices' Iris contract. Computing Devices is now
receiving monthly progress payments under that contract, each of which will
be subject to a percentage holdback. On the achievement of each quarterly
milestone, 50% of the cumulative holdback will be released. This change in
the contractual payment mechanism will substantially increase the working
capital requirements of Computing Devices in the remainder of 1994 and
future years as compared to 1993. Payments of restructure reserves were
$34.7 million and $39.2 million in the first six months of 1994 and 1993,
respectively. Restructure payments in the first six months of 1994 included
amounts attributable to the discontinuance of Arbitron's television ratings
service, amounts payable in connection with excess facilities, and amounts
paid in connection with the Company's disposition of its remaining interests
in Business and Technology Centers and related partnerships.
At June 30, 1994, the Company reported restructure reserves of $105.1
million, a net increase of $18.5 million during the second quarter 1994.
The portion of these reserves estimated to require cash outlays during the
remainder of 1994 is approximately $20 million. The second quarter 1994 net
increase in restructure reserves primarily reflected provisions related to
the sale of the TeleMoney business and to age discrimination litigation
arising out of downsizing actions taken by the Company in past years (see
the "Investments and Advances" and "Restructure Loss (Gain)" notes to the
financial statements in Part I, Item 1 of this report, and "Legal
Proceedings" in Part II, Item 1 of this report).
Investing activities provided $0.5 million of cash during the first
half of 1994 and utilized $12.9 million in the first half of 1993. Cash
received from the liquidation of short-term investments totalled $39.7
million in the first six months of 1994, as the Company's independent
investment manager reduced average maturities during the period. Cash of
$33.5 million received during the first half of 1994 from the sale of
businesses and investments was primarily attributable to the sale of the
Company's TeleMoney Services business and from the final settlement of
obligations under a tax matters agreement relating to the 1986 sale of
Commercial Credit Company. Cash utilized to acquire Tesseract during June
1994, net of Tesseract's cash balances at acquisition, represented $54.3
million of the $56.3 million expended during the first six months of 1994
for acquisitions. Amounts expended for capital assets and software in the
first six months of 1994 and 1993 totalled $16.6 million and $14.9 million,
respectively.
- 14 -
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Financial Condition (cont.)
Cash flows from financing activities produced $10.5 million in cash
during the first half of 1994, primarily due to the receipt of an additional
$15.0 million in net cash proceeds from the closing of the sale by the
Company of additional shares of 5 1/2% Preferred Stock, as a result of the
underwriters' exercise of their overallotment option.
During May 1994, the Company concluded a one year extension of its $35
million domestic revolving credit facility. Under the terms of the
extension, the Company will be provided with credit availability equal to
the lesser of $35 million or 75% of the amount of its eligible accounts
receivable until May 30, 1995, all of which may be used to obtain revolving
loans or standby letters of credit which may not have a final expiration
date later than May 30, 1996. The credit facility as extended is unsecured.
At June 30, 1994, there were $4.6 million in letters of credit and no
revolving loans outstanding under the facility.
Under the terms of the extended facility, the Company must maintain a
minimum consolidated net worth which is subject to increase based on the
Company's net earnings after December 31, 1993 and certain equity
contributions to the Company after the same date. As of June 30, 1994, the
Company was in compliance with this covenant by $19.4 million. The Company
is also required to achieve a prescribed level of operating earnings on a
rolling four quarter basis, and is subject to additional covenants which
limit debt, liens, contingent obligations, operating leases, investments,
cash dividends on common stock, cash repurchases of stock, acquisitions and
divestitures. The Company continues to be in compliance with all covenants
associated with this credit facility.
On July 27, 1994, the Company's Board of Directors authorized the
Company to repurchase up to 2,000,000 shares of the Company's common stock
in open market or privately negotiated transactions. Purchases will be made
from time to time at the discretion of Company management, depending on
share price and market conditions. The principal reason for adopting the
repurchase program is to provide shares to be issued under the Company's
employee stock plans, thereby reducing dilution from such plans. The
Company's domestic revolving credit agreement limits the amount of cash the
Company may expend in connection with such a program to 25% of the amount of
the Company's net income in profitable quarters after the first quarter of
1993. As of June 30, 1994, this amount totalled $14.4 million. The Company
believes that this limitation, which expires when the credit agreement
expires on May 30, 1995, could be modified if desired prior to that time.
The Company expects to meet its operating cash needs (including accrued
restructure liabilities), expenditures for capital assets and software,
dividend obligations with respect to the 5 1/2% Preferred Stock and
expenditures to repurchase common stock from its existing cash balances,
cash flow from operations and proceeds from the exercise of stock options.
- 15 -
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Part II. Other Information
Item 1. Legal Proceedings
As previously reported in Note O in the financial statements contained
in the Company's 1993 Annual Report to Stockholders, which was incorporated
by reference into Part I, Item 3 of the Company's 1993 Annual Report on Form
10-K, the Company is a defendant in eight actions filed in U.S. District
Court in Minnesota currently involving approximately 320 former employees of
the Company as plaintiffs alleging violations of the Age Discrimination in
Employment Act. The parties had previously agreed to the establishment of a
"test case" process whereby a series of three six-week test trials, each
involving twelve randomly selected plaintiffs, was to be conducted. These
trials would be determinative as to issues of liability, but not damage
amounts, if any, with respect to the plaintiffs involved, and could provide
the parties with further information as to the potential resolution of all
remaining cases. The first of these trials had been expected to begin in
June 1994, but has been postponed until at least the fall of 1994. The
Company believes that it acted lawfully in terminating these former
employees, but agreed to the test case process and has explored
opportunities to settle these claims principally because of the costs to the
Company of defending these actions. Although, as previously reported, 92 of
the original plaintiffs agreed to settle their claims for approximately
$600,000, settlement discussions involving the remaining claimants have so
far been unproductive. Nevertheless, the Company believes there is a
reasonable possibility that a settlement of the claims of the remaining
plaintiffs can be achieved on terms acceptable to the Company. Given this
belief, and the Company's estimates of costs to defend these actions, the
Company established as of the end of the second quarter 1994 reserves
totalling $15 million with respect to these cases. The amount of the
reserves includes defense and settlement costs that the Company would be
prepared to absorb if settlement were to occur within what the Company
considers a reasonable period of time. If settlement did not occur within
such time on terms acceptable to the Company, the Company believes the
amount of these reserves adequate for a protracted defense of these actions.
- 16 -
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Part II. Other Information (cont.)
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual meeting of stockholders was held on May 11, 1994.
Of the 44,382,089 shares of the Company's common stock entitled to vote at
the meeting, 38,885,034 shares were present at the meeting in person or by
proxy.
The eight people designated by the Company's Board of Directors as
nominees for director were elected, with voting as follows:
Total Votes Total Votes
Nominee For Withheld
Ruth M. Davis 38,160,725 724,309
Allen W. Dawson 38,162,906 722,128
Ronald James 38,156,531 728,503
Richard G. Lareau 38,157,095 727,939
Charles Marshall 38,163,339 721,695
Lawrence Perlman 38,152,079 732,955
Richard W. Vieser 38,159,533 725,501
Paul S. Walsh 38,156,586 728,448
Stockholders voted to adopt the Ceridian Restated Certificate of
Incorporation. There were 35,285,755 votes cast for the Plan, 1,328,119
votes against the Plan, 217,111 shares specifically abstained from voting
on the matter. In addition, 2,054,049 shares present at the meeting were
the subject of broker non-votes on this matter.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit Description
10.01 Amended and Restated Credit Agreement, dated
as of May 13, 1994, among the Registrant,
Bank of America N.T. & S.A., as Agent and the
Other Financial Institutions Parties Thereto
(the "Credit Agreement")
11 Statement re computation of per share
earnings
- 17 -
<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 1994
Item 6. Exhibits and Reports on Form 8-K (cont.)
(b) Reports on Form 8-K
The following report on Form 8-K was filed by the Company after
30,
June 1994, but prior to the filing of this report:
Report Date
Item Reported
Financial Statements Filed
June 24, 1994 Item 2: Acquisition Item 7: Audited Financial
of Tesseract Statement of Tesseract
Corporation Corporation for the Years
Ended December 31, 1993
and 1992.
Unaudited Financial
Statements of Tesseract
Corporation for the Three
Months Ended March 31, 1994.
Pro forma financial
information reflecting the
combined operations of the
Company and Tesseract
Corporation.
- 18 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Quarterly Report on Form 10-Q for the
period ended June 30, 1994, to be signed on its behalf by the undersigned
thereunto duly authorized.
CERIDIAN CORPORATION
Registrant
Date: August 3, 1994 /s/L. D. Gross
L. D. Gross
Vice President and
Corporate Controller
(Principal Accounting Officer)
- 19 -
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Code
10.01 Amended and Restated Credit Agreement, dated E
as of May 13, 1994, among the Registrant,
Bank of America N.T. & S.A., as Agent and the
Other Financial Institutions Parties Thereto
(the "Credit Agreement")
11 Statement re computation of per share E
earnings
Legend: (IBR) Incorporated by reference from previous filing
(P) Printed material
(E) Electronic Filing
<PAGE>
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of May 13, 1994,
Amending and Restating the Credit Agreement
Dated as of June 30, 1993, as amended,
among
CERIDIAN CORPORATION,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTIES HERETO
<PAGE>
Section Page
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01 Defined Terms......................................... 1
1.02 Other Interpretive Provisions......................... 20
(a) Defined Terms.................................... 20
(b) The Agreement.................................... 20
1.03 Accounting Principles................................. 20
ARTICLE II
THE CREDITS
2.01 Amount and Terms of Commitments....................... 20
(a) The Loans........................................ 20
(b) The Letters of Credit............................ 21
(c) Participation; Old Letters of Credit............. 21
2.02 Notes................................................. 21
2.03 Procedure for Borrowing............................... 22
2.04 Letter of Credit Requests............................. 23
2.05 Extension Letters of Credit........................... 23
2.06 Conversion and Continuation Elections................. 24
2.07 Voluntary Termination or Reduction of Commitments..... 25
2.08 Optional Prepayments.................................. 26
2.09 Mandatory Prepayments of Credit Extensions; Cash
Collateral............................................ 26
(a) Borrowing Base Compliance........................ 26
(b) General.......................................... 26
2.10 Repayment............................................. 26
2.11 Repayment of Letter of Credit Drawings................ 27
2.12 Default in Reimbursement of Issuing Bank.............. 28
2.13 Interest.............................................. 29
2.14 Fees.................................................. 30
(a) Fees Payable to BofA and the Agent............... 30
(b) Commitment Fees.................................. 30
(c) Letter of Credit Fees............................ 30
(d) Fees under the Existing Credit Agreement......... 31
2.15 Computation of Fees and Interest...................... 31
2.16 Payments by the Company............................... 32
2.17 Payments by the Banks to the Agent.................... 32
2.18 Sharing of Payments, Etc.............................. 33
2.19 Pro Rata Treatment. ................................. 34
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<PAGE>
Section Page
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes................................................. 34
3.02 Illegality............................................ 36
3.03 Increased Costs and Reduction of Return............... 37
3.04 Funding Losses........................................ 38
3.05 Inability to Determine Rates.......................... 38
3.06 Substitution of Banks................................. 39
3.07 Survival.............................................. 39
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans........................... 39
(a) Amended and Restated Credit Agreement............ 39
(b) Notes............................................ 39
(c) Consent by Arbitron.............................. 39
(d) Borrowing Base Certificate....................... 39
(e) Resolutions; Incumbency.......................... 39
(f) Articles of Incorporation; By-laws............... 40
(g) Opinion of Counsel to the Company and Arbitron... 40
(h) Payment of Fees and Expenses..................... 40
(i) Termination of Security Interests................ 40
(j) Other Documents.................................. 40
4.02 Conditions to All Credit Extensions................... 40
(a) Notice of Borrowing or Continuation/Conversion... 40
(b) Letter of Credit Request......................... 41
(c) Continuation of Representations and Warranties... 41
(d) No Existing Default.............................. 41
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Corporate Existence and Power......................... 41
5.02 Corporate Authorization; No Contravention............. 42
5.03 Governmental Authorization............................ 43
5.04 Binding Effect........................................ 43
5.05 Litigation............................................ 43
5.06 No Default............................................ 43
5.07 ERISA Compliance...................................... 44
5.08 Title to Properties................................... 45
5.09 Taxes................................................. 45
5.10 Financial Condition................................... 45
5.11 Environmental Matters................................. 45
5.12 Regulated Entities.................................... 46
5.13 No Burdensome Restrictions............................ 46
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iii
<PAGE>
Section Page
5.14 Solvency.............................................. 46
5.15 Labor Relations....................................... 46
5.16 Copyrights, Patents, Trademarks and Licenses, etc..... 46
5.17 Subsidiaries.......................................... 47
5.18 Insurance............................................. 47
5.19 Full Disclosure....................................... 47
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Financial Statements.................................. 47
6.02 Certificates; Other Information....................... 48
6.03 Notices............................................... 49
6.04 Preservation of Corporate Existence, Etc.............. 50
6.05 Maintenance of Property............................... 51
6.06 Insurance............................................. 51
6.07 Payment of Obligations................................ 51
6.08 Compliance with Laws.................................. 52
6.09 Inspection of Property and Books and Records.......... 52
6.10 Environmental Laws.................................... 52
6.11 Use of Proceeds....................................... 52
6.12 Further Assurances.................................... 52
ARTICLE VII
NEGATIVE COVENANTS
7.01 Limitation on Liens................................... 53
7.02 Mergers, Consolidations and Dispositions of Assets.... 54
7.03 Loans and Investments................................. 56
7.04 Limitation on Indebtedness............................ 57
7.05 Contingent Obligations................................ 57
7.06 Use of Proceeds....................................... 57
7.07 Compliance with ERISA................................. 58
7.08 Lease Obligations..................................... 58
7.09 Restricted Payments................................... 58
7.10 Consolidated Net Worth................................ 59
7.11 EBIT.................................................. 59
7.12 Fixed Charge Coverage Ratio........................... 59
7.13 Change in Business.................................... 59
7.14 Change in Structure................................... 59
7.15 Accounting Changes; Designation of Material Subsidiaries 60
7.16 Contracts of Subsidiaries............................. 60
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iv
<PAGE>
Section Page
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default...................................... 60
(a) Non-Payment...................................... 60
(b) Representation or Warranty....................... 60
(c) Specific Defaults................................ 60
(d) Other Defaults................................... 60
(e) Cross-Default.................................... 61
(f) Insolvency; Voluntary Proceedings................ 61
(g) Involuntary Proceedings.......................... 61
(h) ERISA............................................ 62
(i) Monetary Judgments............................... 62
(j) Ownership........................................ 63
(k) Guarantor Defaults............................... 63
8.02 Remedies.............................................. 63
8.03 Rights Not Exclusive.................................. 64
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization......................... 64
9.02 Delegation of Duties.................................. 64
9.03 Liability of Agent.................................... 64
9.04 Reliance by Agent..................................... 65
9.05 Notice of Default..................................... 65
9.06 Credit Decision....................................... 66
9.07 Indemnification....................................... 66
9.08 Agent in Individual Capacity.......................... 67
9.09 Successor Agent....................................... 67
9.10 Collateral Matters.................................... 68
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers................................ 68
10.02 Notices............................................... 69
10.03 No Waiver; Cumulative Remedies........................ 69
10.04 Costs and Expenses.................................... 69
10.05 Indemnity............................................. 70
(a) General Indemnity................................ 70
(b) Survival; Defense................................ 71
10.06 Marshalling; Payments Set Aside....................... 71
10.07 Successors and Assigns................................ 71
10.08 Assignments, Participations, etc...................... 71
10.09 Set-off............................................... 74
10.10 Automatic Debits of Fees.............................. 74
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v
<PAGE>
Section Page
10.11 Notification of Addresses, Lending Offices, Etc....... 74
10.12 Counterparts.......................................... 74
10.13 Severability.......................................... 75
10.14 No Third Parties Benefited............................ 75
10.15 Time.................................................. 75
10.16 Governing Law and Jurisdiction........................ 75
10.17 Waiver of Jury Trial.................................. 75
10.18 Entire Agreement...................................... 76
10.19 Interpretation........................................ 76
10.20 Term of Agreement..................................... 76
10.21 Foreign Currency Conversion........................... 76
SCHEDULES
Schedule 1.01(a) Material Subsidiaries Other than Arbitron
Schedule 1.01(b) Old Letters of Credit
Schedule 2.01 Bank Commitments and Percentages
Schedule 5.05 Litigation
Schedule 5.07 ERISA Plans and Disclosures
Schedule 5.10 Contingent Obligations and Partnerships
Schedule 5.11 Environmental Matters
Schedule 5.17 Subsidiaries and other Equity Investments
Schedule 7.02 Dispositions of Assets Scheduled as of Closing
Date
EXHIBITS
Exhibit A Borrowing Base Certificate
Exhibit B Compliance Certificate
Exhibit C Guaranty
Exhibit D Letter of Credit Application
Exhibit E Note
Exhibit F Notice of Borrowing
Exhibit G Notice of Conversion/Continuation
Exhibit H Opinion of Counsel to Company
N:\CERIDIAN\94CREDIT
vi
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into
as of May 13, 1994, among Ceridian Corporation, a Delaware
corporation (the "Company"), the several financial institutions
party to this Agreement (collectively, the "Banks"; individually,
a "Bank"), and Bank of America National Trust and Savings
Association, as agent for the Banks.
WHEREAS, the Company, the Banks and the Agent are parties to
that certain Credit Agreement dated as of June 30, 1993, as
amended (the "Existing Credit Agreement"); and
WHEREAS, the parties to the Existing Credit Agreement desire
to amend certain terms of the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the Company, the Banks
and the Agent hereby agree that the Existing Credit Agreement
shall, effective as of the Closing Date, be amended and restated
in its entirety as follows:
ARTICLE I
DEFINITIONS
1.01 Defined Terms. In addition to the terms defined
elsewhere in this Agreement, the following terms have the
following meanings:
"Account Receivable" means any right to the payment of
money now owned or hereafter acquired by the Company arising
from the sale or lease of goods, the performance of services
or the licensing of software or other property, whether due
or to become due and whether or not earned by performance,
whether categorized as an account, a contract right, chattel
paper, an instrument or a general intangible and whether
evidenced by promissory notes, open account records or
otherwise.
"Account Receivable Debtor" means the Person who is
obligated on an Account Receivable.
"Acquisition" means any transaction or series of
related transactions for the purpose of or resulting in
(a) the acquisition, directly or indirectly, of all or
substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisi tion,
directly or indirectly, of in excess of 50% of the capital
stock, partnership interests or equity of any Person or
otherwise causing any Person to become a Subsidiary of the
Company, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is
a Subsidiary of the Company) provided that the Company or
the Company's Subsidiary is the surviving entity.
<PAGE>
"Affected Bank" has the meaning specified in
Section 3.06.
"Affiliate" means, as to any Person, any other Person
which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person.
A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership
of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial
owner of 15% or more of the voting equity of a Person shall
for the purposes of this Agreement, be deemed to control the
other Person.
"Agent" means BofA in its capacity as agent for the
Banks hereunder, and any successor agent.
"Agent-Related Persons" means BofA and any successor
agent arising under Section 9.09, together with their
respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for
payments set forth on the signature page hereto in relation
to the Agent or such other address as the Agent may from
time to time specify in accordance with Section 10.02.
"Aggregate Commitment" means the combined Commitments
of the Banks, in the initial amount of Thirty-Five Million
Dollars ($35,000,000), as such amount may be reduced from
time to time pursuant to this Agreement.
"Agreement" means this Amended and Restated Credit
Agreement, as amended from time to time in accordance with
the terms hereof.
"Applicable Margin" means
(i) with respect to Base Rate Loans, 0%; and
(ii) with respect to Offshore Rate Loans, 1.20%.
"Arbitron" means The Arbitron Company, a Maryland
corporation and a Wholly-Owned Subsidiary.
"Arranger" means BA Securities, Inc.
"Assignee" has the meaning specified in subsection
10.08(a).
- 2 -
<PAGE>
"Attorney Costs" means and includes all fees and
disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all
disbursements of internal counsel.
"Bank" (i) has the meaning specified in the
introductory clause hereto and (ii) also includes any
financial institution becoming a party hereto by execution
of an assignment and acceptance agreement in accordance with
Section 10.08.
"Bank Affiliate" means a Person engaged primarily in
the business of commercial banking and that is a Subsidiary
of a Bank or of a Person of which a Bank is a Subsidiary.
"Bankruptcy Code" means the Federal Bankruptcy Reform
Act of 1978 (12 U.S.C. S 101, et seq.).
"Base Rate" means the higher of:
(a) the rate of interest publicly announced from
time to time by BofA in San Francisco, California, as
its "reference rate." It is a rate set by BofA based
upon various factors including BofA's costs and
desired return, general economic conditions and other
factors, and is used as a reference point for pricing
some loans, which may be priced at, above, or below
such announced rate; and
(b) 0.50% per annum above the latest Federal
Funds Rate.
Any change in the reference rate announced by BofA
shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest
based on the Base Rate.
"BofA" means Bank of America National Trust and
Savings Association, a national banking association.
"Borrowing" means a borrowing hereunder consisting of
Loans made to the Company on the same day by the Banks
pursuant to Article II.
"Borrowing Base" means the amount equal to seventy-
five percent (75%) of Eligible Accounts Receivable plus the
amount of cash or Cash Equivalents delivered to the Agent as
collateral pursuant to Section 2.09(a). For purposes of
this definition, Eligible Accounts Receivable (i) shall be
computed as of the most recent Borrowing Base Certificate
furnished by the Company to the Agent and (ii) shall be
- 3 -
<PAGE>
measured by the book value of the Eligible Accounts
Receivable minus all offsets, counterclaims and defenses
which are, or would be, in accordance with the Company's
customary practices, recognized by the issuance of a credit
memo.
"Borrowing Base Certificate" means a certificate in
the form attached hereto as Exhibit A, as the same may be
amended, modified or supplemented from time to time.
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in New York
City or San Francisco are authorized or required by law to
close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank
market.
"Capital Adequacy Regulation" means any guideline,
request or directive of any central bank or other
Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Expenditures" means, for any period, the
aggregate of all expenditures by the Company and its
Subsidiaries for the acquisition of fixed or capital assets
or additions to equipment (including replacements,
capitalized repairs and improvements during such period) as
shown in the Company's consolidated statements of cash flow
for such period in accordance with GAAP.
"Capital Lease" has the meaning specified in the
definition of Capital Lease Obligations.
"Capital Lease Obligations" means all monetary
obligations of the Company or any of its Subsidiaries under
any leasing or similar arrangement which, in accordance with
GAAP, is classified as a capital lease ("Capital Lease").
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or
insured by the United States Government or any agency
thereof having maturities of not more than six months
from the date of acquisition;
(b) certificates of deposit, time deposits,
Eurodollar time deposits, repurchase agreements,
reverse repurchase agreements, or bankers'
acceptances, having in each case a tenor of not more
than six months, issued by any Bank, or by any U.S.
- 4 -
<PAGE>
commercial or investment bank or broker having
combined capital and surplus of not less than
$100,000,000 whose short term securities are rated at
least A-1 by Standard & Poor's Corporation and P-1 by
Moody's Investors Service, Inc.;
(c) commercial paper or promissory note of an
issuer rated at least A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Service Inc.
and in either case having a tenor of not more than
three months.
"Closing Date" means the date on which all conditions
precedent set forth in Section 4.01 are satisfied or waived
by all Banks.
"Co-Applicant" means, with respect to any Letter of
Credit, a Subsidiary of the Company which together with the
Company signs a Letter of Credit Application.
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Commitment" means, (a) as to each Bank executing this
Agreement on the Closing Date, its commitment to extend
credit to the Company in the amount set opposite its name on
Schedule 2.01 (as such amount may be reduced from time to
time in accordance with Section 2.07 or Section 10.08) and
(b) as to each financial institution becoming a Bank
hereunder pursuant to Section 10.08, its commitment to
extend credit in the amount agreed upon in the assignment
and acceptance agreement entered into by it in accordance
with Section 10.08.
"Commitment Percentage" means, as to any Bank, the
percentage derived by dividing such Bank's Commitment by the
Aggregate Commitment.
"Compliance Certificate" means a certificate delivered
to the Agent by the Company pursuant to Section 6.02(a),
substantially in the form of Exhibit B.
"Consolidated Fixed Charges" means, at any time, (a)
Consolidated Interest Expense for the four fiscal quarters
ending on or before the date of determination plus
(b) Current Maturities of Long Term Debt measured as of the
last day of the fiscal quarter ending on or before the date
of determination (but excluding principal payable under the
Loan Documents), as determined in accordance with GAAP.
"Consolidated Net Income (Loss)" means, for any
period, all amounts which would, in accordance with GAAP, be
included in net income (loss) on the consolidated income
- 5 -
<PAGE>
statement of the Company and its Subsidiaries for such
period.
"Consolidated Interest Expense" means, for any period,
gross consolidated interest expense for such period
(including all commissions, discounts, fees and other
charges in connection with Letters of Credit) for the
Company and its Subsidiaries.
"Consolidated Net Worth" means, at any time, with
respect to the Company and its Subsidiaries shareholders'
equity on the date of determination as determined in
accordance with GAAP (except that the effects of direct
charges or credits to shareholders' equity related to
accounting for pensions ("FAS 87") and foreign currency
translation ("FAS 52") are to be disregarded), including,
without duplication, 100% of the net proceeds from the
issuance of the Preferred Stock.
"Contingent Obligation" means, as to the Company or
any of its Subsidiaries, (a) any Guaranty Obligation of that
Person; (b) any reimbursement obligation of that Person with
respect to a standby letter of credit, surety bond, banker's
acceptance or similar instrument; (c) any obligation of that
Person to purchase any materials, supplies or other property
from, or to obtain the services of, another Person (other
than the Company or one of its Subsidiaries) if the relevant
contract or other related document or obligation requires
that payment for such materials, supplies or other property,
or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is
ever made or tendered, or such services are ever performed
or tendered; and (d) all Indebtedness (other than that of
the Company or any of its Subsidiaries) secured by (or for
which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on
property (including accounts and contract rights) owned by
the Company or any such Subsidiary; but in all events
excluding obligations of the type described in clauses (a)
through (d) above to the extent that reserves or liabilities
have been established therefor in the Company's consolidated
financial statements.
"Contractual Obligations" means, as to any Person, any
provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed
of trust or other instrument, document or agreement to which
such Person is a party or by which it or any of its property
is bound.
"Controlled Group" means the Company and all Persons
(whether or not incorporated) under common control or
treated as a single employer with the Company pursuant to
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Section 414(b), (c), (m) or (o) of the Code.
"Conversion Date" means any date on which the Company
elects to convert a Base Rate Loan to an Offshore Rate Loan
or to convert an Offshore Rate Loan to a Base Rate Loan.
"Credit Extension" means a Borrowing, a continuance or
conversion of Loans or the issuance of or purchase of a
participation under Section 2.01(c) in a Letter of Credit.
"Credit Extension Date" means the date on which a
Credit Extension is made.
"Current Maturities of Long Term Debt" means the
principal portion of any Indebtedness with a maturity date
in excess of one year that is due within the next 12 months.
"Default" means any event or circumstance which, with
the giving of notice, the lapse of time, or both, would (if
not cured or otherwise remedied during such time) constitute
an Event of Default.
"Disposition" means (i) the sale, lease, conveyance or
other disposition of property, other than sales or other
dispositions expressly permitted under Section 7.02 and
(ii) the sale or transfer by the Company or any Subsidiary
of the Company of any equity securities issued by any
Subsidiary of the Company and held by such transferor
Person.
"Dollars", "dollars" and "$" each mean lawful money of
the United States.
"Domestic Lending Office" means, with respect to each
Bank, the office of that Bank designated as such in the
signature pages hereto or such other office of the Bank as
it may from time to time specify to the Company and the
Agent.
"EBIT" means, for any period, for the Company and its
Subsidiaries determined in accordance with GAAP, the sum of
(a) Consolidated Net Income (Loss), plus (b) Consolidated
Interest Expense, plus (c) provision for income taxes to the
extent included in the determination of Consolidated Net
Income (Loss), plus (d) Restructure Loss, minus (e) interest
income, and minus (f) Restructure Gain, all determined on a
consolidated basis for the Company and its Subsidiaries;
provided, however, that Consolidated Net Income (Loss) shall
be computed for these purposes without giving effect to
extraordinary losses or gains or losses or gains from
discontinued operations.
"EBITDA" means, for any period, for the Company and
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<PAGE>
its Subsidiaries on a consolidated basis, determined in
accordance with GAAP, the sum of (a) EBIT and
(b) depreciation and amortization expenses.
"Eligible Account Receivable" means an Account
Receivable:
(a) arising from the sale or lease of goods, the
performance of services or the licensing of software
or other property in the Ordinary Course of Business
by the Company, Arbitron or any Wholly-Owned
Subsidiary which is incorporated in the United States
(provided that any such Wholly-Owned Subsidiary shall
have first executed and delivered a Guaranty, together
with satisfactory board of directors resolutions and
incumbency certificate from the Guarantor which has
issued such Guaranty);
(b) upon which the Company's or Arbitron's or any
such Wholly-Owned Subsidiary's right to receive
payment is absolute and not contingent upon the
fulfillment of any condition whatsoever;
(c) that is a valid and legally enforceable
obligation of the Account Receivable Debtor
thereunder;
(d) owned by the Company, Arbitron or any such
Wholly-Owned Subsidiary and not subject to any right,
claim or interest of another;
(e) that does not arise from a sale or lease to,
performance of services for, or license of software or
other property to the Company, an Affiliate, an
employee of the Company or one of its Subsidiaries;
(f) that is payable in dollars and is not the
obligation of an Account Receivable Debtor located in
a foreign country unless such Account Receivable is
supported by a letter of credit in an amount
acceptable to the Agent and issued by a Bank
acceptable to the Agent;
(g) that would not, when aggregated with all
other Eligible Accounts Receivable from the same non-
U.S. government Account Receivable Debtor and its
Affiliates known to the Company cause the aggregate
amount of Eligible Accounts Receivable of such non-
U.S. government Account Receivable Debtor and its
Affiliates to exceed ten percent (10%) of the total
amount of Eligible Accounts Receivable;
(h) that does not represent a progress payment on
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<PAGE>
a product delivery or performance contract unless the
Company, Arbitron or any such Wholly-Owned Subsidiary
has completed its delivery and/or performance
thereunder (other than ongoing warranty obligations
that continue after such final delivery or
performance);
(i) that is not owing by any Account Receivable
Debtor whose obligations the Agent shall have notified
the Company in writing are not deemed to constitute
Eligible Accounts Receivable;
(j) that is otherwise acceptable to the Majority
Banks; and
(k) that is not in default.
For purposes of clause (k) of this definition, an
Account Receivable shall be deemed to be in default upon the
occurrence of any of the following: (x) the Account
Receivable is more than sixty (60) days past due; or (y) any
Account Receivable Debtor obligated upon such Account
Receivable suspends business or makes a general assignment
for the benefit of creditors, or any petition is filed by or
against any Account Receivable Debtor obligated upon such
Account Receivable under any bankruptcy law or any other law
for the relief of debtors.
"Eligible Assignee" means (i) a commercial bank
organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at
least $100,000,000; (ii) a commercial bank organized under
the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and
having a combined capital and surplus of at least
$100,000,000, provided that such bank is acting through a
branch or agency located in the United States; and (iii) any
Bank Affiliate.
"Environmental Claims" means all claims, however
asserted, by any Governmental Authority or other Person
alleging potential liability or responsibility for violation
of any Environmental Law or for release or injury to the
environment or threat to public health, personal injury
(including sickness, disease or death), property damage,
natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup,
removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the alleged or
actual presence, placement, migration, spillage, leakage,
disposal, discharge, emission or release of any Hazardous
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<PAGE>
Material at, in, or from property, whether or not owned by
the Company, or (b) any other circumstances forming the
basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means all federal, state or local
laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative
orders, directed duties, requests, licenses, authorizations,
registration requirements and permits of, and agreements
with, any Governmental Authorities, in each case relating to
environmental and land use matters or health and safety
matters involving Hazardous Materials.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and regulations
promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) under common control with the Company
within the meaning of Section 414(b), 414(c) or 414(m) of
the Code.
"ERISA Event" means (a) with respect to any Qualified
Plan or Multiemployer Plan, an event set forth in Section
4043 of ERISA or the regulations thereunder other than any
such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC;
(b) a withdrawal by the Company or any ERISA Affiliate from
a Qualified Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined
in Section 4001(a)(2) of ERISA); (c) a complete or partial
withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan or cessation of operations at a facility
by the Company or an ERISA Affiliate described in Section
4062(e) of ERISA; (d) the filing of a notice of intent to
terminate, the treatment of a plan amendment as a
termination under Section 4041 or 4041A of ERISA or the
commencement of proceedings by the PBGC to terminate a
Qualified Plan or Multiemployer Plan subject to Title IV of
ERISA; (e) a failure by the Company or any member of the
Controlled Group to make required contributions to a
Qualified Plan or Multiemployer Plan; (f) an event or
condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a
trustee to administer, any Qualified Plan or Multiemployer
Plan; (g) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Company or any ERISA
Affiliate; (h) an application for a funding waiver or an
extension of any amortization period pursuant to Section 412
of the Code with respect to any Plan; (i) a non -exempt
prohibited transaction occurs with respect to any Plan for
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which the Company or any Subsidiary of the Company could
reasonably be expected to be directly or indirectly liable
and which could reasonably be expected to have a Material
Adverse Effect; or (j) a violation of the applicable
requirements of Section 404 or 405 of ERISA or the exclusive
benefit rule under Section 401(a) of the Code by any
fiduciary or disqualified person with respect to any Plan
for which the Company or any member of the Controlled Group
could reasonably be expected to be directly or indirectly
liable and which could reasonably be expected to have a
Material Adverse Effect.
"Eurodollar Reserve Percentage" has the meaning
specified in the definition of "Offshore Rate".
"Event of Default" means any of the events or
circumstances specified in Section 8.01.
"Exchange Act" means the Securities Exchange Act of
1934, and regulations promulgated thereunder.
"Existing Credit Agreement" has the meaning specified
in the introduction of this Agreement.
"Extension" has the meaning specified in Section 2.05.
"Extension Refusal Date" has the meaning specified in
Section 2.05.
"Federal Funds Rate" means, for any period, the rate
set forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the
Federal Reserve Board (including any such successor,
"H.15(519)") for such day opposite the caption "Federal
Funds (Effective)". If on any relevant day such rate is not
yet published in H.15(519), the rate for such day will be
the rate set forth in the daily statistical release
designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including
any such successor, the "Composite 3:30 p.m. Quotation") for
such day under the caption "Federal Funds Effective Rate".
If on any relevant day the appropriate rate for such
previous day is not yet published in either H.15(519) or the
Composite 3:30 p.m. Quotations, the rate for such day will
be the arithmetic mean of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New
York time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the
Agent.
"Federal Reserve Board" means the Board of Governors
of the Federal Reserve System, or any successor thereto.
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"Financial L/C" means, with respect to any Letter of
Credit, a "financial standby letter of credit" as such term
is defined in the Adequacy Guidelines For Bank Holding
Companies: Risk-Based Measure, 12 C.F.R. Part 225, Appendix
A, III.D (1993) and as the definition of such term may be
amended from time to time prior to issuance of any such
Letter of Credit. Such term is described in the 1993 Code
of Federal Regulations as "irrevocable obligations of the
banking organization to pay a third-party beneficiary when a
customer (account party) fails to repay an outstanding loan
or debt instrument (direct credit substitute)."
"GAAP" means generally accepted accounting principles
set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting
profession), or in such other statements by such other
entity as may be in general use by significant segments of
the U.S. accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Authority" means any nation or
government, any state or other political subdivision
thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any
corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the
foregoing.
"Guarantor" means any Person executing a Guaranty.
"Guaranty" means a guaranty in the form attached
hereto as Exhibit C.
"Guaranty Obligation" means, as applied to the Company
or any of its Subsidiaries, any agreement of the Company or
any such Subsidiary to guarantee the Indebtedness of a
Person other than the Company or any of its Subsidiaries
(the "primary obligor"), or any obligation or undertaking of
the Company or any such Subsidiary which, in economic
effect, is substantially equivalent to a guarantee of the
primary obligor's Indebtedness ("primary obligations"),
including any obligation of the Company or any such
Subsidiary, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or
any property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the
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<PAGE>
payment or discharge of any such primary obligation, or
(ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or
financial condition of the primary obligor, or (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 holder of any such primary obligation against
loss in respect thereof.
"Hazardous Materials" means all those substances which
are regulated by, or which may form the basis of liability
under, any Environmental Law, including all substances
identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent,
hazardous chemicals, special waste, hazardous substance,
hazardous material, regulated substance, or toxic substance,
or petroleum or petroleum derived substance or waste.
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness for borrowed money;
(b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than
trade payables entered into in the Ordinary Course of
Business pursuant to ordinary terms); (c) all obligations
evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or
businesses; (d) all indebtedness created or arising under
any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to
property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such
property); and (e) all Capital Lease Obligations.
Indebtedness owed to the Company by its Subsidiaries, by one
Subsidiary to another or by the Company to a Subsidiary
shall not count as Indebtedness.
"Indemnified Person" has the meaning specified in
subsection 10.05(a).
"Indemnified Liabilities" has the meaning specified in
subsection 10.05(a).
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief
of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors
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<PAGE>
or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; in
each case (a) and (b) undertaken under U.S. Federal, State
or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, with respect to any
Offshore Rate Loan, the last day of each Interest Period
applicable to such Loan and, with respect to Base Rate
Loans, (a) the first Business Day of January, April, July
and October for Base Rate Loans outstanding during the
preceding quarter, (b) the Termination Date and (c) each
date a Base Rate Loan is converted into an Offshore Rate
Loan, provided, however, that if any Interest Period for an
Offshore Rate Loan exceeds three months, interest shall also
be paid on the date which falls three months after the
beginning of such Interest Period.
"Interest Period" means, with respect to any Offshore
Rate Loan, the period commencing on the Business Day the
Loan is disbursed or continued or on the Conversion Date on
which the Loan is converted to the Offshore Rate Loan and
ending on the date one, two, three or six months thereafter,
as selected by the Company in its Notice of Borrowing or
Notice of Conversion/Continuation; provided that:
(a) if any Interest Period pertaining to an
Offshore Rate Loan would otherwise end on a day which
is not a Business Day, that Interest Period shall be
extended to the next succeeding Business Day unless
the result of such extension would be to carry such
Interest Period into another calendar month, in which
event such Interest Period shall end on the
immediately preceding Business Day;
(b) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such
Interest Period; and
(c) no Interest Period shall extend beyond the
Termination Date.
"Issuing Bank" means, with respect to each Letter of
Credit, BofA or such other Bank which may issue a Letter of
Credit.
"Joint Venture" means a partnership, joint venture or
other legal arrangement (whether created pursuant to
contract or conducted through a separate legal entity) now
or hereafter formed by the Company or any of its
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<PAGE>
Subsidiaries with another Person in order to conduct a
common venture or enterprise with such Person, but shall not
include a Subsidiary of the Company.
"Lending Office" means, with respect to any Bank, the
office or offices of the Bank specified as its "Lending
Office" or "Domestic Lending Office" or "Offshore Lending
Office", as the case may be, opposite its name on the
applicable signature page hereto, or such other office or
offices of the Bank as it may from time to time notify the
Company and the Agent.
"Letter of Credit" means (i) a standby letter of
credit issued under this Agreement by the Issuing Bank for
the account of the Company and (ii) any Old Letter of Credit
outstanding on the Closing Date, including an Extension of
any letter of credit.
"Letter of Credit Application" means a letter of
credit application and agreement in form and substance
satisfactory to the Issuing Bank. Attached hereto as
Exhibit D is the initial form of Letter of Credit
Application.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or other security
interest (including those created by, arising under or
evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease
Obligation, any financing lease having substantially the
same economic effect as any of the foregoing, or the filing
of any financing statement naming the owner of the asset to
which such lien relates as debtor, under the UCC or any
comparable law) and any contingent or other agreement to
provide any of the foregoing, but not including the interest
of a lessor under an Operating Lease.
"Loan" means an extension of credit by a Bank to the
Company pursuant to Article II, and may be a Base Rate Loan
or an Offshore Rate Loan.
"Loan Documents" means this Agreement, the Notes, the
Letter of Credit Applications, the Guaranty or Guaranties
and all documents delivered to the Agent in connection
therewith, as such instruments, agreements and documents may
be amended, supplemented, restated, modified or renewed from
time to time.
"Majority Banks" means at any time Banks then holding
51% or more of the then aggregate unpaid principal amount of
the Credit Extensions, or, if no Credit Extensions are then
outstanding, Banks then having 51% or more of the
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<PAGE>
Commitments.
"Margin Stock" means "margin stock" as such term is
defined in Regulation G, T, U or X of the Federal Reserve
Board.
"Material Adverse Effect" means a material adverse
change in, or a material adverse effect upon, the
operations, business, properties, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries
taken as a whole.
"Material Subsidiary" means (a) Arbitron and each
Subsidiary of the Company listed on Schedule 1.01(a) and (b)
any Subsidiary of the Company created or acquired after the
Closing Date, the assets of which are $5,000,000 or more (or
the equivalent thereof in another currency).
"Multiemployer Plan" means a "multiemployer plan"
(within the meaning of Section 4001(a)(3) of ERISA) and to
which any member of the Controlled Group makes, is making,
or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated
to make, contributions.
"Note" means a promissory note of the Company payable
to the order of a Bank, substantially in the form of
Exhibit E, evidencing the aggregate indebtedness of the
Company to such Bank resulting from Loans made by such Bank.
"Notice of Borrowing" means a notice given by the
Company to the Agent pursuant to Section 2.03, in
substantially the form of Exhibit F.
"Notice of Conversion/Continuation" means a notice
given by the Company to the Agent pursuant to Section 2.06,
in substantially the form of Exhibit G.
"Notice of Lien" means any "notice of lien" or similar
document intended to be filed or recorded with any court,
registry, recorder's office, central filing office or other
Governmental Authority for the purpose of evidencing,
creating, perfecting or preserving the priority of a Lien
securing obligations owing to a Governmental Authority.
"Obligations" means all Loans, and other Indebtedness,
advances, debts, liabilities, obligations, covenants and
duties owing by the Company to any Bank, the Agent, or any
other Person required to be indemnified under any Loan
Document, of any kind or nature, present or future, whether
or not evidenced by any note, guaranty or other instrument,
arising under this Agreement or under any other Loan
Document, whether or not for the payment of money, whether
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<PAGE>
arising by reason of an extension of credit, the issuance of
a Letter of Credit, loan, guaranty, indemnification or in
any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and
however acquired.
"Offshore Lending Office" means with respect to each
Bank, the office of such Bank designated as such in the
signature pages hereto or such other office of such Bank as
such Bank may from time to time specify to the Company and
the Agent.
"Offshore Rate" means, for each Interest Period in
respect of Offshore Rate Loans comprising part of the same
Borrowing, an interest rate per annum (rounded upward to the
nearest 1/16th of 1%) determined pursuant to the following
formula:
Offshore Rate = IBOR _
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means the maximum
reserve percentage (expressed as a decimal, rounded upward
to the nearest 1/100th of 1%) in effect on the date IBOR for
such Interest Period is determined (whether or not
applicable to any Bank) under regulations issued from time
to time by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities") having a term comparable to such
Interest Period; and
"IBOR" means the rate of interest per annum determined
by the Agent as the rate at which dollar deposits in the
approximate amount of BofA's Offshore Rate Loan and having a
maturity comparable to such Interest Period would be offered
by BofA's Grand Cayman Branch, Grand Cayman B.W.I., to major
banks in the offshore dollar interbank market upon request
of such banks at approximately 11:00 a.m. (New York City
time) two Business Days prior to the commencement of such
Interest Period.
The Offshore Rate shall be adjusted automatically as
of the effective date of any change in the Eurodollar
Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest
based on the Offshore Rate.
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"Old Agreement" means that certain Third Amended and
Restated Credit Agreement, dated as of June 1, 1991, among
the Company (under the name of Control Data Corporation),
the Agent, as agent thereunder, and the other banks party
thereto, as such agreement was amended from time to time.
"Old Letters of Credit" means letters of credit issued
by BofA under the Old Agreement or the Existing Credit
Agreement and outstanding on the Closing Date, which are
listed on Schedule 1.01(b) attached hereto.
"Operating Lease" means, as applied to any Person, any
lease of property which is not a Capital Lease.
"Ordinary Course of Business" means, in respect of any
transaction involving the Company or any Subsidiary of the
Company, the ordinary course of such Person's business, as
conducted by any such Person in accordance with past
practice and undertaken by such Person in good faith and not
for purposes of evading any covenant or restriction in any
Loan Document.
"Organization Documents" means, for any corporation,
the certificate or articles of incorporation, the bylaws,
any certificate of determination or instrument relating to
the rights of preferred shareholders of such corporation,
and all applicable resolutions of the board of directors (or
any committee thereof) of such corporation.
"Other Taxes" has the meaning specified in subsection
3.01(b).
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions
under ERISA.
"Participant" has the meaning specified in subsection
10.08(d).
"Performance L/C" means, with respect to any Letter of
Credit, a "performance standby letter of credit" as such
term is defined in the Adequacy Guidelines For Bank Holding
Companies: Risk-Based Measure, 12 C.F.R. Part 225, Appendix
A, III.D (1993) as the definition of such term may be
amended from time to time prior to issuance of any such
Letter of Credit. Such term is described in the 1993 Code
of Federal Regulations as "irrevocable obligations of the
banking organization to pay a third-party beneficiary when a
customer (account party) fails to perform some other
contractual non-financial obligation."
"Permitted Liens" has the meaning specified in Section
7.01.
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<PAGE>
"Person" means an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental
Authority.
"Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which the Company or any member of
the Controlled Group sponsors or maintains or to which the
Company or any member of the Controlled Group makes or is
obligated to make contributions.
"Preferred Stock" means the Company's 5 1/2%
Cumulative Convertible Exchangeable Preferred Stock, par
value $100 per share.
"Qualified Plan" means a Plan intended to be tax-
qualified under Section 401(a) of the Code, but excluding
any Multiemployer Plan.
"Rate Contracts" means interest rate and currency swap
agreements, cap, floor and collar agreements, interest rate
insurance, currency spot and forward contracts and other
agreements or arrangements designed to provide protection
against fluctuations in interest or currency exchange rates.
"Replacement Bank" has the meaning specified in
Section 3.06.
"Responsible Officer" means the chief executive
officer, the chief financial officer, the president, any
executive vice president, the controller or the treasurer of
the Company.
"Restructure Loss (Gain)" means restructure loss or
restructure gain as such terms are used in the Company's
1993 annual report to shareholders, computed in a manner
consistent with the treatment in such annual report.
"SEC" means the Securities and Exchange Commission, or
any successor thereto.
"Solvent" means, as to any Person at any time, that
(a) the fair value of the property of such Person is greater
than the fair value of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such
value is established and liabilities evaluated for purposes
of Section 101(31) of the Bankruptcy Code and, in the
alternative, for purposes of the Uniform Fraudulent
Conveyances Act (as enacted in the State of New York); (b)
the present fair saleable value of the property of such
Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as
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they become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other
liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a
transaction, for which such Person's property would
constitute unreasonably small capital.
"Stated Amount" means, with respect to any Letter of
Credit, at any date of determination thereof, the maximum
aggregate amount available for drawing thereunder plus the
aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
"Subsidiary" of a Person means any corporation,
association, partnership, joint venture or other business
entity of which more than 50% of the voting stock or other
equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly
by the Person, or one or more of the Subsidiaries of the
Person, or a combination thereof.
"Taxes" has the meaning specified in subsection
3.01(a).
"Termination Date" means the earlier to occur of:
(a) May 30, 1995; and
(b) the date on which the Aggregate Commitment
terminates in accordance with Section 2.07 or Section
8.02.
"Transferee" has the meaning specified in subsection
10.08(e).
"UCC" means the Uniform Commercial Code as in effect
in the State of New York.
"Unfunded Pension Liabilities" means the excess of a
Plan's benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Plan's assets,
determined as of the date of the most recently completed
actuarial valuation with respect to the Plan in accordance
with the assumptions used by the Plan's actuaries for
funding the Plan pursuant to section 412 for the applicable
plan year.
"United States" and "U.S." each means the United
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States of America.
"Wholly-Owned Subsidiary" means any corporation in
which (other than directors' qualifying shares required by
law) 100% of the capital stock of each class having ordinary
voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of
record, by the Company, or by one or more of the other
Wholly-Owned Subsidiaries, or both.
"Withdrawal Liabilities" means, as of any
determination date, the aggregate amount of the liabilities,
if any, pursuant to Section 4201 of ERISA if the Controlled
Group made a complete withdrawal from all Multiemployer
Plans and any increase in contributions pursuant to Section
4243 of ERISA.
1.02 Other Interpretive Provisions
(a) Defined Terms. Unless otherwise specified herein
or therein, all terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document
made or delivered pursuant hereto. The meaning of defined terms
shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not
otherwise defined herein and that are defined in the UCC shall
have the meanings therein described.
(b) The Agreement. The words "hereof", "herein",
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; and subsection, section,
schedule and exhibit references are to this Agreement unless
otherwise specified.
1.03 Accounting Principles
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed
in accordance with GAAP as in effect from time to time, but all
financial computations required under this Agreement shall be
made in accordance with GAAP as in effect and applied by the
Company on March 31, 1994, consistently applied, except to the
extent otherwise agreed upon by the parties hereto.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 Amount and Terms of Commitments. Within the limits of
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each Bank's Commitment, and subject to the other terms and
conditions hereof, the Company may borrow, repay and reborrow
Loans and obtain the issuance of Letters of Credit.
(a) The Loans. During the period from the Closing
Date to the Termination Date, each Bank severally agrees, on the
terms and conditions hereinafter set forth, to make Loans to the
Company in an amount not in excess at any time of such Bank's
Commitment Percentage of the lesser of:
(i) the Borrowing Base and
(ii) the Aggregate Commitment,
minus the sum of (a) all outstanding Loans, (b) the undrawn face
amount of all outstanding Letters of Credit and (c) that portion
of drawings made under Letters of Credit for which the Issuing
Bank has not yet been reimbursed.
(b) The Letters of Credit. The Issuing Bank agrees,
on the terms and conditions hereinafter set forth, on or prior to
the Termination Date, to issue Letters of Credit for the account
of the Company and, if applicable, a Co-Applicant, in an amount
not in excess at any time of the lesser of:
(i) the Borrowing Base and
(ii) the Aggregate Commitment,
minus the sum of (a) all outstanding Loans, (b) the undrawn face
amount of all outstanding Letters of Credit and (c) that portion
of drawings made under Letters of Credit for which the Issuing
Bank has not yet been reimbursed; provided, however, that in no
event may the Stated Amount of Letters of Credit issued to
support workmen's compensation obligations of the Company and its
Subsidiaries exceed $10,000,000 at any one time.
BofA may, at its option, fulfill its Commitment to
issue Letters of Credit by arranging for the issuance of Letters
of Credit by BankAmerica International. Any Letter of Credit
issued by BankAmerica International shall be deemed to be issued
by BofA for the purpose of BofA's fulfilling its Commitment and
retaining a proportionate interest in Letters of Credit pursuant
to subsection (c) of this Section 2.01.
(c) Participation; Old Letters of Credit. Each Bank
(other than the Issuing Bank) agrees to purchase a participation
(i) in each Letter of Credit on the date of issuance of such
Letter of Credit and (ii) in each amendment increasing the face
amount of a Letter of Credit after the issuance thereof, on the
date of such amendment, in an amount equal to its Commitment
Percentage. The Issuing Bank retains a proportionate interest in
the amount of its Commitment Percentage in each Letter of Credit
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after such purchase of participations. With respect to Old
Letters of Credit, each Bank (other than the Issuing Bank) is
deemed to have purchased a participation in the amount of its
Commitment Percentage in such Old Letters of Credit.
2.02 Notes.
(a) The Loans made by each Bank shall be evidenced by
a Note payable to the order of that Bank in an amount equal to
its Commitment.
(b) Each Bank shall endorse on the schedules annexed
to its Note the date, amount and maturity of each Loan made by it
and the amount of each payment of principal made by the Company
with respect thereto. Each Bank is irrevocably authorized by the
Company to make such endorsements, and its Note and each Bank's
record shall be conclusive, absent manifest error; provided,
however, that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not
limit or otherwise affect the obligations of the Company
hereunder or under any such Note to such Bank.
2.03 Procedure for Borrowing.
(a) Each Borrowing shall be made upon the Company's
irrevocable written notice (or telephonic notice, promptly
confirmed by a writing) delivered to the Agent in the form of a
Notice of Borrowing (which notice must be received by the Agent
prior to Noon (New York time) (i) three Business Days prior to
the requested Borrowing date, in the case of Offshore Rate Loans
and (ii) one Business Day prior to the requested Borrowing date,
in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall
be in an aggregate minimum principal amount of Three
Million Dollars ($3,000,000) or any multiple of One
Million Dollars ($1,000,000) in excess thereof;
(B) the requested Borrowing date, which
shall be a Business Day;
(C) whether the Borrowing is to be comprised
of Offshore Rate Loans or Base Rate Loans; and
(D) the duration of the Interest Period
applicable to such Loans included in such notice. If
the Notice of Borrowing fails to specify the duration
of the Interest Period for any Borrowing, such
Borrowing shall consist of Base Rate Loans, regardless
of the type of Loans requested by the Company.
(b) Upon receipt of the Notice of Borrowing, the Agent
will promptly notify each Bank thereof and of the amount of such
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Bank's Commitment Percentage of the Borrowing.
(c) Each Bank will make the amount of its Commitment
Percentage of the Borrowing available to the Agent for the
account of the Company at the Agent's Payment Office by
11:00 a.m. (New York time) on the Borrowing date requested by the
Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the
Company by the Agent at such office by crediting the account of
the Company on the books of BofA with the aggregate of the
amounts made available to the Agent by the Banks and in like
funds as received by the Agent.
(d) Unless the Majority Banks shall otherwise agree,
during the existence of a Default or Event of Default, the
Company may not elect to have a Loan be made as, converted into
or continued as an Offshore Rate Loan.
(e) After giving effect to any Borrowing, conversion
or continuation, there shall not be more than ten different
Interest Periods in effect.
2.04 Letter of Credit Requests.
(a) Whenever the Company wishes to have the Issuing
Bank issue a Letter of Credit, the Company shall deliver to the
Issuing Bank a Letter of Credit Application with appropriate
insertions, signed by the Company, and, if such Letter of Credit
is also to be issued for the account of a Co-Applicant, signed by
the Co-Applicant. Such Letter of Credit Application shall be
delivered at least two and not more than fifteen Business Days
prior to the requested date of issuance, except as provided in
clause (iv) in the proviso to Section 2.05. Requests for
amendments to Letters of Credit shall be submitted in writing at
least two and not more than fifteen Business Days prior to the
requested amendment date. If at any time the Issuing Bank is not
the Agent, a copy of such Letter of Credit Application shall be
delivered to the Agent as well. The Agent shall deliver notice
of the request for the issuance of a Letter of Credit to all
other Banks and copies thereof to all such Banks which have
requested such copies.
In each Letter of Credit Application, the Company
shall designate whether the Letter of Credit is a Financial L/C
or a Performance L/C and whether, if it is a Financial L/C, it is
being issued to support workmen's compensation obligations of the
Company and its Subsidiaries. The determination of the Issuing
Bank and the Agent as to such designation shall be made at or
prior to the time such Letter of Credit is issued, shall be
conclusive in the event of any disagreement with the Company with
respect thereto and shall govern during the term of this
Agreement, notwithstanding any subsequent change in the
definition of any such term in the applicable regulations.
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(b) Letters of Credit may be Financial L/Cs or
Performance L/Cs, and all Letters of Credit shall be denominated
in Dollars except for the one Letter of Credit identified in Thai
baht listed on Schedule 1.01(b). No Letter of Credit shall have
a final expiration date later than May 30, 1996.
(c) The Agent shall deliver to the Company a copy of
each Letter of Credit issued and each amendment thereto and shall
also promptly deliver a copy thereof to each other Bank which has
requested such a copy. Each Letter of Credit shall provide that
payment thereunder shall not be made earlier than three Business
Days after receipt of any documents demanding payment thereunder.
2.05 Extension Letters of Credit. If (a) any Letter of
Credit provides that the term thereof will be automatically
extended or renewed (by issuance of a substitute Letter of Credit
or otherwise) unless notice is given by the Issuing Bank on or
before a specified date (hereinafter called the "Extension
Refusal Date") that such Issuing Bank will not permit such
extension or renewal or (b) the Company requests the extension or
renewal of any other Letter of Credit, then for purposes of
Sections 2.01, 2.04, and 4.02 of this Agreement, any such renewal
or extension granted by the Issuing Bank (hereinafter called an
"Extension") shall be deemed to be the issuance of a new Letter
of Credit and such issuance shall be deemed to occur on the
Extension Refusal Date in the case of a Letter of Credit
described in clause (a) above, or the date of such request in the
case of a Letter of Credit described in clause (b) above;
provided, however, that (i) such extension shall not cause the
respective Letter of Credit to expire after May 30, 1996; (ii) no
Extension may take place after the Termination Date,
notwithstanding the provisions of Section 2.04(b); (iii) the
Extension shall not be deemed to cause any duplication of the
amount of such Letter of Credit for purposes of determining
compliance with Section 2.01(b); (iv) the Issuing Bank shall
receive at least ten but not more than thirty Business Days'
written notice of such Extension, and the accompanying Letter of
Credit Application shall state that it relates to such Extension
and shall specify the related Extension Refusal Date, if any; and
(v) no document need be delivered by the Issuing Bank pursuant to
Section 2.04(c) with respect to any Letter of Credit described in
clause (a) above unless the terms of such Letter of Credit so
require.
2.06 Conversion and Continuation Elections.
(a) Prior to the Termination Date, the Company may
upon irrevocable written notice (or telephonic notice, promptly
confirmed by a writing) to the Agent in accordance with
subsection 2.06(b):
(i) elect to convert on any Business Day, any
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Base Rate Loans (or any part thereof in an
amount not less than $3,000,000, or that is
in an integral multiple of $1,000,000 in
excess thereof) into Offshore Rate Loans; or
(ii) elect to convert on any Interest Payment Date
any Offshore Rate Loans maturing on such
Interest Payment Date (or any part thereof in
an amount not less than $3,000,000, or that
is in an integral multiple of $1,000,000 in
excess thereof) into Base Rate Loans; or
(iii) elect to renew on any Interest Payment
Date any Offshore Rate Loans maturing on
such Interest Payment Date (or any part
thereof in an amount not less than
$3,000,000, or that is in an integral
multiple of $1,000,000 in excess
thereof);
provided, that if the aggregate amount of Offshore Rate Loans has
been reduced, by payment, prepayment, or conversion of part
thereof to be less than $3,000,000, such Offshore Rate Loans
shall automatically convert into Base Rate Loans, and on and
after such date the right of the Company to continue such Loans
as, and convert such Loans into, Offshore Rate Loans shall
terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation in accordance with Section 10.02 to be
received by the Agent not later than Noon (New York time) at
least (i) three Business Days in advance of the Conversion Date
or continuation date, if the Loans are to be converted into or
continued as Offshore Rate Loans; and (ii) one Business Day in
advance of the Conversion Date, if the Loans are to be converted
into Base Rate Loans; specifying:
(A) the proposed Conversion Date or
continuation date;
(B) the aggregate amount of Loans to be
converted or renewed;
(C) the nature of the proposed conversion or
continuation; and
(D) the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period
applicable to Offshore Rate Loans, the Company has failed to
select a new Interest Period to be applicable to such Offshore
Rate Loans or if any Default or Event of Default shall then
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exist, the Company shall be deemed to have elected to convert
such Offshore Rate Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/
Continuation, the Agent will promptly notify each Bank thereof,
or, if no timely notice is provided by the Company, the Agent
will promptly notify each Bank of the details of any automatic
conversion. All conversions and continuations shall be made pro
rata according to the respective outstanding principal amounts of
the Loans with respect to which the notice was given held by each
Bank.
(e) Unless the Majority Banks shall otherwise agree,
during the existence of a Default or Event of Default, the
Company may not elect to have a Loan converted into or continued
as an Offshore Rate Loan.
2.07 Voluntary Termination or Reduction of Commitments.
The Company may, upon not less than five Business Days' prior
written or telephonic (promptly confirmed with a writing) notice
to the Agent, terminate or permanently reduce the Aggregate
Commitment by an aggregate minimum amount of $3,000,000; provided
that no such reduction or termination shall be permitted if,
after giving effect thereto and to any prepayments of the Loans
made on the effective date thereof, the sum of the then
outstanding principal amount of the Loans and the Stated Amount
of the Letters of Credit would exceed the Aggregate Commitment
then in effect and, provided, further, that once reduced in
accordance with this Section 2.07, the Aggregate Commitment may
not be increased. Any reduction of the Aggregate Commitment
shall be applied to each Bank's Commitment in accordance with
such Bank's Commitment Percentage. All accrued commitment fees
to, but not including the effective date of any reduction or
termination of Commitments, shall be paid on the effective date
of such reduction or termination.
2.08 Optional Prepayments. Subject to Section 3.04, the
Company may, at any time or from time to time, upon at least one
Business Day's notice to the Agent with respect to Base Rate
Loans and at least three Business Days' notice to the Agent with
respect to Offshore Rate Loans, ratably prepay Loans in whole or
in part, in an aggregate amount of $3,000,000 or any multiple of
$1,000,000 in excess thereof. Each such notice shall be
delivered no later than Noon (New York time). Such notice of
prepayment shall specify the date and amount of such prepayment
and the type of Loans being prepaid. Such notice shall not
thereafter be revocable by the Company and the Agent will
promptly notify each Bank thereof and of such Bank's Commitment
Percentage of such prepayment. Such notice may be given by
telephone, promptly confirmed by a writing. If such notice is
given by the Company, the Company shall make such prepayment and
the payment amount specified in such notice shall be due and
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payable on the date specified therein, together with accrued
interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.04.
2.09 Mandatory Prepayments of Credit Extensions; Cash
Collateral.
(a) Borrowing Base Compliance. If at any time the
aggregate outstanding principal amount of Loans and the Stated
Amount of Letters of Credit exceeds the lesser of (i) the
Borrowing Base and (ii) the Aggregate Commitment, the Company
shall immediately (i) pay to the Agent on behalf of the Banks an
amount equal to such excess amount plus accrued but unpaid
interest thereon to the date of payment or (ii) deliver to the
Agent as collateral, together with such pledge or security
agreements and other collateral documents as the Agent may
reasonably request, cash or Cash Equivalents in an amount equal
to the amount by which the sum of the aggregate amount of Loans
outstanding and the Stated Amount of Letters of Credit exceeds
the Borrowing Base.
(b) General. Any prepayments pursuant to this Section
2.09 shall be applied first to any Base Rate Loans then
outstanding and then to Offshore Rate Loans with the shortest
Interest Periods remaining. If after making the application of
payments provided for in the preceding sentence, the Company is
required to prepay Credit Extensions in a greater amount than
Loans then outstanding, the excess amount shall be held in an
interest-bearing account as cash collateral for Letters of
Credit, subject to such pledge or security agreements and other
collateral documents as the Agent may reasonably request.
2.10 Repayment. The Company shall repay to the Banks in
full on the Termination Date the aggregate principal amount of
the Loans outstanding on the Termination Date.
2.11 Repayment of Letter of Credit Drawings.
(a) With respect to each Letter of Credit,
(i) when a draft or other demand for payment is
received by the Issuing Bank, it shall
promptly give notice thereof by telecopy or
telephone to the Agent and the Company;
(ii) when a payment is made by the Issuing Bank,
it shall promptly give notice thereof to the
Company and the Agent by telephone or
telecopy; and
(iii) the Company agrees, and shall cause each
Co-Applicant through its execution of a
Letter of Credit Application to agree,
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to promptly reimburse the Issuing Bank
(by making payment to the Agent for the
account of such Issuing Bank) on the
date of any payment or disbursement made
by such Issuing Bank under such Letter
of Credit for such payment or
disbursement; provided, however, that
the Company shall not be deemed to be in
default of this Section 2.11(a) or
Section 8.01(a) with respect to any such
reimbursement obligation prior to the
second Business Day after it has been
notified that the related payment or
disbursement has been made by the
Issuing Bank. Any amount not reimbursed
(by making payment to the Issuing Bank)
on the date of such payment or
distribution by the Issuing Bank shall
bear interest from and including the
date of such payment or disbursement to
but not including the date the Issuing
Bank is reimbursed by the Company
therefor, payable on demand, at a rate
per annum equal to (x) the Base Rate
from time to time in effect for each day
through the third Business Day after the
Company's receipt of the notice provided
for in subsection (a)(i) above, and (y)
the Base Rate plus 2% per annum for each
day thereafter.
(b) Subject to the terms and conditions of this
Agreement, the Company may use the proceeds of a Loan hereunder
to so reimburse the Issuing Bank. If on or before the first
Business Day after receipt of the notice required pursuant to
Section 2.11(a)(i), the Company requests a Loan to which it is
entitled under the terms of this Agreement for the purpose of
paying the related reimbursement obligation and in an amount
sufficient to fully pay such reimbursement obligation, then the
Company shall not be deemed to be in default of its reimbursement
obligations under this section or Section 8.01(a) even though
such Loan is not made until a subsequent Business Day (pursuant
to the notice provisions of Section 2.03).
(c) The Company's obligation to reimburse the Issuing
Bank for payments and disbursements made by the Issuing Bank
under any Letter of Credit shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Company or a
Co-Applicant may have or have had against the Issuing Bank (or
the Agent or any other Bank), including, without limitation,
failure of the Issuing Bank to comply with subsections (a)(i) and
(ii) of this section, any defense based on the failure of the
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demand for payment under such Letter of Credit to conform to the
terms of such Letter of Credit or the legality, validity,
regularity or enforceability of such Letter of Credit or any
defense based on the identity of the transferee of such Letter of
Credit or the sufficiency of the transfer if such Letter of
Credit is transferable; provided, however, that the Company shall
not be obligated to reimburse such Issuing Bank for any wrongful
payment or disbursement made under any Letter of Credit as a
result of acts or omissions constituting gross negligence or
willful misconduct on the part of the Issuing Bank or any of its
officers, employees or agents.
(d) The Company agrees that it will promptly examine
the copy of each Letter of Credit (and any amendments thereto)
sent to it by the Issuing Bank, as well as any and all
instruments and documents delivered to the Company from time to
time, and in the event the Company has any claim of
non-compliance with the Company's instructions or of
discrepancies or other irregularity, the Company will promptly
notify the Issuing Bank and the Agent thereof in writing, and the
Company and any Co-Applicant shall be deemed by their execution
and delivery of the related Letter of Credit Application to have
waived any such claim against the Issuing Bank unless such prompt
notice is given.
(e) Unless specified to the contrary in the relevant
Letter of Credit Application, or any amendment to a Letter of
Credit, the Company and each Co-Applicant agree by their
execution of such application that the Issuing Bank and its
correspondents may receive and accept (i) any item drawn or
presented under such Letter of Credit or other document otherwise
in order, issued or purportedly issued by an agent, executor,
trustee in bankruptcy, receiver or other representative of the
party who is authorized under such Letter of Credit to issue such
item or other document, as complying with the terms of such
Letter of Credit and (ii) documents which on their face appear to
comply with the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 or by later Uniform Customs and Practice
fixed by later Congresses of the International Chamber of
Commerce as in effect on the date the related Letter of Credit is
issued.
2.12 Default in Reimbursement of Issuing Bank.
(a) If the Issuing Bank is not reimbursed by the
Company for any payment or disbursement under a Letter of Credit,
the Agent shall promptly notify each of the other Banks of such
unreimbursed payment or disbursement, and upon such notice the
other Banks shall promptly on the same day (or the next Business
Day if such notice is received after 11:00 a.m., New York time)
provide the Agent with immediately available funds in Dollars for
the account of such Issuing Bank, covering such Bank's Commitment
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Percentage of such payment or disbursement. If the Agent
subsequently receives from the Company or any Co-Applicant any
reimbursement of such payment or disbursement, the Agent shall
promptly remit to each Bank its Commitment Percentage of such
reimbursement. All interest payments received by the Issuing
Bank or the Agent on account of reimbursements under this
Agreement shall be promptly distributed by the Agent to the
Issuing Bank and the other Banks pro rata according to their
respective Commitment Percentages (except to the extent that the
Issuing Bank was not promptly reimbursed by any such Bank).
(b) The obligation of each Bank to provide the Agent
with such Bank's pro rata share of the amount of any payment or
disbursement made by the Issuing Bank under any outstanding
Letter of Credit shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which such Bank may have or
have had against the Issuing Bank (or the Agent or any other
Bank), including, without limitation, any defense based on the
failure of the demand for payment under such Letter of Credit to
conform to the terms of such Letter of Credit or the legality,
validity, regularity or enforceability of such Letter of Credit
or any defense based on the identity of the transferee of such
Letter of Credit or the sufficiency of the transfer if such
Letter of Credit is transferable; provided, however, that the
Banks shall not be obligated to reimburse such Issuing Bank for
any wrongful payment or disbursement made under any Letter of
Credit as a result of acts or omissions constituting gross
negligence or willful misconduct on the part of such Issuing Bank
or any of its officers, employees or agents.
2.13 Interest.
(a) Subject to subsection 2.13(c), each Loan shall
bear interest on the outstanding principal amount thereof from
the date when made until it becomes due at a rate per annum equal
to the Offshore Rate or the Base Rate, as the case may be, plus
the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on
each Interest Payment Date. Interest shall also be paid on the
date of any prepayment of Loans pursuant to Section 2.08 and 2.09
for the portion of the Loans so prepaid and upon payment
(including prepayment) in full thereof and, during the existence
of any Event of Default, interest shall be paid on demand.
(c) While any Event of Default exists or after
acceleration, the Company shall pay interest (after as well as
before entry of judgment thereon to the extent permitted by law)
on the principal amount of all Obligations due and unpaid at a
rate per annum equal to the Base Rate plus 2%.
2.14 Fees.
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(a) Fees Payable to BofA and the Agent. The Company
shall pay to the Agent for the Arranger's and the Agent's own
account fees in the amounts and at the times set forth in a
letter agreement between the Company, BofA and the Arranger dated
April 7, 1994.
(b) Commitment Fees. The Company shall pay to the
Agent for the account of each Bank a commitment fee of .30
percent per annum on the average daily unused portion of such
Bank's Commitment, computed as of the end of each calendar
quarter in arrears based upon the daily utilization for that
quarter as calculated by the Agent. Such commitment fee shall
accrue from the Closing Date to the Termination Date and shall be
due and payable quarterly in arrears on the fifteenth day after
the end of each calendar quarter through the Termination Date,
with the first payment due on July 15, 1994 and the final payment
to be made on the Termination Date; provided that, (i) in
connection with any reduction of Commitments pursuant to Section
2.07, the accrued commitment fee calculated for the period ending
on such date shall also be paid on the date of such reduction,
with the next succeeding quarterly payment being calculated on
the basis of the period from the reduction date to the end of the
quarter in which such reduction occurs and (ii) in connection
with any termination of the Commitments pursuant to Section 2.07
or Article VIII, the accrued commitment fee shall be paid on the
date on which the termination takes place. The commitment fees
provided in this subsection shall accrue at all times after the
Closing Date, including at any time during which one or more
conditions in Article IV are not met.
(c) Letter of Credit Fees.
(i) The Company shall pay to the Agent for the
account of the Banks, pro rata, a fee,
according to their respective Commitment
Percentages, with respect to all Letters of
Credit issued for the account of the Company.
Such fee shall be computed as of the end of
each calendar quarter as follows:
(x) With respect to all Financial L/Cs, 1.20
percent per annum of the daily average Stated
Amount of each such Letter of Credit; and
(y) With respect to Performance L/Cs, .60 percent
per annum of the daily average Stated Amount
of such Performance L/Cs.
Such Letter of Credit fees shall be payable in arrears on the
fifteenth day after the end of each calendar quarter for Letters
of Credit outstanding during such quarter, with the first such
payment due on July 15, 1994, and on the expiration of the last
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Letter of Credit outstanding under this Agreement.
(ii) The Company shall pay to the Issuing Bank for
its sole account:
(x) In arrears on the fifteenth day after
the end of each calendar quarter, with
the first such payment due on July 15,
1994, and on the expiration of the last
Letter of Credit issued by the Issuing
Bank and outstanding under this
Agreement, an issuance fee of .15% per
annum of the daily average Stated Amount
of all Letters of Credit issued by the
Issuing Bank and outstanding during the
preceding calendar quarter; and
(y) From time to time, upon the amendment of
any Letter of Credit, such fees as the
Issuing Bank customarily charges in
connection therewith at the times
customarily charged by the Issuing Bank.
(d) Fees under the Existing Credit Agreement. On the
Closing Date, the Company shall pay to the Agent the fees owed
under the Existing Credit Agreement which have not heretofore
been paid.
2.15 Computation of Fees and Interest.
(a) All computations of interest payable in respect of
Base Rate Loans at all times as the Base Rate is determined by
BofA's "reference rate" shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed.
All other computations of fees and interest under this Agreement
shall be made on the basis of a 360-day year and actual days
elapsed.
(b) The Agent will, with reasonable promptness, notify
the Company and the Banks of each determination of an Offshore
Rate; provided that any failure to do so shall not relieve the
Company of any liability hereunder or provide the basis for any
claim against the Agent. Any change in the interest rate on a
Loan resulting from a change in the Eurodollar Reserve Percentage
shall become effective as of the opening of business on the day
on which such change in the Eurodollar Reserve Percentage becomes
effective. The Agent will with reasonable promptness notify the
Company and the Banks of the effective date and the amount of
each such change, provided that any failure to do so shall not
relieve the Company of any liability hereunder or provide the
basis for any claim against the Agent.
(c) Each determination of an interest rate by the
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Agent pursuant hereto shall be conclusive and binding on the
Company and the Banks in the absence of manifest error.
2.16 Payments by the Company.
(a) All payments (including prepayments) to be made by
the Company on account of principal, interest, fees and other
amounts required hereunder, including reimbursement of drawings
under Letters of Credit, shall be made without set-off,
recoupment or counterclaim and shall, except as otherwise
expressly provided herein, be made to the Agent for the ratable
account of the Banks at the Agent's Payment Office, in dollars
and in immediately available funds, no later than 1:00 p.m. (New
York time) on the dates specified herein. The Agent will promptly
distribute to each Bank its Commitment Percentage (or other
applicable share as expressly provided herein) of such principal,
interest, fees or other amounts, in like funds as received. Any
payment which is received by the Agent later than 1:00 p.m. (New
York time) shall be deemed to have been received on the
immediately succeeding Business Day and any applicable interest
or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of
interest or fees, as the case may be; subject to the provisions
set forth in the definition of "Interest Period" herein.
(c) Unless the Agent shall have received notice from
the Company prior to the date on which any payment is due to the
Banks hereunder that the Company will not make such payment in
full as and when required hereunder, the Agent may assume that
the Company has made such payment in full to the Agent on such
date in immediately available funds and the Agent may (but shall
not be so required), in reliance upon such assumption, cause to
be distributed to each Bank on such due date an amount equal to
the amount then due such Bank. If and to the extent the Company
shall not have made such payment in full to the Agent, each Bank
shall repay to the Agent on demand such amount distributed to
such Bank, together with interest thereon for each day from the
date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate
as in effect for each such day.
2.17 Payments by the Banks to the Agent.
(a) Unless the Agent shall have received notice from a
Bank on the Closing Date or, with respect to each Borrowing after
the Closing Date, at least one Business Day prior to the date of
any proposed Borrowing, that such Bank will not make available to
the Agent as and when required hereunder for the account of the
Company the amount of that Bank's Commitment Percentage of the
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Borrowing, the Agent may assume that each Bank has made such
amount available to the Agent in immediately available funds on
the Borrowing date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to
the Company on such date a corresponding amount. If and to the
extent any Bank shall not have made its full amount available to
the Agent in immediately available funds and the Agent in such
circumstances has made available to the Company such amount, that
Bank shall on the next Business Day following the date of such
Borrowing make such amount available to the Agent, together with
interest at the Federal Funds Rate for and determined as of each
day during such period. A notice of the Agent submitted to any
Bank with respect to amounts owing under this subsection 2.17(a)
shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such
Bank's Loan on the date of borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent on
the next Business Day following the date of such Borrowing, the
Agent shall notify the Company of such failure to fund and, upon
demand by the Agent, the Company shall pay such amount to the
Agent for the Agent's account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate per
annum equal to the interest rate applicable at the time to the
Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any
date of borrowing shall not relieve any other Bank of any
obligation hereunder to make a Loan on the date of such
borrowing, but no Bank shall be responsible for the failure of
any other Bank to make the Loan to be made by such other Bank on
the date of any borrowing.
2.18 Sharing of Payments, Etc. If, other than as expressly
provided elsewhere herein, any Bank shall obtain on account of
any Credit Extension made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its Commitment Percentage of payments on
account of the Credit Extensions obtained by all the Banks, such
Bank shall forthwith (a) notify the Agent of such fact, and (b)
purchase from the other Banks such participations in the Credit
Extensions made by them as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from the purchasing Bank,
such purchase shall to that extent be rescinded and each other
Bank shall repay to the purchasing Bank the purchase price paid
therefor, together with an amount equal to such paying Bank's
Commitment Percentage (according to the proportion of (i) the
amount of such paying Bank's required repayment to (ii) the total
amount so recovered from the purchasing Bank) of any interest or
other amount paid or payable by the purchasing Bank in respect of
the total amount so recovered. The Company agrees that any Bank
so purchasing a participation from another Bank pursuant to this
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Section 2.18 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of
set-off, but subject to Section 10.09) with respect to such
participation as fully as if such Bank were the direct creditor
of the Company in the amount of such participation. The Agent
will keep records (which shall be conclusive and binding in the
absence of manifest error) of participations purchased pursuant
to this Section 2.18 and will in each case notify the Banks
following any such purchases or repayments.
2.19 Pro Rata Treatment. All Borrowings and repayments
shall be effected so that after giving effect thereto all Loans
shall be pro rata among the Banks according to their Commitment
Percentages. All participations and Letters of Credit shall be
effected so that after giving effect thereto all participations
in each Letter of Credit shall be pro rata among the Banks
according to their Commitment Percentages.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Subject to subsection 3.01(g), any and all
payments by the Company to each Bank or the Agent under this
Agreement shall be made free and clear of, and without deduction
or withholding for, any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Bank and the
Agent, such taxes (including income taxes or franchise taxes)
imposed on or measured by each Bank's net income (all such
non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes").
(b) In addition, the Company shall pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment
made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other
Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to subsection 3.01(g), the Company shall
indemnify and hold harmless each Bank and the Agent for the full
amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this
Section 3.01) paid by the Bank or the Agent and any liability
(including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. Payment
under this indemnification shall be made within 30 days from the
date the Bank or the Agent makes written demand therefor, except
that the Company shall not be required to make such payment
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within 30 days if (i) no Default or Event of Default has occurred
and is continuing and (ii) the Company is diligently contesting
such Taxes or Other Taxes and has agreed in writing to the
satisfaction of each Bank, the Issuing Bank and the Agent to pay
to each such Bank, the Issuing Bank and the Agent all such
penalties, fines and interest incurred by such Bank, the Issuing
Bank and the Agent as a result of the Company's actions and the
resulting delay in payment. Notwithstanding the foregoing, if at
any time a Default or Event of Default occurs and is continuing,
each Bank may request the Company, and the Company shall, make
payment under this indemnification within 10 days from the date
the Bank, the Issuing Bank or the Agent makes written demand
therefor. In any event, the obligations owed by the Company
under this subsection (c) shall be paid not later than the
Termination Date, unless otherwise agreed by the affected Bank
and the Company.
(d) If the Company shall be required by law to deduct
or withhold any Taxes or Other Taxes from or in respect of any
sum payable hereunder to any Bank or the Agent, then, subject to
subsection 3.01(g):
(i) the sum payable shall be increased as
necessary so that after making all required
deductions (including deductions applicable
to additional sums payable under this Section
3.01) such Bank or the Agent, as the case may
be, receives an amount equal to the sum it
would have received had no such deductions
been made;
(ii) the Company shall make such deductions, and
(iii) the Company shall pay the full amount
deducted to the relevant taxation authority
or other authority in accordance with
applicable law.
(e) Within 30 days after the date of any payment by
the Company of Taxes or Other Taxes, the Company shall furnish to
the Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.
(f) Each Bank which is a foreign person (i.e., a
person other than a United States person for United States
Federal income tax purposes) agrees no later than the Closing
Date (or, in the case of a Bank which becomes a party hereto
pursuant to Section 10.08 after the Closing Date, the date upon
which the Bank becomes a party hereto) to deliver to the Company
through the Agent two accurate and complete signed originals of
Internal Revenue Service Form 1001, 4224 or any successor
thereto, as appropriate, in each case indicating that the Bank is
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on the date of delivery thereof entitled to receive payments
under this Agreement free from withholding of United States
Federal income tax.
(g) The Company will not be required to pay any
additional amounts in respect of United States Federal income tax
pursuant to subsection 3.01(d) to any Bank for the account of any
Lending Office of such Bank:
(i) if the obligation to pay such additional
amounts would not have arisen but for a
failure by such Bank to comply with its
obligations under subsection 3.01(f) in
respect of such Lending Office; or
(ii) if such Bank shall have delivered to the
Company the forms referred to in subsection
3.01(f), and such Bank shall not at any time
be entitled to exemption from deduction or
withholding of United States Federal income
tax in respect of payments by the Company
hereunder for the account of such Lending
Office for any reason other than a change in
United States law or regulations or in the
official interpretation of such law or
regulations by any governmental authority
charged with the interpretation or
administration thereof (whether or not having
the force of law) after the date of delivery
of such forms.
(h) If the Company is required to pay additional
amounts to any Bank or the Agent pursuant to subsection 3.01(d),
then such Bank shall use its reasonable best efforts (consistent
with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue if
such change in the judgment of such Bank is not otherwise
disadvantageous to the tax planning of such Bank.
3.02 Illegality.
(a) If any Bank determines that the introduction of
any law or regulation, or any change in any law or regulation or
in the interpretation or administration thereof, has made it
unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Bank or its
Lending Office to make Offshore Rate Loans, then, on notice
thereof by the Bank to the Company through the Agent, the
obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank shall have notified the Agent and the
Company that the circumstances giving rise to such determination
no longer exists.
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(b) If a Bank determines that it is unlawful to
maintain any Offshore Rate Loan, the Company shall prepay in full
all Offshore Rate Loans of that Bank then outstanding, together
with interest accrued thereon, either on the last day of the
Interest Period thereof if the Bank may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if
the Bank may not lawfully continue to maintain such Offshore Rate
Loans, together with any amounts required to be paid in
connection therewith pursuant to Section 3.04.
(c) If the Company is required to prepay any Offshore
Rate Loan immediately as provided in subsection 3.02(b), then
concurrently with such prepayment, the Company shall borrow from
the affected Bank, in the amount of such repayment, a Base Rate
Loan.
(d) Before giving any notice to the Agent pursuant to
this Section 3.02, the affected Bank shall designate a different
Lending Office with respect to its Offshore Rate Loans if such
designation will avoid the need for giving such notice or making
such demand and will not, in the judgment of the Bank, be illegal
or otherwise disadvantageous to the Bank.
3.03 Increased Costs and Reduction of Return.
(a) If any Bank determines that, due to either (i) the
introduction of or any change (other than any change by way of
imposition of or increase in reserve requirements included in the
calculation of the Offshore Rate) in or in the interpretation of
any law or regulation or (ii) the compliance with any guideline
or request from any central bank or other Governmental Authority
(whether or not having the force of law), there is any increase
in the cost to such Bank of agreeing to make or making, funding
or maintaining any Offshore Rate Loans or issuing or
participating in any Letter of Credit, then the Company shall be
liable for, and shall from time to time, upon demand therefor by
such Bank (with a copy of such demand to the Agent), pay to the
Agent for the account of such Bank, upon receipt of a certificate
from such Bank, additional amounts as are sufficient to
compensate such Bank for such increased costs. Such certificate
shall set forth the amount owed to such Bank by the Company under
this subsection (a), shall explain the reason the payment is
required and shall be conclusive absent manifest error.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change
in any Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or
(iv) compliance by the Bank (or its Lending Office) or any
corporation controlling the Bank, with any Capital Adequacy
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Regulation; reduces or would reduce the rate of return on such
Bank's capital as a consequence of its Commitment, the Loans, the
Letters of Credit or its participation therein to a level below
that which such Bank could have achieved but for such
introduction, change or compliance (taking into consideration
such Bank's or such corporation's policies with respect to
capital adequacy) then, upon demand of such Bank (with a copy to
the Agent), the Company shall pay to the Bank, from time to time
as specified by the Bank, upon receipt of a certificate from such
Bank, additional amounts sufficient to compensate the Bank for
such reduction. Such certificate shall set forth the amount owed
to such Bank by the Company under this subsection (b), shall
explain the reason the payment is required and shall be
conclusive absent manifest error.
3.04 Funding Losses. The Company agrees to reimburse each
Bank and to hold each Bank harmless from any loss or expense
which the Bank may sustain or incur as a consequence of:
(a) the failure of the Company to make any payment or
required prepayment of principal of any Offshore Rate Loan
(including payments made after any acceleration thereof);
(b) the failure of the Company to borrow, continue or
convert a Loan after the Company has given a Notice of Borrowing
or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment
after the Company has given a notice in accordance with Section
2.08;
(d) the prepayment (including pursuant to
Section 2.09) of an Offshore Rate Loan on a day which is not the
last day of the Interest Period with respect thereto; or
(e) the conversion pursuant to Section 2.06 of any
Offshore Rate Loan to a Base Rate Loan on a day that is not the
last day of the respective Interest Period;
including any such loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain its Offshore
Rate Loans hereunder or from fees payable to terminate the
deposits from which such funds were obtained. Solely for
purposes of calculating amounts payable by the Company to the
Banks under this Section 3.04, each Offshore Rate Loan made by a
Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at
the IBOR rate used in determining the Offshore Rate for such
Offshore Rate Loan by a matching deposit or other borrowing in
the interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Loan is in
fact so funded.
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3.05 Inability to Determine Rates. If the Agent determines
that for any reason adequate and reasonable means do not exist
for ascertaining the Offshore Rate for any requested Interest
Period with respect to a proposed Offshore Rate Loan or that the
Offshore Rate applicable pursuant to subsection 2.13(a) for any
requested Interest Period with respect to a proposed Offshore
Rate Loan does not adequately and fairly reflect the cost to the
Banks of funding such Loan, the Agent will forthwith give notice
of such determination to the Company and each Bank. Thereafter,
the obligation of the Banks to make or maintain Offshore Rate
Loans hereunder shall be suspended until the Agent revokes such
notice in writing. Upon receipt of such notice, the Company may
revoke any Notice of Borrowing or Notice of
Conversion/Continuation. If the Company does not revoke such
notice, the Banks shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the
applicable notice submitted by the Company, but such Loans shall
be made, converted or continued as Base Rate Loans instead of
Offshore Rate Loans.
3.06 Substitution of Banks. Upon the receipt by the
Company from any Bank (an "Affected Bank") of a claim for
compensation pursuant to Sections 3.01, 3.02 or 3.03, the Company
may: (i) request one or more of the other Banks to acquire and
assume all or part of such Affected Bank's Loans and Commitments
but no Bank shall be required to do so; or (ii) designate a
replacement bank or financial institution satisfactory to the
Company to acquire and assume all or part of such Affected Bank's
Loans and Commitments (a "Replacement Bank"). Any such
designation of a Replacement Bank under clause (ii) shall be
subject to the prior written consent of the Agent, and such
Replacement Bank shall comply with Section 10.08 as if it were an
Assignee.
3.07 Survival. The agreements and obligations of the
Company in this Article III shall survive the payment of all
other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans. This Agreement shall not
be effective until (i) the Agent shall have received on or before
the Closing Date the items set forth in subsections (a) through
(h) and (j) in form and substance satisfactory to the Agent and
each Bank in sufficient copies for each Bank and (ii) the
condition that the events set forth in subsection (i) shall have
been completed to the satisfaction of the Company:
(a) Amended and Restated Credit Agreement. This
Agreement, executed by the Company, the Agent and each of the
Banks (provided that the Agent may accept a facsimile transmitted
signature page from any Bank which shall bind such Bank with the
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same force and effect as an originally executed signature page
from such Bank);
(b) Notes. The Notes, executed by the Company;
(c) Consent by Arbitron. Arbitron shall have
consented and agreed to the terms and provisions of this
Agreement by signing a copy hereof in the space provided below;
(d) Borrowing Base Certificate. A Borrowing Base
Certificate, executed by the Company, calculated as of March 31,
1994;
(e) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of
directors of the Company or any duly
authorized committee thereof approving and
authorizing the execution, delivery and
performance by the Company of this Agreement
and the other Loan Documents to be delivered
by the Company hereunder, and authorizing the
Credit Extensions, certified as of the
Closing Date by the Secretary or an Assistant
Secretary of the Company; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company and Arbitron,
certifying the names and true signatures of
the officers of the Company and Arbitron
authorized to execute, deliver and perform,
as applicable, this Agreement and all other
Loan Documents to be delivered by each such
Person hereunder;
(f) Articles of Incorporation; By-laws. The articles
or certificate of incorporation and bylaws of the Company and of
Arbitron as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of the Company and Arbitron, as
the case may be, as of the Closing Date;
(g) Opinion of Counsel to the Company and Arbitron.
An opinion of John A. Haveman, counsel to the Company and
Arbitron, addressed to the Agent, the Banks and BankAmerica
International, substantially in the form of Exhibit H;
(h) Payment of Fees and Expenses. The Company shall
have paid all fees due on the Closing Date, together with the
Agent's Attorney Costs incurred up to and including the Closing
Date;
(i) Termination of Security Interests. Receipt by the
Company of (i) evidence that the Security Agreement, dated as of
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June 30, 1993, executed by the Company under the Existing Credit
Agreement in favor of the Agent on behalf of the Banks and any
collateral documents related thereto have been terminated and the
security interests created thereby have been cancelled, (ii) UCC-
3 termination statements executed by the Agent on behalf of the
Banks to be filed in all jurisdictions in which UCC-1 financing
statements had been filed to perfect the security interest of the
Agent for the benefit of the Banks under such Security Agreement;
and (iii) cancelled Notes that were executed by the Company
pursuant to the Existing Credit Agreement (provided that the
Agent may deliver such cancelled Notes to the Company promptly
after the Closing Date); and
(j) Other Documents. Such other approvals, opinions
or documents as the Agent or any Bank may request.
4.02 Conditions to All Credit Extensions. The obligation
of each Bank to make any Credit Extension to be made by it
hereunder is subject to the satisfaction of the following
conditions precedent on the date of the relevant Credit
Extension:
(a) Notice of Borrowing or Continuation/Conversion.
With respect to each Borrowing, the Agent shall have received a
Notice of Borrowing or a Notice of Continuation/Conversion, as
applicable;
(b) Letter of Credit Request. With respect to each
request for the issuance or amendment of a Letter of Credit, the
Issuing Bank shall have received (and in the event the Issuing
Bank is not the Agent, the Agent shall have received) (i) a
Letter of Credit Application, with all blanks completed, signed
by the Company and any Subsidiary of the Company also requesting
the issuance of such Letter of Credit and (ii) a written
certificate signed by a Responsible Officer, designating the
Letter of Credit as a Financial L/C or a Performance L/C and
indicating whether such Letter of Credit supports workmen's
compensation obligations;
(c) Continuation of Representations and Warranties.
The representations and warranties made by the Company contained
in Article V shall be true and correct on and as of such Credit
Extension Date with the same effect as if made on and as of such
date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be
true and correct as of such earlier date); and
(d) No Existing Default. No Default or Event of
Default shall exist or shall result from such Credit Extension.
Each Notice of Borrowing, Notice of Continuation/Conversion or
Letter of Credit Application submitted by the Company hereunder
shall constitute a representation and warranty by the Company
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hereunder, as of the date of each such notice or application and
as of the date of each Credit Extension that the conditions in
Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each
Bank that:
5.01 Corporate Existence and Power.
(a) Each of the Company and its Material Subsidiaries:
(i) is a corporation duly organized, validly
existing and in good standing under the laws
of the jurisdiction of its incorporation;
(ii) has the power and authority and all material
governmental licenses, authorizations,
consents and approvals to own its assets and
carry on its business;
(iii) is duly qualified as a foreign
corporation, licensed and in good
standing under the laws of each
jurisdiction where its ownership, lease
or operation of property or the conduct
of its business requires such
qualification, except in the case of any
Subsidiary where the failure to be so
qualified, licensed or in good standing
would not adversely affect the business
or operations of such Subsidiary in any
significant manner; and
(iv) is in compliance with all material
requirements of laws and regulations
applicable to it.
(b) Each of the Company's other Subsidiaries:
(i) is a corporation duly organized, validly
existing and in good standing under the laws
of the jurisdiction of its incorporation;
(ii) has the power and authority and all
governmental licenses, authorizations,
consents and approvals to own its assets,
carry on its business;
(iii) is duly qualified as a foreign
corporation, licensed and in good
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standing under the laws of each
jurisdiction where its ownership, lease
or operation of property or the conduct
of its business requires such
qualification; and
(iv) is in compliance with all material
requirements of laws and regulations
applicable to it;
except where any failure to comply with the requirements of this
subsection would not, individually or in the aggregate, result in
a Material Adverse Effect.
5.02 Corporate Authorization; No Contravention. Each of
the Company and Arbitron (and any other Wholly-Owned Subsidiary
which has executed a Guaranty) has the power and authority to
execute, deliver and perform its obligations under the Loan
Documents to which it is a party. The execution, delivery and
performance by the Company of this Agreement and any other Loan
Document to which it is a party and by Arbitron (and any such
Wholly-Owned Subsidiary) of a Guaranty have been duly authorized
by all necessary corporate action, and do not and will not:
(a) contravene the terms of any of that Person's
Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document
evidencing any Contractual Obligation to which such Person is a
party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is
subject; or
(c) violate any law or regulation applicable to that
Person.
5.03 Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority is necessary or required
in connection with the execution, delivery or performance by, or
enforcement against, the Company or Arbitron (or any other
Guarantor) of the Agreement or any other Loan Document.
5.04 Binding Effect. This Agreement and each other Loan
Document to which the Company or Arbitron (or any other
Guarantor) is a party, when executed and delivered, will
constitute the legal, valid and binding obligations of the
Company and Arbitron (and such other Guarantor) to the extent it
is a party thereto, enforceable against such Person in accordance
with their respective terms, except (a) as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally or by
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equitable principles relating to enforceability and (b) for any
limitations on the enforceability of the Obligations to a Bank
which has not complied with the requirements of the Minnesota
Business Activity Law, Section 290.371 of the Minnesota Revised
Statutes, for the relevant period.
5.05 Litigation. Attached hereto as Schedule 5.05 is a
list of all material litigation in which the Company or any
Subsidiary is a plaintiff or a defendant as of the Closing Date.
As of the Closing Date and except as provided in Schedule 5.05,
there are no actions, suits, proceedings, claims or disputes
pending, or to the best knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any
Governmental Authority, against the Company, or its Subsidiaries
or any of their respective Properties which:
(a) purport to affect or pertain to this Agreement, or
any other Loan Document, or any of the transactions contemplated
hereby or thereby; or
(b) if determined adversely to the Company, or its
Subsidiaries, would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order
or any order of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the
execution, delivery and performance of this Agreement or any
other Loan Document, or directing that the transactions provided
for herein or therein not be consummated as herein or therein
provided.
5.06 No Default. No Default or Event of Default exists or
would result from the incurring of any Obligations by the
Company. Neither the Company nor any of its Subsidiaries is in
default under or with respect to any Contractual Obligation in
any respect which, individually or together with all such
defaults, could reasonably be expected to have a Material Adverse
Effect.
5.07 ERISA Compliance. The following representations and
warranties are made as of the Closing Date; provided, that if, in
the Ordinary Course of Business, a Responsible Officer acquires
actual knowledge of a change in circumstances relating to the
events and conditions referred to in this Section 5.07 which (i)
alters the accuracy of such representations and warranties and
(ii) could reasonably be expected to have a Material Adverse
Effect, the Company must disclose such change in circumstances to
the Banks before the next Credit Extension Date (unless
previously disclosed pursuant to Section 6.03 or 10.02 whereupon
such disclosure will be deemed to modify Schedule 5.07), and the
Banks have the right to determine whether to extend credit based
upon such change in circumstances.
(a) Schedule 5.07 lists all Plans and separately
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identifies Qualified Plans and Multiemployer Plans. All written
descriptions thereof provided to the Agent are true and complete
in all material respects.
(b) To the best knowledge of the Company, no facts or
circumstances exist which could reasonably be expected to have a
Material Adverse Effect in connection with the failure of any
Plan, or the failure of the Company, an ERISA Affiliate or any
Person with regard to the Plan, to comply with the applicable
provisions of ERISA, the Code and other Federal or state law.
(c) Except as specifically disclosed in Schedule 5.07,
with respect to any Plan neither the Company nor any ERISA
Affiliate has or expects to incur any liability under Title IV of
ERISA (other than for premiums due and not delinquent under
Section 4007 of ERISA).
(d) The obligations of the Company and other members
of the Controlled Group to provide current or former employee(s)
with life insurance or employee welfare plan benefits (within the
meaning of Section 3(1) of ERISA) following retirement or
termination of employment are reflected in the Company's
consolidated financial statements in accordance with GAAP.
(e) Except as specifically disclosed in Schedule 5.07,
to the Company's best knowledge, as of the Closing Date, no ERISA
Event has occurred or is reasonably expected to occur with
respect to any Plan.
(f) Except as specifically disclosed in Schedule 5.07,
there are no material pending or, to the best knowledge of the
Company, threatened claims, actions or lawsuits, other than
routine claims for benefits in the usual and ordinary course, (i)
that have been or may be asserted or instituted against any Plan
maintained or sponsored by the Company or its assets, any member
of the Controlled Group with respect to any Qualified Plan, or to
the Company's best knowledge, any fiduciary with respect to any
Plan for which the Company may be directly or indirectly liable,
through indemnification obligations or otherwise, and (ii) that
could reasonably be expected to have a Material Adverse Effect.
5.08 Title to Properties. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no
Liens, other than Permitted Liens.
5.09 Taxes. The Company and its Subsidiaries have filed
all Federal and other material tax returns and reports required
to be filed, and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or
imposed upon them or their Properties, income or assets otherwise
due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves
have been provided in accordance with GAAP and no Notice of Lien
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has been filed or recorded. There is no proposed tax assessment
against the Company or any of its Subsidiaries which would, if
the assessment were made, have a Material Adverse Effect.
5.10 Financial Condition.
(a) The audited consolidated financial statements of
the Company and its Subsidiaries dated December 31, 1993, and the
unaudited consolidated financial statements of the Company and
its Subsidiaries dated March 31, 1994:
(i) were prepared in accordance with GAAP
consistently applied throughout the period
covered thereby, except as otherwise
expressly noted therein; and
(ii) are complete, accurate and fairly present the
financial condition of the Company and its
Subsidiaries as of the date thereof and
results of operations for the period covered
thereby.
(b) Since March 31, 1994, there has been no Material
Adverse Effect.
(c) Attached hereto as Schedule 5.10 is a list of
(i) Contingent Obligations of the Company and its consolidated
Subsidiaries as of the Closing Date and (ii) general partnership
interests owned by the Company and its consolidated Subsidiaries
as of the Closing Date, showing the aggregate liabilities of such
partnerships and Contingent Obligations as of April 30, 1994.
5.11 Environmental Matters.
(a) As of the Closing Date, except as specifically
disclosed in Schedule 5.11, the on-going operations of the
Company and each of its Subsidiaries comply in all respects with
all Environmental Laws, except such non-compliance which would
not (if enforced in accordance with applicable law) result in
liability that would reasonably be expected to have a Material
Adverse Effect.
(b) As of the Closing Date, except as specifically
disclosed in Schedule 5.11, none of the Company, any of its
Subsidiaries or any of their respective present property or
operations is subject to any outstanding written order from or
agreement with any Governmental Authority nor subject to any
judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material.
(c) Except as specifically disclosed in Schedule 5.11,
there are no Hazardous Materials or other conditions or
circumstances existing with respect to any property, or arising
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from operations prior to the Closing Date, of the Company or any
of its Subsidiaries that would reasonably be expected to give
rise to Environmental Claims with a potential liability of the
Company and its Subsidiaries that in the aggregate for any such
condition, circumstance or property would reasonably be expected
to have a Material Adverse Effect.
5.12 Regulated Entities. None of the Company, any Person
controlling the Company, or any Subsidiary of the Company, is
(a) an "investment company" within the meaning of the Investment
Company Act of 1940; or (b) subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power
Act, the Interstate Commerce Act, any state public utilities
code, or any other Federal or state statute or regulation
limiting its ability to incur Indebtedness, except that certain
Persons who may be deemed to control the Company are registered
investment companies within the meaning of the Investment Company
Act of 1940.
5.13 No Burdensome Restrictions. Neither the Company nor
any of its Subsidiaries is a party to or bound by any Contractual
Obligation, or subject to any charter or corporate restriction,
or any requirement of law, which could reasonably be expected to
have a Material Adverse Effect.
5.14 Solvency. The Company and each of its Material
Subsidiaries are Solvent.
5.15 Labor Relations. As of the Closing Date, there are no
strikes, lockouts or other labor disputes against the Company or
any of its Subsidiaries, or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of
its Subsidiaries, and no significant unfair labor practice
complaint is pending against the Company or any of its
Subsidiaries or, to the best knowledge of the Company, threatened
against any of them before any Governmental Authority.
5.16 Copyrights, Patents, Trademarks and Licenses, etc.
The Company or its Subsidiaries own or are licensed or otherwise
have the right to use all of the patents, trademarks, service
marks, trade names, copyrights, franchises, authorizations and
other rights that are reasonably necessary for the operation of
their respective businesses, without conflict with the rights of
any other Person. To the best knowledge of the Company, no
slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now
contemplated to be employed by the Company or any of its
Subsidiaries infringes upon any rights held by any other Person;
except as specifically disclosed in Schedule 5.05, no claim or
litigation regarding any of the foregoing is pending or
threatened, and no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of the Company, proposed, which,
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in either case, could reasonably be expected to have a Material
Adverse Effect.
5.17 Subsidiaries. As of the Closing Date, the Company has
no Subsidiaries other than those specifically disclosed in Part A
of Schedule 5.17 hereto and has no material equity investments in
any other corporation or entity other than those specifically
disclosed in Part B of Schedule 5.17.
5.18 Insurance. As of the Closing Date, the properties of
the Company and its Subsidiaries are insured with financially
sound and reputable insurance companies, in such amounts, with
such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such
Subsidiary operates.
5.19 Full Disclosure. None of the representations or
warranties made by the Company or any of its Subsidiaries in the
Loan Documents as of the date such representations and warranties
are made or deemed made, and none of the statements contained in
each exhibit, report, statement or certificate furnished by or on
behalf of the Company in connection with the Loan Documents as of
the date such statements are made or deemed made, contains any
untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are
made, not misleading.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Bank
shall have any Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, unless the
Majority Banks waive compliance in writing:
6.01 Financial Statements The Company shall deliver to the
Agent in form and detail satisfactory to the Agent and the
Majority Banks, with sufficient copies for each Bank:
(a) as soon as available, but not later than 120 days
after the end of each fiscal year, a copy of the audited
consolidated financial statements of the Company as of the end of
such fiscal year, setting forth in each case in comparative form
the figures for the previous year, and accompanied by the opinion
of KPMG Peat Marwick or another nationally-recognized independent
public accounting firm which report shall state that such
consolidated financial statements present fairly in all material
respects the financial position of the Company and its
Subsidiaries as of the dates indicated and the results of their
operations and their cash flows for the periods indicated in
conformity with GAAP. Such opinion shall not be qualified or
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limited for any reason, including, without limitation, because of
a restricted or limited examination by such accountant of any
material portion of the Company's or any Subsidiary's records;
(b) as soon as available, but not later than 60 days
after the end of each calendar quarter, a copy of the Company's
quarterly report on Form 10-Q filed with the SEC with respect to
such fiscal quarter; and
(c) as soon as available, but not later than 30 days
after the end of each month, an operating report showing the
relevant data by business unit of the Company, prepared on a
basis generally consistent with the monthly operating reports
delivered by the Company to the Banks pursuant to the Existing
Credit Agreement, which financial statements shall be in
accordance with GAAP.
6.02 Certificates; Other Information. The Company shall
furnish to the Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsections 6.01(a) and (b) above, a
Compliance Certificate, signed by a Responsible Officer;
(b) copies of each registration statement of the
Company other than with respect to employee benefit plans, each
periodic report regarding the Company required pursuant to
Section 13 of the Exchange Act, each annual report, each proxy
statement and any amendments to any of the above filed or
reported by the Company with or to any securities exchange or the
Securities and Exchange Commission, of each communication from
the Company or any Subsidiary to the Company's shareholders
generally, promptly upon the filing or making thereof and copies
of such other filings, reports and communications with the
Company's shareholders as the Agent may from time to time
request;
(c) upon release, copies of all financially material
press releases;
(d) on the Closing Date, and as soon as available, but
not later than 30 days after the end of each month, a Borrowing
Base Certificate;
(e) promptly after the creation or Acquisition of any
Material Subsidiary, the name of such Subsidiary, a description
of its business, the price paid for the stock or assets of such
Subsidiary, its net worth and the value of its assets; and
(f) promptly, such additional business, financial,
corporate affairs and other information as the Agent, at the
request of any Bank, may from time to time reasonably request.
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6.03 Notices. The Company shall promptly notify the Agent
and each Bank upon a Responsible Officer of the Company obtaining
knowledge:
(a) of the occurrence of any Default or Event of
Default;
(b) of (i) any breach or non-performance of, or any
default under, any Contractual Obligation of the Company or any
of its Subsidiaries which could result in a Material Adverse
Effect; and (ii) any dispute, litigation, investigation,
proceeding or suspension which may exist at any time between the
Company or any of its Subsidiaries and any Governmental Authority
which could result in a Material Adverse Effect;
(c) of the commencement of, or any material
development in, any litigation or proceeding affecting the
Company or any Subsidiary (i) which has a reasonable possibility
of resulting in liability to the Company or one of its
Subsidiaries in the amount of $1,000,000 or more, (ii) in which
injunctive or similar relief is sought and which, if adversely
determined, would reasonably be expected to have a Material
Adverse Effect, or (iii) in which the relief sought is an
injunction or other stay of the performance of this Agreement or
any Loan Document;
(d) of (i) any and all enforcement, cleanup, removal
or other governmental or regulatory actions instituted or
threatened against the Company or any of its Subsidiaries or any
of their respective Properties pursuant to any applicable
Environmental Laws, (ii) all other Environmental Claims, and
(iii) any environmental or similar condition on any real property
adjoining or in the vicinity of the property of the Company or
any Subsidiary that could reasonably be anticipated to cause the
property of the Company or any of its Subsidiaries or any part
thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any
Environmental Laws, if, individually or in the aggregate, the
events or conditions described or the amount claimed in clauses
(i), (ii) and (iii) could result in a Material Adverse Effect;
(e) of any of the following events if it could
reasonably be expected to have a Material Adverse Effect:
(i) an ERISA Event;
(ii) the adoption of any Plan that is subject to
Title IV of ERISA or Section 412 of the Code
by any member of the Controlled Group; or
(iii) the adoption of any amendment to a Plan
that is subject to Title IV of ERISA or
Section 412 of the Code.
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Each notice under this Section 6.03(e) shall include a copy
of any notice with respect to such event that may be required to
be filed with a Governmental Authority and is then due and any
notice delivered by a Governmental Authority to the Company or
any member or its Controlled Group with respect to such event.
(f) any Material Adverse Effect subsequent to the date
of the most recent audited financial statements of the Company
delivered to the Banks pursuant to subsection 6.01(a); and
(g) of any labor controversy resulting in or
threatening to result in any strike, work stoppage, boycott,
shutdown or other labor disruption against or involving the
Company or any of its Subsidiaries.
Each notice pursuant to this Section shall be
accompanied by a written statement by a Responsible Officer of
the Company setting forth details of the occurrence referred to
therein, and stating what action the Company proposes to take
with respect thereto and at what time. Each notice under
subsection 6.03(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document
that have been breached or violated.
6.04 Preservation of Corporate Existence, Etc. The Company
shall, and shall cause each of its Subsidiaries to:
(a) except as permitted in Section 7.02, preserve and
maintain in full force and effect its corporate existence and
good standing under the laws of its state or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all
material rights, privileges, qualifications, permits, licenses
and franchises necessary or desirable in the normal conduct of
its business except in connection with transactions permitted by
Section 7.02;
(c) use its reasonable efforts, in the Ordinary Course
of Business, to preserve its business organization and preserve
the goodwill and business of the customers, suppliers and others
having material business relations with it; and
(d) preserve or renew all of its registered
trademarks, trade names and service marks, the non-preservation
of which could reasonably be expected to have a Material Adverse
Effect, provided, however, that the Company shall not be deemed
to be in default under this Section 6.04 if a Subsidiary (other
than a Material Subsidiary) fails to comply herewith so long as
such failure is de minimis.
6.05 Maintenance of Property. The Company shall maintain,
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and shall cause each of its Subsidiaries to maintain, and
preserve all its property which is used or useful in its business
in good working order and condition, ordinary wear and tear
excepted, make all necessary repairs thereto and renewals and
replacements thereof, and to keep such property free of any
Hazardous Materials, except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect,
except as permitted by Section 7.02. The Company shall use at
least the standard of care typical in the industry in the
operation of its facilities.
6.06 Insurance. The Company shall maintain, and shall
cause each of its Subsidiaries to maintain, with financially
sound and reputable independent insurers, insurance with respect
to its Properties and business against loss or damage of the
kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other
Persons; including workers' compensation insurance, public
liability and property and casualty insurance. Upon request of
the Agent or any Bank, the Company shall furnish the Agent, with
sufficient copies for each Bank, at reasonable intervals (but not
more than once per calendar year) a certificate of a Responsible
Officer of the Company (and, if requested by the Agent, any
insurance broker of the Company) setting forth the nature and
extent of all insurance maintained by the Company and its
Subsidiaries in accordance with this Section 6.06 or any
Collateral Documents (and which, in the case of a certificate of
a broker, were placed through such broker).
6.07 Payment of Obligations. The Company shall, and shall
cause its Subsidiaries to, pay and discharge as the same shall
become due and payable, all their respective obligations and
liabilities, including:
(a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings
and adequate reserves in accordance with GAAP are being
maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law
become a Lien upon its property; and
(c) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness;
provided, however, that the Company and its Subsidiaries shall
not be deemed to be in default under this Section 6.07 if failure
to comply herewith would not result in a Material Adverse Effect.
6.08 Compliance with Laws. The Company shall comply, and
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shall cause each of its Subsidiaries to comply, in all material
respects with all material regulations and requirements of any
Governmental Authority having jurisdiction over it or its
business (including the Federal Fair Labor Standards Act), except
such as may be contested in good faith or as to which a bona fide
dispute may exist.
6.09 Inspection of Property and Books and Records. The
Company shall maintain and shall cause each of its Subsidiaries
to maintain proper books of record and account, in which full,
true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such
Subsidiaries. The Company shall permit, and shall cause each of
its Subsidiaries to permit, representatives and independent
contractors of the Agent or any Bank to visit and inspect any of
their respective properties, to examine their respective
corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants at such reasonable times during
normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Company; provided, however,
when a Default exists, (i) the Agent or any Bank may do any of
the foregoing at any time during normal business hours and
without advance notice and (ii) such inspection, examination and
meetings shall be at the Company's expense.
6.10 Environmental Laws.
(a) The Company shall, and shall cause each of its
Subsidiaries to, conduct its operations and keep and maintain its
property in compliance in all material respects with all
Environmental Laws.
(b) Upon the written request of the Agent or any Bank,
the Company shall submit to the Agent with sufficient copies for
each Bank, at the Company's sole cost and expense, a report
providing an update of the status of any environmental, health or
safety compliance, hazard or liability issue identified in any
notice or report required pursuant to subsection 6.03(d).
6.11 Use of Proceeds. The Company shall use the proceeds
of the Loans and the Letters of Credit solely for working capital
and other general lawful corporate purposes.
6.12 Further Assurances.
(a) The Company shall ensure that all written
information, exhibits and reports furnished to the Agent or the
Banks do not and will not contain any untrue statement of a
material fact and do not and will not omit to state any material
fact necessary to make the statements contained therein not
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misleading in light of the circumstances in which made, and will
promptly disclose to the Agent and the Banks and correct any
defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgement or recordation
thereof.
(b) Promptly upon request by the Agent or the Majority
Banks, the Company shall (and shall cause any of its Subsidiaries
to) do, execute, acknowledge and deliver any and all such further
acts, certificates, assurances and other instruments as the Agent
or such Banks, as the case may be, may reasonably require from
time to time in order (i) to carry out more effectively the
purposes of this Agreement or any other Loan Document, and (ii)
to better assure, convey, grant, assign, transfer, preserve,
protect and confirm to the Agent and Banks the rights granted or
now or hereafter intended to be granted to the Banks under any
Loan Document or under any other document executed in connection
therewith.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any
Bank shall have any Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, unless the
Majority Banks waive compliance in writing:
7.01 Limitation on Liens. The Company shall not, and shall
not suffer or permit any of its Subsidiaries to, directly or
indirectly, make, create, incur, assume or suffer to exist any
Lien upon or with respect to any part of its property, whether
now owned or hereafter acquired, other than the following
("Permitted Liens"):
(a) any Lien created under any Loan Document;
(b) Liens for taxes, fees, assessments or other
governmental charges or statutory obligations which are not
delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 6.07, provided
that no notice of Lien has been filed or recorded under the Code;
(c) Liens arising in the Ordinary Course of Business
in connection with obligations that are not overdue or which are
being contested in good faith and by appropriate proceedings,
including, but not limited to Liens under bid, performance and
other surety bonds, supersedeas and appeal bonds, Liens on
advance or progress payments received from customers under
contracts for the sale, lease or license of goods, software or
services and upon the products being sold or licensed, in each
case securing performance of the underlying contract or the
repayment of such advances in the event final acceptance of
performance under such contracts does not occur; and Liens upon
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funds collected temporarily from others pending payment or
remittance on their behalf;
(d) Liens (other than any Lien imposed by ERISA)
required in the Ordinary Course of Business in connection with
workers' compensation, unemployment insurance and other social
security legislation;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the Ordinary Course of Business
which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the
property subject thereto or interfere with the ordinary conduct
of the businesses of the Company and its Subsidiaries;
(f) purchase money security interests on any property
acquired or held by the Company or its Subsidiaries in the
Ordinary Course of Business securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost
of acquiring such property to the extent permitted under Section
7.04; provided that (i) any such Lien attaches to such property
concurrently with or within 20 days after the acquisition
thereof, (ii) such Lien attaches solely to the property so
acquired in such transaction, and (iii) the principal amount of
the debt secured thereby does not exceed 100% of the cost of such
property;
(g) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of
set-off or similar rights and remedies as to deposit accounts or
other funds maintained with a creditor depository institution;
provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations
promulgated by the Federal Reserve Board, and (ii) such deposit
account is not intended by the Company or any of its Subsidiaries
to provide collateral to the depository institution;
(h) any Lien on any asset existing at the time such
asset is acquired by the Company or one of its Subsidiaries or is
merged into or consolidated with the Company or one of its
Subsidiaries and not created in contemplation of such event and
any replacement Lien arising out of the extension, renewal or
replacement of the related obligation secured by such Lien, so
long as any such replacement Lien does not extend to property not
covered by the Lien replaced or renewed; and
(i) any Lien (not otherwise permitted by this Section
7.01) securing an obligation of the Company or any Subsidiary if
the aggregate amount of all such obligations secured by all such
Liens does not exceed $75,000,000.
7.02 Mergers, Consolidations and Dispositions of Assets.
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(a) Except as provided in Section 7.02(b), the Company
shall not, and shall not permit any of its Subsidiaries to: (i)
sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one or a series of related transactions) any property
or assets (including accounts and notes receivable, with or
without recourse) (collectively, "transfer") to any Person except
in the Ordinary Course of Business; (ii) transfer to any Person
other than the Company or a Subsidiary any outstanding capital
stock that has been issued by any Subsidiary; or (iii)
consolidate with or merge into any other Person.
(b) Section 7.02(a) shall not apply to or restrict:
(i) the merger or consolidation of any Subsidiary
into the Company, or with or into any other
Subsidiaries, provided that if any such
transaction is between a Subsidiary and a
Wholly-Owned Subsidiary, the Wholly-Owned
Subsidiary is the continuing or surviving
corporation;
(ii) the transfer by any Subsidiary of the Company
of any assets (upon voluntary liquidation or
otherwise) to the Company or a Wholly-Owned
Subsidiary of the Company;
(iii) transfers of real estate not used or
useful in the business of the Company
and its Subsidiaries, any bulk sale of
inventory not representing a then
current product line of the Company or
its Subsidiaries, or any sale of
property or assets used in connection
with discontinued or abandoned product
lines of the Company or its
Subsidiaries;
(iv) the sale of equipment to the extent that such
equipment is exchanged for credit against the
purchase price of similar replacement
equipment, or the proceeds of such sale are
reasonably promptly applied to the purchase
price of such replacement equipment;
(v) (i) the transfer of assets by the Company to
any of its Subsidiaries in the Ordinary
Course of Business or to any of its
Subsidiaries incorporated in a jurisdiction
outside of the United States, if such
transfer is a sale for fair market value and
the consideration received by the Company is
cash and (ii) the transfer of the business
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and assets of the Company's Computing Devices
International division to a Subsidiary of the
Company;
(vi) the transfer, merger or consolidation of the
assets listed on Schedule 7.02;
(vii) any transfer of assets by the Company or
any of its Subsidiaries to any Person in
connection with a transaction permitted
under Section 7.03; and
(viii) transfers of assets not otherwise
permitted hereunder (whether by merger,
consolidation or otherwise) occurring
after the Closing Date which are made
for fair market value; provided, that
(i) at the time of any transfer, no
Event of Default exists or would result
from such transfer and (ii) the
aggregate net book value of all assets
so transferred by the Company and its
Subsidiaries together shall not exceed
$35,000,000.
7.03 Loans and Investments. The Company shall not and
shall not permit any of its Subsidiaries to, (i) purchase or
acquire or make any commitment to purchase or acquire any capital
stock, equity interest, all or substantially all of the assets
of, or any obligations or other securities of, or any interest
in, any Person, or (ii) make any advance, loan, extension of
credit or capital contribution to or any other investment in any
Person including any Affiliate of the Company, except for:
(a) transactions of a type described in the preamble
to this Section 7.03 which involve only the Company and its
Subsidiaries existing on the Closing Date;
(b) transactions of a type described in the preamble
to this Section 7.03 which are permitted under Section 7.02, and
extensions of credit to purchasers of assets or property of the
Company and its Subsidiaries to the extent such sales are
permitted under Section 7.02;
(c) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of
goods, the performance of services or the licensing of software
or other property in the Ordinary Course of Business;
(d) investments in Cash Equivalents and investment
grade marketable securities;
(e) equity interests received directly or indirectly
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by the Company or any of its Subsidiaries for the transfer by the
Company or such Subsidiary of assets to the extent such transfers
are permitted under Section 7.02;
(f) Acquisitions by the Company or any of its
Subsidiaries to the extent the consideration provided by the
Company or any such Subsidiary consists of capital stock of the
Company if any such Acquisition is approved by the board of
directors and/or shareholders, if appropriate, of the Person
being so acquired or controlling the business or division being
acquired;
(g) loans to or equity investments in any Person which
was a Subsidiary of the Company at the time such loan or
investment was made but which, as a result of transactions
permitted under Section 7.02, is no longer a Subsidiary of the
Company; and
(h) transactions described in the preamble to this
Section 7.03 not otherwise permitted hereunder, provided that (i)
the aggregate amount of cash and other assets (determined on a
net book value basis) expended, advanced, transferred, invested
or contributed by the Company and its Subsidiaries in connection
with all such transactions (other than to the extent that
reserves or liabilities have been established for such
expenditures, advances, transfers, investments or contributions
in the Company's consolidated financial statements as of the
Closing Date) does not exceed $125,000,000; (ii) the cash portion
of the amount expended, advanced, transferred, invested or
contributed pursuant to clause (i) of this proviso does not
exceed $100,000,000; (iii) not more than $50,000,000 in the
aggregate of the cash and other assets referred to in clause (i)
of this proviso may be expended, advanced, transferred, invested
or contributed to an entity which would be a Joint Venture after
such transaction; and (iv) any such transaction which is an
Acquisition is approved by the board of directors and/or
shareholders, if appropriate, of the Person being so acquired or
controlling the business or division being acquired.
7.04 Limitation on Indebtedness. The Company shall not,
and shall not suffer or permit any of its Subsidiaries to,
create, incur, assume, suffer to exist, or otherwise become or
remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
and
(b) Other Indebtedness of the Company and its
Subsidiaries in an aggregate amount not to exceed $75,000,000.
7.05 Contingent Obligations. The Company shall not, and
shall not suffer or permit any of its Subsidiaries to, create,
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incur, assume or suffer to exist any Contingent Obligations
except:
(a) Contingent Obligations incurred pursuant to this
Agreement;
(b) endorsements for collection or deposit in the
Ordinary Course of Business;
(c) any Contingent Obligations relating to letters of
credit, bank guarantees or similar instruments incurred by
Computing Devices Canada Ltd. in connection with the IRIS system
contract dated April 18, 1991 and in connection with a contract
dated as of January 3, 1994 with the Diesel Division of General
Motors Canada Limited; and
(d) Contingent Obligations of the Company and its
Subsidiaries in an aggregate amount not in excess of $40,000,000.
7.06 Use of Proceeds. The Company shall not and shall not
suffer or permit any of its Subsidiaries to use any portion of
the Loan proceeds, directly or indirectly, (i) to purchase or
carry Margin Stock, (ii) to repay or otherwise refinance
indebtedness of the Company or others incurred to purchase or
carry Margin Stock, (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14
of the Exchange Act.
7.07 Compliance with ERISA. The Company shall not, and
shall not suffer or permit any of its Subsidiaries to: (i)
terminate any Plan subject to Title IV of ERISA so as to result
in liability to the Company or any ERISA Affiliate which could
reasonably be expected to have a Material Adverse Effect, (ii)
permit to exist any ERISA Event which is reasonably likely to
result in liability to any member of the Controlled Group which
could reasonably be expected to have a Material Adverse Effect,
(iii) make a complete or partial withdrawal (within the meaning
of ERISA Section 4201) from any Multiemployer Plan so as to
result in any Withdrawal Liabilities to the Company or any ERISA
Affiliate which could reasonably be expected to have a Material
Adverse Effect, or (iv) enter into any new Plan or amend any
existing Plan if doing so is reasonably likely to result in any
increase in liability to any member of the Controlled Group which
could reasonably be expected to have a Material Adverse Effect
and is neither required by law nor necessary to satisfy
qualification requirements in the case of a Qualified Plan.
7.08 Lease Obligations. The Company shall not permit the
aggregate minimum non-cancelable payment commitments in respect
of Operating Leases for the Company and its Subsidiaries on a
consolidated basis determined in accordance with GAAP at the end
of any fiscal year to exceed, for any subsequent fiscal year,
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$60,000,000 (exclusive of $16,000,000, or such lesser amount as
may be reserved in the Company's consolidated financial
statements to pay such commitments).
7.09 Restricted Payments. The Company shall not, and shall
not suffer or permit any of its Subsidiaries to, declare or make
any dividend payment or other distribution of assets, properties,
cash, rights, obligations or securities on account of any shares
of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or
any warrants, rights or options to acquire such shares, now or
hereafter outstanding; except that (a) so long as no Default or
Event of Default under subsections 8.01(a), (e)(i), (f), (g) or
(i) has occurred and is continuing the Company and any
Wholly-Owned Subsidiary of the Company may:
(i) declare and make dividend payments or other
distributions payable solely in its common
stock;
(ii) purchase, redeem or otherwise acquire shares
of its common stock or warrants or options to
acquire any such shares with the proceeds
received from the substantially concurrent
issue of new shares of its common stock;
(iii) declare and make dividend payments with
respect to the Preferred Stock;
(iv) declare or pay cash dividends to its
stockholders and purchase, redeem or
otherwise acquire shares of its capital stock
or warrants, rights or options to acquire any
such shares for cash so long as (i) the
aggregate amount paid by the Company and its
Subsidiaries in respect of all such
transactions does not exceed 25% of
Consolidated Net Income in any fiscal quarter
after the first fiscal quarter of 1993 and
(ii) after giving effect to such proposed
action, no Default or Event of Default would
exist. In the event that the aggregate
amount paid pursuant to clause (i) in the
preceding sentence is less than 25% of
Consolidated Net Income during any fiscal
quarter after the first fiscal quarter of
1993, the unexpended amount may be carried
forward to subsequent fiscal quarters; and
(b) the restrictions set forth in this Section 7.09
shall not apply to any payment, distribution, purchase,
redemption or prepayment by any Subsidiary of the Company to or
in favor of the Company.
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7.10 Consolidated Net Worth. The Company shall not permit
its Consolidated Net Worth at any time to be less than
$105,000,000 plus (a) 75% of Consolidated Net Income (not to be
reduced by Consolidated Net Losses) subsequent to December 31,
1993, plus (b) 100% of the net proceeds from the issuance of any
capital stock by the Company after December 31, 1993 except stock
issued to or in connection with employee and director benefit
plans.
7.11 EBIT. Commencing July 1, 1993, the Company shall not
permit its EBIT to be less than $45,000,000 for the Company's
most recently completed four fiscal quarters.
7.12 Fixed Charge Coverage Ratio. On and after June 30,
1993, the Company shall not permit its ratio of (a) EBITDA, plus
interest income, minus Capital Expenditures to (b) Consolidated
Fixed Charges to be less than 2.25 to 1, all calculated for the
preceding four fiscal quarters of the Company.
7.13 Change in Business. The Company shall not, and shall
not permit any of its Subsidiaries to, engage in any material
line of business substantially different from those lines of
business carried on by it on the Closing Date.
7.14 Change in Structure. Except as expressly permitted
under Sections 7.02, 7.03 and 7.09, the Company shall not and
shall not permit Arbitron to, make any changes in its equity
capital structure (including in the terms of its outstanding
stock), or amend its certificate of incorporation in any material
respect.
7.15 Accounting Changes; Designation of Material
Subsidiaries. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required
or permitted by GAAP, or change the fiscal year of the Company or
of any of its consolidated Subsidiaries, nor shall the Company
change the designation of a Material Subsidiary unless the stock
or assets of such Subsidiary are disposed of as permitted
hereunder.
7.16 Contracts of Subsidiaries. The Company shall not
permit any of its Subsidiaries (other than Computing Devices
Canada Ltd. and Computing Devices Company Ltd. and its
Subsidiaries) to enter into any contract restricting the ability
of such Subsidiary to pay dividends to the Company.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall
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constitute an "Event of Default":
(a) Non-Payment. The Company fails to pay, (i) when
and as required to be paid herein, any amount of principal of any
Loan, or any reimbursement obligation in respect of a Letter of
Credit, or (ii) within 5 days after the same shall become due,
any interest, fee or any other amount payable hereunder or
pursuant to any other Loan Document; or
(b) Representation or Warranty. Any representation or
warranty by the Company or any of its Subsidiaries made or deemed
made herein, in any Loan Document, or which is contained in any
certificate, document or financial or other statement by the
Company, any of its Subsidiaries, or their respective Responsible
Officers, furnished at any time under this Agreement, or in or
under any Loan Document, shall prove to have been incorrect in
any material respect on or as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform
or observe any term, covenant or agreement contained in Section
6.03 or 6.09 or in Article VII; or the Company fails to perform
or observe any term, covenant or agreement contained in Section
6.01 or 6.02, and such default continues unremedied for a period
of 10 days; or
(d) Other Defaults. The Company fails to perform or
observe any other term or covenant contained in this Agreement or
any Loan Document, and such default continues unremedied for a
period of 20 days; or
(e) Cross-Default. The Company or any of its
Subsidiaries (i) fails to make any required payment when due in
respect of any Indebtedness or Contingent Obligation having a
principal or face amount of $7,500,000 or more when due or any
Rate Contract having a notional amount of $7,500,000 or more when
due (whether at scheduled maturity or required prepayment or by
acceleration, demand, or otherwise); or (ii) fails to perform or
observe any other condition or covenant, or any other event shall
occur or condition exist, under any agreement or instrument
relating to any such Indebtedness or Contingent Obligation, and
such failure continues after the applicable grace or notice
period, if any, specified in the document relating thereto on the
date of such failure if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be
declared to be due and payable prior to its stated maturity, or
such Contingent Obligation to become payable or cash collateral
in respect thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. The Company,
Arbitron or any other Subsidiary of the Company (i) ceases or
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fails to be Solvent, or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; provided, however,
that it shall not be an Event of Default under this
subsection (f) if any Subsidiary of the Company to which this
subsection applies (other than Arbitron) does not have annual
revenues in excess of 1% of the consolidated revenues of the
Company or net worth which constitutes more than 5% of the
Consolidated Net Worth of the Company in the fiscal year
immediately preceding the date this subsection first becomes
applicable to such Subsidiary; or
(g) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Company,
or Arbitron or any other Subsidiary of the Company, or any writ,
judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Company's or
any of its Subsidiaries' Properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Company or any of its
Subsidiaries admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief
(or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company or any of its
Subsidiaries acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in
possession (or agent therefor), or other similar Person for
itself or a substantial portion of its property or business;
provided, however, that it shall not be an Event of Default under
this subsection (g) if any Subsidiary of the Company to which
this subsection applies (other than Arbitron) does not have
annual revenues in excess of 1% of the consolidated revenues of
the Company or net worth which constitutes more than 5% of the
Consolidated Net Worth of the Company in the fiscal year
immediately preceding the date this subsection first becomes
applicable to such Subsidiary; or
(h) ERISA. Any of the following events occurs which,
individually or in the aggregate, could reasonably be expected to
result in liability which has a Material Adverse Effect: (i) a
member of the Controlled Group fails to pay when due, after the
expiration of any applicable grace period, any installment
payment with respect to its Withdrawal Liability under a
Multiemployer Plan unless the obligation to make such payment or
the amount thereof is disputed in good faith by the Controlled
Group member and such member is pursuing in a timely manner its
legal right to object thereto; (ii) the Company or an ERISA
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Affiliate fails to satisfy its contribution requirements under
Section 412(c)(11) of the Code (without regard to Section
412(m)), whether or not it has sought a waiver under Section
412(d) of the Code; (iii) an ERISA Event involving the withdrawal
by the Company or an ERISA Affiliate from a Plan with respect to
which it is a "substantial employer" (as defined in Section
4001(a)(2) or Section 4062(e) of ERISA), imposing liability on
the withdrawing employer for its proportionate share of that
Plan's Unfunded Pension Liabilities; (iv) an ERISA Event
involving the complete or partial withdrawal by the Company or an
ERISA Affiliate from a Multiemployer Plan, imposing liability on
the withdrawing employer for Withdrawal Liabilities and the
amount of the required annual Withdrawal Liabilities payment
materially exceeds the amount of contributions to the
Multiemployer Plan by the withdrawing employer for the preceding
calendar year or the average annual amount of such contributions
for the five preceding calendar years, whichever is greater; (v)
an ERISA Event not described in clause (iii) or (iv) with respect
to a Plan or Plans, resulting in the imposition of liability on
the Company or a Controlled Group member pursuant to Title IV of
ERISA; (vi) a Plan that is intended to be qualified under Section
401(a) of the Code has been finally determined to have lost its
qualification and all opportunity for appeal or correction has
lapsed; (vii) any member of the Controlled Group has been finally
determined to be liable for a tax under Code Section 4975 in
connection with a non-exempt prohibited transaction and all
opportunity for appeal has lapsed; (viii) a court of competent
jurisdiction has found that the Company or a Controlled Group
member is liable for damages in connection with a violation of
Section 404, 405 or 406 of ERISA and all opportunity for appeal
has lapsed; or (ix) any member of the Controlled Group is
assessed a tax under Section 4980B of the Code unless the
obligation to pay such tax or the amount thereof is disputed in
good faith by the Controlled Group member and such member is
pursuing in a timely manner its legal right to object thereto; or
(i) Monetary Judgments. One or more final
(non-interlocutory) judgments, orders or decrees shall be entered
against the Company or any of its Subsidiaries involving in the
aggregate a liability (not fully covered by independent
third-party insurance) as to any single or related series of
transactions, incidents or conditions, of $10,000,000 or more,
and the same shall remain unvacated and unstayed pending appeal
for a period of 10 days after the entry thereof; or
(j) Ownership. Any Person or group of Persons is the
beneficial owner of 30 percent or more of the voting power of the
Company for a period of 30 days or more. For purposes of this
subsection (k), the terms "group" and "beneficial owner" shall
have the meanings given to those terms in Section 13 of the
Securities Exchange Act of 1934, as amended; or
(k) Guarantor Defaults. Any Guarantor fails in any
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material respect to perform or observe any term, covenant or
agreement in its Guaranty; or any Guaranty is for any reason
partially (including with respect to future advances) or wholly
revoked or invalidated, or otherwise ceases to be in full force
and effect, or any Guarantor or any other Person contests in any
manner the validity or enforceability of any Guaranty or denies
that it has any further liability or obligation thereunder; or
any event described in paragraphs (f) or (g) occurs with respect
to any Guarantor; provided, however, that the merger of any
Guarantor into the Company shall not create a default under this
paragraph (k).
8.02 Remedies. If any Event of Default occurs, the Agent
shall, at the request of, or may, with the consent of, the
Majority Banks,
(a) declare the Commitment of each Bank to make Loans
and purchase participations in Letters of Credit and of the
Issuing Bank to issue Letters of Credit to be terminated,
whereupon such Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all
rights and remedies available to it and the Banks under the Loan
Documents or applicable law;
provided, however, that upon the occurrence of any event
specified in paragraph (f) or (g) of Section 8.01 above (in the
case of clause (i) of paragraph (g) upon the expiration of the
60-day period mentioned therein), the obligation of each Bank to
make Loans and purchase participations in Letters of Credit and
of the Issuing Bank to issue Letters of Credit shall
automatically terminate without notice to the Company and the
unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and
payable without further act of the Agent or any Bank and without
notice to the Company. If at the time an Event of Default
occurs, Letters of Credit are issued and unexpired, the Company
shall deposit with the Agent cash in an amount equal to the
Stated Amount of all Letters of Credit.
8.03 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not
exclusive of any other rights, powers, privileges or remedies
provided by law or in equity, or under any other instrument,
document or agreement now existing or hereafter arising.
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ARTICLE IX
THE AGENT
9.01 Appointment and Authorization. Each Bank hereby
irrevocably appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms
of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement
or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
9.02 Delegation of Duties. The Agent may execute any of
its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it
selects with reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons
shall (i) be liable for any action taken or omitted to be taken
by any of them under or in connection with this Agreement or any
other Loan Document (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any
of the Banks for any recital, statement, representation or
warranty made by the Company or any Subsidiary or Affiliate of
the Company, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Agreement
or any other Loan Document, or for the value of any Collateral or
the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for
any failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the
Properties, books or records of the Company or any of the
Company's Subsidiaries or Affiliates.
9.04 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be
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fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile,
telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and
upon advice and statements of legal counsel (including counsel to
the Company), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or
concurrence of the Majority Banks as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction
by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any
such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of
the Majority Banks and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the
Banks.
(b) For purposes of determining compliance with the
conditions specified in Sections 4.01 and 4.02, each Bank that
has executed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or
other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to
be consented to or approved by or acceptable or satisfactory to
the Bank, unless an officer of the Agent responsible for the
transactions contemplated by the Loan Documents shall have
received notice from the Bank prior to the initial Borrowing
specifying its objection thereto and either such objection shall
not have been withdrawn by notice to the Agent to that effect or
the Bank shall not have made available to the Agent the Bank's
ratable portion of such Borrowing.
9.05 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Event of Default, except with respect to defaults in the payment
of principal, interest and fees required to be paid to the Agent
for the account of the Banks, unless the Agent shall have
received written notice from a Bank or the Company referring to
this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give
notice thereof to the Banks. The Agent shall take such action
with respect to such Default or Event of Default as shall be
requested by the Majority Banks in accordance with Article VIII;
provided, however, that unless and until the Agent shall have
received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of the Banks.
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9.06 Credit Decision. Each Bank expressly acknowledges
that none of the Agent-Related Persons has made any
representation or warranty to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without
reliance upon the Agent and based on such documents and
information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of
the Company and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated
thereby, and made its own decision to enter into this Agreement
and extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon
the Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company. Except for
notices, reports and other documents expressly herein required to
be furnished to the Banks by the Agent, the Agent shall not have
any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of
the Company which may come into the possession of any of the
Agent-Related Persons.
9.07 Indemnification. Whether or not the transactions
contemplated hereby shall be consummated, the Banks shall
indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), ratably from
and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Loans and
the termination or resignation of the related Agent) be imposed
on, incurred by or asserted against any such Person any way
relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken
or omitted by any such Person under or in connection with any of
the foregoing; provided, however, that no Bank shall be liable
for the payment to the Agent-Related Persons of any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall
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reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document,
or any document contemplated by or referred to herein to the
extent that the Agent is not reimbursed for such expenses by or
on behalf of the Company. Without limiting the generality of the
foregoing, if the Internal Revenue Service or any other
Governmental Authority of the United States or other jurisdiction
asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Bank (because the
appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank
shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction
on the amounts payable to the Agent under this Section, together
with all costs and expenses (including Attorney Costs). The
obligation of the Banks in this Section shall survive the payment
of all Obligations hereunder.
9.08 Agent in Individual Capacity. BofA and its Affiliates
may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory or other
business with the Company and its Subsidiaries and Affiliates as
though BofA were not the Agent hereunder and without notice to or
consent of the Banks. With respect to its Loans, BofA shall have
the same rights and powers under this Agreement as any other Bank
and may exercise the same as though it were not the Agent, and
the terms "Bank" and "Banks" shall include BofA in its individual
capacity.
9.09 Successor Agent. The Agent may, and at the request of
the Majority Banks shall, resign as Agent upon 30 days' notice to
the Banks. If the Agent shall resign as Agent under this
Agreement, the Majority Banks shall appoint from among the Banks
a successor agent for the Banks which successor agent shall be
approved by the Company. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article IX
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and Sections 10.04 and 10.05 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a
retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the
Banks shall perform all of the duties of the Agent hereunder
until such time, if any, as the Majority Banks appoint a
successor agent as provided for above.
9.10 Collateral Matters. The Banks irrevocably authorize
the Agent, effective on the Closing Date, to release any Lien
granted to or held by the Agent upon any Collateral under (and as
defined in) the Existing Credit Agreement.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no
consent with respect to any departure by the Company therefrom,
shall be effective unless the same shall be in writing and signed
by the Majority Banks, the Company and acknowledged by the Agent,
and then such waiver shall be effective only in the specific
instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless
in writing and signed by all the Banks, the Company and
acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to subsection
8.02(a)) or subject any Bank to any additional obligations;
(b) postpone or delay any date fixed for any payment
of principal, interest, fees or other amounts due to the Banks
(or any of them) hereunder or under any Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or of any fees or other amounts
payable hereunder or under any Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which shall be
required for the Banks or any of them to take any action
hereunder;
(e) amend this Section 10.01 or Section 2.18; or
(f) discharge any Guarantor except as otherwise may be
provided in this Agreement or except where the consent of the
Majority Banks only is specifically provided for;
and, provided further, that no amendment, waiver or consent
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shall, unless in writing and signed by the Agent in addition to
the Majority Banks or all the Banks, as the case may be, affect
the rights or duties of the Agent under this Agreement or any
other Loan Document.
10.02 Notices.
(a) All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission,
provided that any matter transmitted by the Company by facsimile
(i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on the applicable signature
page hereof, and (ii) shall be followed promptly by a hard copy
original thereof) and mailed, faxed or delivered, to the address
or facsimile number specified for notices on the applicable
signature page hereof; or, as directed to the Company or the
Agent, to such other address as shall be designated by such party
in a written notice to the other parties, and as directed to each
other party, at such other address as shall be designated by such
party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications
shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next day) delivery, or
transmitted by facsimile machine, respectively, or if delivered,
upon delivery, except that notices pursuant to Article II or IX
shall not be effective until actually received by the Agent.
(c) The Company acknowledges and agrees that any
agreement of the Agent and the Banks in Article II herein to
receive certain notices by telephone and facsimile is solely for
the convenience and at the request of the Company. The Agent and
the Banks shall be entitled to rely on the authority of any
Person purporting to be a Person authorized by the Company to
give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action
taken or not taken by the Agent or the Banks in reliance upon
such telephonic or facsimile notice. The obligation of the
Company to repay the Loans shall not be affected in any way or to
any extent by any failure by the Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at
variance with the terms understood by the Agent and the Banks to
be contained in the telephonic or facsimile notice.
10.03 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or
any Bank, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege.
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10.04 Costs and Expenses. The Company shall, whether or not
the transactions contemplated hereby shall be consummated:
(a) pay or reimburse BofA (including in its capacity
as Agent) within twenty Business Days after demand (subject to
subsection 4.01(i)) for all costs and expenses incurred by BofA
(including in its capacity as Agent) in connection with the
development, preparation, delivery, administration and execution
of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any Loan
Document and any other documents prepared in connection herewith
or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable
Attorney Costs incurred by BofA (including in its capacity as
Agent) with respect thereto;
(b) pay or reimburse each Bank and the Agent within
twenty Business Days after demand (subject to subsection 4.01(f))
for all costs and expenses incurred by them in connection with
the enforcement, attempted enforcement, or preservation of any
rights or remedies (including in connection with any "workout" or
restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding) under this
Agreement, any other Loan Document, and any such other documents,
including Attorney Costs incurred by the Agent and any Bank; and
(c) pay or reimburse BofA (including in its capacity
as Agent) within twenty Business Days after demand (subject to
subsection 4.01(i)) for all audit, environmental inspection and
review (including the allocated cost of such internal services),
search and filing costs, fees and expenses, incurred or sustained
by BofA (including in its capacity as Agent) in connection with
the matters referred to under subsections (a) and (b) of this
Section.
10.05 Indemnity. Whether or not the transactions
contemplated hereby shall be consummated:
(a) General Indemnity. The Company shall pay, defend,
indemnify, and hold each Bank, the Agent, the Arranger and each
of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including cleanup costs and
engineering consulting costs in respect of Environmental Claims
and Attorney Costs) of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and
administration of this Agreement and any other Loan Documents, or
the transactions contemplated hereby and thereby, and with
respect to any investigation, litigation or proceeding (including
any Insolvency Proceeding, Environmental Claim proceedings or
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appellate proceeding) related to this Agreement or the Loans or
the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Company shall have
no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities arising from the gross negligence or
willful misconduct of such Indemnified Person.
(b) Survival; Defense. The obligations in this
Section 10.05 shall survive payment and cancellation of all other
Obligations. At the election of any Indemnified Person, the
Company shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole
discretion, at the sole cost and expense of the Company;
provided, however, that the Company shall only be obligated to
hire one counsel to represent all of the Banks unless any Bank
advises the Company that its legal counsel has advised it that
its interest is materially different from that of the other Banks
and it would not be adequately represented without its own
separate counsel, in which case the Company shall hire separate
counsel for such Bank, satisfactory to such Bank. All amounts
owing under this Section 10.05 shall be paid within 30 days after
demand.
10.06 Marshalling; Payments Set Aside. Neither the Agent
nor the Banks shall be under any obligation to marshall any
assets in favor of the Company or any other Person or against or
in payment of any or all of the Obligations. To the extent that
the Company makes a payment or payments to the Agent or the
Banks, or the Agent or the Banks enforce their Liens or exercise
their rights of set-off, and such payment or payments or the
proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee,
receiver or any other party in connection with any Insolvency
Proceeding, or otherwise, then to the extent of such recovery the
obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set-off had
not occurred.
10.07 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns,
except that the Company may not assign or transfer any of its
rights or obligations under this Agreement without the prior
written consent of the Agent and each Bank.
10.08 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of the
Company at all times other than during the existence of an Event
of Default and of the Agent and the Issuing Bank, at any time
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assign and delegate to one or more Eligible Assignees (provided
that no written consent of the Company, the Agent or the Issuing
Bank shall be required in connection with any assignment and
delegation by a Bank to a Bank Affiliate of such Bank) (each an
"Assignee") all, or any ratable part of all, of the Loans, the
Commitments and the other rights and obligations of such Bank
hereunder, in a minimum amount of $5,000,000; provided, however,
that (i) the Company and the Agent may continue to deal solely
and directly with such Bank in connection with the interest so
assigned to an Assignee until (A) written notice of such
assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall have been
given to the Company and the Agent by such Bank and the Assignee;
(B) such Bank and its Assignee shall have delivered to the
Company and the Agent an assignment and acceptance agreement in
form and substance satisfactory to the Agent, together with any
Notes subject to such assignment and (C) the assignor Bank or
Assignee has paid to the Agent a processing fee in the amount of
$2,500. The consent of the Company to any such assignment shall
not be unreasonably withheld.
(b) From and after the date that the Agent notifies
the assignor Bank that it has received an executed assignment and
acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned
to it pursuant to such assignment and acceptance agreement, shall
have the rights and obligations of a Bank under the Loan
Documents, and (ii) the assignor Bank shall, to the extent that
rights and obligations hereunder and under the other Loan
Documents have been assigned by it pursuant to such assignment
and acceptance agreement, relinquish its rights and be released
from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of
notice by the Agent that it has received an executed assignment
and acceptance agreement and payment of the processing fee, the
Company shall execute and deliver to the Agent upon receipt of
the old Notes owned by the Bank assigning all or a portion of its
Commitment, new Notes evidencing such Assignee's assigned Loans
and Commitment and, if the assignor Bank has retained a portion
of its Loans and its Commitment, replacement Notes in the
principal amount of the Revolving Loans retained by the assignor
Bank (such Notes to be in exchange for, but not in payment of,
the Notes held by such Bank). Immediately upon each Assignee's
making its processing fee payment under the assignment and
acceptance agreement, this Agreement, shall be deemed to be
amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the resulting adjustment
of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Bank
pro tanto.
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(d) Any Bank may at any time sell to one or more
commercial banks or other Persons not Affiliates of the Company
(a "Participant") participating interests in any Loans, the
Commitment of that Bank and the other interests of that Bank (the
"originating Bank") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Bank's obligations
under this Agreement shall remain unchanged, (ii) the originating
Bank shall remain solely responsible for the performance of such
obligations, (iii) the Company and the Agent shall continue to
deal solely and directly with the originating Bank in connection
with the originating Bank's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Bank shall
transfer or grant any participating interest under which the
Participant shall have rights to approve any amendment to, or any
consent or waiver with respect to, this Agreement or any other
Loan Document, except to the extent such amendment, consent or
waiver would require unanimous consent of the Banks as described
in clauses (a), (b) and (c) in the first proviso to Section
10.01. In the case of any such participation, the Participant
shall be entitled to the benefit of Sections 3.01, 3.03 and 10.05
as though it were also a Bank hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement.
(e) Each Bank agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality
of all information identified as "confidential" by the Company
and provided to it by the Company or any Subsidiary of the
Company, or by the Agent on such Company's or Subsidiary's
behalf, in connection with this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any
such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement; except to
the extent such information (i) was or becomes generally
available to the public other than as a result of a disclosure by
the Bank, or (ii) was or becomes available on a non -confidential
basis from a source other than the Company, provided that such
source is not bound by a confidentiality agreement with the
Company known to the Bank; provided further, however, that any
Bank may disclose such information (A) at the request or pursuant
to any requirement of any Governmental Authority to which the
Bank is subject or in connection with an examination of such Bank
by any such authority; (B) pursuant to subpoena or other court
process; (C) when required to do so in accordance with the
provisions of any applicable requirement of law; and (D) to such
Bank's independent auditors and other professional advisors.
Notwithstanding the foregoing, the Company authorizes each Bank
to disclose to any Participant or Assignee (each, a "Transferee")
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and to any prospective Transferee, such financial and other
information in such Bank's possession concerning the Company or
its Subsidiaries which has been delivered to Agent or the Banks
pursuant to this Agreement or which has been delivered to the
Agent or the Banks by the Company in connection with the Banks'
credit evaluation of the Company prior to entering into this
Agreement; provided that, unless otherwise agreed by the Company,
such Transferee agrees in writing to such Bank to keep such
information confidential to the same extent required of the Banks
hereunder.
(f) Notwithstanding any other provision contained in
this Agreement or any other Loan Document to the contrary, any
Bank may assign all or any portion of the Loans or Notes held by
it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank, provided that any
payment in respect of such assigned Loans or Notes made by the
Company to or for the account of the assigning or pledging Bank
in accordance with the terms of this Agreement shall satisfy the
Company's obligations hereunder in respect to such assigned Loans
or Notes to the extent of such payment. No such assignment shall
release the assigning Bank from its obligations hereunder.
10.09 Set-off. In addition to any rights and remedies of
the Banks provided by law, if an Event of Default exists, each
Bank is authorized at any time and from time to time, without
prior notice to the Company, any such notice being waived by the
Company to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness
at any time owing to, such Bank to or for the credit or the
account of the Company against any and all Obligations owing to
such Bank, now or hereafter existing, irrespective of whether or
not the Agent or such Bank shall have made demand under this
Agreement or any Loan Document and although such Obligations may
be contingent or unmatured. Each Bank agrees promptly to notify
the Company and the Agent after any such set-off and application
made by such Bank; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and
application. The rights of each Bank under this Section 10.09
are in addition to the other rights and remedies (including other
rights of set-off) which the Bank may have.
10.10 Automatic Debits of Fees. With respect to any fee, or
any other cost or expense (including Attorney Costs) due and
payable to the Agent or BofA under the Credit Documents, the
Company hereby irrevocably authorizes BofA to debit any deposit
account of the Company with BofA in an amount such that the
aggregate amount debited from all such deposit accounts does not
exceed such fee or other cost or expense. If there are
insufficient funds in such deposit accounts to cover the amount
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of the fee or other cost or expense then due, such debits will be
reversed (in whole or in part, in BofA's sole discretion) and
such amount not debited shall be deemed to be unpaid. No such
debit under this Section 10.10 shall be deemed a setoff.
10.11 Notification of Addresses, Lending Offices, Etc. Each
Bank shall notify the Agent in writing of any changes in the
address to which notices to the Bank should be directed, of
addresses of its Offshore Lending Office, of payment instructions
in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably
request.
10.12 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement in any number of
separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together
shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Agent.
10.13 Severability. The illegality or unenforceability of
any provision of this Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the
legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
10.14 No Third Parties Benefited. This Agreement is made
and entered into for the sole protection and legal benefit of the
Company, the Banks and the Agent, and their permitted successors
and assigns, and no other Person shall be a direct or indirect
legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the
other Loan Documents. Neither the Agent nor any Bank shall have
any obligation to any Person not a party to this Agreement or
other Loan Documents.
10.15 Time. Time is of the essence as to each term or
provision of this Agreement and each of the other Loan Documents.
10.16 Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT AND ANY OTHER LOAN DOCUMENTS 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, EACH OF THE COMPANY, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
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NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY,
THE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED
HERETO. THE COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE
BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with the
other Loan Documents, embodies the entire agreement and
understanding among the Company, the Banks and the Agent, and
supersedes all prior or contemporaneous Agreements and
understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof, except for the letter
agreement between the Agent, the Arranger and the Company
described in subsection 2.14(a).
10.19 Interpretation. This Agreement is the result of
negotiations between and has been reviewed by counsel to the
Agent, the Company and other parties, and is the product of all
parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against the Banks or the Agent
merely because of the Agent's or Banks' involvement in the
preparation of such documents and agreements.
10.20 Term of Agreement. This Agreement shall not terminate
until all Obligations (other than inchoate obligations under
Article III and Section 10.05 which survive the termination of
this Agreement) have been paid to the Agent and the Banks, even
though the Termination Date may have occurred.
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10.21 Foreign Currency Conversion. If for the purpose of
(a) determining the amount owed to an Issuing Bank in respect of
payments made under a Letter of Credit or (b) obtaining judgment
in any court, it is necessary to convert a sum due hereunder in
another currency into U.S. Dollars, the Company agrees, to the
fullest extent that it may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase such other currency
with U.S. Dollars at San Francisco, California on the Business
Day preceding that on which the reimbursement amount in respect
of the Letter of Credit is due or final judgment is given.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
CERIDIAN CORPORATION
By: John Grierson
Title: Vice President and Treasurer
Address for notices:
8100 34th Avenue South
Minneapolis, Minnesota 55425
Attention: Treasury Department
Facsimile: (612) 853-3932
Telephone: (612) 853-5265
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: Matthew Gabel
Title: Vice President
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Address for notices:
1455 Market Street, 12th Floor
San Francisco, California 94103
Attn: Global Agency #5596
Facsimile: (415) 622-4894
Telephone: (415) 953-4370
Address for payment:
Bank of America NT&SA
ABA No. 121-000-358
Attn: Global Agency No. 5596
Credit to Account No. 12339-15086
Ref: Ceridian Corporation
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By: Patricia DelGrande
Title: Vice President
LENDING OFFICES
For Base Rate Loans:
1850 Gateway Boulevard
Concord, California 94520
Attention: Peggy Sanders
Facsimile: (510) 675-7531
Telephone: (510) 675-7732
For Offshore Rate Loans:
1850 Gateway Boulevard
Concord, California 94520
Attention: Peggy Sanders
Facsimile: (510) 675-7531
Telephone: (510) 675-7732
Address for notices:
1850 Gateway Boulevard
Concord, California 94520
Attention: Peggy Sanders
Facsimile: (510) 675-7531
Telephone: (510) 675-7732
With a copy to:
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200 West Adams Street
Chicago, Illinois 60606
Attn: Patricia P. DelGrande
Facsimile: (312) 641-2350
Telephone: (312) 269-4667
THE BANK OF NEW YORK
By: Carol L. Flaton
Title: Assistant Vice President
LENDING OFFICES
For Base Rate Loans and Non-Letter
of Credit Fees:
101 Barclay Street
New York, New York 10007
Attention: Commercial Loan
Servicing Department
Facsimile: (212) 635-1208
Telephone: (212) 635-6691
For Offshore Rate Loans:
101 Barclay Street
New York, New York 10007
Attention: Eurodollar/Cayman
Funding Area
Facsimile: (212) 635-1208
Telephone: (212) 635-6691
For Letters of Credit:
101 Barclay Street
New York, New York 10007
Attention: Trade Services Dept.
Facsimile: (212) 635-1208
Telephone: (212) 635-6691
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Address for notices:
One Wall Street
19th Floor
New York, New York 10286
Attention: Yvonne Forbes
Facsimile: (212) 635-1208
Telephone: (212) 635-6691
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: Kit C. Wong
Title: Associate
LENDING OFFICES
For Base Rate Loans:
Morgan Christiana
500 Stanton Christiana Road
Newark, Delaware 19713
Attention: Lou Morano/Antoniette
Wilson
Facsimile: (302) 634-1094
Telephone: (302) 634-1800
For Offshore Rate Loans:
Morgan Christiana
500 Stanton Christiana Road
Newark, Delaware 19713
Attention: Lou Morano/Antoniette
Wilson
Facsimile: (302) 634-1094
Telephone: (302) 634-1800
Addresses for notices:
60 Wall Street
New York, New York 10260-0060
Attention: Kit Wong
Facsimile: (212) 648-5336
Telephone: (212) 648-7340
CHEMICAL BANK
By: Edmond P. DeForest
Title: Vice President
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LENDING OFFICES
For Base Rate Loans:
270 Park Avenue
New York, New York 10017
Attention: Miranda Chin/Loan
Products
Facsimile: (212) 818-1456
Telephone: (212) 270-4994
For Offshore Rate Loans:
270 Park Avenue
New York, New York 10017
Attention: Miranda Chin/Loan
Products
Facsimile: (212) 818-1456
Telephone: (212) 270-4994
Address for notices:
270 Park Avenue
New York, New York 10017
Attention: Miranda Chin/Loan
Products
Facsimile: (212) 818-1456
Telephone: (212) 270-4994
FIRST BANK NATIONAL ASSOCIATION
By: Todd W. Nelson
Title: Vice President
LENDING OFFICES
For Base Rate Loans:
601 2nd Avenue South
Minneapolis, Minnesota 55402-4302
Attention: Karen Johnson
Facsimile: (612) 973-0824
Telephone: (612) 973-0546
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For Offshore Rate Loans:
601 2nd Avenue South
Minneapolis, Minnesota 55402-4302
Attention: Karen Johnson
Facsimile: (612) 973-0824
Telephone: (612) 973-0546
Address for notices:
First Bank Place
601 2nd Avenue, South
Minneapolis, Minnesota 55402-4302
Attention: Todd W. Nelson
Facsimile: (612) 973-0824
Telephone: (612) 973-0550
BankAmerica International is a party to this Agreement solely as
an Issuing Bank with respect to Letters of Credit. BankAmerica
International shall have no commitment to make Loans, to hold or
purchase a participation in any Letter of Credit, or to issue any
additional Letters of Credit hereunder. Notwithstanding the
foregoing, BankAmerica International shall be a "Bank", under the
provisions of this Agreement, with a Commitment Percentage of
zero percent (0%).
BANKAMERICA INTERNATIONAL
By: Dennis Dubois
Title: Vice President
Address for payment:
200 West Adams
Suite 2700
Chicago, Illinois 60606
Attention: Dennis Dubois
Facsimile: (312) 641-0962
Telephone: (312) 269-4604
Address for notices:
200 West Adams
Suite 2700
Chicago, Illinois 60606
Attention: Dennis Dubois
Facsimile: (312) 641-0962
Telephone: (312) 269-4604
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C O N S E N T O F G U A R A N T O R
The undersigned Guarantor hereby consents and agrees to the
terms and provisions of the foregoing Amended and Restated Credit
Agreement. Nothing express or implied in the foregoing Amended
and Restated Credit Agreement, or any other document contemplated
thereby, shall be construed as a release or other discharge of
the undersigned from any of its obligations and liabilities as a
"Guarantor" under the Existing Credit Agreement. The Guaranty
dated as of June 30, 1993 executed and delivered by the
undersigned under the Existing Credit Agreement is hereby
ratified and confirmed for all purposes as a "Guaranty" under the
foregoing Amended and Restated Credit Agreement.
THE ARBITRON COMPANY
By: John Grierson
Title: Treasurer
94cragmt
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Exhibit 11
CERIDIAN CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(Amounts in millions, except per share data) Three Months
For the periods ended June 30, 1994 1993
Net earnings available to common
stockholders - primary $ 13.2 $ 8.4
Restore dividends on convertible
preferred stock (a) 3.2 --
Net earnings 16.4 8.4
Restore interest expense on convertible
debentures (a) (b) -- 3.5
Net earnings for fully diluted earnings
per share $ 16.4 $ 11.9
Weighted average common shares
outstanding 44.5 42.9
Common share equivalents from stock
options (c) 1.3 0.7
Weighted average common shares and
equivalents outstanding - primary 45.8 43.6
Shares issuable assuming conversion of
preferred stock (a) 10.4 --
Shares issuable assuming conversion of
debentures (a) -- 6.8
Weighted average common shares and
equivalents outstanding - adjusted for
full dilution 56.2 50.4
Net earnings available to common
stockholders - primary $ 13.2 $ 8.4
Weighted average common shares and
equivalents outstanding - primary (c) 45.8 43.6
Primary earnings per share $ 0.29 $ 0.19
Net earnings for fully diluted earnings
per share $ 16.4 $ 11.9
Weighted average common shares and
equivalents outstanding - adjusted for
full dilution 56.2 50.4
Fully diluted earnings per share (c) $ 0.29 $ 0.24
(a) Convertible preferred stock issued and convertible
debentures redeemed in December 1993.
(b) Net of income tax effect which is nil.
(c) Common stock equivalents and shares issuable assuming
conversion of convertible debentures not reported in 1993
because the result is anti-dilutive or additional dilution
is less than 3% as prescribed by APBO No. 15. This
calculation is submitted in accordance with Regulation S-X
item 601(b)(11).
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Exhibit 11 (cont.)
CERIDIAN CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(Amounts in millions, except per share data) Six Months
For the periods ended June 30, 1994 1993
Net earnings available to common
stockholders - primary $ 32.1 $ 21.3
Restore dividends on convertible
preferred stock (a) 6.5 --
Net earnings 38.6 21.3
Restore interest expense on convertible
debentures (a) (b) -- 6.9
Net earnings for fully diluted earnings
per share $ 38.6 $ 28.2
Weighted average common shares
outstanding 44.4 42.9
Common share equivalents from stock
options (c) 1.3 0.7
Weighted average common shares and
equivalents outstanding - primary 45.7 43.6
Shares issuable assuming conversion of
preferred stock (a) 10.4 --
Shares issuable assuming conversion of
debentures (a) -- 6.8
Weighted average common shares and
equivalents outstanding - adjusted for
full dilution 56.1 50.4
Net earnings available to common
stockholders - primary $ 32.1 $ 21.3
Weighted average common shares and
equivalents outstanding - primary (c) 45.7 43.6
Primary earnings per share $ 0.70 $ 0.49
Net earnings for fully diluted earnings
per share $ 38.6 $ 28.2
Weighted average common shares and
equivalents outstanding - adjusted for
full dilution 56.1 50.4
Fully diluted earnings per share (c) $ 0.69 $ 0.56
(a) Convertible preferred stock issued and convertible
debentures redeemed in December 1993.
(b) Net of income tax effect which is nil.
(c) Common stock equivalents and shares issuable assuming
conversion of convertible debentures not reported in 1993
because the result is anti-dilutive or additional dilution
is less than 3% as prescribed by APBO No. 15. This
calculation is submitted in accordance with Regulation S-X
item 601(b)(11).
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