UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission file number 1-5075
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EG&G, Inc.
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2052042
- --------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
45 William Street, Wellesley, Massachusetts 02181
- ------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (617) 237-5100
----------------
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
- ------------------- -----------------------------------------
Common Stock, $1 Par Value New York Stock Exchange, Inc.
- -------------------------- -----------------------------
Preferred Share Purchase Rights New York Stock Exchange, Inc.
- ------------------------------- -----------------------------
Securities registered pursuant to Section 12 (g) of the Act: None
- ----------------------------------------------------------------------
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [x]
The aggregate market value of the common stock, $1 par value, held by
nonaffiliates of the registrant on February 23, 1996, was $1,165,703,101.
As of February 23, 1996, there were outstanding, exclusive of treasury
shares, 47,654,234 shares of common stock, $1 par value.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF EG&G, INC.'S 1996 PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS...................PART III (Items 10, 11 and 12)
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL BUSINESS DESCRIPTION
EG&G, Inc. was incorporated under the laws of the Commonwealth of Massachusetts
in 1947. EG&G, Inc. (hereinafter referred to as "EG&G", the "Company", or the
"Registrant", which includes the Company's subsidiaries) is a broad-based
technology company that provides optoelectronic, mechanical and
electromechanical components and instruments to manufacturers and end-users in
the medical, aerospace, automotive and other ground transportation,
environmental and industrial markets worldwide. The Company also provides
wide-ranging technical services to governmental and industrial
customers. In 1995, the Company had sales of $1.4 billion from continuing
operations.
The Company's continuing operations are classified into four industry segments:
Technical Services, Instruments, Mechanical Components and Optoelectronics.
RECENT DEVELOPMENTS
In January 1995, the Company's Board of Directors authorized the purchase of an
additional 10 million shares of common stock. During 1995, the Company
purchased 7.7 million shares of such common stock through periodic purchases
on the open market at an aggregate cost of $135.1 million. As of
December 31, 1995 the Company had authorization to purchase 5.6 million
additional shares.
In July 1995, the Company announced that EG&G Technical Services of West
Virginia had been awarded the site-support contract for the U.S. Department of
Energy's Morgantown Energy Technology Center. The contact, which has a
potential value of more than $90 million, could, including options, extend over
five years.
In October 1995, the Company issued $115 million of unsecured ten-year notes
at an annual interest rate of 6.8%. Proceeds from the sale were used to pay
down commercial paper borrowings that were used for general corporate purposes,
including financing open market repurchases of the Company's common stock.
In November 1995, the Company announced that the U.S. Customs Service had
awarded a five year, including options, national asset management contract
with a potential value of $92 million to EG&G Dynatrend for the Department of
Treasury asset forfeiture program. This is the second time that EG&G had
competed for and won this Department of Treasury management contract.
INDUSTRY SEGMENTS
Set forth below is a brief summary of each of the Company's four industry
segments together with a description of certain of the more significant or
recently introduced products, services or operations.
TECHNICAL SERVICES
Through its Technical Services segment, the Company supplies engineering,
scientific, environmental, management and technical support services to a broad
range of governmental and industrial customers. These services include:
analysis and testing services for the automotive industry; base operations for
the National Aeronautics and Space Administration ("NASA") at the Kennedy Space
Center ("KSC"); chemical weapons disposal and technical and support services
for the U.S. Department of Defense ("DoD"); seized-property administration
for the U.S. Customs Service; technical support for the National Science
Foundation in Antarctica; consulting services in transportation; physical
security services for government agencies; and services and products for
the environmental market. The Company offers services in this segment
under trade names which include Automotive Research, Dynatrend, Structural
Kinematics and Washington Analytical Services Center. In 1995, this segment
represented 43% of the Company's total sales from continuing operations and 43%
of the Company's operating income from continuing operations before general
corporate expenses.
For the automobile, chemical additive and petroleum industries, the Company
provides automobile durability, performance and emissions testing, and tests
fuels, lubricants and chemical additives. The Company performs automobile
durability and performance testing for all major U.S. and a number of foreign
automobile manufacturers.
As base operations contractor for the KSC, the Company provides institutional,
technical and maintenance support services. In particular, the Company manages
KSC's 600 buildings, structures and facilities; tests new astronaut rescue
procedures and escape systems; fields a force of 200 uniformed security
personnel and a SWAT team; provides fire protection and medical services;
handles all propellant substances; and manages the shuttle landing facility.
The Company has been the base operations contractor at KSC since 1983 and is
currently in the third year of a four-year contract
that has two three-year renewal options at the discretion of the government.
NASA has announced that it will designate a single Space Shuttle Flight
Operations contractor in 1996. While the impact of this initiative cannot
be determined, the Company believes at this time that its contract will not
be adversely affected.
Company contracts with the DoD fall into two general categories: (i)
traditional defense activities, and (ii) decommissioning. The Company's
traditional defense activities focus on such strategic areas as research
and engineering analyses in support of DoD advanced development programs.
An example of a decommissioning project is the operation of the U.S. Army's
facility for the disposal of lethal chemical agents and munitions in Tooele,
Utah.
The Company also provides engineering and management services in a variety of
fields, including transportation, physical security and property management
for several government agencies. Government clients include the U.S.
Departments of Transportation, State and Treasury, the U.S. Customs Service
and the Environmental Protection Agency.
In the environmental area, the Company is developing a range of proprietary
technologies with a view towards expanding its presence in the public and
private sector waste minimization and remediation markets.
INSTRUMENTS
The Company develops and manufactures instruments and systems for applications
in medical and clinical diagnostics; biochemical, medical and life science
research; industrial and pharmaceutical process measurement; environmental
monitoring; gas and oil field applications; airport and industrial security;
and food inspection. The Company's instruments provide a wide range of
measurement capabilities and options through the use of high-speed signal
processing, image enhancement and a broad utilization of detector
technologies including products which feature the accurate
generation, detection and measurement of various segments of the eletromagnetic
spectrum. The Company offers products in this segment under trade names which
include Astrophysics, Flow Technology, Berthold, Ortec and Wallac. In 1995,
this segment represented 21% of the Company's total sales from continuing
operations and 15% of the Company's operating income from continuing
operations before general corporate expenses.
High performance bioanalytic and diagnostic instruments manufactured by the
Company are used in hospitals, clinics and pharmaceutical and medical research
facilities. These instruments are generally based on time-resolved
fluorescence and chemiluminescence technologies that use light measurement
to analyze samples. Because these light measurement technologies do not
involve the use of radioactive material, concerns about sample transport and
waste disposal are not present. Among other things, these instruments are
used to screen blood for thyroid dysfunction, fertility-related disorders,
fetal defects and diseases in newborns, and to detect relapse in patients
who have been treated for cancer. The Company introduced AutoDelfia ,
an automated immunoassay fluorescence diagnostic system. The Company also
sells reagents for use in connection with certain of these instruments.
Through its Instruments segment, the Company also produces security screening
systems that employ X-ray technology and various supporting image-enhancing
techniques for non-intrusive inspection of baggage and packages at airport
portals, baggage processing areas, mail rooms, courthouses, schools and
buildings in general. The Company has introduced two new security screening
products: the Z-Scan and a portable large cargo X-ray screening system.
The Z-Scan uses color images, X-rays and proprietary software to detect
explosives, narcotics or contraband in packages and luggage. The Z-Scan
can process up to 1,200 bags an hour. The United Kingdom
Department of Transportation has certified the Z-Scan for detection of drugs
and contraband in checked cargo. The large cargo X-ray screening system allows
non-intrusive inspection of boxes, crates and containers in search of
contraband, weapons and explosives fo use at border crossings, ports of entry,
warehouses and airports.
Instruments produced by the Company also include process inspection systems
that combine X-ray technology from the Company's Instruments segment and optical
components from the Company's Optoelectronics segment. These systems are used
in food processing and packaging plants to monitor, detect and remove foreign
objects from raw and processed food at various points on the production line.
Such systems are also used to check intravenous-medicine bags and automobile
oil filters for leaks, measure the fat content of meat and detect and
separate non-biodegradable PVCs from recyclable plastics.
Based on its expertise in nuclear measurements, the Company produces
instruments to detect, characterize and measure radiation, including a
complete line of radiation-protection measuring systems for laboratories,
nuclear facilities and environmental monitoring. The Company also offers
industrial on-line level and density measuring instruments for process
control and measurement of liquids, slurries or solids in containers, tanks and
pipes.
MECHANICAL COMPONENTS
Through its Mechanical Components segment, the Company produces advanced seals
and bellows products, valves, nozzles, metal ducting, precision aerospace
components, motors and heat management devices for the petrochemical and
chemical processing, transportation, defense and aerospace markets. The
Company offers these products under trade names which include Pressure
Science, Rotron and Sealol. In 1995, this segment represented 18% of the
Company's total sales from continuing operations and 25% of the Company's
operating income from continuing operations before general corporate expenses.
Products sold in this segment include blower systems, power-conversion devices
and other components for locomotives, transit cars and buses and defense product
applications. Many of these products were first developed by the Company for
defense-related purposes and are now marketed and sold for commercial
applications.
The Company also produces mechanical sealing components and systems, which use
welded metal bellows devices pioneered by the Company, for the process
industries. Such industries include pharmaceuticals, food processing, oil
refining and chemical and petrochemical processing. The Company expects
that the market for the Company's advanced zero leakage gas seals will grow
as a result of environmental legislation which requires manufacturers to
significantly reduce emissions.
For aerospace applications, the Company produces valves, advanced sealing
components, aircraft exhaust components and ducting.
OPTOELECTRONICS
Through its Optoelectronics segment, the Company offers a broad variety of
components that emit and detect light in the spectrum from ultraviolet through
visible to the far infrared. These components range from simple photocells to
sophisticated imaging systems, light sources that include various types of
flashtubes and laser diodes, and complex devices for weapons' trigger
systems. Applications include light sensors used in automotive and
commercial electronics, sensors used in smoke detectors and medical imaging
systems, and sophisticated arrays for communications and remote sensing of
the earth. The Company expects to make significant research and development
and capital expenditures in this segment over the next several years.
The Company offers products in this segment under trade names which include
Electro-Optics Heimann Optoelectronics, IC Sensors, Reticon, Judson and Vactec.
In 1995, this segment represented 18% of the Company's total sales from
continuing operations and 17% of the Company's operating income from
continuing operations before general corporate expenses.
Products of this segment include detectors of visible and non-visible light,
including high performance silicon photodiodes to detect and measure light and
other optical radiation for industrial, space, military, analytical and
scientific instrumentation. Light detectors are also manufactured by the
Company for a variety of commercial applications. The Company also makes
a wide variety of flashlamps for use in photocopy and reprographic equipment,
photo-typesetting systems, beacons, indicators and laser systems and
accessories. In addition, the Company manufactures power supplies for
military high frequency electronic applications that are used primarily for
precision controlled switching of electric current in electronic equipment.
The Company is continuing the development of amorphous silicon imaging systems
for medical and industrial applications. These X-ray systems incorporate
amorphous silicon which replaces film in X-ray systems and translates the
rays directly into digital pulses that then immediately produce the image on
a cathode ray tube.
Through this segment, the Company also produces micromachined sensors, which are
small silicon-wafer-based devices that combine a sensing function with
intelligent signal processing. The Company mass produces these micromachined
infrared sensors for consumer, medical and automotive applications and
manufactures high performance micromachined silicon sensors for missile-
guidance systems. In a joint venture, the Company is developing more
advanced micromachined electronic accelerometers for automotive and
industrial applications.
DISCONTINUED OPERATIONS
Since its founding, the Company has provided services to the U.S. Department of
Energy ("DOE") and its predecessor organizations. These services related
primarily to nuclear energy research and nuclear weapons production and
testing. As a result of changing procurement and administrative priorities
at the DOE, to continue to provide these services the Company would have been
required to invest significant levels of capital and accept broader
liabilities and lower fees. In 1994, the Company determined that it would
not seek renewal of its four contracts with the DOE and would not seek
management and operations contracts at other DOE sites. Accordingly,
the Company is reporting its former DOE Support segment as discontinued
operations. Future sales and income from discontinued operations will
decrease as the remaining DOE contract expires in 1996 and are dependent
upon the work scope and fee pools negotiated annually that are currently
under review by the DOE. Three of these DOE contracts expired in 1995.
The Rocky Flats contract for the management and operation of the
Rocky Flats Environmental Technology Center near Golden, Colorado terminated in
June, 1995. The Reynolds Electrical and Engineering Co. contract for
support and maintenance services for the underground nuclear weapons test
program and its design laboratories at the Nevada Test Site expired on
December 31, 1995. The Energy Measurements contract to provide scientific
and engineering services also relating to the Nevada Test Site expired on
December 31, 1995.
Under the Mound Applied Technologies contract, the remaining DOE contract which
is scheduled to expire on September 30, 1996, the Company provides all support
services at the facility and is responsible for the assembly and testing of
radioisotopic thermionic generators for space and special terrestrial power
missions. The expiration date may be modified by the DOE in accordance with
contract terms. The Company also is responsible for the transfer to other
DOE facilities of technology relating to the Mound facility's former mission
involving the manufacturing of components for nuclear weapons.
MARKETING
The Company markets its services and products through its own specialized sales
forces as well as independent foreign and domestic manufacturer representatives
and distributors. In certain foreign countries, the Company has entered into
joint venture and license agreements with local firms to manufacture and
market its products.
RAW MATERIALS AND SUPPLIES
Raw materials and supplies used by the Company are generally readily available
in adequate quantities from domestic and foreign sources.
PATENTS AND TRADEMARKS
While the Company's patents, trademarks, and licenses in the aggregate are
important to its business, the Company does not believe that the loss of any
one patent, trademark or license or group of related patents, trademarks, or
licenses would have a materially adverse effect on the overall business of
the Company or on any of its industry segments.
BACKLOG
The approximate dollar value of unfilled orders of continuing operations by
industry segment as of December 31, 1995 and January 1, 1995 is set forth in
the table below.
(In Thousands) December 31, 1995 January 1, 1995
----------------- ---------------
Technical Services $224,087 $247,380
Instruments 50,776 46,474
Mechanical Components 95,466 87,879
Optoelectronics 125,630 111,402
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Total $495,959 $493,135
======== ========
At December 31, 1995, 46% of the backlog represents orders received from U.S.
Government agencies, primarily the DoD. The order backlog for each segment
relates differently to future sales based on different business
characteristics, primarily order and delivery lead times and customer
demand requirements. The Company estimates that approximately 91% of its
backlog as of December 31, 1995 will be billed during 1996.
DOE Support backlog, which is not reflected above, represents annual contract
funding that has actually been appropriated and was $126 million at December 31,
1995 and $757 million at January 1, 1995.
While the Company has not generally experienced material cancellations of
orders, orders may be cancelled by customers without financial penalty, and
backlog does not necessarily represent actual future shipments.
GOVERNMENT CONTRACTS
In accordance with government regulations, all of the Company's government
contracts are subject to termination for the convenience of the government.
Costs incurred under cost-reimbursable contracts are subject to audit by the
government. The results of prior audits, which have been completed through
1991, have not had a material effect on the Company.
Continuing Operations: Sales to U.S. Government agencies, which were
predominantly to the DoD and NASA, were $537 million, $542 million and $560
million in 1995, 1994 and 1993, respectively. In October 1993, the Company
was selected by NASA to continue as the base operations contractor at the
KSC. The contract contained reductions in contract value and has
resulted in a lower annual fee than the prior contract. This contract and
the prior contract contributed sales of $172 million, $176 million and $201
million in 1995, 1994 and 1993, respectively. There are two years remaining
on the contract, which has two three-year renewal options at the discretion
of the government. NASA has announced that it will designate a single Space
Shuttle Flight Operations contractor in 1996. While the impact of this
initiative cannot be determined at this time, the Company believes that its
contract will not be adversely affected.
Discontinued Operations: The Company's four major cost-plus-award-fee contracts
with the DOE contributed $660 million of sales to discontinued operations in
1995. The EG&G Rocky Flats, Inc. contract terminated in June 1995. The
Reynolds Electrical and Engineering Co., Inc. and the EG&G Energy
Measurements, Inc. contracts expired on December 31, 1995. The EG&G Mound
Applied Technologies, Inc. contract, the Company's remaining management and
operations contract with DOE, expires on September 30, 1996. The work scope
and fee pools are negotiated annually, and the expiration date may be
modified by the DOE in accordance with contract terms. The Mound contract
contributed $136 million of sales to discontinued operations in 1995. The
Company does not anticipate incurring any material loss on the ultimate
completion of the contracts.
COMPETITION
Because of the wide range of its products and services, the Company faces many
different types of competition and competitors. Competitors range from large
foreign and domestic organizations that produce a comprehensive array of goods
and services, to small concerns producing a few goods or services for
specialized market segments.
The Technical Services segment provides technical services to several agencies
of the federal government, including the DoD and NASA. This business is
typically won through competition with a number of large and small
contractors, many of whom are as large or larger than the Company and who,
therefore, have resources and capabilities that are comparable to or greater
than those of the Company. The primary bases for competition in these
markets are technical and management capabilities, current and past
performance, and price. Competition is typically subject to mandated
procurement and competitive bidding requirements. Competition
for automotive testing services is primarily from a few specialized testing
companies and from customer-owned testing facilities, and is primarily based
on quality, service, and price.
In the Instruments segment, the Company competes with instrument companies,
some large, most small, that serve narrow segments of markets in X-ray and
magnetic security systems, nuclear, industrial, and diagnostic
instrumentation, and instrumentation for exploration and development of oil
and gas resources. The Company competes in these markets on the basis
of product performance, product reliability, service and price.
Consolidation of competitors through acquisitions and mergers and the
Company's increasing activity in all selected diagnostics and industrial
markets are expected to increase the proportion of large competitors
in this segment.
In the Mechanical Components segment, the Company is a leading supplier of
selected precision aircraft exhaust components, specialized fans and heat
transfer devices, and mechanical seals for industrial applications.
Competition in these areas is typically from small specialized manufacturing
companies.
In the Optoelectronics segment, the Company is among the leading suppliers of
specialty flashtubes, silicon photodetectors, avalanche photodiodes, cadmium
sulfide and cadmium selenide detectors, photodiode arrays and switched power
supplies. Typically, competition is from small specialized manufacturing
companies.
Within the Mechanical Components, Optoelectronics and Instruments segments,
competition for governmental purchases is subject to mandated procurement
procedures and competitive bidding practices. In these segments, the
Company competes on the basis of product performance, quality, service and
price. In much of the Optoelectronics and Instruments segments and in the
specialized fan and aircraft and marine mechanical seal markets included
in the Mechanical Components segment, advancing technology and research
and development are also important competitive factors.
RESEARCH AND DEVELOPMENT
During 1995, 1994 and 1993, Company-sponsored research and development
expenditures were approximately $42.4 million, $38.6 million and $34.7
million, respectively.
ENVIRONMENTAL COMPLIANCE
The Company is conducting a number of environmental investigations and remedial
actions at current and former Company locations and, along with other companies,
has been named a potentially responsible party for certain waste disposal sites.
The Company accrues for environmental issues in the accounting period that the
Company's responsibility is established and when the cost can be reasonably
estimated. As of December 31, 1995, the Company had an accrual of $3.8
million to reflect its estimated liability for environmental remediation. As
assessments and remediation activities progress at each individual site,
these liabilities are reviewed to reflect additional information as it
becomes available. There have been no environmental problems to date that
have had or are expected to have a material effect on the Company's
financial position or results of operations. While it is reasonably
possible that a material loss exceeding the amounts recorded may have been
incurred, the preliminary stages of the investigations make it impossible
for the Company to reasonably estimate the range of potential exposure.
EMPLOYEES
As of March 1, 1996, the Company employed approximately 15,000 persons,
including 1,000 persons in the former DOE Support segment. Certain of the
Company's subsidiaries are parties to contracts with labor unions. The
Company considers its relations with employees to be satisfactory.
<PAGE>
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
SEGMENT SALES AND INCOME
Sales and Operating Income (Loss) From Continuing Operations by Industry Segment
For the Five Years Ended December 31, 1995
<TABLE>
(In thousands) 1995 1994 1993 1992 1991
- ------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Sales:
Technical Services $ 617,391 $ 613,588 $ 636,041 $ 608,864 $ 586,537
Instruments 293,575 273,088 237,223 226,900 230,196
Mechanical Components 249,255 232,500 244,878 274,199 295,519
Optoelectronics 259,357 213,380 201,274 210,118 146,274
---------- ---------- ---------- ---------- ----------
$1,419,578 $1,332,556 $1,319,416 $1,320,081 $1,258,526
========== ========== ========== ========== ==========
Operating Income (Loss) From Continuing Operations:
Technical Services $ 48,155 $ 46,075 $ 68,762 $ 56,924 $ 55,601
Instruments 17,142 (49,580) 10,413 16,016 21,954
Mechanical Components 27,241 18,766 24,408 21,835 28,426
Optoelectronics 19,328 8,674 11,474 3,905 7,140
General Corporate Expenses (29,193) (34,882) (27,573) (29,895) (27,456)
---------- ---------- ---------- ---------- ----------
$ 82,673 $ (10,947) $ 87,484 $ 68,785 $ 85,665
========== ========== ========== ========== ==========
<F1>
The operating income (loss) from continuing operations for 1994 included a
goodwill write-down of $40.3 million and restructuring charges of $30.4
million. The impact of these nonrecurring charges on each segment was as
follows: Technical Services - $1.6 million, Instruments - $55.7 million,
Mechanical Components - $2.7 million, Optoelectronics - $9.7 million and
General Corporate Expenses - $1 million.
</TABLE>
<PAGE>
Additional information relating to the Company's operations in the various
industry segments follows:
<TABLE>
Depreciation and Capital
(In thousands) Amortization Expense Expenditures
------------------------ -------------------------
1995 1994 1993 1995 1994 1993
------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Technical Services $ 7,698 $ 7,447 $ 8,422 $12,047 $ 7,314 $ 6,315
Instruments 11,887 11,621 9,213 4,639 5,398 6,555
Mechanical Components 5,585 6,091 6,870 6,978 6,197 5,598
Optoelectronics 13,220 10,690 12,417 35,925 17,748 8,469
Corporate 1,036 941 920 2,250 620 923
------- ------- ------- ------- ------- -------
$39,426 $36,790 $37,842 $61,839 $37,277 $27,860
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
(In thousands) Identifiable Assets
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Technical Services $113,901 $129,995 $127,917
Instruments 225,358 220,232 256,117
Mechanical Components 100,363 93,721 97,317
Optoelectronics 200,719 193,302 142,630
Corporate and Other 163,574 155,879 140,906
-------- -------- --------
$803,915 $793,129 $764,887
======== ======== ========
<F2>
Corporate assets consist primarily of cash and cash equivalents, prepaid
pension and taxes, and investments.
</TABLE>
<PAGE>
FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
Information relating to geographic areas follows:
<TABLE>
Operating Income (Loss)
(In thousands) Sales From Continuing Operations
---------------------------------- ----------------------------
1995 1994 1993 1995 1994 1993
---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
U.S. $1,065,424 $1,026,970 $1,049,131 $ 82,256 $ 57,679 $ 96,495
Germany 87,690 61,310 134,754 4,508 (43,492) 53
Other Non-U.S. 266,464 244,276 135,531 25,102 9,748 18,509
Corporate --- --- --- (29,193) (34,882) (27,573)
---------- ---------- ---------- -------- -------- --------
$1,419,578 $1,332,556 $1,319,416 $ 82,673 $(10,947) $ 87,484
========== ========== ========== ======== ======== ========
</TABLE>
<TABLE>
(In thousands) Identifiable Assets
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
U.S. $353,130 $341,725 $305,344
Germany 89,834 100,650 154,361
Other Non-U.S. 197,377 194,875 164,276
Corporate and Other 163,574 155,879 140,906
-------- -------- --------
$803,915 $793,129 $764,887
======== ======== ========
<F1>
Transfers between geographic areas were not material.
</TABLE>
<PAGE>
ITEM 2. PROPERTIES
As of March 1, 1996, the Company occupied approximately 4,228,500 square feet
of building area, of which approximately 1,611,800 square feet is owned and
the balance leased. The Company's headquarters occupies 53,350 square feet
of leased space in Wellesley, Massachusetts. The Company's other operations
are conducted in manufacturing and assembly plants, research laboratories,
administrative offices and other facilities located in 26 states, Washington,
D.C., Puerto Rico, the U.S. Virgin Islands and 26 foreign countries.
Non-U.S. facilities account for approximately 1,189,700 square feet of owned
and leased property, or approximately 28% of the Company's total occupied space.
The Company's leases on property are both short-term and long-term. In
management's opinion, the Company's properties are well-maintained and are
adequate for its present requirements.
At certain government facilities, the Company previously occupied government
furnished space. A majority of this space was occupied by the Discontinued
Operations and has since been assigned to the new management contractor.
Except for operations based on government facilities, substantially all of
the machinery and equipment used by the Company in its other activities is
owned by the Company and the balance is leased or furnished by contractors or
customers.
The following table indicates the approximate square footage of real property
owned and leased attributable to each of the Company's industry segments.
<TABLE>
Owned Leased Total
(Sq. Feet) (Sq. Feet) (Sq. Feet)
---------- ---------- ----------
<S> <C> <C> <C>
Continuing Operations
Technical Services 163,400 1,058,100 1,221,500
Instruments 551,100 414,500 965,600
Mechanical Components 556,700 532,800 1,089,500
Optoelectronics 336,000 549,300 885,300
Corporate Offices 4,600 62,000 66,600
--------- --------- ---------
Total 1,611,800 2,616,700 4,228,500
========= ========= =========
</TABLE>
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to various investigations, claims, and legal proceedings
covering a wide range of matters that arise in the ordinary course of its
business activities. Each of these matters is subject to various
uncertainties, and it is possible that some of these matters may be
resolved unfavorably to the Company. The Company has established accruals
for matters that are probable and reasonably estimable. Management believes
that any liability that may ultimately result from the resolution of these
matters in excess of amounts provided will not have a material adverse
effect on the financial position or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Listed below are the executive officers of the Company as of March 22, 1996.
No family relationship exists between any of the officers.
Name Position Age
- -------------------------------------------------------------------------------
<S> <C> <C>
John M. Kucharski Chairman of the Board, 60
President and Chief Executive Officer
Fred B. Parks Executive Vice President and 48
Chief Operating Officer
Murray Gross Vice President, 59
General Counsel and Clerk
John F. Alexander, II Vice President, Chief Financial 39
Officer and Corporate Controller
Angelo D. Castellana Vice President 54
Dale L. Fraser Vice President 60
Earl M. Fray Vice President 62
E. Lavonne Lewis Vice President 59
Deborah S. Lorenz Vice President 46
Donald H. Peters Vice President 55
Luciano S. Rossi Vice President 50
Edward H. Snow Vice President 59
C. Michael Williams Vice President 59
Peter H. Zavattaro Vice President 58
Daniel T. Heaney Treasurer 42
</TABLE>
<PAGE>
Mr. Kucharski joined the Company in 1972. He was elected a Vice President in
1979, a Senior Vice President in 1982 and Executive Vice President in 1985.
In 1986 he was elected President and Chief Operating Officer, in 1987 Chief
Executive Officer and was elected Chairman of the Board of Directors in 1988.
Dr. Parks joined the Company in 1976. He was elected a Vice President in 1988,
a Senior Vice President in 1991, and Executive Vice President and Chief
Operating Officer in 1995.
Mr. Gross joined the Company in 1971. He was elected Assistant General Counsel
and Assistant Clerk in 1978 and Vice President, General Counsel and Clerk in
1990.
Mr. Alexander joined the Company in 1982. He was elected Corporate Controller
in 1991, a title he retained when named a Vice President in 1995. He was
elected Chief Financial Officer effective in January 1996.
Mr. Castellana joined the Company in 1965. He was elected a Vice President in
1991 and is Group Executive of the Instruments segment.
Mr. Fraser joined the Company in 1961. He was elected a Vice President in 1990.
Mr. Fray joined the Company in 1977. He was elected a Vice President in 1994
and is General Manager of EG&G Mound.
Ms. Lewis joined the Company in 1970. She was elected Vice President in 1995
and is Director of Human Resources.
Ms. Lorenz joined the Company in 1990. She was elected a Vice President in
1992 and is Director of Investor Relations and Corporate Communications.
Dr. Peters joined the Company in 1968. He was elected a Vice President in
1987 and is Director of Planning.
Mr. Rossi joined the Company in 1967. He was elected a Vice President in 1988
and is Group Executive of the Mechanical Components segment.
Dr. Snow joined the Company in 1977. He was elected a Vice President in 1992
and is Group Executive of the Optoelectronics segment.
Mr. Williams joined the Company in 1972. He was elected a Vice President in
1984 and is Group Executive of the Technical Services segment.
Mr. Zavattaro joined the Company in 1959. He was elected a Vice President
in 1985.
Mr. Heaney joined the Company in 1980. He was elected Treasurer in 1995.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Market Price of Common Stock
1994 Quarters
-----------------------------
First Second Third Fourth
------ ------ ------ ------
High $19.00 $16.50 $15.88 $17.00
Low 16.38 14.13 14.63 13.75
1995 Quarters
-----------------------------
First Second Third Fourth
------ ------ ------ ------
High $15.50 $18.38 $20.00 $24.50
Low 13.00 15.00 16.38 18.00
Dividends
1994 Quarters
----------------------------
First Second Third Fourth
----- ------ ----- ------
Cash Dividends
Per Common Share $ .14 $ .14 $ .14 $ .14
1995 Quarters
----------------------------
First Second Third Fourth
----- ------ ----- ------
Cash Dividends
Per Common Share $ .14 $ .14 $ .14 $ .14
The Company's common stock is listed and traded on the New York Stock Exchange.
The number of holders of record of the Company's common stock as of February 23,
1996, was approximately 13,124.
In October 1995, the Board of Directors of the Company declared a regular
quarterly cash dividend of fourteen cents per share of common stock. The
quarterly cash dividend was paid on February 9, 1996, to stockholders of
record at the close of business on January 19, 1996.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
SELECTED FINANCIAL INFORMATION
<CAPTION>
For the Five Years Ended December 31, 1995
(In thousands
where applicable) 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Operations:
Sales $1,419,578 $1,332,556 $1,319,416 $1,320,081 $1,258,526
Operating income (loss) from
continuing operations 82,673 (10,947)a 87,484 68,785 85,665
Income (loss) from
continuing operations 54,304 (32,107) 54,622 48,765 51,936
Income from discontinued operations,
net of income taxes 13,736 26,452 24,949 39,014 29,306
Income (loss) before cumulative effect
of accounting changes 68,040 (5,655) 79,571 87,779 81,242
Net income (loss) 68,040 (5,655) 59,071c 87,779 81,242
Earnings (loss) per share:
Continuing operations 1.05 (.58) .97 .87 .93
Discontinued operations .27 .48 .44 .69 .52
Income (loss) before cumulative effect
of accounting changes 1.32 (.10) 1.41 1.56 1.45
Net income (loss) 1.32 (.10) 1.05c 1.56 1.45
Return on equity 16.8% (1.2)%b 12.4%d 19.6% 20.6%
Weighted average common
shares outstanding 51,483 55,271 56,504 56,385 55,901
Financial Position:
Working capital $ 218,235 $ 199,656 $ 227,935 $ 247,518 $ 214,495
Current ratio 1.87:1 1.71:1 1.98:1 2.07:1 1.90:1
Total assets 803,915 793,129 764,887 746,577 694,024
Short-term debt 5,275 59,988 43,589 40,267 57,337
Long-term debt 115,222 812 1,450 1,956 2,298
Long-term liabilities 71,296 65,129 52,727 38,871 33,479
Stockholders' equity 366,946 445,366 477,534 473,636 420,711
-Per share 7.71 8.08 8.51 8.34 7.45
Total debt/total capital 25% 12% 9% 8% 12%
Common shares outstanding 47,610 55,124 56,131 56,812 56,495
Other Data:
Cash flows from continuing
operations $ 123,831 $ 70,341 $ 76,217 $ 94,554 $ 77,720
Cash flows from discontinued
operations 26,334 25,542 35,920 33,253 26,709
Cash flows from operating
activities 150,165 95,883 112,137 127,807 104,429
Capital expenditures 61,839 37,277 27,860 22,446 26,617
Depreciation and amortization 39,426 36,790 37,842 36,292 33,726
Cash dividends per common share .56 .56 .52 .49 .42
<F1>
a) Included a goodwill write-down of $40.3 million and restructuring charges of $30.4 million.
b) Return on equity before effect of nonrecurring items described in a) was 11.8%.
c) Included one-time after-tax charges of $20.5 million, or $.36 per share, due to adoption of
SFAS Nos. 106 and 109.
d) Return on equity before cumulative effect of accounting changes was 16.4%.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
OVERVIEW
In 1994, the Company initiated a series of significant actions to reposition
its businesses for future success. These initiatives included withdrawal from
the Department of Energy (DOE) Support business, restructuring the cost model
of continuing operations, improved utilization of working capital, liquidation
of non-strategic investments and assets, replacing a portion of equity capital
with long-term debt, adoption of Economic Value Added (EVA) as the basis of
measurement and incentive compensation systems and increased investment in
internal development programs. Substantial progress was made in each of
these areas in 1995 and is detailed later in this report. These programs
have resulted in significant changes in financial results in 1995 and are
expected to continue to do so in the future.
Sales increased $87 million in 1995 to $1.4 billion, and operating income
increased by 38% over 1994 before nonrecurring charges. Total annualized
cost savings under the 1994 restructuring plan are expected to reach $28
million in 1996. Key measures of effectiveness of working capital
management, Days Sales Outstanding and Inventory Turns, improved by 10%
and 18%, respectively, in 1995. Research and development and capital
expenditures increased by 10% and 66%, respectively.
FACTORS AFFECTING FUTURE OPERATING RESULTS
Future trends in revenues and operating income will be dependent on both
external factors and on the success of the various programs described above.
In Technical Services, future performance will continue to be impacted by
increased competition, continued funding pressures and changing customer
requirements. Future performance in our products segments will be highly
dependent on the technological success and market acceptance of our new
program initiatives including the amorphous silicon and micromachined sensor
projects. Continued success in improving operational efficiency will be
required to offset increasing price pressure in most of the Company's
product offerings.
RESULTS OF OPERATIONS
The discussion that follows is a summary analysis of the major changes by
industry segment.
1995 Compared to 1994
Sales
Sales from continuing operations of $1,420 million for 1995 were $87 million,
or 7%, higher than 1994 sales.
Technical Services: The $3.8 million increase was the net result of billings
under two contracts for communication systems development and water flow
control offset by decreases resulting from continuing reductions in
government funding and the phase-down of the Superconducting Super Collider
Laboratory contract. In addition, demand for stationary automotive testing
services was lower in 1995. The government services businesses are subject
to a highly competitive procurement environment, continuing changes in
federal budget priorities and rapidly changing customer requirements.
While the impact of these uncertainties on future results cannot be
determined, the Company continues to see new opportunities for these
businesses.
Instruments: The $20.4 million increase resulted primarily from higher demand
for diagnostic and security products and the effect of changes in foreign
exchange rates, partially offset by an $11 million decrease due to the
divestiture of three product lines under the restructuring plan.
Mechanical Components: The $16.8 million increase was due to improving market
conditions, primarily for industrial process sealing and aerospace products.
Optoelectronics: Sales increased $46 million, or 22%, primarily due to $28
million of higher sales of IC Sensors, acquired at the end of the third
quarter of 1994, and higher shipments of flash products.
Operating Income (Loss) From Continuing Operations
Excluding the 1994 nonrecurring charges, operating income from continuing
operations increased $22.9 million, or 38%, in 1995. The 1994 operating loss
included nonrecurring charges of $40.3 million for a goodwill write-down and
$30.4 million for restructuring charges.
Technical Services: Income was flat, excluding the 1994 restructuring charges
of $1.6 million, as the income earned on the two contracts described previously,
and an unfavorable contract adjustment and early retirement costs recorded in
1994 were offset by several decreases. These decreases included costs
incurred in excess of contract coverage, an estimated provision for a legal
judgment, start-up costs for the environmental services and systems business and
the effect of lower sales levels in certain government services and the
automotive testing markets.
Instruments: The increase of $11.1 million, excluding the 1994 nonrecurring
charges of $55.7 million, resulted from cost reductions of $6.9 million from
the 1994 restructuring plan, margin on higher sales and the 1994 expense
related to the close-down of a research and development project. The
increases were partially offset by the unfavorable impact on export shipment
margins caused by the strengthening of the Finnish markka against other major
currencies, the expenses associated with the expansion of the food-monitoring
business and a provision for additional cost reductions.
Mechanical Components: The $5.8 million increase, excluding the 1994
restructuring charges of $2.7 million, resulted primarily from margin on
higher sales and $1.5 million of cost reductions. The 1994 results included
a provision for environmental remediation costs of $1.3 million and start-up
costs for the transportation element of the electromechanical business.
Optoelectronics: Excluding the 1994 nonrecurring charges of $9.7 million,
the $1 million net increase resulted from margin on higher sales and $2.6
million of cost reductions. The increases were partially offset by lower
margins due to competitive pricing pressures and higher production costs
in one product line and completion of certain government contracts in 1994.
The Company significantly increased research and development expenses and
capital expenditures in 1995 to support the amorphous silicon and
micromachined sensor programs. The Company anticipates continued increases
in research and development expenses and capital expenditures to support
product development initiatives in this segment.
General Corporate Expenses: The $4.6 million decrease, excluding the 1994
restructuring charges of $1 million, resulted from $3.8 million of cost
reductions in 1995, and $1 million of separation costs and $1 million of
costs associated with the restructuring plan recorded in 1994. These
decreases in expenses were partially offset by management incentive accruals.
Other: The $9.6 million increase in other income was due to gains on sales of
investments and operating assets, higher income generated by joint ventures
and lower investment write-downs. Partially offsetting these factors were
higher interest expense and foreign exchange losses.
Under the 1994 restructuring plan, the net work force reduction in 1995 was
500, bringing the total reductions to 700 positions since the inception of
the plan. The actions taken under the restructuring plan resulted in
pre-tax savings of $15 million during 1995. Total annualized cost
savings under the plan are expected to reach $28 million in 1996. The
annualized savings expected for each segment in 1996 are as follows:
Instruments--$12 million, Mechanical Components--$2 million,
Optoelectronics--$7 million and General Corporate Expenses--$7
million. The restructuring plan was substantially completed at the end of
1995.
The effective tax rate for continuing operations was 36.9% in 1995. The
effective tax rate of 87.5% in 1994 was higher than normal as a result of
the impact of the goodwill write-down and the restructuring charges.
In 1995, the Company decreased its discount rates for employee benefit plans
as a result of the decrease in long-term interest rates. The rates for
compensation increases and long-term return on assets were also reduced.
The net result of these changes will not materially affect
the Company's future results of operations.
Depreciation Change: The Company changed its method of depreciation for
certain classes of plant and equipment purchased after January 1, 1995 from an
accelerated method to the straight-line method for financial reporting
purposes. The Company believes that the straight-line method more
appropriately reflects the timing of the economic benefits to be received
from these assets, consisting mainly of manufacturing equipment. The
Company also changed its convention for calculating depreciation expense
during the year that an asset is acquired. Previously, the Company used
the half-year convention; starting in 1995, the Company commences
depreciation in the month the asset is placed in service. In 1995, the
effect of applying these new methods was to reduce depreciation expense by
$4.3 million, and to increase income from continuing operations and net
income by $2.7 million and net income per share by $.05. The reductions in
depreciation expense represent the differences in current year depreciation
expense between the old and new methods. Most of this difference occurred in
the Optoelectronics segment. Depreciation and amortization was higher in
1995 than in 1994 because the effect of the changes in methods was exceeded
by the effect of higher capital expenditures and inclusion of IC Sensors'
depreciation for a full year.
Discontinued Operations: Income from discontinued operations, net of income
taxes, was $12.7 million lower in 1995. The decrease reflected the
expiration of the Idaho National Engineering Laboratory (INEL) contract in
September 1994 and the Rocky Flats contract in June 1995. Future sales and
income from discontinued operations will continue to decrease
because the Nevada Test Site contracts expired on December 31, 1995 and
the Mound contract expires on September 30, 1996. Sales and income from
the Mound contract are dependent upon the work scope and fee pools that are
negotiated annually, and the expiration date may be modified by the DOE in
accordance with contract terms. The Mound contract contributed $136 million
of sales and $5.5 million of operating income to discontinued operations in
1995 and is the Company's one remaining DOE management and operations
contract.
Environmental: The Company is conducting a number of environmental
investigations and remedial actions at current and former Company locations
and, along with other companies, has been named a potentially responsible
party for certain waste disposal sites. The Company accrues for
environmental issues in the accounting period that the Company's responsibility
is established and when the cost can be reasonably estimated. As of
December 31, 1995, the Company had an accrual of $3.8 million to reflect
its estimated liability for environmental remediation. As assessments and
remediation activities progress at each individual site, these liabilities
are reviewed to reflect additional information as it becomes available.
There have been no environmental problems to date that have had or are
expected to have a material effect on the Company's financial position or
results of operations. While it is reasonably possible that a material loss
exceeding the amounts recorded may have been incurred, the preliminary
stages of the investigations make it impossible for the Company to reasonably
estimate the range of potential exposure.
1994 COMPARED TO 1993
During the third quarter of 1994, three significant events occurred that had a
material effect on both the current financial results and the expected future
performance of the Company. First, the Company decided not to seek renewal
of its four DOE management and operations contracts. Second, management
completed its review of the remaining operating segments' performance and
developed a plan to reposition these businesses to attain the Company's
business goals. The plan resulted in restructuring charges of $30.4 million.
Finally, the decline in the financial results of certain operating elements
within the Instruments segment, together with a strategic and operational
review of these operations, resulted in an evaluation of the related
goodwill for possible impairment. This evaluation resulted in a $39.2
million write-down of goodwill and a reduction in the estimated remaining
useful life of unamortized goodwill from 36 years to 16 years. The Company
also wrote off $1.1 million of a small Optoelectronics unit's goodwill.
Additional information related to these events is discussed below and in Notes
5, 8 and 10 to the consolidated financial statements.
Sales
Sales from continuing operations for 1994 were $1,333 million, $13 million
higher than 1993 sales.
Technical Services: The $22 million decline resulted primarily from the $32
million reduction in program expenditures under the new base operations
contract with the National Aeronautics and Space Administration (NASA) at
the Kennedy Space Center (KSC). In addition, automotive testing sales
declined $8 million to more normal levels following increases in 1993 caused
by the introduction of new testing protocols. Partially offsetting these
decreases were increased billings of $21 million from the chemical weapons
disposal contract as it moves into its testing phase.
Instruments: The $36 million increase resulted primarily from $31 million of
sales of Wallac, acquired late in the second quarter of 1993, and a $12
million increase in airport security product sales. These increases were
partially offset by a $4 million sales decrease in other businesses. These
businesses are being sold under the restructuring plan and contributed sales
of $16 million in 1994.
Mechanical Components: The $12 million decrease was primarily due to the
absence of sales of an operation divested late in 1993.
Optoelectronics: The $12 million increase was due primarily to higher
shipments of flash products of $20 million, and $5 million of sales of
IC Sensors, acquired at the end of the third quarter of 1994. Partially
offsetting the increases were the absence of $5 million of sales from
an operation divested late in 1993 and a $4 million decrease in sales
on a government contract that ended in September 1994.
Operating Income (Loss) From Continuing Operations
The operating loss from continuing operations in 1994 was $10.9 million
compared to income of $87.5 million in 1993. The loss from continuing
operations included the $40.3 million write-down of goodwill and
restructuring charges of $30.4 million resulting from management's
restructuring plan. The Wallac and IC Sensors acquisitions were the
main contributors to the $3.9 million increase in research and development
expenses. The $13.4 million increase in selling, general and administrative
expenses resulted mainly from Wallac and increased Corporate expenses,
offset by cost reductions in the Instruments segment and the absence of
expenses of operations divested in 1993.
Restructuring Charges: During the third quarter of 1994, management completed
its review of the operating segments and developed a plan to reposition these
businesses to attain the Company's business goals. The plan resulted in pre-
tax restructuring charges of $30.4 million. The principal actions in the
restructuring plan included reduction of excess manufacturing capacity,
changes in distribution channels, consolidation and re-engineering of support
infrastructure, disposal of under-utilized assets, withdrawal from certain
unprofitable product lines, disposal of excess property and general cost
reductions. The restructuring plan will result in the termination of the
jobs of approximately 1,000 non-DOE employees; the net work force
reduction will be approximately 800 non-DOE employees. The major
components of the restructuring charges were $21 million of employee
separation costs, $4.9 million of noncash charges to dispose of certain
product lines and assets through sale or abandonment and $4.5 million of
charges to terminate lease and other contractual obligations no longer
required as a result of the restructuring plan. The charges do not include
additional costs associated with the restructuring plan, such as voluntary
early retirement programs, training, consulting, purchases of equipment and
relocation of employees and equipment. These costs were charged to
operations or capitalized, as appropriate, when incurred. The implementation
of this plan commenced during the second half of 1994 and was substantially
completed at the end of 1995.
Technical Services: The $22.7 million decrease resulted primarily from
reductions in the automotive testing business from the $4.7 million impact of
lower sales and, to a lesser extent, from increased costs. A reduction at the
KSC of $5.1 million was due to the lower fee on the new base operations
contract. In addition, a $3.3 million decrease resulted from
unfavorable 1994 contract adjustments compared to favorable 1993 contract
settlements. Restructuring charges of $1.6 million and early retirement
costs also contributed to the decrease. The restructuring plan is not
expected to have a significant, direct impact on future results in this
segment since cost reductions primarily relate to operations with cost
reimbursable contracts. However, the Company does expect to be more
competitive in bidding for future procurements as a result of cost reductions.
Instruments: The Instruments loss of $49.6 million resulted primarily from a
goodwill write-down of $39.2 million related to the Berthold business acquired
in 1989, and restructuring charges of $16.5 million. The remainder of the
decrease resulted from costs associated with delays in the introduction of
new diagnostic products, the impact that the strengthening of the
Finnish markka had on Wallac's results, higher royalty expense and
expenses related to the close-down of a research and development project.
Partially offsetting these decreases were $2.5 million of cost reductions in
the nuclear business.
Mechanical Components: The decrease of $5.6 million resulted from $2.7 million
of restructuring charges, a provision for environmental remediation costs of
$1.3 million and increased start-up costs for the transportation element of
the electromechanical business.
Optoelectronics: Profits resulting from higher flash product shipments and
the continued benefit of cost reductions implemented in 1993 were offset by
$8.6 million of restructuring charges and, to a lesser extent, the impact of
lower sales on a government contract. In addition, the results reflected a
$1.1 million write-off of a small unit's goodwill.
General Corporate Expenses: The increase was due to $1 million of
restructuring charges, $1 million of consulting costs that were associated
with the restructuring plan, $1 million of separation costs incurred during
the first six months of the year plus general cost increases.
Other: The net change in other income (expense) was due to the write-down of
certain investments by $4.5 million to their estimated realizable value due
to deterioration in the company/partnership's financial condition and the
decision to liquidate the Company's position in investments no longer
consistent with its strategic direction.
The 1994 tax provision and effective rate for continuing operations were
significantly impacted by the goodwill write-down and the restructuring
charges. The Company did not record any tax benefit from the goodwill
write-down and approximately $11 million of the restructuring
charges because these charges, while tax deductible, were incurred in tax
jurisdictions where the Company had existing operating loss carryforwards.
Discontinued Operations: During 1994, the Company announced a plan to exit the
DOE business and decided not to seek renewal of its four DOE management and
operations contracts although it intends to continue to meet its
obligations under the terms and conditions of the present contracts. The
Company will not compete for management and operations contracts at other
DOE facilities. Accordingly, the Company is reporting the former
DOE Support segment as discontinued operations for all periods presented in the
consolidated financial statements. The Company's contract to manage the INEL
expired September 30, 1994 and contributed $240 million of sales and $7.3
million of operating income to discontinued operations in 1994.
Income from discontinued operations, net of income taxes, was $1.5 million
above the 1993 level. The increase resulted from a cost/productivity
improvement fee of $7.3 million earned at Rocky Flats offset partially by
the fee reduction reflecting the expiration of the INEL contract in
September 1994.
FINANCIAL CONDITION
The Company's cash and cash equivalents increased $9.8 million in 1995 while
commercial paper borrowings were eliminated and long-term debt proceeds were
$115 million. Net cash provided by operating activities was $150.2 million
in 1995, $95.9 million in 1994 and $112.1 million in 1993. The net cash
provided by continuing operations was higher in 1995 compared
to 1994 as a result of increased earnings and a $29.6 million reduction in
accounts receivable and inventories, despite higher sales, resulting from
the Company's aggressive operating capital reduction program. The decrease
in 1994's net cash provided when compared to 1993 resulted from lower
earnings, partially offset by a net reduction in working capital. The net
cash provided by operating activities was used principally for stock
repurchases, capital expenditures, cash dividends and, in 1994 and 1993,
for acquisitions. Proceeds from issuing common stock in 1993 were due to
an employee stock purchase plan which was terminated in that year.
Cash outlays in 1995 under the 1994 restructuring plan were $17.5 million,
mainly for employee termination costs, bringing the total spent under the
plan to $21.5 million. Future cash outlays of $3.7 million primarily
represent payments for lease commitments and employee termination benefits
being paid over time. Proceeds from dispositions of non-strategic assets
generated cash in excess of $20 million in 1995.
Discontinued operations generated cash of $26.3 million in 1995. Future cash
flows from discontinued operations will decrease due to the expiration of all
but the Mound contract by the end of 1995.
Capital expenditures were $61.8 million in 1995, an increase of $24.6 million
over the 1994 level, and are expected to exceed the 1995 level by 40% to 50%
in 1996. These increases support new product development initiatives
primarily in the Optoelectronics segment, including the amorphous silicon
and micromachined sensor programs.
In 1995, the Company issued $115 million of unsecured ten-year notes, of a
total $150 million authorized, at an interest rate of 6.8%. The unissued
notes of $35 million are covered by a shelf registration. The proceeds
were used to pay off commercial paper borrowings that were used mainly to
finance repurchases of the Company's common stock. The Company has two
revolving credit agreements totaling $250 million. These agreements
consist of a $175 million, 364-day facility, which expires in March 1996,
and a $75 million, three-year facility, which expires in March 1998. The
Company did not draw down either of these credit facilities during
1995, and is in the process of negotiating an extension of these agreements.
During 1995, the Company purchased 7.7 million shares of its common stock
through periodic purchases on the open market at a cost of $135.1 million.
As of December 31, 1995, the Company had authorization to purchase 5.6
million additional shares.
<PAGE>
The Company has limited involvement with derivative financial instruments and
uses them only to protect an underlying exposure. The Company uses forward
exchange contracts and options to hedge certain foreign commitments and
transactions denominated in foreign currencies. The notional amount of
outstanding forward exchange contracts was $57.4 million as of December
31, 1995. The average term is three months, corresponding with expected
collections or payments. On forward contracts, there are no cash
requirements until maturity. Credit risk is minimal because the contracts
are with very large banks; any market risk is offset by the exposure on the
underlying hedged items. Gains and losses on forward contracts are offset
against foreign exchange gains and losses on the underlying hedged items
and, in some cases, are deferred until underlying exposures are recognized
if there is a firm commitment.
DIVIDENDS
In January 1996, the Board of Directors declared a regular quarterly cash
dividend of 14 cents per share, resulting in an annual rate of 56 cents per
share for 1996. EG&G has paid cash dividends, without interruption, for 31
years and continues to retain what management believes to be sufficient
earnings to support the funding requirements of its planned growth.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
CONSOLIDATED BALANCE SHEET
<CAPTION>
As of December 31, 1995 and January 1, 1995
(Dollars in thousands except per share data) 1995 1994
Current Assets: --------- ---------
<S> <C> <C>
Cash and cash equivalents $ 76,204 $ 66,424
Accounts receivable (Note 3) 211,903 226,268
Inventories (Note 4) 114,199 123,299
Other (Notes 7 and 13) 66,380 56,635
Net assets of discontinued operations (Note 5) --- 8,852
--------- ---------
Total Current Assets 468,686 481,478
--------- ---------
Property, Plant and Equipment:
At cost (Note 6) 417,566 364,801
Accumulated depreciation and amortization (270,026) (243,139)
--------- ---------
Net Property, Plant and Equipment 147,540 121,662
--------- ---------
Investments (Note 7) 16,072 16,515
Intangible Assets (Note 8) 123,421 127,312
Other Assets (Notes 12 and 13) 48,196 46,162
--------- ---------
Total Assets $ 803,915 $ 793,129
========= =========
Current Liabilities:
Short-term debt (Note 9) $ 5,275 $ 59,988
Accounts payable 72,759 66,132
Accrued restructuring costs (Note 10) 3,748 21,532
Accrued expenses (Note 11) 164,923 134,170
Net liabilities of discontinued
operations (Note 5) 3,746 ---
--------- ---------
Total Current Liabilities 250,451 281,822
--------- ---------
Long-Term Debt (Note 9) 115,222 812
Long-Term Liabilities (Notes 12 and 13) 71,296 65,129
Contingencies (Note 14)
Stockholders' Equity (Note 16):
Preferred stock $1 par value, authorized
1,000,000 shares; none outstanding --- ---
Common stock $1 par value, authorized
100,000,000 shares; issued 60,102,000 shares 60,102 60,102
Retained earnings 498,181 459,738
Cumulative translation adjustments 28,679 10,785
Net unrealized gain on marketable
investments (Note 7) 244 3,337
Cost of shares held in treasury;
12,492,000 shares in 1995 and
4,978,000 shares in 1994 (220,260) (88,596)
--------- ---------
Total Stockholders' Equity 366,946 445,366
--------- ---------
Total Liabilities and Stockholders' Equity $ 803,915 $ 793,129
========= =========
<F1>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
For the Three Years Ended December 31, 1995
<CAPTION>
(Dollars in thousands except per share data) 1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Sales:
Products $ 802,187 $ 750,649 $ 725,627
Services 617,391 581,907 593,789
---------- ---------- ----------
Total Sales 1,419,578 1,332,556 1,319,416
---------- ---------- ----------
Costs and Expenses (Note 12):
Cost of sales:
Products 512,970 486,564 472,262
Services 539,076 508,045 498,791
---------- ---------- ----------
Total cost of sales 1,052,046 994,609 971,053
Research and development expenses 42,379 38,585 34,664
Selling, general and administrative expenses 242,480 239,609 226,215
Goodwill write-down (Note 8) --- 40,300 ---
Restructuring charges (Note 10) --- 30,400 ---
---------- ---------- ----------
Total Costs and Expenses 1,336,905 1,343,503 1,231,932
---------- ---------- ----------
Operating Income (Loss) From
Continuing Operations 82,673 (10,947) 87,484
Other Income (Expense), Net (Note 19) 3,386 (6,176) 1,008
---------- ---------- ----------
Income (Loss) From Continuing Operations
Before Income Taxes 86,059 (17,123) 88,492
Provision for Income Taxes (Note 13) 31,755 14,984 33,870
---------- ---------- ----------
Income (Loss) From Continuing Operations 54,304 (32,107) 54,622
Income From Discontinued Operations,
Net of Income Taxes (Note 5) 13,736 26,452 24,949
---------- ---------- ----------
Income (Loss) Before Cumulative Effect
of Accounting Changes 68,040 (5,655) 79,571
Cumulative Effect of Accounting Changes:
Income taxes (Note 13) --- --- (7,300)
Postretirement benefits other than
pensions (Note 12) --- --- (13,200)
---------- ---------- ----------
Net Income (Loss) $ 68,040 $ (5,655) $ 59,071
========== ========== ==========
Earnings (Loss) Per Share (Note 20):
Continuing Operations $ 1.05 $ (.58) $ .97
Discontinued Operations .27 .48 .44
---------- ---------- ----------
Income (Loss) Before Cumulative Effect
of Accounting Changes 1.32 (.10) 1.41
Cumulative Effect of Accounting Changes:
Income taxes --- --- (.13)
Postretirement benefits other than pensions --- --- (.23)
---------- ---------- ----------
Net Income (Loss) $ 1.32 $ (.10) $ 1.05
========== ========== ==========
<F1>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
For the Three Years Ended December 31, 1995
<CAPTION>
Net
Unrealized Total
Cumulative Gain on Cost of Stock-
Common Retained Translation Marketable Shared Held holders'
(Dollars in thousands except per share data) Stock Earnings Adjustments Investments in
Treasury Equity
------- -------- ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 3, 1993 $60,102 $473,262 $(1,323) $ --- $ (58,405)
$473,636
Net income --- 59,071 --- --- --- 59,071
Cash dividends ($.52 per share) --- (29,358) --- --- --- (29,358)
Exercise of employee stock options
and related income tax benefits --- (298) --- --- 7,356 7,058
Translation adjustments --- --- (6,964) --- --- (6,964)
Issuance of common stock for employee
benefit plans --- (6,614) --- --- 25,724 19,110
Purchase of common stock for treasury --- --- --- --- (45,019) (45,019)
------- -------- ------- -------- --------- --------
Balance, January 2, 1994 60,102 496,063 (8,287) --- (70,344)
477,534
Net loss --- (5,655) --- --- --- (5,655)
Cash dividends ($.56 per share) --- (31,012) --- --- --- (31,012)
Exercise of employee stock options
and related income tax benefits --- 342 --- --- 887 1,229
Translation adjustments --- --- 19,072 --- --- 19,072
Purchase of common stock for treasury --- --- --- --- (19,139) (19,139)
Unrealized gain on marketable investments --- --- --- 3,337 --- 3,337
------- -------- ------- -------- --------- --------
Balance, January 1, 1995 60,102 459,738 10,785 3,337 (88,596)
445,366
Net income --- 68,040 --- --- --- 68,040
Cash dividends ($.56 per share) --- (29,293) --- --- --- (29,293)
Exercise of employee stock options
and related income tax benefits --- 246 --- --- 3,415 3,661
Translation adjustments --- --- 17,894 --- --- 17,894
Purchase of common stock for treasury --- --- --- --- (135,079) (135,079)
Change in net unrealized gain on
marketable investments --- --- --- (3,093) --- (3,093)
Redemption of shareholder rights --- (550) --- --- --- (550)
------- -------- ------- -------- --------- --------
Balance, December 31, 1995 $60,102 $498,181 $28,679 $ 244 $(220,260)
$366,946
======= ======== ======= ======== =========
========
<F1>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Years Ended December 31, 1995
(Dollars in thousands) 1995 1994 1993
---------- --------- ---------
<S> <C> <C> <C>
Cash Flows Provided by Operating Activities:
Net income (loss) $ 68,040 $ (5,655) $ 59,071
Deduct net income from discontinued operations (13,736) (26,452) (24,949)
Add cumulative effect of accounting changes --- --- 20,500
---------- --------- ---------
Income (loss) from continuing operations 54,304 (32,107) 54,622
Adjustments to reconcile income (loss) from
continuing operations to net cash provided
by continuing operations:
Goodwill write-down --- 40,300 ---
Noncash portion of restructuring charges --- 4,902 ---
Depreciation and amortization 39,426 36,790 37,842
Losses (gains) on dispositions and
investments, net (5,442) 5,322 (3,176)
Changes in assets and liabilities, net of
effects from companies purchased and divested:
Decrease in accounts receivable 17,535 6,284 20,054
Decrease (increase) in inventories 12,106 1,643 (1,971)
Increase (decrease) in accounts payable 6,087 2,124 (12,146)
Increase (decrease) in accrued
restructuring costs (17,522) 21,532 ---
Increase (decrease) in accrued expenses 27,609 2,904 (5,410)
Change in prepaid and deferred taxes (3,712) (5,163) (3,514)
Change in prepaid expenses and other (6,560) (14,190) (10,084)
---------- --------- ---------
Net Cash Provided by Continuing Operations 123,831 70,341 76,217
Net Cash Provided by Discontinued Operations 26,334 25,542 35,920
---------- --------- ---------
Net Cash Provided by Operating Activities 150,165 95,883 112,137
---------- --------- ---------
Cash Flows Used in Investing Activities:
Capital expenditures (61,839) (37,277) (27,860)
Proceeds from dispositions of businesses and
sales of property, plant and equipment 15,238 2,872 9,503
Cost of acquisitions, net of cash and cash
equivalents acquired --- (32,841) (32,186)
Proceeds from sales of investment securities 10,584 5,092 7,813
Other (2,754) (2,730) (2,503)
---------- --------- ---------
Net Cash Used in Investing Activities (38,771) (64,884) (45,233)
---------- --------- ---------
Cash Flows Used in Financing Activities:
Increase (decrease) in commercial paper (49,814) 14,873 2,977
Other debt payments (5,607) (3,939) (17,752)
Proceeds from issuance of long-term debt 115,000 ---
Proceeds from issuance of common stock 3,661 1,229 26,168
Purchases of common stock (135,079) (19,139) (45,019)
Cash dividends (29,293) (31,012) (29,358)
Other (1,763) --- ---
---------- --------- ---------
Net Cash Used in Financing Activities (102,895) (37,988) (62,984)
---------- --------- ---------
Effect of Exchange Rate Changes on
Cash and Cash Equivalents 1,281 1,228 (1,487)
---------- --------- ---------
Net Increase (Decrease) in Cash and Cash Equivalents 9,780 (5,761) 2,433
Cash and Cash Equivalents at Beginning of Year 66,424 72,185 69,752
---------- --------- ---------
Cash and Cash Equivalents at End of Year $ 76,204 $ 66,424 $ 72,185
========== ========= =========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest $ 7,271 $ 5,063 $ 6,819
Income taxes 23,380 41,353 41,256
<F1>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Principles of Consolidation: The consolidated financial statements include
the accounts of EG&G, Inc. and its subsidiaries (the Company). All material
intercompany balances and transactions have been eliminated in consolidation.
Certain reclassifications have been made to conform prior years' data to the
current format.
Sales: Sales under cost-reimbursement contracts are recorded as costs are
i ncurred and include applicable income in the proportion that costs incurred
bear to total estimated costs. Other product and service sales are recorded
at the time of shipment for products and at the end of a contract phase for
service contracts. If a loss is anticipated on any contract, provision for
the entire loss is made immediately.
Inventories: Inventories, which include material, labor and manufacturing
overhead, are valued at the lower of cost or market. The majority of
inventories is accounted for using the first-in, first-out method. All
other inventories are accounted for using the last-in, first-out (LIFO) method.
Property, Plant and Equipment: The Company depreciates plant and equipment
over their estimated useful lives using accelerated methods for income tax
purposes. The Company changed its method of depreciation for certain classes
of plant and equipment purchased after January 1, 1995 from an accelerated
method to the straight-line method for financial statement purposes. The
Company believes that the straight-line method more appropriately reflects
the timing of the economic benefits to be received from these assets,
consisting mainly of manufacturing equipment, during their estimated useful
lives. The Company also changed its convention for calculating depreciation
expense during the year that an asset is acquired. Previously, the Company
used the half-year convention; starting in 1995, the Company commences
depreciation in the month the asset is placed in service. In 1995, the
effect of applying these new methods was to reduce depreciation expense by
$4.3 million, and to increase income from continuing operations and net
income by $2.7 million and net income per share by $.05. The
reductions in depreciation expense represent the differences in current year
depreciation expense between the old and new methods. Most of this difference
occurred in the Optoelectronics segment. Depreciation and amortization was
higher in 1995 than in 1994 because the effect of the changes in methods was
exceeded by the effect of higher capital expenditures and inclusion of IC
Sensors' depreciation for a full year. For financial statement purposes,
the estimated useful lives generally fall within the following ranges:
buildings and special-purpose structures 10 to 25 years; leasehold
improvements estimated useful life or remaining term of lease, whichever
is shorter; machinery and equipment 3 to 7 years; special-purpose equipment
expensed or depreciated over the life of the initial related contract.
Nonrecurring tooling costs are capitalized, while recurring costs are
expensed.
Pension Plans: The Company's funding policy provides that payments to the U.S.
pension trusts shall at least be equal to the minimum funding requirements of
the Employee Retirement Income Security Act of 1974. Non-U.S. plans are accrued
for but generally not funded, and benefits are paid from operating funds.
Translation of Foreign Currencies: The balance sheet accounts of non-U.S.
operations, exclusive of stockholders' equity, are translated at year-end
exchange rates, and income statement accounts are translated at weighted
average rates in effect during the year; any translation adjustments are
made directly to a component of stockholders' equity. The after-tax
aggregate net transaction gains (losses) were not material for the years
presented.
Intangible Assets: Intangible assets result from acquisitions accounted for
using the purchase method of accounting and include the excess of cost over
the fair market value of the net assets of the acquired businesses.
Substantially all of these intangible assets are being amortized over
periods of up to 20 years. Subsequent to the acquisition, the Company
continually evaluates whether later events and circumstances have occurred
that indicate the remaining estimated useful life of goodwill may warrant
revision or that the remaining balance of goodwill may not
be recoverable. When factors indicate that goodwill should be evaluated for
possible impairment, the Company uses an estimate of the related business
segment's discounted future cash flows over the remaining life of the goodwill
in measuring whether the goodwill is recoverable. See Note 8 for discussion
of the goodwill write-down occurring in 1994.
During 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which,
effective January 1, 1996, requires the determination of whether an impairment
has occurred to be based on undiscounted cash flows. If it is determined
that an impairment has occurred, the impaired asset must be written down
to fair value. The Company does not expect the adoption of SFAS No. 121 to
have a material impact on its financial statements.
Cash Flows: For purposes of the Consolidated Statement of Cash Flows, the
Company considers all highly liquid instruments with a purchased maturity of
three months or less to be cash equivalents. The carrying amount of cash
and cash equivalents approximates fair value due to the short maturities.
Environmental Matters: The Company accrues for costs associated with the
remediation of environmental pollution when it is probable that a liability has
been incurred and the Company's proportionate share of the amount can be
reasonably estimated. Any recorded liabilities have not been discounted.
2. Acquisitions
In September 1994, the Company acquired IC Sensors, a leading supplier of
micromachined sensing and control components used in the automotive, medical,
industrial and consumer product markets, for cash of $30 million. The excess of
the cost over the fair market value of the net assets acquired was $21 million,
which is being amortized over 15 years using a straight-line method. In
September 1994, the Company also acquired NoVOCs, Inc., which offers a process
for restoring groundwater contaminated by gasoline and other volatile organic
compounds, for cash of $3.3 million and contingent payments based on future
sales. These acquisitions were accounted for using the purchase method, and
their results of operations were included in the consolidated results of the
Company from the date of acquisition. The effect of these acquisitions was
not material to the consolidated results of operations.
3. Accounts Receivable
Accounts receivable as of December 31, 1995 and January 1, 1995 included
unbilled receivables of $44 million and $57 million, respectively, which were
due primarily from U.S. Government agencies. Accounts receivable were net of
reserves for doubtful accounts of $4.4 million and $5.8 million as of
December 31, 1995 and January 1, 1995, respectively.
4. Inventories
Inventories as of December 31, 1995 and January 1, 1995 consisted of the
following:
(In thousands) 1995 1994
-------- --------
Finished goods $ 28,540 $ 35,304
Work in process 28,613 28,551
Raw materials 57,046 59,444
-------- --------
$114,199 $123,299
======== ========
The portion of inventories accounted for using the LIFO method of determining
inventory costs in 1995 and 1994 approximated 23% and 25%, respectively, of
total inventories. The excess of current cost of inventories over the LIFO value
was approximately $9 million at December 31, 1995 and $10 million at January 1,
1995.
5. Discontinued Operations
The former DOE Support segment, which has provided services under
management and operations contracts, is presented as discontinued operations in
accordance with Accounting Principles Board (APB) Opinion No. 30.
The EG&G Rocky Flats, Inc. contract terminated in June 1995. The Reynolds
Electrical and Engineering Co., Inc. and the EG&G Energy Measurements, Inc.
contracts expired on December 31, 1995. The EG&G Mound Applied
Technologies, Inc. contract, the Company's remaining management and operations
contract with the DOE, expires on September 30, 1996. The work scope and fee
pools are negotiated annually, and the expiration date may be modified by the
DOE in accordance with contract terms.
Summary operating results of the discontinued operations were as follows:
<TABLE>
(In thousands) 1995 1994 1993
-------- ---------- ----------
<S> <C> <C> <C>
Sales $659,852 $1,300,064 $1,378,532
Costs and expenses 638,719 1,259,369 1,340,149
-------- ---------- ----------
Income from discontinued
operations before income taxes 21,133 40,695 38,383
Provision for income taxes 7,397 14,243 13,434
-------- ---------- ----------
Income from discontinued
operations, net of income taxes $ 13,736 $ 26,452 $ 24,949
======== ========== ==========
</TABLE>
Given the nature of the government contracts, the Company does not anticipate
incurring any material loss on the ultimate completion of the contracts.
Net assets (liabilities) of discontinued operations as of December 31, 1995 and
January 1, 1995 consisted of the following:
(In thousands) 1995 1994
-------- -------
Accounts receivable, primarily unbilled $ 7,575 $15,717
Operating current liabilities (11,439) (6,934)
Other 118 69
-------- -------
$ (3,746) $ 8,852
======== =======
6. Property, Plant and Equipment, at Cost
Property, plant and equipment as of December 31, 1995 and January 1, 1995
consisted of the following:
(In thousands) 1995 1994
-------- --------
Land $ 12,003 $ 15,877
Buildings and leasehold improvements 108,254 95,938
Machinery and equipment 297,309 252,986
-------- --------
$417,566 $364,801
======== ========
7. Investments
Investments as of December 31, 1995 and January 1, 1995 consisted of the
following:
(In thousands) 1995 1994
------- -------
Marketable investments (Note 12) $ 9,547 $14,187
Other investments 1,396 6,330
Joint venture investments 7,349 5,314
------- -------
18,292 25,831
------- -------
Less investments classified as other
current assets (2,220) (9,316)
------- -------
$16,072 $16,515
======= =======
Marketable investments consisted of common stocks and trust assets which were
primarily invested in money market funds, fixed income securities and common
stocks to meet the supplemental executive retirement plan obligation. SFAS No.
115 require sthat available-for-sale investments in securities that have readily
determinable fair values be measured at fair value in the balance sheet and that
unrealized holding gains and losses for these investments be reported in a
separate component of stockholders' equity until realized. The net
unrealized holding gain, net of deferred income taxes, reported as a
separate component of stockholders' equity, was $0.2 million at
December 31, 1995, a $3.1 million decrease from the $3.3 million gain at
January 1, 1995. In 1995, proceeds and, included in the results
of operations, gross realized gains from sales of available-for-sale
securities were $4.8 million and $3.7 million, respectively. Average
cost was the basis for computing the realized gains.
Marketable investments classified as available for sale as of
December 31, 1995 and January 1, 1995 consisted of the following:
<TABLE>
(In thousands) 1995 1994
---------------------------------- ------------------------------------
Gross Unrealized Gross Unrealized
Holding Holding
Market ---------------- Market -----------------
Value Cost Gains (Losses) Value Cost Gains (Losses)
------ ------ ------ -------- ------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Common stocks $6,355 $6,144 $ 919 $(708) $11,994 $6,860 $5,134 $ ---
Fixed income
securities 2,789 2,694 95 --- 1,987 1,987 --- ---
Money market funds 261 261 --- --- 206 206 --- ---
Other 142 72 70 --- --- --- --- ---
------ ------ ------ ----- ------- ------ ------ -----
$9,547 $9,171 $1,084 $(708) $14,187 $9,053 $5,134 $ ---
====== ====== ====== ===== ======= ====== ====== =====
</TABLE>
The market values were based on quoted market prices. As of December 31,
1995, the fixed income securities, on average, have maturities of approximately
eight years.
Other investments consisted of nonmarketable investments in venture capital
partnerships and private companies, which are carried at the lower of cost or
net realizable value. The estimated aggregate fair value of other investments
approximated the carrying amount at December 31, 1995 and January 1, 1995.
The fair values of other investments were estimated based on the most recent
rounds of financing and securities transactions and on other pertinent
information, including financial condition and operating results. The
Company wrote down certain investments by $2.5 million in 1995 and $4.5
million in 1994 to their estimated realizable value due to deterioration
in the company/partnership's financial condition and the decision to
liquidate the Company's position in investments no longer consistent
with its strategic direction.
Marketable investments of $1.2 million and other investments of $1 million were
classified as other current assets at December 31, 1995. Marketable investments
of $8.3 million and other investments of $1 million were classified as other
current assets at January 1, 1995.
Joint venture investments are accounted for using the equity method.
<PAGE>
8. Intangible Assets
Intangible assets were shown net of accumulated amortization of $42.2 million
and $31.6 million at December 31, 1995 and January 1, 1995, respectively.
The $3.9 million net decrease in intangible assets resulted primarily from
current year amortization, partially offset by the effect of translating
goodwill denominated in non-U.S. currencies at current exchange rates.
In 1994, the continued decline in the financial results of the operating
elements of the Company's Berthold business acquired in 1989, the resultant
strategic and operational review and the application of the Company's
objective measurement tests resulted in an evaluation of goodwill for
possible impairment. The underlying factors contributing to the decline
in financial results included changes in the marketplace, delays in
customer acceptance of new technologies and worldwide economic conditions.
The Company calculated the present value of expected cash flows to determine
the fair value of the business using a discount rate of 12% which represents
the Company's weighted average cost of capital. The evaluation resulted in
a $39.2 million write-down of Berthold's $76 million goodwill balance.
The evaluation also led the Company to determine that the remaining
amortization period for the goodwill should be reduced from 36 years to 16
years based on the factors identified above. The Company also wrote off
$1.1 million of a small Optoelectronics unit's goodwill in 1994.
9. Debt
There were no commercial paper borrowings outstanding at December 31, 1995.
Short-term debt at January 1, 1995 consisted primarily of commercial paper of
$49.8 million that had maturities of less than 90 days. The weighted average
interest rate on commercial paper borrowings was 6.1% at January 1, 1995.
Commercial paper borrowings averaged $52.5 million during 1995 at an average
interest rate of 6.1% compared to average borrowings of $42.3 million during
1994 at an average interest rate of 4.7%. Current maturities of long-term debt
are also included in this account. During 1995, the Company renewed its credit
facilities with the signing of two revolving credit agreement extensions
totaling $250 million. These agreements consist of a $175 million, 364-day
facility, which expires in March 1996, and a $75 million, three-year facility,
which expires in March 1998. These agreements serve as backup facilities for
the commercial paper borrowings. The Company did not draw down either of
these credit facilities during 1995. The Company is in the process of
negotiating another extension of these agreements for which there are no
significant commitment fees.
At December 31, 1995, long-term debt included $115 million of unsecured
ten-year notes issued in October 1995 at an interest rate of 6.8%. The
total notes authorized were $150 million, and the unissued notes of $35
million are covered by a shelf registration. The carrying amount of the
Company's long-term debt approximated the estimated fair value at
December 31, 1995 based on a quoted market price.
10. Restructuring Charges
During the third quarter of 1994, management completed its review of various
operating elements and developed a plan to reposition these businesses to attain
the Company's business goals. The plan resulted in pre-tax restructuring
charges of $30.4 million. The principal actions in the restructuring plan
included reduction of excess manufacturing capacity, changes in distribution
channels, consolidation and re-engineering of support infrastructure,
disposal of under-utilized assets, withdrawal from certain unprofitable
product lines, disposal of excess property and general cost reductions.
During 1995, the net work force reduction was 500, bringing the total
reduction to 700 positions since the inception of the plan. The restructuring
plan called for a net work force reduction of approximately 800 positions in
continuing operations. There will be some additional terminations in
early 1996.
The major components of the restructuring charges were $21 million of
employee separation costs, $4.9 million of noncash charges to dispose of
certain product lines and assets through sale or abandonment and $4.5
million of charges to terminate lease and other contractual obligations
no longer required as a result of the restructuring plan. The charges
do not include additional costs associated with the restructuring plan
such as voluntary early retirement programs, training, consulting, purchases
of equipment and relocation of employees and equipment. These costs were
charged to operations or capitalized, as appropriate, when incurred.
Under the 1994 restructuring plan, cash outlays in 1995 were $17.5
million, mainly for employee termination costs, bringing the total spent
to $21.5 million. As of December 31, 1995, accrued restructuring costs
of $3.7 million primarily represent payments for lease commitments and
employee termination benefits being paid over time.
11. Accrued Expenses
Accrued expenses as of December 31, 1995 and January 1, 1995 consisted of the
following:
(In thousands) 1995 1994
-------- --------
Payroll and incentives $ 28,660 $ 16,842
Employee benefits 40,178 44,482
Federal, non-U.S. and state income taxes 33,153 17,243
Other 62,932 55,603
-------- --------
$164,923 $134,170
======== ========
12. Employee Benefit Plans
Savings Plan: The Company has a savings plan for the benefit of qualified U.S.
employees. Under this plan, the Company contributes an amount equal to the
lesser of 55% of the amount of the employee's voluntary contribution or 3.3% of
the employee's annual compensation. In 1993, the contribution was the lesser of
50% or 3% of the same items. Savings plan expense was $5.7 million in 1995,
$6.2 million in 1994 and $5.7 million in 1993.
Pension Plans: The Company has defined benefit pension plans covering
substantially all U.S. employees and non-U.S. pension plans for non-U.S.
employees. The plans provide benefits that are based on an employee's years of
service and compensation near retirement. Assets of the U.S. plan are composed
primarily of corporate equity and debt securities.
Net periodic pension cost included the following components:
<TABLE>
(In thousands) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Service cost benefits earned during the period $ 9,073 $ 9,822 $ 8,398
Interest cost on projected benefit obligations 16,733 15,070 14,030
Actual return on plan assets (42,992) (461) (18,316)
Net amortization and deferral 24,310 (15,442) 3,852
-------- -------- --------
$ 7,124 $ 8,989 $ 7,964
======== ======== ========
</TABLE>
The decrease in pension expense for 1995 was caused by changes in the discount
rate and other actuarial assumptions in the U.S. plan.
The following table sets forth the funded status of the principal U.S. pension
plan and the principal non-U.S. pension plans and the amounts recognized in the
Company's Consolidated Balance Sheet at December 31, 1995 and January 1,
1995:
<TABLE>
(In thousands) 1995 1994
------------------ ------------------
Non-U.S. U.S. Non-U.S. U.S.
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligations $23,702 $165,913 $18,832 $137,490
======= ======== ======= ========
Accumulated benefit obligations $24,806 $174,569 $20,329 $144,729
======= ======== ======= ========
Projected benefit obligations
for service provided to date $31,490 $205,100 $27,050 $170,286
Plan assets at fair value --- 219,960 --- 173,947
Plan assets less (greater) than ------- -------- ------- --------
projected benefit obligations 31,490 (14,860) 27,050 (3,661)
Unrecognized net transition asset --- 4,508 --- 5,259
Unrecognized prior service costs (983) 807 (987) 924
Unrecognized net gain (loss) 2,504 (18,922) 2,101 (22,948)
------- -------- ------- --------
Accrued pension liability (asset) $33,011 $(28,467) $28,164 $(20,426)
======= ======== ======= ========
Actuarial assumptions as of the year-end
measurement date were:
Discount rate 7.00% 7.25% 8.00% 8.25%
Rate of compensation increase 4.50% 5.00% 5.50% 5.50%
Long-term rate of return on assets --- 9.50% --- 9.75%
</TABLE>
The non-U.S. accrued pension liability included $32.5 million and $27.8 million
classified as long-term liabilities as of December 31, 1995 and January 1, 1995,
respectively. The U.S. pension asset was classified as other noncurrent assets.
The Company also sponsors a supplemental executive retirement plan to provide
senior management with benefits in excess of normal pension benefits. At
December 31, 1995 and January 1, 1995, the projected benefit obligations were
$11 million and $9.7 million, respectively. Assets with a fair value of $8.3
million and $6 million, segregated in a trust, were available to meet this
obligation as of December 31, 1995 and January 1, 1995, respectively.
Pension expense for this plan was approximately $1.5 million in 1995
and 1994, and $1 million in 1993.
Postretirement Medical Plans: The Company provides health care benefits for
eligible retired U.S. employees under a comprehensive major medical plan or
under health maintenance organizations where available. The majority of the
Company's U.S. employees become eligible for retiree health benefits if
they retire directly from the Company and have at least ten years of service.
Generally, the major medical plan pays stated percentages of covered expenses
after a deductible is met, and takes into consideration payments by other
group coverages and by Medicare. The plan requires retiree contributions
under most circumstances and has provisions for cost-sharing changes.
For employees retiring after 1991, the Company has capped its medical
premium contribution based on employees' years of service. The Company
funds the amount allowable under a 401(h) provision in the Company's defined
benefit pension plan. Assets of the plan are composed primarily of
corporate equity and debt securities.
Effective January 4, 1993, the Company adopted SFAS No. 106 on accounting for
postretirEment benefits other than pensions for its U.S. retiree health
benefits described above. This statement requires the expected cost of
Postretirement benefits to be charged to expense during the years in
which employees render service. This is a change from the prior policy
of recognizing these costs as paid. As part of adopting the new standard,
the Company recorded a one-time, noncasH charge against earnings of $20
million before taxes, or $13.2 million after income taxes ($.23 per share).
This cumulative adjustment represented the discounted present value of
expected future retiree health benefits attributed to employees' service
rendered prior to January 4, 1993.
<PAGE>
Net periodic postretirement medical benefit cost included the following
components:
<TABLE>
(In thousands) 1995 1994 1993
------- ------ ------
<S> <C> <C> <C>
Service cost - benefits earned during the period $ 391 $ 426 $ 360
Interest cost on accumulated benefit obligation 1,697 1,620 1,686
Actual return on plan assets (1,001) (70) (3)
Net amortization and deferral 544 (237) 3
------- ------ ------
$1,631 $1,739 $2,046
</TABLE>
The following table sets forth the plan's funded status and the amounts
recognized in the Company's Consolidated Balance Sheet at
December 31, 1995 and January 1, 1995:
<TABLE>
(In thousands) 1995 1994
------- -------
<S> <C> <C>
Accumulated benefit obligation:
Current retirees $15,762 $16,128
Active employees eligible to retire 908 440
Other active employees 7,171 5,281
------- -------
23,841 21,849
Plan assets at fair value 7,342 4,165
Plan assets less than accumulated ------- -------
benefit obligation 16,499 17,684
Unrecognized net gain 381 251
------- -------
Accrued postretirement medical liability $16,880 $17,935
Actuarial assumptions as of ======= =======
the year-end measurement
date were:
Discount rate 7.25% 8.25%
Health care cost trend rate:
First year 13.0% 14.0%
Ultimate 6.5% 6.5%
Years to reach ultimate 8 years 9 years
Long-term rate of return on assets 9.50% 9.75%
</TABLE>
The accrued postretirement medical benefit obligation included $15.9 million
and $16.9 million classified as long-term liabilities as of December 31, 1995
and January 1, 1995, respectively.
If the health care cost trend rate was increased 1%, the accumulated
postretirement benefit obligation would have increased by approximately $1.5
million at December 31, 1995. The effect of this increase on the annual cost
for 1995 would have been approximately $0.1 million.
Other: During 1995, the Company adopted an Economic Value Added Incentive
Compensation Plan, the purpose of which is to provide incentive compensation
to certain key employees, including all officers, in a form that relates the
financial rewards to an increase in the value of the Company to its
shareholders. Awards under this plan are approved annually by the Board of
Directors.
Effective January 3, 1994, the Company adopted SFAS No. 112 on accounting
for postemployment benefits. This new standard requires that benefits paid
for former or inactive employees after employment but prior to retirement
must be accrued if certain criteria are met. Adoption of the statement was
not material to the Company's financial position or results of operations.
The above information does not include amounts related to benefit plans
applicable to employees associated with contracts with the DOE and NASA
because the Company is not responsible for the current or future funded
status of the plans.
13. Income Taxes
Effective January 4, 1993, the Company adopted SFAS No. 109 on accounting for
income taxes. This standard determines deferred income taxes based on the
estimated future tax effects of differences between the financial statement
and tax basis of assets and liabilities, given the provisions of enacted tax
laws. Prior to the implementation of this statement, the Company accounted
for income taxes under APB Opinion No. 11. As part of adopting the new
standard, the Company recorded a one-time, noncash charge against earnings
of $7.3 million ($.13 per share).
The components of income (loss) from continuing operations before income
taxes for financial reporting purposes were as follows:
(In thousands) 1995 1994 1993
------- -------- -------
U.S. $53,264 $ 15,986 $70,449
Non-U.S. 32,795 (33,109) 18,043
------- -------- -------
$86,059 $(17,123) $88,492
======= ======== =======
<PAGE>
The components of the provision for income taxes for continuing operations
were as follows:
<TABLE>
(In thousands) 1995 1994 1993
Deferred Deferred Deferred
Current (Prepaid) Total Current (Prepaid) Total Current (Prepaid) Total
------- --------- ------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal $26,268 $(3,411) $22,857 $10,735 $(2,569) $ 8,166 $19,495 $3,454 $22,949
State 3,572 (264) 3,308 3,670 157 3,827 5,275 (255) 5,020
Non-U.S. 5,325 265 5,590 2,834 157 2,991 6,398 (497) 5,901
------- ------- ------- ------- ------- ------- ------- ------ -------
$35,165 $(3,410) $31,755 $17,239 $(2,255) $14,984 $31,168 $2,702 $33,870
======= ======= ======= ======= ======= ======= ======= ======
</TABLE>
The total provision for income taxes included in the consolidated financial
statements was as follows:
<TABLE>
(In thousands) 1995 1994 1993
<S> <C> <C> <C>
Continuing operations $31,755 $14,984 $33,870
Discontinued operations 7,397 14,243 13,434
$39,152 $29,227 $47,304
</TABLE>
The major differences between the Company's effective tax rate for continuing
operations and the Federal statutory rate were as follows:
1995 1994 1993
------ -------- -------
Federal statutory rate 35.0 % (35.0) % 35.0 %
Non-U.S. rate differential, net (0.3) (18.2) (2.5)
State income taxes, net 2.5 14.5 3.7
Goodwill amortization 2.0 10.0 1.7
Increase (decrease) in valuation allowance (4.5) 117.0 1.0
Other, net 2.2 (0.8) (0.6)
------ -------- -------
Effective tax rate 36.9 % 87.5 % 38.3 %
The 1994 tax provision and effective rate for continuing operations were
significantly impacted by the goodwill write-down and the restructuring charges.
The Company did not record any tax benefit from the goodwill write-down and
approximately $11 million of the restructuring charges because these charges,
while tax deductible, were incurred in tax jurisdictions where the Company had
existing operating loss carryforwards and, therefore, the related tax assets
were offset by a valuation allowance.
The effect of SFAS No. 109 on the consolidated effective tax rate was minimal
in 1993.
<PAGE>
The tax effects of temporary differences and carryforwards which gave rise to
prepaid (deferred) income taxes as of December 31, 1995 and January 1, 1995
were as follows:
(In thousands) 1995 1994
------- -------
Deferred tax assets:
Inventory reserves $ 4,902 $ 5,266
Other reserves 10,983 6,058
Depreciation 6,020 9,325
Vacation pay 6,319 6,080
Net operating loss carryforwards 35,616 31,102
Postretirement health benefits 5,940 6,123
Restructuring reserve 1,870 7,578
All other, net 23,576 23,608
------- -------
Total deferred tax assets 95,226 95,140
Deferred tax liabilities: ------- -------
Award and holdback fees (3,629) (4,193)
Pension contribution (8,301) (5,092)
Amortization (8,734) (7,835)
All other, net (7,771) (12,423)
------- -------
Total deferred tax liabilities (28,435) (29,543)
------- -------
Valuation allowance (29,243) (32,658)
------- -------
Net prepaid taxes $37,548 $32,939
======= =======
At December 31, 1995, the Company had non-U.S. (primarily from Germany) net
operating loss carryforwards of $76.9 million, of which $5.4 million expire
in years 1996 through 2005 and $71.5 million of which carry forward
indefinitely. The $29.2 million valuation allowance results primarily
from these carryforwards, for which the Company currently believes it is
more likely than not that they will not be realized.
Current prepaid income taxes of $40.2 million and $26.7 million at December 31,
1995 and January 1, 1995, respectively, were included in other current assets.
Long-term prepaid income taxes of $3.6 million and $11.6 million were included
in other noncurrent assets at December 31, 1995 and January 1, 1995,
respectively. Long-term deferred income taxes of $6.3 million and $5.3 million
were included in long-term liabilities at December 31, 1995 and January 1, 1995,
respectively.
In general, it is the practice and intention of the Company to reinvest the
earnings of its non-U.S. subsidiaries in those operations. Repatriation of
retained earnings is done only when it is advantageous. Applicable Federal
taxes are provided only on amounts planned to be remitted. Accumulated net
earnings of non-U.S. subsidiaries for which no Federal taxes have been
provided as of December 31, 1995 were $76 million, which does not include
amounts that, if remitted, would result in little or no additional tax
because of the availability of non-U.S. tax credits. Federal taxes that
would be payable upon remittance of these earnings are estimated to be
$21.9 million at December 31, 1995.
14. Contingencies
The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the ordinary
course of its business activities. Each of these matters is subject to
various uncertainties, and it is possible that some of these matters may
be resolved unfavorably to the Company. The Company has established
accruals for matters that are probable and reasonably estimable.
Management believes that any liability that may ultimately result from
the resolution of these matters in excess of amounts provided will not
have a material adverse effect on the financial position or results of
operations of the Company.
In addition, the Company is conducting a number of environmental
investigations and remedial actions at current and former Company locations
and, along with other companies, has been named a potentially responsible
party for certain waste disposal sites. The Company accrues for environmental
issues in the accounting period that the Company's responsibility is
established and when the cost can be reasonably estimated. The Company has
accrued $3.8 million to reflect its estimated liability for environmental
remediation. As assessments and remediation activities progress at each
individual site, these liabilities are reviewed to reflect additional
information as it becomes available. There have been no environmental
problems to date that have had or are expected to have a material effect
on the Company's financial position or results of operations. While it is
reasonably possible that a material loss exceeding the amounts recorded
may have been incurred, the preliminary stages of the investigations make
it impossible for the Company to reasonably estimate the range of potential
exposure. During 1994 and 1995, the Company received notices from the
Internal Revenue Service (IRS) asserting deficiencies in Federal corporate
income taxes for the Company's 1985 to 1991 taxable years. The total
additional tax proposed by the IRS amounts to $43 million plus interest.
The Company has filed petitions in the United States Tax Court to challenge
most of the deficiencies asserted by the IRS. The Company believes that it
has meritorious legal defenses to those deficiencies and believes that the
ultimate outcome of the case will not result in a material impact on the
Company's consolidated results of operations or financial position.
15. Risks and Uncertainties
The American Institute of Certified Public Accountants issued Statement of
Position (SOP) 94-6, "Disclosure of Certain Significant Risks and
Uncertainties," effective for fiscal years ending after December 15, 1995.
The SOP requires disclosures about the nature of operations and the use of
estimates in the preparation of financial statements. If specified
disclosure criteria are met, it requires disclosures about certain
significant estimates and current vulnerability due to certain
concentrations.
EG&G, Inc. is a broad-based technology company that provides an array of
products and technical services to manufacturers and end-users in medical,
aerospace, automotive and other ground transportation, environmental,
industrial and government markets worldwide. The Company's industry segments
are Technical Services, Instruments, Mechanical Components and Optoelectronics.
Based on sales, Technical Services is the largest segment, representing over 40%
of the Company's sales; the other three segments are about equal in size. The
Technical Services segment supplies engineering, scientific, environmental,
management and technical support services primarily to U.S. Government
agencies. Analysis and testing services are provided primarily to the U.S.
automotive industry. The Instruments segment develops and manufactures
hardware and associated software for applications in medical diagnostics,
biochemical and medical research, materials analyses, environmental monitoring,
industrial process measurement, food monitoring and airport and industrial
security worldwide. Mechanical Components provides products to four worldwide
markets. Mechanical seals and bellows products are designed and manufactured
for the chemical and petrochemical industries. Fans, blowers, ducting,
components, seals and metallic parts/valves are supplied to the aerospace
market. Motors and power supplies are sold to the transportation market.
Regenerative blower and biofiltration systems are used in the environmental
remediation market. The Optoelectronics segment designs and manufactures
optical sensors, flashlamps and laser diodes. Electronic components are
provided for industrial, consumer and medical applications and defense and
energy programs. Micromachined sensors are used for a variety of
applications, such as pressure sensors and accelerometers. Optoelectronics
is designing medical imaging devices based on amorphous silicon technology.
High-reliability power supplies are manufactured. This segment's
products are distributed worldwide.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
During 1995, 38% of the Company's sales from continuing operations were to
U.S. Government agencies, predominantly to the Department of Defense and
NASA. In accordance with government regulations, all of the Company's
government contracts are subject to termination for the convenience of the
government. Costs incurred under cost-reimbursable contracts are subject to
audit by the government. The results of prior audits, complete through 1991,
have not had a material effect on the Company. For additional information on
government contracts, see Note 21.
Given the nature of the DOE contracts, which are presented as discontinued
operations, the Company does not anticipate incurring any material loss on
the ultimate completion of the contracts.
For information concerning various investigations, claims, legal proceedings,
environmental investigations and remedial actions, and notices from the IRS,
see Note 14.
<PAGE>
16. Stockholders' Equity
At December 31, 1995, 5.5 million shares of the Company's common stock were
reserved for employee benefit plans.
The Company has nonqualified and incentive stock option plans for officers and
key employees. Under these plans, options may be granted at prices not less than
100% of the fair market value on the date of grant. All options expire ten years
from the date of grant. Options granted in 1994 become exercisable, in ratable
installments, over a period of five years from the date of grant. In other
years, options became exercisable at the date of grant. The Stock Option
Committee of the Board of Directors, at its sole discretion, may also
include stock appreciation rights in any option granted. There are no stock
appreciation rights outstanding under these plans.
A summary of certain stock option information is as follows:
<TABLE>
(In thousands) 1995 1994 1993
------------------------- ------------------------- -------------------------
Number Number Number
of Shares Price Range of Shares Price Range of Shares Price Range
--------- -------------- --------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year 3,611 $14.25 - 22.88 3,260 $14.44 - 22.88 2,902 $14.44 - 22.88
Granted 13 15.00 - 17.88 736 14.25 - 15.38 726 21.63
Exercised (197) 14.25 - 22.88 (54) 14.44 - 17.25 (355) 14.44 - 22.88
Lapsed (151) 14.25 - 22.88 (331) 14.44 - 22.88 (13) 15.50 - 22.88
----- -------------- ----- -------------- ----- --------------
Outstanding at
end of year 3,276 $14.25 - 22.88 3,611 $14.25 - 22.88 3,260 $14.44 - 22.88
===== ============== ===== ============== =====
==============
Exercisable at
end of year 2,740 2,895 3,260
===== ===== =====
Available for grant at
end of year 2,226 1,354 1,144
===== ===== =====
</TABLE>
In January 1996, the Board of Directors granted 650,000 options which become
exercisable, in ratable installments, over a period of five years from date of
grant at an exercise price of $21.75 per share.
<PAGE>
On January 25, 1995, the Board of Directors adopted a new Shareholder Rights
Plan. Under the plan, preferred stock purchase rights were distributed on
February 8, 1995 as a dividend at the rate of one right for each share of
common stock outstanding. Each right, when exercisable, entitles a
stockholder to purchase one one-thousandth of a share of a new series of
junior participating preferred stock at a price of $60. The rights become
exercisable only if a person or group acquires 20% or more or announces a
tender or exchange offer for 30% or more of the Company's common stock.
This preferred stock is nonredeemable and will have 1,000 votes per share.
The rights are nonvoting, expire in 2005 and may be redeemed prior to
becoming exercisable. The Company has reserved 70,000
shares of preferred stock, designated as Series C Junior Participating Preferred
Stock, for issuance upon exercise of such rights. If a person (an "Acquiring
Person") acquires or obtains the right to acquire 20% or more of the Company's
outstanding common stock (other than pursuant to certain approved offers), each
right (other than rights held by the Acquiring Person) will entitle the holder
to purchase shares of common stock of the Company at one-half of the current
market price at the date of occurrence of the event. In addition, in the event
that the Company is involved in a merger or other business combination in which
it is not the surviving corporation or in connection with which the Company's
common stock is changed or converted, or it sells or transfers 50% or more of
its assets or earning power to another person, each right that has not
previously been exercised will entitle its holder to purchase shares of
common stock of such other person at one-half of the current market price
of such common stock at the date of the occurrence of the event. In
connection with the adoption of the plan, the Company redeemed the rights
issued pursuant to the Company's January 28, 1987 Rights Agreement at a
redemption price of $.01 per right to shareholders of record as of
February 8, 1995.
17. Financial Instruments
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of temporary cash investments and accounts
receivable. At December 31, 1995, the Company had no significant concentrations
of credit risk. The Company has limited involvement with derivative financial
instruments and uses them only to protect an underlying exposure. The Company
uses forward exchange contracts and options to hedge certain foreign
commitments and transactions denominated in foreign currencies. The notional
amount of outstanding forward exchange contracts was $57.4 million as of
December 31, 1995 and $24.5 million as of January 1, 1995. The carrying value
as of December 31, 1995 and January 1, 1995, which approximated fair value, was
not significant. The average contract term is three months, corresponding with
expected collections or payments. On forward contracts, there are no cash
requirements until maturity. Credit risk is minimal because the contracts are
with very large banks; any market risk is offset by the exposure on the
underlying hedged items. When forward contracts are closed, the Company enters
into spot transactions to fulfill the contract obligations. Gains and losses
on forward contracts are offset against foreign exchange gains and losses on
the underlying hedged items and, in some cases, are deferred until underlying
exposures are recognized if there is a firm commitment. Transactions covered
by hedge contracts include collection of receivables from third-party
customers, collection of intercompany receivables, payments to third-party
suppliers and payment of intercompany payables.
See Notes 1, 7 and 9 for disclosures about fair values, including methods and
assumptions, of other financial instruments.
18. Leases
The Company leases certain property and equipment under operating leases.
Rental expense charged to earnings for 1995, 1994 and 1993 amounted to $18.7
million, $19.3 million and $18.7 million, respectively. Minimum rental
commitments under noncancelable operating leases are as follows: $16.3 million
in 1996, $12.2 million in 1997, $8.2 million in 1998, $5 million in 1999, $3.1
million in 2000 and $9.1 million after 2000. The above information does not
include amounts related to leases covered by contracts with the DOE and NASA
because the costs are reimbursable under the contracts.
19. Other Income (Expense), Net
Other income (expense), net, consisted of the following:
(In thousands) 1995 1994 1993
------- ------- -------
Interest income $ 4,930 $ 3,167 $ 4,043
Gains (losses) on investments, net (Note 7) 2,047 (4,682) 2,975
Interest expense (8,514) (5,419) (6,264)
Other 4,923 758 254
------- ------- -------
$ 3,386 $(6,176) $ 1,008
======= ======= =======
Other consists mainly of gains on the sale of operating assets, income from
joint ventures and foreign exchange losses.
20. Earnings (Loss) Per Share
Earnings (loss) per common share was computed by dividing net income (loss) by
the weighted average number of common shares outstanding. The number of
shares issuable upon the exercise of stock options had no material effect on
earnings (loss) per share. The weighted average number of shares used in the
earnings (loss) per share computations were 51,483,000 for 1995, 55,271,000 for
1994 and 56,504,000 for 1993.
21. Industry Segment and Geographic Area Information
The Company's continuing operations are classified into four industry segments:
Technical Services, Instruments, Mechanical Components and Optoelectronics.
The products and services of these segments are described in Note 15 and
elsewhere in the Annual Report. Sales and operating income (loss) from
continuing operations by industry segment are shown in the Segment Sales and
Income section of this report; such information with respect to 1995, 1994 and
1993 is considered an integral part of this note.
Sales to U.S. Government agencies, which were predominantly to the Department
of Defense and NASA, were $537 million, $542 million and $560 million in 1995,
1994 and 1993, respectively. In October 1993, the Company was selected by
NASA to continue as the base operations contractor at the KSC. The contract
contained reductions in contract value and has resulted in a lower annual fee
from the prior contract. This and the prior contract contributed sales of $172
million, $176 million and $201 million in 1995, 1994 and 1993, respectively.
There are two years remaining on the contract, which has two three-year
renewal options at the discretion of the government. NASA has announced
that it will designate a single Space Shuttle Flight Operations contractor
in 1996. While the impact of this initiative cannot be determined, the
Company believes at this time that its contract will not be adversely
affected.
Additional information relating to the Company's operations in the various
industry segments follows:
<TABLE>
Depreciation and Capital
(In thousands) Amortization Expense Expenditures
-------------------------- --------------------------
1995 1994 1993 1995 1994 1993
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Technical Services $ 7,698 $ 7,447 $ 8,422 $12,047 $ 7,314 $ 6,315
Instruments 11,887 11,621 9,213 4,639 5,398 6,555
Mechanical Components 5,585 6,091 6,870 6,978 6,197 5,598
Optoelectronics 13,220 10,690 12,417 35,925 17,748 8,469
Corporate 1,036 941 920 2,250 620 923
------- ------- ------- ------- ------- -------
$39,426 $36,790 $37,842 $61,839 $37,277 $27,860
======= ======= ======= ======= ======= =======
(In thousands) Identifiable Assets
----------------------------
1995 1994 1993
-------- -------- --------
Technical Services $113,901 $129,995 $127,917
Instruments 225,358 220,232 256,117
Mechanical Components 100,363 93,721 97,317
Optoelectronics 200,719 193,302 142,630
Corporate and Other 163,574 155,879 140,906
-------- -------- --------
$803,915 $793,129 $764,887
======== ======== ========
</TABLE>
Corporate assets consist primarily of cash and cash equivalents, prepaid pension
and taxes, and investments.
Information relating to geographic areas follows:
<TABLE>
(In thousands) Operating Income (Loss)
Sales From Continuing Operations
---------------------------------- ---------------------------
1995 1994 1993 1995 1994 1993
---------- ---------- ---------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
U.S. $1,065,424 $1,026,970 $1,049,131 $82,256 $ 57,679 $ 96,495
Germany 87,690 61,310 134,754 4,508 (43,492) 53
Other Non-U.S. 266,464 244,276 135,531 25,102 9,748 18,509
Corporate --- --- --- (29,193) (34,882) (27,573)
---------- ---------- ---------- ------- -------- --------
$1,419,578 $1,332,556 $1,319,416 $82,673 $(10,947) $ 87,484
========== ========== ========== ======= ======== ========
(In thousands) Identifiable Assets
----------------------------
1995 1994 1993
-------- -------- --------
U.S. $353,130 $341,725 $305,344
Germany 89,834 100,650 154,361
Other Non-U.S. 197,377 194,875 164,276
Corporate and Other 163,574 155,879 140,906
-------- -------- --------
$803,915 $793,129 $764,887
======== ======== ========
</TABLE>
Transfers between geographic areas were not material.
22. Quarterly Financial Information (Unaudited)
<TABLE>
<CAPTION>
Selected quarterly financial information follows:
(In thousands except per share data) Quarters
First Second Third Fourth Year
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
1995 $338,230 $342,251 $361,602 $377,495 $1,419,578
Sales
Operating income from continuing
operations 15,673 20,435 19,086 27,479 82,673
Income from continuing operations
before income taxes 15,473 20,268 20,304 30,014 86,059
Income from continuing operations 9,352 12,343 13,669 18,940 54,304
Net income 13,689 16,376 15,978 21,997 68,040
Earnings per share:
Continuing operations (a) .17 .23 .27 .40 1.05
Net income (a) .25 .31 .32 .46 1.32
Cash dividends per common share .14 .14 .14 .14 .56
Market price of common stock:
High 15.50 18.38 20.00 24.50
Low 13.00 15.00 16.38 18.00
Close 15.00 16.75 19.50 24.25
1994
Sales $325,747 $329,880 $336,860 $340,069 $1,332,556
Operating income (loss) from
continuing operations 12,675 15,012 (54,961) 16,327 (10,947)
Income (loss) from continuing
operations before income taxes 12,654 14,579 (58,343)b 13,987 (17,123)
Income (loss) from continuing
operations 7,813 8,977 (56,940) 8,043 (32,107)
Net income (loss) 14,353 16,423 (48,294) 11,863 (5,655)
Earnings (loss) per share:
Continuing operations .14 .16 (1.03) .15 (.58)
Net income (loss) .26 .30 (.88) .22 (.10)
Cash dividends per common share .14 .14 .14 .14 .56
Market price of common stock:
High 19.00 16.50 15.88 17.00
Low 16.38 14.13 14.63 13.75
Close 16.38 15.00 15.25 14.13
<F1>
a) The sum of the quarterly earnings per share does not equal the year's earnings
per share. This is due to changes in weighted average shares of common stock
outstanding resulting from share repurchases in 1995.
b) Included a goodwill write-down of $40.3 million and restructuring charges of
$30.4 million.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of EG&G, Inc.:
We have audited the accompanying consolidated balance sheets of EG&G, Inc. (a
Massachusetts corporation) and subsidiaries as of December 31, 1995 and January
1, 1995, and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 1995, January 1, 1995 and
January 2, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of EG&G, Inc. and
subsidiaries as of December 31, 1995 and January 1, 1995, and the results of
their operations and their cash flows for the years ended December 31, 1995,
January 1, 1995 and January 2, 1994, in conformity with generally accepted
accounting principles.
As explained in Notes 12 and 13 to the consolidated financial statements,
effective January 4, 1993, the Company changed its method of accounting for
postretirement benefits other than pensions and for income taxes. As explained
in Note 7 to the consolidated financial statements, effective January 3, 1994,
the Company changed its method of accounting for marketable investments. As
explained in Note 1 to the consolidated financial statements, effective
January 2, 1995, the Company changed its method of accounting for
depreciation of certain plant and equipment.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
January 23, 1996
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
a) DIRECTORS
The information required by this Item with respect to Directors is contained
on Pages 14 through 19 of the Company's 1996 Proxy Statement under the captions
"Election of Directors" and "Information Relative to the Board of Directors and
Certain of its Committees" and is herein incorporated by reference.
b) EXECUTIVE OFFICERS
The information required by this item with respect to Executive Officers is
contained in Part I of this Report.
ITEM 11. EXECUTIVE COMPENSATION
The information required to be disclosed by this Item is contained in
Pages 14 - 19 of the Company's 1996 Proxy Statement from under the caption
"Summary Compensation Table" up to and including "Aggregated Option Exercises
in Last Fiscal Year and Fiscal Year-End Value Option Table" and Notes thereto,
and is herein incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information required by this Item is contained on Pages 8 - 9 of the
Company's 1996 Proxy Statement under the captions "Security Ownership of
Certain Beneficial Owners" and "Security Ownership of Management" and is
herein incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Not applicable.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES, AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS REPORT:
1. FINANCIAL STATEMENTS
Included in Part II, Item 8:
Consolidated Balance Sheet as of December 31, 1995 and
January 1, 1995
Consolidated Statement of Operations for the Three Years
Ended December 31, 1995
Consolidated Statement of Stockholders' Equity for the Three
Years Ended December 31, 1995
Consolidated Statement of Cash Flows for the Three Years
Ended December 31, 1995
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
2. FINANCIAL STATEMENT SCHEDULES
Report of Independent Public Accountants on Financial Statement
Schedules
Schedule II - Valuation and Qualifying Accounts
Financial statement schedules, other than those above, are omitted
because of the absence of conditions under which they are required or
because the required information is given in the financial statements
or notes thereto.
Separate financial statements of the Registrant are omitted since it
is primarily an operating company, and since all subsidiaries included
in the consolidated financial statements being filed, in the
aggregate, do not have minority equity interests and/or indebtedness
to any person other than the Registrant or its consolidated
subsidiaries in amounts which together exceed five percent of total
consolidated assets.
3. EXHIBITS
3.1 The Company's Restated Articles of Organization, as filed with
the Massachusetts Secretary of the Commonwealth on July 31, 1995,
were filed with the Commission on September 21, 1995 as Exhibit 4(i)
to the Company's Registration Statement on Form S-8 and are herein
incorporated by reference.
3.2 The Company's By-Laws as amended by the Board of Directors
on May 3, 1995, were filed with the Commission on September 21,
1995, as Exhibit 4(ii) to the Company's Registration Statement on
Form S-8, and are herein incorporated by reference.
4.1 The form of certificate used to evidence ownership of EG&G
Common Stock, $1 par value, was filed as Exhibit 4(a) to EG&G's
Registration Statement on Form S-3, File No. 2-69642 and is herein
incorporated by reference.
4.2 Form of Indenture dated June 28, 1995 between the Company
and the First National Bank of Boston, as Trustee was filed with the
Commission as Exhibit 4.1 to EG&G's Registration Statement on Form
S-3, File No. 33-59675 and is herein incorporated by reference.
*10.1 EG&G, Inc. Supplemental Executive Retirement Plan revised as
of April 19, 1995.
*10.2 EG&G, Inc. Economic Value Added Plan as adopted by the
EG&G, Inc. Board of Directors on January 24, 1996.
10.3 3-Year Competitive Advance and Revolving Credit Facility
Agreement ("3-Year Agreement") dated as of March 21, 1994 among
EG&G, Inc., the Lenders Named Herein and Chemical Bank as
Administrative Agent; Amendment No. 1 to 3-Year Agreement dated as
of Mach 15, 1995; Amendment No. 2 to 3-Year Agreement dated as of
March 14, 1996.
10.4 364-Day Competitive Advance and Revolving Credit Facility
Agreement ("364-Day Agreement") dated as of March 21, 1994 among
EG&G, Inc., the Lenders Named Herein and Chemical Bank as
Administrative Agent; Amendment No. 1 to 364-Day Agreement dated
as of Mach 15, 1995; Amendment No. 2 to 364-Day Agreement dated
as of March 14, 1996.
*10.5 Employment Contracts:
(1) Employment contract between John M. Kucharski and EG&G
dated November 1, 1993.
(2) Employment contract between Murray Gross and EG&G dated
November 1, 1993.
(3) Employment contract between John F. Alexander, II and EG&G
dated November 1, 1993.
(4) Employment contract between Angelo Castellana and EG&G
dated November 1, 1993.
(5) Employment contract between Dale L. Fraser and EG&G dated
November 1, 1993.
(6) Employment contract between Earl M. Fray and EG&G dated
June 20, 1994.
(7) Employment contract between Daniel T. Heaney and EG&G
dated June 1, 1995.
(8) Employment contract between E. Lavonne Lewis and EG&G
dated June 1, 1995.
(9) Employment contract between Deborah S. Lorenz and EG&G
dated November 1, 1993.
(10) Employment contract between Fred B. Parks and EG&G dated
November 1, 1993.
(11) Employment contract between Donald H. Peters and EG&G
dated November 1, 1993.
(12) Employment contract between Luciano Rossi and EG&G dated
November 1, 1993.
(13) Employment contract between Edward H. Snow and EG&G
dated November 1, 1993.
(14) Employment contract between C. Michael Williams and EG&G
dated November 1, 1993.
(15) Employment contract between Peter H. Zavattaro and EG&G
dated November 1, 1993.
Except for the name of the officer in the employment contracts identified by
numbers 3 through and including 15, the form of said employment contracts is
identical in all respects. The employment contracts identified by numbers 1
and 2 are identical to each other and are virtually identical to the contracts
identified by numbers 3 through 15 except that they provide for a longer
contract term, three years as opposed to one year. The employment contract
between John F. Alexander, II and EG&G is representative of the employment
contracts of the executive officers and is attached hereto as Exhibit 10.5.
*10.6 The EG&G, INC. 1978 NON-QUALIFIED STOCK OPTION
PLAN as amended by the Board of Directors on January 26, 1988, was
filed with the Commission as Exhibit 14(a)3.(v) to EG&G's Annual
Report on Form 10-K for the fiscal year ending January 3, 1988, and is
herein incorporated by reference.
*10.7 The EG&G, INC. 1982 INCENTIVE STOCK OPTION PLAN as
amended by the Board of Directors on January 24, 1990, was filed
with the Commission as Exhibit B on pages 37-42 of the Company's
1990 Proxy Statement and is herein incorporated by reference.
*10.8 The EG&G, Inc. 1992 STOCK OPTION PLAN was filed as
Exhibit 4(v) to EG&G's Registration Statement on Form S-8, File No.
33-49898 and is herein incorporated by reference.
21 Subsidiaries of the Registrant.
23 Consent of Independent Public Accountants.
24 Power of Attorney (appears on signature page).
27 Financial Data Schedule.
*This exhibit is a management contract or compensatory plan or arrangement
required to be filed as an Exhibit pursuant to Item 14(c) of Form 10-K.
(b) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the last quarter of
the fiscal year ended December 31, 1995.
(c) PROXY STATEMENT
EG&G's 1996 Proxy Statement, in definitive form, was filed electronically on
March 7, 1996, with the Securities and Exchange Commission in Washington,
D.C. pursuant to the Commission's Rule 14a-6.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULES
To EG&G, Inc.:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of EG&G, Inc. included in this Form
10-K and have issued our report thereon dated January 23, 1996. Our audit
was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. Schedule II is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. The schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial
statements taken as a whole.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
January 23, 1996
<PAGE>
SCHEDULE II
EG&G, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1995
<TABLE>
(In thousands) Additions
(Subtractions)
Balance Charged Accounts Balance
at Beginning (Credited) Charged at End
Description of Year to Income Off Other of Year
- ----------------- ------------ -------------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Reserve for
Doubtful Accounts
- -----------------
Year Ended
January 2, 1994 $5,621 $ 737 $ (755) $523 (A) $6,126
Year Ended
January 1, 1995 $6,126 $1,255 $(1,868) $307 (B) $5,820
Year Ended
December 31, 1995 $5,820 $ (468) $(1,214) $218 $4,356
<F1>
(A) Includes reserves of $705 related to a company acquired in 1993.
(B) Includes reserves of $222 related to a company acquired in 1994.
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our reports dated January 23, 1996, included in this Form 10-K,
into Registration Statements previously filed by EG&G, Inc. on, respectively,
Form S-8, File No. 2-61241; Form S-8, File No. 2-98168; Form S-8, File No.
33-36082; Form S-8, File No. 33-35379; Form S-8, File No. 33-49898; Form S-8,
File No. 33-57606; Form S-8, File No. 33-54785; Form S-8; File No. 33-62805;
and Form S-3, File No. 33-59675.
/s/Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
March 22, 1996
POWER OF ATTORNEY
We, the undersigned officers and directors of EG&G, Inc., hereby severally
constitute John M. Kucharski, and Murray Gross, and each of them singly, our
true and lawful attorneys with full power to them, and each of them singly, to
sign for us and in our names, in the capacities indicated below, this Annual
Report on Form 10-K and any and all amendments to said Annual Report on Form
10-K, and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable EG&G, Inc. to comply with
the provisions of the Securities Exchange Act of 1934, and all requirements
of the Securities and Exchange Commission, hereby rectifying and confirming
signed by our said attorneys, and any and all amendments thereto.
Witness our hands on the date set forth below.
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
EG&G, Inc.
March 22, 1996 By:/s/John M. Kucharski
John M. Kucharski
Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer)
March 22 , 1996 By:/s/John F. Alexander, II
John F. Alexander, II
Vice President, Chief Financial Officer
and Corporate Controller
(Principal Financial and Accounting Officer)
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated:
By: /s/John M. Kucharski
John M. Kucharski, Director
Date: March 22, 1996
By: /s/Tamara J. Erickson
Tamara J. Erickson, Director
Date: March 18, 1996
By: /s/Robert F. Goldhammer
Robert F. Goldhammer, Director
Date: March 15, 1996
By: /s/John B. Gray
John B. Gray, Director
Date: March 14, 1996
By: /s/Kent F. Hansen
Kent F. Hansen, Director
Date: March 18, 1996
By: /s/Greta Marshall
Greta Marshall, Director
Date: March 22, 1996
By:________________
William F. Pounds, Director
Date: March , 1996
By: /s/Samuel Rubinovitz
Samuel Rubinovitz, Director
Date: March 14, 1996
By: /s/John Larkin Thompson
John Larkin Thompson, Director
Date: March 14, 1996
By: /s/G. Robert Tod
G. Robert Tod, Director
Date: March 22, 1996
<PAGE>
EXHIBIT INDEX
Exhibit Exhibit Name
Number
10.1 EG&G, Inc. Supplemental Executive Retirement Plan revised as
of April 19, 1995.
10.2 EG&G, Inc. Economic Value Added Plan as adopted by the EG&G, Inc.
Board of Directors on January 24, 1996.
10.3 3-Year Competitive Advance and Revolving Credit Facility Agreement
("3-Year Agreement") dated as of March 21, 1994 among EG&G, Inc.,
the Lenders Named Herein and Chemical Bank as Administrative Agent;
Amendment No. 1 to 3-Year Agreement dated as of Mach 15, 1995;
Amendment No. 2 to 3-Year Agreement dated as of March 14, 1996.
10.4 364-Day Competitive Advance and Revolving Credit Facility Agreement
("364-Day Agreement") dated as of March 21, 1994 among EG&G,
Inc., the Lenders Named Herein and Chemical Bank as Administrative
Agent; Amendment No. 1 to 364-Day Agreement dated as of Mach 15,
1995; Amendment No. 2 to 364-Day Agreement dated as of March 14,
1996.
10.5 Employment Contract between John F. Alexander, II and EG&G, Inc.
21 Subsidiaries of the Registrant
27 Financial Data Schedule
<PAGE>
EXHIBIT 10.1
Revised 04/19/95
EG&G, INC.
Supplemental Executive Retirement Plan
SECTION I
Plan Objectives
1.1 The objectives of the Supplemental Executive Retirement Plan (the
"Plan") are as follows: to increase the overall effectiveness of the
Company's executive compensation program to attract, retain, and
motivate qualified senior executives;
1.2 to provide retirement benefits more closely related to Total
Compensation; and
1.3 to soften the financial impact of early retirement for Participants.
SECTION II
Definitions
When used herein, the following terms shall have the meaning indicated below:
2.1 Actuarial Equivalence means a benefit of equivalent value to the benefit
which otherwise would have been provided determined on the basis of
the 1971 Group Annuity Mortality Table with no loading, and projected
by Scale E, with a one-year age setback for the Participant and a five-
year age setback for any Beneficiary, and on the basis of an interest
rate of 7 percent.
2.2 Average Total Compensation means the average annual Total
Compensation of a Participant for the highest five successive years of
Credited Service for which the Participant is directly compensated by the
Company out of the last ten years of such Credited Service prior to age
65 or earlier termination of employment.
2.3 Basic Plan means the EG&G, Inc. Employees' Retirement Plan and any
other Company retirement plan under which a Participant is entitled to
receive benefits.
2.4 Basic Plan Benefit means the annual benefit payable under the Basic Plan
in the form of a straight-life annuity at the time of retirement or at age
65, whichever benefit is greater.
2.5 Committee means the Senior Executive Compensation and Governance
Committee of the EG&G, Inc. Board of Directors.
2.6 Company means EG&G, Inc. and any subsidiary of which EG&G, Inc.
controls 50 percent or more of the voting stock.
2.7 Credited Service shall be determined in accordance with the following:
(a) A Participant shall accrue a full year of Credited Service for each
year in which he has at least 2,080 Hours of Service. In any year
in which a Participant has less than 2,080 Hours of Service, the
Participant shall be deemed to complete 1/12 of a Year of
Credited Service for each 173-1/3 Hours of Service completed
during such year.
(b) Service with a company other than the Company may, at the
discretion of the Committee, be deemed to be Credited Service.
(c) In the event a Participant who has completed ten or more Years
of Service becomes a Disabled Participant, the period of
disability up to age 65 shall be counted as Credited Service
regardless of whether the Participant remains in the employ of the
Company.
(d) A Participant shall in no event be deemed to accrue more than
one full year of Credited Service with respect to any year.
(e) If the Participant was an Employee of the Company, terminated
his Employment and is rehired, the following rules shall apply in
determining his years of Credited Service:
(i) In the case of a Participant who had ten or more Years of
Service, his Years of Credited Service accrued during his
prior period of Employment shall be reinstated as of the
date of his re-employment.
(ii) In the case of a Participant whose Employment terminated
before completing ten Years of Service, his Years of
Credited Service accrued during his prior period of
Employment shall be reinstated unless the "Break-in-Service"
exceeds the greater of: (a) five years, or (b) the
number of prior Years of Service.
2.8 Disabled Participant means a Participant who incurs a physical or
mental condition which, as determined by the Federal Social Security
Administration, renders the Participant eligible to receive disability
benefits under Title 11 of the Federal Social Security Act, as amended
from time to time.
2.9 Effective Date means January 1, 1978.
2.10 Eligible Spouse means a person who was legally married to the
Participant on the date of retirement or, if not retired, the date of
death.
2.11 Employee means any person employed by the Company or a successor in
a merger or other reorganization.
2.12 Employment means service in the employ of the Company, or a
successor in a merger or other reorganization.
2.13 Executive Officer means an officer of EG&G, Inc. at or above the Vice
Presidential level, the General Counsel, the Treasurer, the Corporate
Controller, Assistant Treasurer, and Assistant Clerk.
2.14 Participant means either an Executive Officer of EG&G, Inc. or any
other employee of the Company who is so designated by the Committee.
2.15 Plan Benefit means the annual benefit payable in accordance with this
Plan.
2.16 Social Security Benefit means the estimated annual Primary Old Age
Insurance Amount which the Participant would be entitled to receive at
retirement under the Federal Social Security Act; provided, however,
that the Social Security, Benefit for a Participant who dies or retires
prior to age 65 shall be calculated on such date as if:
(a) the Participant will not receive any future wages which would be
treated as wages for purposes of the Federal Social Security Act;
and
(b) the Participant had elected to begin receiving Social Security as
of the earliest age then allowable to the Participant under said
Act.
2.17 Social Security Tax Base means the 35 year average of maximum wages
upon which Social Security taxes were based during each of the calendar
years ending with the calendar year in which the Employee reaches his
Normal Retirement Date, assuming no change in the Social Security
maximum taxable wage after the Employee's termination of
Employment. In order to determine the Social Security Tax Base for an
Employee who works beyond his Normal Retirement Date, it will be
assumed that the Employee's Normal Retirement Date occurs in the year
of termination.
2.18 Surviving Spouse Option means that the Participant's Plan Benefit will be
paid in the form of a 50 percent joint and Survivor option which is the
Actuarial Equivalent of the Participant's Plan Benefit had it been paid in
the form of a Lifetime Income Option.
2.19 Total Compensation means the total cash compensation in the form of
base salary and incentive awards paid under the EG&G, Inc.
Management Incentive Program (Incentive Award) paid to a Participant
by the Company. For purposes of this Plan, an Incentive Award shall
be allocated to the period of employment for which such Incentive
Award was earned rather than to the period during which such Incentive
Award was paid.
2.20 Years of Service shall be determined in accordance with the following:
(a) A Participant shall accrue a Year of Service for each year in
which he has 1,000 or more Hours of Service with the Company.
Any Year in which the Participant has less than 1,000 but more
than 500 Hours of Service shall not constitute a Break-in-Service
but will not be considered as a Year of Service. If in any Year,
the Participant has less than 500 Hours of Service, he shall incur
a Break-in-Service.
(b) A Participant shall be considered as accruing Hours of Service in
accordance with his normal work week for each week:
(i) while on an authorized leave of absence, if at or before
the end of such leave, the Participant returns to service,
provided however, that a Participant on a leave who fails
to return to service at or before the end of such leave, will
be considered to have terminated his Employment as of
the last day of service with the Company. If, however,
such failure to return was due to death, disability, or
retirement on his early or normal retirement date, the
Participant's date of termination will be the date on which
one of the above occurs.
(ii) during the one-year period following the date on which a
Participant is laid off due to a reduction in work force
provided the Participant returns to service within the one-year
period following his date of termination. If the
Participant does not return to service within said one-year
period, whether because he was not recalled or was
recalled but did not return to service, the Participant shall
be considered to have terminated his service as of the last
day of service.
If a Participant terminates his Employment and is rehired, the following
rules shall apply in determining his Years of Service:
(a) In the case of a Participant who had five or more Years of
Service, his Years of Service accrued during his prior period of
Employment shall be reinstated as of the date of his re-employment.
(b) In the case of a Participant whose Employment terminated before
completing five Years of Service, his Years of Service accrued
during his prior period of Employment shall be reinstated unless
the "Break-in-Service" exceeds five years.
In no event shall a Participant be deemed to have more than one Year of
Service with respect to any Year.
SECTION III
Plan Benefits
3.1 Plan Benefit - Subject to Section IV below, a Participant who has
attained age 55 and completed five Years of Service (including at least
five Years of Service after the Effective Date of this Plan) upon
retirement shall be entitled to receive an annual Plan Benefit equal to (a)
less (b) plus (c) calculated as follows:
(a) .85 percent of Average Total Compensation for each Year of
Credited Service, plus .75 percent of Average Total
Compensation in excess of Social Security Tax Base;
Less
(b) 100 percent of the Participant's Basic Plan Benefit;
Plus
(c) The reduction, if any, to the early retirement benefit payable
from the Basic Plan due to the limitations as set forth in Section
415(b) of the Internal Revenue Code of 1986.
The benefit payable under the Plan, however, shall in no event be less than (c)
above. Years of Service after age 65 shall not be counted in determining the
Plan Benefit in 3.1(a) above, nor shall any actuarial adjustment be made as the
result of, either retirement before or after age 65.
3.2 Pre-Retirement Death Benefit - If a Participant who has attained age 55
and completed five Years of Service dies prior to retirement, the
Participant's Eligible Spouse, if any, shall be entitled to receive an
annual Plan Benefit determined as if the Participant had retired and
elected a 50 percent Actuarial Equivalent Surviving Spouse Option on
the day before the Participant died. If a participant dies prior to
attaining age 55, but after the completion of five years of service, the
participant's benefit will be calculated on the date of the participant's
death; and the participant's eligible spouse, if any, shall be entitled to
receive an annual Plan Benefit in the form of 50 percent Actuarial
Equivalent Surviving Spouse Option commencing on the day the
participant would have attained age 55, if still living.
3.3 Form of Payment - The form of payment shall be:
(a) In the form of a lifetime income for any Participant who does not
have an Eligible Spouse.
(b) In the form of a 50 percent Surviving Spouse option for any
Participant who does have an Eligible Spouse.
Benefit payments will commence on the first of the month following the
month in which the Participant retires, but not later than April 1 of the
calendar year following the Participant attaining age 70 1/2.
3.4 Except as provided in Sections 4.1 and 4.2, the Company shall promptly
pay all Participants or Eligible Spouses the benefits due them under the
plan without any right to offset or to delay any benefits pending the
outcome of any arbitration, lawsuit or other dispute with any such
Participant.
SECTION IV
Miscellaneous
4.1 Forfeiture of Benefits - No benefits shall be paid under this Plan if a
Participant, without the prior consent of the Committee, enters into or in
any manner takes part as an employee, agent, officer, director, owner,
or otherwise, in any business or entity which in the opinion of the
Committee is in competition with or is in the same field as the business
of the Company. After age 65, a Participant may join a business in the
same field as, but not in competition with the Company. The foregoing
shall not apply to ownership of less than 5 percent of the stock of a
publicly-held corporation whose stock is publicly-traded on an exchange
or in the over-the-counter market.
4.2 Provisions for Benefits - The Plan is unfunded. Benefits are paid from
the operating revenues of the Company. Notwithstanding the foregoing,
EG&G, Inc., in its sole discretion, may create one or more trusts to hold
assets of the Plan and to provide for the payment of benefits. EG&G,
Inc. shall be the owner of each trust and the trust corpus shall be subject
to the claims of general creditors in the event of the bankruptcy or
insolvency of EG&G, Inc. The trusts shall contain such other terms and
conditions as EG&G, Inc. may deem necessary or advisable to ensure
that benefits are not includable, by reason of the trusts, in the income of
trust beneficiaries prior to actual distribution and that the existence of
the trusts do not cause the Plan to be considered "funded" for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as
amended.
4.3 Government Regulations - It is intended that the Plan will comply with
all applicable laws and governmental regulations. The Company shall
not be obligated to perform an obligation hereunder, or make any benefit
payments, in any case where, in the opinion of the Company's General
Counsel, such performance would result in violation of any law or
regulation.
4.4 Nonassignment - The right to compensation after termination hereunder
shall not be assignable, and neither the Participant, nor an Eligible
Spouse, nor any designated beneficiary shall be entitled to have such
payments commuted or made otherwise than in accordance with the
provisions of this Plan.
4.5 Arbitration - Any controversy relating to this Plan shall be settled by
arbitration in the City o f Boston, Commonwealth of Massachusetts,
pursuant to the rules then obtaining of the American Arbitration
Association, and judgment upon the award ma be entered in any court
having jurisdiction, and the Company and the Participant agree to be
bound by the arbitration decision on any such controversy. Unless
otherwise agreed by the parties hereto, arbitration will be by three
arbitrators. The cost of any such arbitration shall be borne equally by
the Company and the Participant. Each party shall be responsible for its
own legal expenses.
4.6 Amendment or Discontinuance - The Board of Directors of EG&G, Inc.
may amend or terminate the Plan at any time. Such amendment or
termination shall not reduce, eliminate, or accelerate the benefit
entitlements in course of payment to retired Participants, joint
annuitants, or surviving spouses, or the accrued Plan Benefit of all
Participants.
4.7 Additional Retirement Security - In the event that a person other than
EG&G, Inc. acquires or makes a tender offer for 15 percent or more of
the outstanding shares of the Company's capital stock, the provisions of
this Section 4.7 shall automatically become effective immediately and
this Plan shall be amended by the addition of subsections (a), (b), (c)
and (d) below unless the Board of Directors of EG&G, Inc. votes
otherwise within twenty days of such event:
(a) The requirement contained in section 3.1 that, in order to retire
and receive an annual Plan Benefit, a Participant must have
attained age 55 and completed at least five years of Service after
the Effective Date of this Plan, shall be eliminated. Benefit
payments will not commence until the Participant has retired.
(b) All Participants in the Plan who retired prior to the happening of
such event shall have an irrevocable, vested right, except in the
event of insolvency or bankruptcy as defined in Section 7.1 of the
EG&G, Inc. Non-Qualified Benefit Trust Agreement, to
continue to receive an annual Plan Benefit at the level determined
in accordance with Section III without discontinuance or
reduction, but in no event will this right be enforceable against
the trust.
(c) All Participants in this Plan who retire after the happening of
such event shall have an irrevocable, vested right except in the
event of insolvency or bankruptcy as defined in Section 7.1 of the
EG&G, Inc. Non-Qualified Benefit Trust Agreement, to the
maximum annual Plan Benefit determined in accordance with
section 3.1 hereof, without reduction, forfeiture or
discontinuance, but in no event will this right be enforceable
against the trust.
(d) No new Participant(s) shall be added to this Plan after the
happening of such event.
For the purposes of this section, the word "person" shall mean a person
as defined in section 3 (13)(9) of the Securities Exchange Act of 1934.
SECTION V
Administration
5.1 The Plan shall be administered by the Committee. If any member of the
Committee shall be receiving benefits under the Plan, or is eligible to
participate in the plan, such member may not participate in any decisions
of the Committee relating to the Plan.
5.2 The Committee may employ counsel, agents, and such clerical,
accounting and actuarial services as they might require in carrying out
the provisions of the Plan.
5.3 The Committee may from time to time establish rules and procedures for
the administration of the Plan. Such rules, procedures and decisions so
made shall be conclusive and binding on all persons having an interest in
the Plan. The Committee shall make all determinations as to the right of
any person to a benefit under this Plan. Any denial by the Committee of
a claim for benefits filed by a Participant or a Beneficiary, shall be
stated in writing by the Committee and delivered or mailed to the
Participant or Beneficiary. The Committee shall afford a reasonable
opportunity to any Participant or Beneficiary whose claim for benefits has
been denied, for a review of the decision denying the claim.
5.4 In the event a Participant who is entitled to receive benefits under this
Plan becomes incapacitated in any way so as to be unable to manage his
financial affairs, payments becoming due to such person may be made to
another for his benefit as directed by a court of competent jurisdiction.
Payments made pursuant to such power shall be a complete discharge of
any liability for making such payment under the provision of the Plan.
5.5 The Committee shall have such duties and powers as may be necessary
to discharge its duties hereunder, including, but not by way of
limitation, the following:
(a) To construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner, and time of
payment of any benefit hereunder.
(b) To prescribe rules, procedures and forms to be followed
regarding the administration of the Plan.
(c) To select a trust or trusts to hold assets or administer benefits
under the Plan.
(d) To receive, review and keep on file (as it deems convenient or
proper) reports of the financial condition, and of the receipts and
disbursements, of any Trust or Trusts holding assets of the Plan,
and a copy of this Plan including any amendments thereto.
5.6 The Administrative Committee and the individual members thereof shall
be indemnified by the Company against any and all liabilities arising by
reason of any act or failure to act made in good faith pursuant to the
provisions of the Plan, including expenses reasonably incurred in the
defense of any claim relating thereto.
<PAGE>
Exhibit 10.2
As adopted by the
EG&G, Inc. Board of Directors
on January 24, 1996
EG&G, Inc.
EVA INCENTIVE PLAN
ARTICLE I
Statement of Purpose
1.1 The purpose of the EVA Incentive Plan (the "Plan") is to provide a system
of incentive compensation which will promote the maximization of Economic
Value Added ("EVA") over the long term. In order to align management
incentives with shareholder interests, incentive compensation will reward
the creation of value. This Plan will tie incentive compensation to EVA
and thereby reward management for creating value.
1.2 EVA is the performance measure of value creation for EG&G, Inc. (the
"Company"). Managers create value when they employ capital in an
endeavor that generates a return that exceeds the cost of the capital
employed. Managers lose value when they employ capital in an endeavor
that generates a return that is less than the cost of capital employed.
EVA measures the total value created (or lost) by management by
subtracting the cost of capital employed from the operating profit after
tax generated by an EVA Business Unit, as hereinafter defined.
ARTICLE II
Definitions
Unless the context provides a different meaning, the following terms shall have
the following meanings:
"Act" means the Securities Exchange Act of 1934, as amended.
"Actual EVA" means, with respect to an EVA Business Unit for a fiscal year, the
EVA of such EVA Business Unit for such year as determined by the Chief
Financial Officer with the concurrence of the Committee.
"Code" means the Internal Revenue Code of 1986, as amended.
"Capital" means, with respect to an EVA Business Unit for a fiscal year, the
investment made in such EVA Business Unit, as determined by the Chief Financial
Officer with the concurrence of the Committee for such year. Each component of
Capital will be measured by computing an average balance based on the ending
monthly balance for the twelve months of a fiscal year.
"Capital Charge" means, with respect to an EVA Business Unit for a fiscal year,
the deemed opportunity cost of employing Capital in the business of such EVA
Business Unit for such year. The Capital Charge is computed as follows:
Capital Charge = Capital x Cost of Capital
"Cause" shall have the meaning set forth in the personnel policies for the EVA
Business Unit by which a Participant is employed at the time of termination.
Notwithstanding the foregoing, in the event of a Change of Control, "Cause"
shall mean:
(i) misappropriating any funds or property of the EVA Business Unit;
(ii) unreasonable refusal to perform the duties assigned to the
Participant;
(iii) conviction of a felony;
(iv) continuous conduct bringing notoriety to the EVA Business Unit
and having an adverse effect on the name or public image of the
EVA Business Unit; or
(v) continued failure by the Participant to observe any provisions of
any written employment contract with the EVA Business Unit after
being informed of such breach.
"Change in Control" means that any of the following events shall occur or be
deemed to have occurred:
(i) any "person", as such term is used in Section 13(d) and 14(d) of the
Act (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportion as their ownership of
stock in the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the
Company, and any new director whose election by the Board of Directors
or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds of the directors then still in office
who were either directors at the beginning of the period or whose
election or whose nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board of
Directors;
(iii) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation; or
(iv) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
"Chief Executive Officer" means the Chief Executive Officer of the Company as
designated by the Board of Directors of the Company from time to time.
"Chief Financial Officer" means the Chief Financial Officer of the Company as
designated by the Board of Directors of the Company from time to time.
"Committee" means the Compensation and Stock Option Committee of the Board
of Directors of the Company or such other committee as such Board may designate
from
time to time.
"Company" means EG&G, Inc., a Massachusetts corporation, and its successors
and assigns, including any corporation with which the Company is merged or
consolidated.
"Cost of Capital" means for a fiscal year the weighted average of the after-tax
cost of debt and the cost of equity for such year, as determined by the Chief
Financial Officer with the concurrence of the Committee.
"Declared Incentive" means, with respect to a Participant for a fiscal year,
the product of the Initial Declared Incentive multiplied by the Individual
Performance Factor, if any.
"EVA" means, with respect to an EVA Business Unit for a fiscal year, the NOPAT
of such EVA Business Unit for such year minus the Capital Charge of such EVA
Business Unit for such year, all as determined by the Chief Financial Officer
with the concurrence of the Committee. EVA may be positive or negative.
"EVA Business Unit" means a business unit or group of business units, including
the Company, that are uniquely identified for the purpose of calculating EVA.
"Expected Improvement in EVA" means the constant EVA improvement that is
added to shift the target up each year as determined by the Company from time
to time. This is determined by the expected growth in EVA per year with
respect to an EVA Business Unit.
"Executive Officer" means a corporate officer of the Company elected by the
Board
of Directors of the Company.
"Incentive Multiple" means, with respect to an EVA Business Unit for a fiscal
year, the difference between the Actual EVA and the Target EVA divided by the
Leverage Factor plus 1.0.
"Incentive Reserve" means, with respect to a Participant who is either an
Executive Officer of the Company, a general manager of an EVA Business Unit, or
a highly compensated employee as determined from time to time by the Committee,
a bookkeeping record of an account to which Declared Incentives are credited,
or debited as the case may be, from time to time under the Plan and from which
incentive payments to such Participant are debited.
"Individual Performance Factor" means, with respect to a Participant, the
addition or subtraction of up to 25% of the Declared Incentive adjusted to
reflect individual job performance for the fiscal year. The Individual
Performance Factor may be utilized at the discretion of the manager of an EVA
Business Unit provided that the total accrued incentive for the EVA Business
Unit does not increase or decrease as a result of the utilization of the
Individual Performance Factor.
"Initial Declared Incentive" means, with respect to a Participant for a fiscal
year, the product of the Target Incentive multiplied by the Incentive Multiple.
"Leverage Factor" means, with respect to an EVA Business Unit for a fiscal
year, the negative (positive) deviation from Target EVA necessary before a zero
(two times) Target Incentive is earned as determined by the Committee from time
to time.
"NOPAT " means, with respect to an EVA Business Unit for a fiscal year, the net
operating profit after taxes for such fiscal year, as determined by the Chief
Financial Officer with the concurrence of the Committee.
"Participant" means, for a fiscal year, each salaried employee who is
designated as a Participant, in the case of Executive Officers of the Company,
by the Committee, and in all other cases, by the Chief Executive Officer or his
designee.
"Plan" means this EG&G, Inc. EVA Incentive Plan, as amended from time to
time.
"Reserve Balance" means, with respect to a Participant subject to the Incentive
Reserve, a bookkeeping record of the net balance of the amounts credited to and
debited against such Participant's Incentive Reserve following the end of each
fiscal year. For a Participant's first year of participation in the Plan, such
Participant's Reserve Balance shall initially be equal to zero.
"Target EVA" means, with respect to an EVA Business Unit for the initial year
that such EVA Business Unit is subject to the Plan, the level of EVA as
determined by the Company.
After the initial year that an EVA Business Unit is subject to the Plan, the
Target EVA for such EVA Business Unit for each succeeding fiscal year shall be
revised according to the following formula:
Target EVA = ((Prior Fiscal Year's Actual EVA + Prior Fiscal Year's
Target EVA) divided by 2)) + Expected Improvement in EVA
"Target Incentive" means, with respect to a Participant for a fiscal year, the
Target Incentive for such Participant for such fiscal year as determined by the
Committee in the case of Participants who are Executive Officers of the Company
at the time of determination, and, in all other cases, by the Chief Executive
Officer or his designee.
ARTICLE III
Determinations and Distribution of Incentives
3.1 Determinations. For each fiscal year of the Company beginning with
the 1995 fiscal year, the Company shall determine with respect to such
fiscal year:
(1) the persons who will be Participants;
(2) the EVA Business Unit or Units for each such Participant and the
weighting between or among said Units;
(3) the Target Incentive for each Participant;
(4) the minimum and maximum ranges for the Individual Performance
Factors; and
(5) the Target EVA, Leverage Factor, and Expected Improvement in
EVA for each EVA Business Unit.
As soon as practicable following the close of such fiscal year, the
Company shall determine the following with respect to such fiscal year
for each Participant:
(1) the Actual EVA for each EVA Business Unit;
(2) the Incentive Multiple by EVA Business Unit;
(3) the Individual Performance Factors, if any;
(4) the Initial Declared Incentive; and
(5) the Declared Incentive.
3.2 Distribution.
A. As soon as practicable following the close of each fiscal year of
the Company, but no later than March 15 following such close, the
Company, with respect to those Participants subject to the
Incentive Reserve, shall:
(1) Add the Declared Incentive for such fiscal year (including
any negative incentives) to the Incentive Reserve;
(2) Pay out a prescribed portion of any positive Reserve Balance
in accordance with the distribution ratio shown below; and
(3) Carry the remaining Reserve Balance (positive or negative)
forward to the next fiscal year.
The prescribed distribution ratios for the Incentive Reserve for a
Participant are:
First year of the Plan 80%
Second year of the Plan 67%
Third year of the Plan 57%
Fourth and subsequent years of the Plan 50%
All distributions from the Incentive Reserve shall be made on a
last-in, first-out basis, such that the distribution for any given
fiscal year shall come first from the Declared Incentive for that
fiscal year, with any remainder of that distribution coming from the
Reserve Balance attributable to years prior to the fiscal year for
which the current distribution is being made.
B. As soon as practicable following the close of each fiscal year of
the Company, but no later than March 15 following such close, the
Company shall pay the Declared Incentive to those Participants
not subject to the Incentive Reserve.
3.3 Negative Reserve Balance. If, as a result of a negative EVA, a
Reserve Balance has a deficit, no Participant shall be required, at
any time, to make a cash reimbursement to his or her Incentive
Reserve. Such negative Reserve Balance, however, will be carried
forward and will be netted against future EVA performance.
3.4 Lump Sum. All distributions from the Plan shall be made in a cash
lump sum unless payment is deferred in a timely manner by the
Participant with the consent of the Company under the Company's
incentive deferral policy as in effect from time to time.
3.5 Interest. No interest shall be paid on or accrue to any Reserve
Balance.
ARTICLE IV
Plan Matters and Change in Status
4.1 Plan Matters. The Committee on behalf of the Company shall determine
all Plan matters regarding the Plan with respect to Participants who
are Executive Officers at the time of determination. Unless otherwise
expressly reserved to the Committee, the Chief Executive Officer or
his designee on behalf of the Company shall determine all Plan matters
with respect to all other Participants.
4.2 Hires, Promotions and Transfers. A Participant who is hired,
transferred or promoted during a fiscal year into a position
qualifying for participation in the Plan will participate on a
prorated basis in the year of hire, transfer or promotion based on the
percentage of the fiscal year the Participant is in such qualifying
position. A Participant who transfers his or her employment from
one participating EVA Business Unit to another EVA Business Unit will
retain his or her Incentive Reserve and the Initial Declared Incentive
and Declared Incentive for such Participant shall be pro-rated based
on the time spent in each EVA Business Unit.
4.3 Retirement. A Participant who terminates employment with the Company
during a fiscal year by virtue of retirement at age 55 or older shall
be entitled to receive the positive Reserve Balance, if any, and may
be eligible for a share of the Declared Incentive. The Declared
Incentive shall be calculated as if the Participant had remained
employed as of the end of the fiscal year. Participant's share of the
Declared Incentive will be calculated by multiplying the Declared
Incentive by a proration factor equal to the number of full weeks of
Participant's actual employment during the fiscal year divided by
fifty-two (52). Eligibility will be based on the authorization of the
Participant's manager and must be approved at the start of the fiscal
year in which the retirement is to occur. Payment of the positive
Reserve Balance, if any, and Participant's share of any Declared
Incentive will be made at the same time as payments under the Plan are
made to Participants actively employed by the Company.
4.4 Disability. A Participant who becomes permanently disabled, as
defined in the Company's long-term disability benefits program, shall
be entitled to receive the positive Reserve Balance, if any, and may
be eligible for a share of the Declared Incentive. The Declared
Incentive shall be calculated as if the Participant had remained
employed as of the end of the fiscal year. Participant's share of the
Declared Incentive will be calculated by multiplying the Declared
Incentive by a proration factor equal to the number of full weeks of
Participant's actual employment during the fiscal year divided by
fifty-two (52). Eligibility will be based on the authorization of the
Participant's manager. Payment of the positive Reserve Balance, if
any, and Participant's share of any Declared Incentive will be made at
the same time as payments under the Plan are made to Participants
actively employed by the Company.
4.5 Death. If a Participant terminates employment with the Company during
a fiscal year by reason of death, the estate of the Participant shall
be entitled to receive the positive Reserve Balance, if any, and may
be eligible for a share of the Declared Incentive. The Declared
Incentive shall be calculated as if the Participant had remained
employed as of the end of the fiscal year. Participant's share of the
Declared Incentive will be calculated by multiplying the Declared
Incentive by a proration factor equal to the number of full weeks
of Participant's actual employment during the fiscal year divided by
fifty-two (52). Eligibility will be based on the authorization of the
Participant's manager. Payment of the positive Reserve Balance, if
any, and Participant's share of any Declared Incentive will be made at
the same time as payments under the Plan are made to Participants
actively employed by the Company.
4.6 Involuntary Termination Without Cause. A Participant whose employment
is terminated by the Company or any subsidiary without Cause shall
forfeit his or her Declared Incentive, Incentive Reserve and any
Reserve Balance unless a different determination is made by the
Company.
4.7 Voluntary Termination. In the event that a Participant voluntarily
terminates employment with the Company or any of its subsidiaries, the
right of the Participant to his or her Declared Incentive, Incentive
Reserve and any Reserve Balance shall be forfeited unless a different
determination is made by the Company.
4.8 Involuntary Termination for Cause. In the event of termination of
employment for Cause, the right of the Participant to his or her
Declared Incentive, Incentive Reserve and any Reserve Balance shall
be forfeited unless a different determination is made by the Company.
4.9 Breach of Agreement. Notwithstanding any other provision of the Plan
or any other agreement, in the event that a Participant shall breach
any non-competition agreement or provision relating to the Company or
breach any agreement with respect to the post-employment conduct of
such Participant, including those contained in any benefit or
incentive plan or award, the Incentive Reserve held by such
Participant shall be forfeited.
4.10 Change In Control. Upon a Change in Control, the Plan shall
terminate and positive Reserve Balances shall be paid to Participants
unless the Plan is continued on no less beneficial terms to the
Participants. Payments under this Section 4.10 shall be made without
regard to whether the deductibility of such payments (or any other
"parachute payments," as that term is defined in Section 280G of the
Code, to or for the benefit of the Participant) would be limited or
precluded by Section 280G and without regard to whether such payments
(or any other "parachute payments" as so defined) would subject the
Participant to the federal excise tax levied on certain "excess
parachute payments" under Section 4999 of the Code; provided that if
the total of all "parachute payments" to or for the benefit of the
Participant, after reduction for all federal, state and local taxes
(including the tax described in Section 4999 of the Code, if
applicable) with respect to such payments (the "Total After-Tax
Payments"), would be increased by the limitation or elimination
of any payment under this Section 4.10, amounts payable under this
Section 4.10 shall be reduced to the extent, and only to the extent,
necessary to maximize the Total After-Tax Payments. The determination
as to whether and to what extent payments under this Section 4.10 are
required to be reduced in accordance with the preceding sentence shall
be made at the Company's expense by Arthur Andersen LLP or by such
other certified public accounting firm as the Board of Directors of
the Company may designate prior to a Change in Control of the Company.
In the event of any underpayment or overpayment under this Section
4.10 as determined by Arthur Andersen LLP (or such other firm as may
have been designated in accordance with the preceding sentence), the
amount of such underpayment or overpayment shall forthwith be paid to
the Participant or refunded to the Company, as the case may be, with
interest at the applicable federal rate provided for in Section 7872
(f)(2) of the Code.
4.11 No Guarantee. Participation in the Plan is no guarantee that payments
under the Plan will be made or that selection as a Participant will be
made for the subsequent fiscal year.
ARTICLE V
General Provisions
5.1 Withholdings. The Company shall have the right to withhold all
amounts, including but not limited to, taxes, which in the
determination of the Company, are required to be withheld under law
with respect to any amount due or paid under the Plan.
5.2 Expenses. All expenses and costs in connection with the adoption and
administration of the Plan shall be borne by the Company out of its
general funds.
5.3 Claims for Benefits. Participants who terminate service for any
reason will be deemed to have made a claim for benefits and no written
claim will be required. Claims for benefits will be decided by the
Chief Executive Officer or, in the case of a claim pertaining to an
Executive Officer, by the Committee (collectively referred to as the
"Adjudicator"). If the Adjudicator believes that a terminated
Participant is not entitled to benefits, it shall notify the
Participant in writing of the denial of benefits within 90 days of the
Participant's termination of service. In the event that a claim is
wholly or partially denied, the Participant or his representative
will receive a written explanation of the reason for denial. The
Participant or his representative may request a review of the denied
claim within 60 days of receipt of the denial and, in connection
therewith, may review pertinent documents and submit comments in
writing. Upon receipt of an appeal, the Adjudicator shall decide the
appeal within 60 days of receipt. The decision on appeal shall be in
writing, shall include specific reasons for the decision and shall r
efer to pertinent provisions of the Plan on which the decision is
based. In reaching its decision, the Adjudicator shall have complete
discretionary authority to determine all questions arising in the
interpretation and administration of the Plan and to construe the
terms of the Plan, including any doubtful or disputed terms and the
eligibility of a Participant for benefits.
5.4 Action Taken in Good Faith. The Company may employ attorneys,
consultants, accountants or other persons and the Company's directors
and officers shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or Chief
Executive Officer in good faith shall be final and binding upon all
employees, the Company and all other interested parties. No member of
the Committee and no officer, director, employee or representative of
the Company, or any of its affiliates acting on behalf of or in
conjunction with the Committee, shall be personally liable for any
action, determination, or interpretation, whether of commission or
omission, taken or made with respect to the Plan.
5.5 Rights Personal to Employees. Any rights provided to an employee
under the Plan shall be personal to such employee, shall not be
transferable (except by will or pursuant to the laws of descent or
distribution), and shall be exercisable during the employee's
lifetime, only by such employee.
5.6 Distribution. Upon termination of the Plan or suspension for a period
of more than 90 days, the positive Reserve Balance of each Participant
shall be distributed as soon as practicable but in no event later than
90 days from such event. The Committee, in its sole discretion, may
accelerate distribution of the balance of any Incentive Reserve, in
whole or in part, at any time without penalty.
5.7 Non-Allocation of Award. In the event of a suspension or termination
of the Plan during any fiscal year, as provided herein at Section
10.1, the Declared Incentive for such year shall be deemed forfeited
and no portion thereof shall be allocated to Participants. In the
event of a suspension, any such forfeiture shall not affect the
calculation of EVA in any subsequent year.
ARTICLE VI
Limitations
6.1 No Continued Employment. Nothing contained herein shall provide any
employee with any right to continued employment or in any way abridge
the rights of the Company and its subsidiaries to determine the terms
and conditions of employment and whether to terminate employment of
any employee. Neither the establishment of the Plan or the grant of
an award or bonus hereunder shall be deemed to constitute an express
or implied contract of employment for any period of time or in any way
abridge the rights of the Company or any of its subsidiaries to
determine the terms and conditions of employment or to terminate the
employment of any employee with or without Cause at any time.
6.2 No Vested Rights. Except as otherwise expressly provided herein, no
employee or other person shall have any claim of right (legal,
equitable, or otherwise) to any award, allocation, or distribution or
any right, title, or vested interest in any amounts in such employee's
Incentive Reserve and no officer or employee of the Company or any
subsidiary or any other person shall have any authority to make
representations or agreements to the contrary. No interest conferred
herein to a Participant shall be assignable or subject to any lien or
pledge or any claim by a Participant's creditors. The right of the
Participant to receive a distribution thereunder shall be an
unsecured claim against the general assets of the Company and the
Participant shall have no rights in or against any specific assets of
the Company as the result of participation hereunder.
6.3 Not Part of Other Benefits. The benefits provided in this Plan shall
not be deemed a part of any other benefit provided by the Company or
any of its subsidiaries to its employees. Neither the Company nor any
of its subsidiaries assumes any obligation to Participants except as
specified herein. This is a complete statement of the terms and
conditions of the Plan as in effect on January 1, 1995.
6.4 Other Plans. Nothing contained herein shall limit the power of either
the Company or its subsidiaries or the power of the Committee to grant
bonuses to employees of the Company or any of its subsidiaries,
whether or not Participants in this Plan.
6.5 Unfunded Plan. This Plan is unfunded. Nothing herein shall create or
be deemed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company (or any of its
subsidiaries) and any Participant.
ARTICLE VII
Authority
7.1 Full and sole power and authority to interpret and administer this
Plan shall be vested in the Committee which shall have the sole
authority to make rules and regulations for the administration of
the Plan. The Committee may from time to time make such decisions
and adopt such rules and regulations for implementing the Plan as it
deems appropriate for any Participant under the Plan. Any decision
taken by the Committee arising out of or in connection with the
construction, administration, interpretation and effect of the Plan
shall be final, conclusive and binding upon all Participants and any
person claiming under or through them. The Committee may delegate its
power and authority with respect to the Plan to the Chief Executive
Officer from time to time as it determines.
ARTICLE VIII
Notice
8.1 Any notice to be given pursuant to the provisions of the Plan shall be
in writing and directed to the appropriate recipient thereof at his or
her business address or office location.
ARTICLE IX
Effective Date
9.1 This Plan shall be effective as of January 1, 1995.
<PAGE>
ARTICLE X
Amendments
10.1 This Plan may be amended, suspended or terminated in whole or in part
at any time from time to time at the sole discretion of the Committee;
provided, however, that no such change in the Plan shall be effective
to eliminate or diminish the distribution of any award that has been
allocated to the Incentive Reserve of a Participant prior to the date
of such amendment, suspension or termination. Notice of any such
amendment, suspension or termination shall be given promptly to each
Participant.
ARTICLE XI
Applicable Law
11.1 This Plan shall be construed in accordance with the provisions of the
laws of the Commonwealth of Massachusetts.
EXECUTION COPY
364-DAY
COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of March 21, 1994
among
EG&G, INC.,
THE LENDERS NAMED HEREIN
and
CHEMICAL BANK,
as Administrative Agent
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TABLE OF CONTENTS
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<S> <C> <C>
Page
ARTICLE I. DEFINITIONS. . . . . . . . . . . . . . 1
SECTION 1.01. Defined Terms1
SECTION 1.02. Terms Generally11
ARTICLE II. THE CREDITS. . . . . . . . . . . . . .12
SECTION 2.01. Commitments . . . . . . . . . . . . .12
SECTION 2.02. Loans . . . . . . . . . . . . . . . .13
SECTION 2.03. Competitive Bid Procedure . . . . . .15
SECTION 2.04. Standby Borrowing Procedure . . . . .18
SECTION 2.05. Facility Fees . . . . . . . . . . . .19
SECTION 2.06. Repayment of Loans; Evidence of Debt 19
SECTION 2.07. Interest on Loans . . . . . . . . . .20
SECTION 2.08. Default Interest. . . . . . . . . . .21
SECTION 2.09. Alternate Rate of Interest. . . . . .21
SECTION 2.10. Termination and Reduction
of Commitments . . . . . . . . . . .22
SECTION 2.11. Prepayment. . . . . . . . . . . . . .22
SECTION 2.12. Reserve Requirements; Change
in Circumstances . . . . . . . . . .23
SECTION 2.13. Change in Legality. . . . . . . . . .25
SECTION 2.14. Indemnity . . . . . . . . . . . . . .26
SECTION 2.15. Pro Rata Treatment. . . . . . . . . .27
SECTION 2.16. Sharing of Setoffs. . . . . . . . . .27
SECTION 2.17. Payments. . . . . . . . . . . . . . .28
SECTION 2.18. Duty to Mitigate; Assignment of
Commitments Under Certain
Circumstances. . . . . . . . . . . .28
SECTION 2.19. Taxes . . . . . . . . . . . . . . . .29
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ARTICLE III. REPRESENTATIONS AND WARRANTIES . . . .33
SECTION 3.01. Corporate Existence and Power . . . .33
SECTION 3.02. Corporate and Governmental
Authorization; Contravention . . . .33
SECTION 3.03. Binding Effect. . . . . . . . . . . .33
SECTION 3.04. Financial Information . . . . . . . .34
SECTION 3.05. Litigation. . . . . . . . . . . . . .34
SECTION 3.06. Compliance with ERISA . . . . . . . .34
SECTION 3.07. Taxes . . . . . . . . . . . . . . . .35
SECTION 3.08. Subsidiaries. . . . . . . . . . . . .35
SECTION 3.09. Representations and Warranties of
Each Borrowing Subsidiary. . . . . .35
SECTION 3.10. Federal Reserve Regulations . . . . .36
SECTION 3.11. Investment Company Act; Public
Utility Holding Company Act. . . . .37
SECTION 3.12. Environmental and Safety Matters. . .37
ARTICLE IV. CONDITIONS OF LENDING. . . . . . . . .38
SECTION 4.01. All Borrowings. . . . . . . . . . . .38
SECTION 4.02. Closing Date. . . . . . . . . . . . .38
SECTION 4.03. First Borrowing by Each
Borrowing Subsidiary . . . . . . . .39
ARTICLE V. COVENANTS. . . . . . . . . . . . . . .40
SECTION 5.01. Information . . . . . . . . . . . . .40
SECTION 5.02. Corporate Existence; Businesses and
Properties . . . . . . . . . . . . .42
SECTION 5.03. Insurance . . . . . . . . . . . . . .42
SECTION 5.04. Litigation and Other Notices. . . . .43
SECTION 5.05. Maintaining Records; Access to
Properties and Inspections . . . . .43
SECTION 5.06. Fixed Charge Coverage . . . . . . . .43
SECTION 5.07. Net Debt to Capitalization Ratio. . .43
SECTION 5.08. Negative Pledge . . . . . . . . . . .43
SECTION 5.09. Consolidations, Mergers and
Sales of Assets. . . . . . . . . . .45
ARTICLE VI. EVENTS OF DEFAULT. . . . . . . . . . .45
ARTICLE VII. GUARANTEE. . . . . . . . . . . . . . .49
ARTICLE VIII. THE ADMINISTRATIVE AGENT . . . . . . .51
ARTICLE IX. MISCELLANEOUS. . . . . . . . . . . . .55
SECTION 9.01. Notices. . . . . . . . . . . . . . .55
SECTION 9.02. Survival of Agreement. . . . . . . .55
SECTION 9.03. Binding Effect . . . . . . . . . . .56
SECTION 9.04. Successors and Assigns . . . . . . .56
SECTION 9.05. Expenses; Indemnity. . . . . . . . .59
SECTION 9.06. Applicable Law . . . . . . . . . . .60
SECTION 9.07. Waivers; Amendment . . . . . . . . .60
SECTION 9.08. Entire Agreement . . . . . . . . . .61
SECTION 9.09. Severability . . . . . . . . . . . .62
SECTION 9.10. Counterparts . . . . . . . . . . . .62
SECTION 9.11. Headings . . . . . . . . . . . . . .62
SECTION 9.12. Right of Setoff. . . . . . . . . . .62
SECTION 9.13. Jurisdiction; Consent to
Service of Process62
SECTION 9.14. Waiver of Jury Trial . . . . . . . .63
SECTION 9.15. Addition of Borrowing Subsidiaries .63
SECTION 9.16. Confidentiality. . . . . . . . . . .64
SECTION 9.17. Collateral . . . . . . . . . . . . .65
SECTION 9.18. Interest Rate Limitation . . . . . .65
Exhibits
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid Accept/Reject Letter
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Opinion of Murray Gross, Esq.
Exhibit D-2 Form of Opinion of Murray Gross, Esq.
Exhibit E Form of Borrowing Subsidiary Agreement
Schedules
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries
Schedule 3.12(a) Environmental and Safety Matters
Schedule 3.12(b) Environmental and Safety Matters
Schedule 3.12(c) Environmental and Safety Matters
/TABLE
<PAGE>
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY
AGREEMENT (the "Agreement") dated as of March 21, 1994, among
EG&G, INC., a Massachusetts corporation (the "Company"), the
Borrowing Subsidiaries (as such term is defined herein;
together with the Company, the "Borrowers"), the lenders
listed in Schedule 2.01 (the "Lenders") and CHEMICAL BANK, a
New York banking corporation, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent").
The Lenders have been requested to extend credit to the
Borrowers to enable them to borrow on a standby revolving
credit basis on and after the date hereof and at any time and
from time to time prior to the Maturity Date a principal
amount not in excess of $175,000,000 at any time outstanding.
The Lenders have also been requested to provide a procedure
pursuant to which the Borrowers may invite the Lenders to bid
on an uncommitted basis on short-term borrowings by the
Borrowers. The proceeds of all such borrowings are to be used
for general corporate purposes, including commercial paper
back-up and to finance acquisitions. The Lenders are willing
to extend such credit on the terms and subject to the
conditions herein set forth. Capitalized terms used but not
defined herein shall have the meanings assigned to such terms
in Article I.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement,
the following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR
Loans.
"ABR Loan" shall mean any Standby Loan bearing interest
at a rate determined by reference to the Alternate Base Rate
in accordance with the provisions of Article II.
"Administrative Questionnaire" shall mean an
Administrative Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a
specified person, another person that directly or indirectly
controls or is controlled by or is under common control with
the person specified.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the greater of (a) the Prime Rate in effect on such
day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall
mean the rate of interest per annum publicly announced from
time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City; each change
in the Prime Rate shall be effective on the date such change
is publicly announced as effective. "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers,
as released on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so released
for any day which is a Business Day, the arithmetic average
(rounded upwards to the next 1/100th of 1%), as determined by
the Administrative Agent, of the quotations for the day of
such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by
it. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability
or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of
the first sentence of this definition until the circumstances
giving rise to such inability no longer exist. Any change in
the Alternate Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee in the
form of Exhibit C.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Board of Directors" shall mean the Board of Directors of
the Company or any duly authorized committee thereof.
"Borrowing" shall mean a group of Loans of a single Type
made by the Lenders to a single Borrower (or, in the case of
a Competitive Borrowing, by the Lender or Lenders whose
Competitive Bids have been accepted pursuant to Section 2.03)
on a single date and as to which a single Interest Period is
in effect.
"Borrowing Subsidiary" shall mean any Subsidiary which
shall have executed and delivered to the Administrative Agent
and each Lender a Borrowing Subsidiary Agreement.
"Borrowing Subsidiary Agreement" shall mean an agreement,
in the form of Exhibit E hereto, duly executed by the Company
and a Subsidiary.
"Business Day" shall mean any day (other than a day which
is a Saturday, Sunday or legal holiday in the State of New
York) on which banks are open for business in New York City;
provided, however, that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"A Change in Control" shall be deemed to have occurred if
(a) any person or group of persons shall have acquired
beneficial ownership of more than 50% of the outstanding
Voting Shares of the Company (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations thereunder),
or (b) during any period of 12 consecutive months, commencing
before or after the date of this Agreement, individuals who on
the first day of such period were directors of the Company
(together with any replacement or additional directors who
were nominated or elected by a majority of directors then in
office) cease to constitute a majority of the Board of
Directors of the Company.
"Closing Date" shall mean the date hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
the same may be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender hereunder as set forth as of the
Closing Date in Schedule 2.01 hereto as such Lender's
Commitment may be permanently terminated or reduced from time
to time pursuant to Section 2.10. The Commitment of each
Lender shall automatically and permanently terminate on the
Maturity Date if not terminated earlier pursuant to the terms
hereof.
"Competitive Bid" shall mean an offer by a Lender to make
a Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a
notification made by a Borrower pursuant to Section 2.03(d) in
the form of Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive
Bid, (i) in the case of a Eurodollar Loan, the Margin, and
(ii) in the case of a Fixed Rate Loan, the fixed rate of
interest offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made
pursuant to Section 2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a Borrowing consisting
of a Competitive Loan or concurrent Competitive Loans from the
Lender or Lenders whose Competitive Bids for such Borrowing
have been accepted under the bidding procedure described in
Section 2.03.
"Competitive Loan" shall mean a Loan made pursuant to the
bidding procedure described in Section 2.03. Each Competitive
Loan shall be a Eurodollar Competitive Loan or a Fixed Rate
Loan.
"Consolidated EBIT" shall mean, for any period,
Consolidated Net Income of the Company and its Consolidated
Subsidiaries excluding the effect of non-cash extraordinary
items and accounting changes for such period, plus income
taxes during such period, plus the aggregate amount deducted
in determining such Consolidated Net Income for such period in
respect of Consolidated Net Interest Expense of the Company
and its Consolidated Subsidiaries for such period, all
determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, the
consolidated net income (or loss) of the Company and its
Consolidated Subsidiaries for such period, determined in
accordance with GAAP.
"Consolidated Net Indebtedness" shall mean, for any date,
(a) the sum of all outstanding Indebtedness of the Company and
its Consolidated Subsidiaries as of such date less (b)
Eligible Investments as of such date, all determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Interest Expense" shall mean, for any
period, (a) the gross interest expense of the Company and its
Consolidated Subsidiaries (excluding the amortization of
transaction costs) in respect of Indebtedness included within
clauses (i) through (iv) of the definition of Indebtedness for
such period minus (b) interest income for such period, all
determined in accordance with GAAP.
"Consolidated Subsidiary" shall mean, at any date, any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated
financial statements as of such date.
"Default" shall mean any event or condition which upon
notice, lapse of time or both would constitute an Event of
Default.
"dollars" or "$" shall mean lawful money of the
United States of America.
"Eligible Investments" shall mean:
(a) cash and cash equivalents;
(b) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by,
the United States of America (or any agency thereof to the
extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing
within one year from the date of acquisition thereof by the
Company or any Subsidiary;
(c) investments in money market funds the assets of which
are invested in obligations of the type described in (b) above
(irrespective of maturity); and
(d) other money market investments offered by any of the
Lenders or a commercial bank having the highest credit
rating available from Standard & Poor's Corporation or Moody's
Investors Service, Inc. and having maturities of less than 90
days.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended from time to
time.
"ERISA Affiliate" shall mean any trade or business
(whether or not incorporated) that, together with the Company,
is treated as a single employer under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised
of Eurodollar Loans.
"Eurodollar Competitive Loan" shall mean any Competitive
Loan bearing interest at a rate determined by reference to the
LIBO Rate in accordance with the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive
Loan or Eurodollar Standby Loan.
"Eurodollar Standby Loan" shall mean any Standby Loan
bearing interest at a rate determined by reference to the LIBO
Rate in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to
such term in Article VI.
"Existing Facilities" shall mean (i) the $150,000,000
Credit Agreement dated July 1, 1988 among the Company and the
lenders named therein and (ii) the $150,000,000 Credit
Agreement dated August 19, 1988 among the Company, the lenders
named therein and the Bank of New England as agent.
"Facility A Credit Agreement" shall mean the 3-Year
Competitive Advance and Revolving Credit Facility Agreement
dated the date hereof among the parties hereto.
"Facility Fee" shall have the meaning assigned to such
term in Section 2.05(a).
"Financial Officer" of any corporation shall mean the
chief financial officer, principal accounting officer,
treasurer or assistant treasurer of such corporation.
"Fixed Rate Borrowing" shall mean a Borrowing comprised
of Fixed Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in
the form of a decimal to no more than four decimal places)
specified by the Lender making such Loan in its Competitive
Bid.
"GAAP" shall mean generally accepted accounting
principles, applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guaranteed Obligations" shall mean the principal of and
interest on the Loans made to, and the other obligations,
monetary or otherwise, of, the Borrowing Subsidiaries under
this Agreement.
"Indebtedness" of any person shall mean at any date,
without duplication, (i) all obligations of such person for
borrowed money (but not including non-recourse obligations of
such person), (ii) all obligations of such person evidenced by
bonds, debentures, notes or other similar instruments, except
trade payables and reimbursement obligations in respect of
performance bonds and standby letters of credit to the extent
the obligations underlying such letters of credit would not be
considered Indebtedness, all of which arise in the ordinary
course of business, (iii) all obligations of such person to
pay the deferred purchase price of property or services,
except trade accounts payable and accrued expenses arising in
the ordinary course of business, (iv) all obligations of such
person as lessee under capital leases, (v) all Indebtedness of
others secured by a Lien on any asset of such person (but not
including non-recourse obligations of such person) and (vi)
all Indebtedness of others guaranteed by such person.
"Interest Payment Date" shall mean (i) as to any
Eurodollar Loan for which the Interest Period is 1, 2 or 3
months, the last day of the Interest Period, (ii) as to any
Eurodollar Loan for which the Interest Period is 6 months, the
last day of the Interest Period and the date that would be the
last day of an Interest Period commencing on the same date but
having a duration of 3 months, (iii) as to any ABR Loan, the
last day of March, June, September and December in each year,
or if such day is not a Business Day, the next succeeding
Business Day and (iv) as to any Fixed Rate Loan, the last day
of the Interest Period applicable thereto.
"Interest Period" shall mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing
or on the last day of the immediately preceding Interest
Period applicable to such Borrowing, as the case may be, and
ending on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect, (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing or on the last day of
the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or
December 31, (ii) the Maturity Date, and (iii) the date such
Borrowing is repaid or prepaid in accordance with Section 2.06
or Section 2.11 and (c) as to any Fixed Rate Borrowing, the
period commencing on the date of such Borrowing and ending on
the date specified in the Competitive Bids in which the offers
to make the Fixed Rate Loans comprising such Borrowing were
extended, which shall not be earlier than seven days after the
date of such Borrowing or later than 360 days after the date
of such Borrowing; provided, however, that if any Interest
Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding
Business Day unless, in the case of Eurodollar Loans only,
such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end
on the next preceding Business Day. Interest shall accrue
from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal
to the arithmetic average of the rates at which dollar
deposits approximately equal in principal amount to (i) in the
case of a Standby Borrowing, the Administrative Agent's
portion of such Eurodollar Borrowing and (ii) in the case of
a Competitive Borrowing, a principal amount that would have
been the Administrative Agent's portion of such Competitive
Borrowing had such Competitive Borrowing been a Standby
Borrowing, and for a maturity comparable to such Interest
Period are offered to the principal London offices of the
Administrative Agent (or, if the Administrative Agent does not
at the time maintain a London office, the principal London
office of any Affiliate of the Administrative Agent) in
immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period.
"Lien" shall mean any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind whatsoever
(including any conditional sale or other title retention
agreement, any lease in the nature thereof and the filing of
or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction).
"Loan" shall mean a Competitive Loan or a Standby Loan,
whether made as a Eurodollar Loan, an ABR Loan or a Fixed Rate
Loan, as permitted hereby.
"Margin" shall mean, as to any Eurodollar Competitive
Loan, the margin (expressed as a percentage rate per annum in
the form of a decimal to no more than four decimal places) to
be added to or subtracted from the LIBO Rate in order to
determine the interest rate applicable to such Loan, as
specified in the Competitive Bid relating to such Loan.
"Margin Regulations" shall mean Regulations G, T, U and
X of the Board as from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Margin Stock" shall have the meaning given such term
under Regulation U of the Board.
"Material Adverse Effect" shall mean a materially adverse
effect on the business, assets, operations or condition,
financial or otherwise, of the Company and its Consolidated
Subsidiaries taken as a whole.
"Maturity Date" shall mean March 20, 1995.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Company or
any ERISA Affiliate (other than one considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Code
Section 414) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"person" shall mean any natural person, corporation,
business trust, joint venture, association, company,
partnership or government, or any agency or political
subdivision thereof.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"Plan" shall mean any employee pension benefit plan
(other than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Code that is
maintained for current or former employees, or any beneficiary
thereof, of the Company or any ERISA Affiliate.
"Register" shall have the meaning given such term in
Section 9.04(d).
"Regulation D" shall mean Regulation D of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Reportable Event" shall mean any reportable event as
defined in Section 4043(b) of ERISA or the regulations issued
thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Code
Section 414).
"Required Lenders" shall mean, at any time, Lenders
having Commitments representing more than 50% of the Total
Commitment or, for purposes of acceleration pursuant to clause
(ii) of Article VI, Lenders holding Loans representing more
than 50% of the aggregate principal amount of the Loans
outstanding.
"Shareholders' Equity" shall mean, with respect to the
Company at any date, (a) the sum of (i) common stock and
preferred stock taken at par or stated value at such date,
(ii) capital in excess of par value at such date, (iii)
cumulative translation adjustments and other adjustments
required by GAAP at such date and (iv) retained earnings (or
deficit) at such date minus (b) treasury stock at such date,
all determined in accordance with GAAP.
"Standby Borrowing" shall mean a Borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made
pursuant to Section 2.04 in the form of Exhibit A-5.
"Standby Loans" shall mean the revolving loans made
pursuant to Section 2.04. Each Standby Loan shall be a
Eurodollar Standby Loan or an ABR Loan.
"subsidiary" shall mean, with respect to any person (the
"parent"), any corporation, association or other business
entity of which securities or other ownership interests
representing more than 50% of the ordinary voting power are,
at the time as of which any determination is being made, owned
or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean a subsidiary of the Company.
"Total Commitment" shall mean, at any time, the aggregate
amount of Commitments of all the Lenders, as in effect at such
time.
"Type", when used in respect of any Loan or Borrowing,
shall refer to the Rate by reference to which interest on such
Loan or on the Loans comprising such Borrowing is determined.
For purposes hereof, "Rate" shall include the LIBO Rate, the
Alternate Base Rate and the Fixed Rate.
"Voting Shares" shall mean, as to any corporation,
outstanding shares of stock of any class of such corporation
entitled to vote in the election of directors, excluding
shares entitled so to vote only upon the happening of some
contingency.
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in
Section 1.01 shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding mascu-
line, feminine and neuter forms. The words "include,"
"includes" and "including" shall be deemed to be followed by
the phrase "without limitation." All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall
otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time
to time; provided, however, that for purposes of determining
compliance with any covenant set forth in Article V, such
terms shall be construed in accordance with GAAP as in effect
on the date hereof applied on a basis consistent with the
application used in preparing the Company's audited financial
statements referred to in Section 3.04.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and
conditions and relying upon the representations and warranties
herein set forth, each Lender agrees, severally and not
jointly, to make Standby Loans to the Borrowers, at any time
and from time to time on and after the Closing Date hereof and
until the earlier of the Maturity Date and the termination of
the Commitment of such Lender, in an aggregate principal
amount at any time outstanding not to exceed such Lender's
Commitment minus the amount by which the Competitive Loans
outstanding at such time shall be deemed to have used such
Commitment pursuant to Section 2.15, subject, however, to the
conditions that (i) at no time shall (A) the sum of (x) the
outstanding aggregate principal amount of all Standby Loans
made by all Lenders plus (y) the outstanding aggregate
principal amount of all Competitive Loans made by all Lenders
exceed (B) the Total Commitment and (ii) at all times the
outstanding aggregate principal amount of all Standby Loans
made by each Lender shall equal the product of (A) the
percentage which its Commitment represents of the Total
Commitment times (B) the outstanding aggregate principal
amount of all Standby Loans.
Within the foregoing limits, the Borrowers may borrow,
pay or prepay and reborrow Standby Loans hereunder, on and
after the Closing Date and prior to the Maturity Date, subject
to the terms, conditions and limitations set forth herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be
made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their respective
Commitments; provided, however, that the failure of any Lender
to make any Standby Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being under-
stood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Loan required to be
made by such other Lender). Each Competitive Loan shall be
made in accordance with the procedures set forth in Section
2.03. The Standby Loans or Competitive Loans comprising any
Borrowing shall be in an aggregate principal amount which is
an integral multiple of $1,000,000 and not less than
$5,000,000 (or an aggregate principal amount equal to the
remaining balance of the available Commitments).
(b) Each Competitive Borrowing shall be comprised
entirely of Eurodollar Competitive Loans or Fixed Rate Loans,
and each Standby Borrowing shall be comprised entirely of
Eurodollar Standby Loans or ABR Loans, as any Borrower may
request pursuant to Section 2.03 or 2.04, as applicable. Each
Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided that (i) any exercise of such option
shall not affect the obligation of such Borrower to repay such
Loan in accordance with the terms of this Agreement and (ii)
the Borrowers shall not be liable for increased costs under
Section 2.12 or 2.13 to the extent that (A) such costs could
be avoided by the use of a different branch or Affiliate to
make Eurodollar Loans and (B) such use would not, in the
judgment of such Lender, entail any expense for which such
Lender shall not be indemnified hereunder. Borrowings of more
than one Type may be outstanding at the same time; provided,
however, that no Borrowing shall be requested which, if made,
would result in an aggregate of more than 10 separate Standby
Borrowings comprised of Eurodollar Loans being outstanding
hereunder at any one time. For purposes of the foregoing,
Loans having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate
Loans.
(c) Subject to Section 2.02(d), each Lender shall make
each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to the
Administrative Agent in New York, New York, not later than
12:00 noon, New York City time, and the Administrative Agent
shall by 3:00 p.m., New York City time, credit the amounts so
received to the general deposit account of the applicable
Borrower with the Administrative Agent or, if a Borrowing
shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts
so received to the respective Lenders. Competitive Loans
shall be made by the Lender or Lenders whose Competitive Bids
therefor are accepted pursuant to Section 2.03 in the amounts
so accepted. Standby Loans shall be made by the Lenders pro
rata in accordance with Section 2.15. Unless the
Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's
portion of such Borrowing, the Administrative Agent may assume
that such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c) and the Administrative
Agent may, in reliance upon such assumption, make available to
the applicable Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have made such
portion available to the Administrative Agent, such Lender and
the applicable Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the
date such amount is made available to such Borrower until the
date such amount is repaid to the Administrative Agent at (i)
in the case of such Borrower, the interest rate applicable at
the time to the Loans comprising such Borrowing and (ii) in
the case of such Lender, the Federal Funds Effective Rate. If
such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such
Lender's Loan as part of such Borrowing for purposes of this
Agreement.
(d) Any Borrower may refinance all or any part of any
Borrowing with a Borrowing of the same or a different Type
made pursuant to Section 2.03 or Section 2.04, subject to the
conditions and limitations set forth herein and elsewhere in
this Agreement, including refinancings of Competitive
Borrowings with Standby Borrowings and Standby Borrowings with
Competitive Borrowings. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid in accordance with
Section 2.06 with the proceeds of a new Borrowing hereunder
and the proceeds of the new Borrowing, to the extent they do
not exceed the principal amount of the Borrowing being
refinanced, shall not be paid by the Lenders to the
Administrative Agent or by the Administrative Agent to the
applicable Borrower pursuant to Section 2.02(c); provided,
however, that (i) if the principal amount extended by a Lender
in a refinancing is greater than the principal amount extended
by such Lender in the Borrowing being refinanced, then such
Lender shall pay such difference to the Administrative Agent
for distribution to the Lender described in (ii) below, (ii)
if the principal amount extended by a Lender in the Borrowing
being refinanced is greater than the principal amount being
extended by such Lender in the refinancing, the Administrative
Agent shall return the difference to such Lender out of
amounts received pursuant to (i) above and (iii) to the extent
any Lender fails to pay the Agent amounts due from it pursuant
to (i) above, any Loan or portion thereof being refinanced
with such amounts shall not be deemed repaid in accordance
with Section 2.06 and shall be payable by the Company.
SECTION 2.03. Competitive Bid Procedure. (a) In order
to request Competitive Bids, a Borrower shall hand deliver or
telecopy to the Administrative Agent a duly completed
Competitive Bid Request in the form of Exhibit A-1 hereto, to
be received by the Administrative Agent (i) in the case of a
Eurodollar Competitive Borrowing, not later than 10:00 a.m.,
New York City time, four Business Days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 10:00 a.m., New York City time, one
Business Day before a proposed Competitive Borrowing. No ABR
Loan shall be requested in, or made pursuant to, a Competitive
Bid Request. A Competitive Bid Request that does not conform
substantially to the format of Exhibit A-1 may be rejected in
the Administrative Agent's sole discretion, and the
Administrative Agent shall promptly notify the applicable
Borrower of such rejection by telecopy. Each Competitive Bid
Request shall refer to this Agreement and specify whether the
Borrowing then being requested is to be a Eurodollar Borrowing
or a Fixed Rate Borrowing, the date of such Borrowing (which
shall be a Business Day), the aggregate principal amount
thereof, which shall be in a minimum principal amount of
$5,000,000 and in an integral multiple of $1,000,000, and the
Interest Period with respect thereto (which may not end after
the Maturity Date). Promptly after its receipt of a
Competitive Bid Request that is not rejected as aforesaid, the
Administrative Agent shall invite by telecopy (in the form set
forth in Exhibit A-2 hereto) the Lenders to bid, on the terms
and conditions of this Agreement, to make Competitive Loans.
(b) Each Lender invited to bid may, in its sole
discretion, make one or more Competitive Bids to the appli-
cable Borrower responsive to such Borrower's Competitive Bid
Request. Each Competitive Bid by a Lender must be received by
the Administrative Agent by telecopy, in the form of Exhibit
A-3 hereto, (i) in the case of a Eurodollar Competitive
Borrowing, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii)
in the case of a Fixed Rate Borrowing, not later than 9:30
a.m., New York City time, on the day of a proposed Competitive
Borrowing. Multiple bids will be accepted by the
Administrative Agent. Competitive Bids that do not conform
substantially to the format of Exhibit A-3 may be rejected by
the Administrative Agent, and the Administrative Agent shall
notify the Lender making such nonconforming bid of such
rejection as soon as practicable. Each Competitive Bid shall
refer to this Agreement and specify (x) the principal amount
(which shall be in a minimum principal amount of $5,000,000
and in an integral multiple of $1,000,000 and which may equal
the entire principal amount of the Competitive Borrowing
requested) of the Competitive Loan or Loans that the Lender is
willing to make, (y) the Competitive Bid Rate or Rates at
which the Lender is prepared to make the Competitive Loan or
Loans and (z) the Interest Period and the last day thereof.
If any Lender invited to bid shall elect not to make a
Competitive Bid, such Lender shall so notify the
Administrative Agent by telecopy (I) in the case of Eurodollar
Competitive Loans, not later than 9:30 a.m., New York City
time, three Business Days before a proposed Competitive
Borrowing, and (II) in the case of Fixed Rate Loans, not later
than 9:30 a.m., New York City time, on the day of a proposed
Competitive Borrowing; provided, however, that failure by any
Lender to give such notice shall not cause such Lender to be
obligated to make any Competitive Loan as part of such
Competitive Borrowing. A Competitive Bid submitted by a
Lender pursuant to this paragraph (b) shall be irrevocable.
(c) The Administrative Agent shall promptly notify the
applicable Borrower, by telecopy, of all the Competitive Bids
made, the Competitive Bid Rate and the principal amount of
each Competitive Loan in respect of which a Competitive Bid
was made and the identity of the Lender that made each bid.
The Administrative Agent shall send a copy of all Competitive
Bids to such Borrower for its records as soon as practicable
after completion of the bidding process set forth in this
Section 2.03.
(d) The applicable Borrower may in its sole and absolute
discretion, subject only to the provisions of this paragraph
(d), accept or reject any Competitive Bid referred to in
paragraph (c) above. Such Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in
the form of a Competitive Bid Accept/Reject Letter, whether
and to what extent it has decided to accept or reject any of
or all the bids referred to in paragraph (c) above, (x) in the
case of a Eurodollar Competitive Borrowing, not later than
10:30 a.m., New York City time, three Business Days before a
proposed Competitive Borrowing, and (y) in the case of a Fixed
Rate Borrowing, not later than 10:30 a.m., New York City time,
on the day of a proposed Competitive Borrowing; provided,
however, that (i) the failure of such Borrower to give such
notice shall be deemed to be a rejection of all the bids
referred to in paragraph (c) above, (ii) such Borrower shall
not accept a bid made at a particular Competitive Bid Rate if
it has decided to reject a bid made at a lower Competitive Bid
Rate, (iii) the aggregate amount of the Competitive Bids
accepted by such Borrower shall not exceed the principal
amount specified in the Competitive Bid Request, (iv) if such
Borrower shall accept a bid or bids made at a particular
Competitive Bid Rate but the amount of such bid or bids shall
cause the total amount of bids to be accepted to exceed the
amount specified in the Competitive Bid Request, then such
Borrower shall accept a portion of such bid or bids in an
amount equal to the amount specified in the Competitive Bid
Request less the amount of all other Competitive Bids accepted
with respect to such Competitive Bid Request, which
acceptance, in the case of multiple bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount
of each such bid at such Competitive Bid Rate, and (v) except
pursuant to clause (iv) above, no bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum
principal amount of $5,000,000 and an integral multiple of
$1,000,000; provided further, however, that if a Competitive
Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may be
for a minimum of $1,000,000 or any integral multiple thereof,
and in calculating the pro rata allocation of acceptances of
portions of multiple bids at a particular Competitive Bid Rate
pursuant to clause (iv) the amounts shall be rounded to
integral multiples of $1,000,000 in a manner which shall be in
the discretion of the applicable Borrower. A notice given
pursuant to this paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each
bidding Lender whether or not its Competitive Bid has been
accepted (and if so, in what amount and at what Competitive
Bid Rate) by telecopy, and each successful bidder will
thereupon become bound, subject to the other applicable
conditions hereof, to make the Competitive Loan or Loans in
respect of which its bid has been accepted.
(f) A Competitive Bid Request shall not be made within
five Business Days after the date of any previous Competitive
Bid Request.
(g) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit
such bid directly to the applicable Borrower one quarter of an
hour earlier than the latest time at which the other Lenders
are required to submit their bids to the Administrative Agent
pursuant to paragraph (b) above.
(h) All notices required by this Section 2.03 shall be
given in accordance with Section 9.01.
SECTION 2.04. Standby Borrowing Procedure. In order to
request a Standby Borrowing, a Borrower shall hand deliver or
telecopy to the Administrative Agent a duly completed Standby
Borrowing Request in the form of Exhibit A-5 (a) in the case
of a Eurodollar Standby Borrowing, not later than 10:30 a.m.,
New York City time, three Business Days before such Borrowing,
and (b) in the case of an ABR Borrowing, not later than 10:30
a.m., New York City time, on the day of such Borrowing. No
Fixed Rate Loan shall be requested or made pursuant to a
Standby Borrowing Request. Such notice shall be irrevocable
and shall in each case specify (i) whether the Borrowing then
being requested is to be a Eurodollar Standby Borrowing or an
ABR Borrowing; (ii) the date of such Standby Borrowing (which
shall be a Business Day) and the amount thereof; and (iii) if
such Borrowing is to be a Eurodollar Standby Borrowing, the
Interest Period with respect thereto, which shall not end
after the Maturity Date. If no election as to the Type of
Standby Borrowing is specified in any such notice, then the
requested Standby Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Standby
Borrowing is specified in any such notice, then the Borrower
shall be deemed to have selected an Interest Period of one
month's duration. Notwithstanding any other provision of this
Agreement to the contrary, no Standby Borrowing shall be
requested if the Interest Period with respect thereto would
end after the Maturity Date. The Administrative Agent shall
promptly advise the Lenders of any notice given pursuant to
this Section 2.04 and of each Lender's portion of the
requested Borrowing.
SECTION 2.05. Facility Fees. (a) The Company agrees to
pay to each Lender, through the Administrative Agent, on each
March 31, June 30, September 30 and December 31 (with the
first payment being due on March 31, 1994) and on the date on
which the Commitment of such Lender shall be terminated as
provided herein, a facility fee (a "Facility Fee"), at a rate
per annum equal to .08% per annum on the average daily amount
of the Commitment of such Lender, whether used or unused,
during the preceding quarter (or other period commencing on
the date of this Agreement, or ending with the Maturity Date
or the date on which the Commitment of such Lender shall be
terminated). All Facility Fees shall be computed on the basis
of the actual number of days elapsed in a year of 360 days.
The Facility Fee due to each Lender shall commence to accrue
on the date of this Agreement, and shall cease to accrue on
the earlier of the Maturity Date and the termination of the
Commitment of such Lender as provided herein.
(b) All Facility Fees shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for
distribution, if and as appropriate, among the Lenders. Once
paid, none of the Facility Fees shall be refundable under any
circumstances.
SECTION 2.06 Repayment of Loans; Evidence of Debt.
(a) Each Borrower hereby agrees that the outstanding
principal balance of each Standby Loan shall be payable on the
last day of the Interest Period applicable thereto and on the
Maturity Date and that the outstanding principal balance of
each Competitive Loan shall be payable on the last day of the
Interest Period applicable thereto. Each Loan shall bear
interest on the outstanding principal balance thereof as set
forth in Section 2.07.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the
indebtedness to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of
principal and interest payable and paid such Lender from time
to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in
which it will record (i) the amount of each Loan made
hereunder, the Type of each Loan made and the Interest Period
applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from
each Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder from
each Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant
to paragraphs (b) and (c) of this Section 2.06 shall, to the
extent permitted by applicable law, be prima facie evidence of
the existence and amounts of the obligations therein recorded;
provided, however, that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the
Borrowers to repay the Loans in accordance with their terms.
<PAGE>
SECTION 2.07. Interest on Loans.
(a) Subject to the provisions of Section 2.08, the Loans
comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal to (i) in
the case of each Eurodollar Standby Loan, the LIBO Rate for
the Interest Period in effect for such Borrowing plus 1/4 of
1% and (ii) in the case of each Eurodollar Competitive Loan,
the LIBO Rate for the Interest Period in effect for such
Borrowing plus the Margin offered by the Lender making such
Loan and accepted by the applicable Borrower pursuant to
Section 2.03.
(b) Subject to the provisions of Section 2.08, the Loans
comprising each ABR Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, for periods during which
the Alternate Base Rate is determined by reference to the
Prime Rate and 360 days for other periods) at a rate per annum
equal to the Alternate Base Rate.
(c) Subject to the provisions of Section 2.08, each
Fixed Rate Loan shall bear interest at a rate per annum
(computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the fixed rate of interest
offered by the Lender making such Loan and accepted by the
Borrower pursuant to Section 2.03.
(d) Interest on each Loan shall be payable on each
Interest Payment Date applicable to such Loan except as
otherwise provided in this Agreement. The applicable LIBO
Rate or Alternate Base Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.08. Default Interest. If a Borrower shall
default in the payment of the principal of or interest on any
Loan or any other amount becoming due hereunder, whether by
scheduled maturity, notice of prepayment, acceleration or
otherwise, such Borrower shall owe interest, payable on
demand, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum
(computed as provided in Section 2.07(b)) equal to the
Alternate Base Rate plus 2%.
SECTION 2.09. Alternate Rate of Interest. (a) In the
event, and on each occasion, that on the day two Business Days
prior to the commencement of any Interest Period for a
Eurodollar Borrowing the Administrative Agent shall have
determined (i) that dollar deposits in the principal amounts
of the Eurodollar Loans comprising such Borrowing are not
generally available in the London interbank market or (ii)
that reasonable means do not exist for ascertaining the LIBO
Rate, the Administrative Agent shall, as soon as practicable
thereafter, give telecopy notice of such determination to the
Borrowers and the Lenders. In the event of any such
determination under clauses (i) or (ii) above, until the
Administrative Agent shall have advised the Borrowers and the
Lenders that the circumstances giving rise to such notice no
longer exist, (x) any request by a Borrower for a Eurodollar
Competitive Borrowing pursuant to Section 2.03 shall be of no
force and effect and shall be denied by the Administrative
Agent and (y) any request by a Borrower for a Eurodollar
Standby Borrowing pursuant to Section 2.04 shall be deemed to
be a request for an ABR Borrowing.
(b) In the event a Lender notifies the Administrative
Agent that the rates at which dollar deposits are being
offered will not adequately and fairly reflect the cost to
such Lender of making or maintaining its Eurodollar Loan
during such Interest Period, the Administrative Agent shall
notify the applicable Borrower of such notice and until the
Lender shall have advised the Administrative Agent that the
circumstances giving rise to such notice no longer exist, any
request by such Borrower for a Eurodollar Standby Borrowing
shall be deemed a request for an ABR Borrowing for the same
Interest Period with respect to such Lender.
(c) Each determination by the Administrative Agent
hereunder shall be made in good faith and shall be conclusive
absent manifest error.
SECTION 2.10. Termination and Reduction of Commitments.
(a) The Commitments shall be automatically terminated on
the Maturity Date.
(b) Upon at least three Business Days' prior irrevocable
telecopy notice to the Administrative Agent, the Company may
at any time in whole permanently terminate, or from time to
time in part permanently reduce, the Total Commitment;
provided, however, that (i) each partial reduction of the
Total Commitment shall be in an integral multiple of
$1,000,000 and in a minimum principal amount of $5,000,000 and
(ii) no such termination or reduction shall be made which
would reduce the Total Commitment to an amount less than the
aggregate outstanding principal amount of the Competitive
Loans.
(c) Each reduction in the Total Commitment hereunder
shall be made ratably among the Lenders in accordance with
their respective Commitments. The Company shall pay to the
Administrative Agent for the account of the Lenders, on each
date of reduction of any portion of the Total Commitment, the
Facility Fees on the amount of the Commitments so terminated
accrued through the date of such termination or reduction.
SECTION 2.11. Prepayment. (a) Each Borrower shall have
the right at any time and from time to time to prepay any
Standby Borrowing, in whole or in part, upon giving telecopy
notice (or telephone notice promptly confirmed by telecopy) to
the Administrative Agent: (i) before 10:00 a.m., New York
City time, three Business Days prior to prepayment, in the
case of Eurodollar Loans, and (ii) before 10:00 a.m., New York
City time, one Business Day prior to prepayment, in the case
of ABR Loans; provided, however, that each partial prepayment
shall be in an amount which is an integral multiple of
$1,000,000 and not less than $5,000,000. No prepayment may be
made in respect of any Competitive Borrowing.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.10, the Borrowers shall pay
or prepay so much of the Standby Borrowings as shall be
necessary in order that the aggregate principal amount of the
Competitive Loans and Standby Loans outstanding will not
exceed the Total Commitment, after giving effect to such
termination or reduction.
(c) Each notice of prepayment shall specify the
prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall
commit the applicable Borrower to prepay such Borrowing (or
portion thereof) by the amount stated therein on the date
stated therein. All prepayments under this Section 2.11 shall
be subject to Section 2.14 but otherwise without premium or
penalty. All prepayments under this Section 2.11 shall be
accompanied by accrued interest on the principal amount being
prepaid to the date of payment.
SECTION 2.12. Reserve Requirements; Change in
Circumstances. (a) Notwithstanding any other provision
herein, if after the date of this Agreement any change in
applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or
not having the force of law) shall result in the imposition,
modification or applicability of any reserve, special deposit
or similar requirement against assets of, deposits with or for
the account of or credit extended by any Lender, or shall
result in the imposition on any Lender or the London interbank
market of any other condition affecting this Agreement, such
Lender's Commitment or any Eurodollar Loan or Fixed Rate Loan
made by such Lender, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or Fixed Rate Loan or to
reduce the amount of any sum received or receivable by such
Lender with respect to any Eurodollar Loan or Fixed Rate Loan
hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender to be material, then such
additional amount or amounts as will compensate such Lender
for such additional costs or reduction will be paid by the
Borrowers to such Lender upon demand. Notwithstanding the
foregoing, no Lender shall be entitled to request compensation
under this paragraph with respect to any Competitive Loan if
the change giving rise to such request was applicable to such
Lender at the time of submission of the Competitive Bid
pursuant to which such Competitive Loan was made.
(b) If any Lender shall have determined that the
adoption after the date hereof of any law, rule, regulation or
guideline arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices
entitled "International Convergence of Capital Measurement and
Capital Standards," or the adoption after the date hereof of
any other law, rule, regulation or guideline regarding capital
adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by
any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Lender (or any lending office of such
Lender) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such
Lender's capital as a consequence of this Agreement, such
Lender's Commitment or the Loans made by such Lender pursuant
hereto to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be
material, then from time to time such additional amount or
amounts as will compensate such Lender for such reduction will
be paid by the Borrowers to such Lender. It is acknowledged
that this Agreement is being entered into by the Lenders on
the understanding that the Lenders will not be required to
maintain capital against their Commitments under currently
applicable laws, regulations and regulatory guidelines. In
the event the Lenders shall be advised by any Governmental
Authority or shall otherwise determine on the basis of
pronouncements of any Governmental Authority that such
understanding is incorrect, it is agreed that the Lenders will
be entitled to make claims under this paragraph (b) based upon
market requirements prevailing on the date hereof for
commitments under comparable credit facilities against which
capital is required to be maintained.
(c) A certificate of each Lender setting forth such
amount or amounts as shall be necessary to compensate such
Lender as specified in paragraph (a) or (b) above, as the case
may be, shall be delivered to the Company promptly by such
Lender upon becoming aware of any costs pursuant to paragraphs
(a) or (b) above and shall be conclusive absent manifest
error. The Company shall pay each Lender the amount shown as
due on any such certificate delivered by it within 10 days
after its receipt of the same.
(d) Failure on the part of any Lender to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with
respect to any period shall not constitute a waiver of such
Lender's right to demand compensation with respect to such
period or any other period. The protection of this Section
shall be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the law,
rule, regulation, guideline or other change or condition which
shall have occurred or been imposed. No Lender shall be
entitled to compensation under this Section 2.12 for any costs
incurred or reduction suffered with respect to any date unless
such Lender shall have notified the Company that it will
demand compensation for such costs or reductions not more than
90 days after the later of (i) such date and (ii) the date on
which such Lender shall have become aware of such costs or
reductions. Notwithstanding any other provision of this
Section 2.12, no Lender shall demand compensation for any
increased cost or reduction referred to above if it shall not
at the time be the general policy or practice of such Lender
to demand such compensation in similar circumstances under
comparable provisions of other credit agreements, if any.
SECTION 2.13. Change in Legality. (a) Notwithstanding
any other provision herein, if any change in any law or
regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to
its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, by written notice to the Company and to
the Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be
made by such Lender hereunder, whereupon such Lender
shall not submit a Competitive Bid in response to a
request for Eurodollar Competitive Loans and any request
for a Eurodollar Standby Borrowing shall, as to such
Lender only, be deemed a request for an ABR Loan unless
such declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made
by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR
Loans as of the effective date of such notice as provided
in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or
(ii) above, all payments and prepayments of principal which
would otherwise have been applied to repay the Eurodollar
Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of,
or resulting from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.13, a notice by any
Lender shall be effective as to each Eurodollar Loan, if
lawful, on the last day of the Interest Period currently
applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt.
SECTION 2.14. Indemnity. The Borrowers shall indemnify
each Lender against any out-of-pocket loss or expense which
such Lender may sustain or incur as a consequence of (a) any
failure to borrow or to refinance any Loan hereunder after
irrevocable notice of such borrowing or refinancing has been
given pursuant to Section 2.03 or 2.04, (b) any payment,
prepayment or conversion, or assignment required under Section
2.18, of a Eurodollar Loan required by any other provision of
this Agreement (other than Section 2.13) or otherwise made or
deemed made on a date other than the last day of the Interest
Period, if any, applicable thereto, (c) any default in payment
or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, whether by scheduled
maturity, acceleration, irrevocable notice of prepayment or
otherwise) or (d) the occurrence of any Event of Default,
including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired
to effect or maintain such Loan or any part thereof as a
Eurodollar Loan or a Fixed Rate Loan. Such loss or reasonable
expense shall include an amount equal to the excess, if any,
as reasonably determined by such Lender, of (i) its cost of
obtaining the funds for the Loan being paid, prepaid,
refinanced or not borrowed or so assigned (assumed to be the
LIBO Rate applicable thereto or, in the case of a Fixed Rate
Loan, the fixed rate of interest applicable thereto) for the
period from the date of such payment, prepayment, refinancing
or failure to borrow or refinance or such assignment, to the
last day of the Interest Period for such Loan (or, in the case
of a failure to borrow or refinance the Interest Period for
such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such
Lender in reemploying in similar investments the funds so
paid, prepaid or not borrowed or refinanced or so assigned for
the remainder of such period or Interest Period, as the case
may be. A certificate of any Lender setting forth any amount
or amounts which such Lender is entitled to receive pursuant
to this Section 2.14 shall be delivered to the Borrowers and
shall be conclusive absent manifest error.
SECTION 2.15. Pro Rata Treatment. Except as required
under Section 2.12, each payment or prepayment of principal of
any Standby Borrowing, each payment of interest on the Standby
Loans, each payment of the Facility Fees, each reduction of
the Commitments and each refinancing of any Borrowing with a
Standby Borrowing of any Type, shall be allocated pro rata
among the Lenders in accordance with their respective
Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal
amounts of their outstanding Standby Loans). Each payment of
principal of any Competitive Borrowing shall be allocated pro
rata among the Lenders participating in such Borrowing in
accordance with the respective principal amounts of their
outstanding Competitive Loans comprising such Borrowing. Each
payment of interest on any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such
Borrowing in accordance with the respective amounts of accrued
and unpaid interest on their outstanding Competitive Loans
comprising such Borrowing. For purposes of determining the
available Commitments of the Lenders at any time, each
outstanding Competitive Borrowing shall be deemed to have
utilized the Commitments of the Lenders (including those
Lenders which shall not have made Loans as part of such
Competitive Borrowing) pro rata in accordance with such
respective Commitments. Each Lender agrees that in computing
such Lender's portion of any Borrowing to be made hereunder,
the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or
lower whole dollar amount.
SECTION 2.16. Sharing of Setoffs. Each Lender agrees
that if it shall, through the exercise of a right of banker's
lien, setoff or counterclaim, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or
other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or
by any other means, obtain payment (voluntary or involuntary)
in respect of any Standby Loan or Loans as a result of which
the unpaid principal portion of its Standby Loans shall be
proportionately less than the unpaid principal portion of the
Standby Loans of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at
face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Standby Loans of
such other Lender, so that the aggregate unpaid principal
amount of the Standby Loans and participations in the Standby
Loans held by each Lender shall be in the same proportion to
the aggregate unpaid principal amount of all Standby Loans
then outstanding as the principal amount of its Standby Loans
prior to such exercise of banker's lien, setoff or counter-
claim or other event was to the principal amount of all
Standby Loans outstanding prior to such exercise of banker's
lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjust-
ments shall be made pursuant to this Section 2.16 and the
payment giving rise thereto shall thereafter be recovered,
such purchase or purchases or adjustments shall be rescinded
to the extent of such recovery and the purchase price or
prices or adjustment restored without interest. Any Lender
holding a participation in a Standby Loan deemed to have been
so purchased may exercise any and all rights of banker's lien,
setoff or counterclaim with respect to any and all moneys
owing to such Lender by reason thereof as fully as if such
Lender had made a Standby Loan in the amount of such
participation.
SECTION 2.17. Payments. (a) The Borrowers shall make
each payment (including principal of or interest on any
Borrowing and any Facility Fees or other amounts) hereunder
from an account in the United States not later than 12:00
noon, New York City time, on the date when due in dollars to
the Administrative Agent at its offices at 270 Park Avenue,
New York, New York, in immediately available funds.
(b) Whenever any payment (including principal of or
interest on any Borrowing or any Facility Fees or other
amounts) hereunder shall become due, or otherwise would occur,
on a day that is not a Business Day, such payment may 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 Facility Fees, if applicable.
SECTION 2.18. Duty to Mitigate; Assignment of
Commitments Under Certain Circumstances. (a) Any Lender (or
Transferee) claiming any additional amounts payable pursuant
to Section 2.12 or Section 2.19 or exercising its rights under
Section 2.13 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or
document requested by the Company or to change the
jurisdiction of its applicable lending office if the making of
such a filing or change would avoid the need for or reduce the
amount of any such additional amounts which may thereafter
accrue or avoid the circumstances giving rise to such exercise
and would not, in the sole determination of such Lender (or
Transferee), be otherwise disadvantageous to such Lender (or
Transferee).
(b) In the event that any Lender shall have delivered a
notice or certificate pursuant to Section 2.09(b), 2.12 or
2.13, or the Borrowers shall be required to make additional
payments to any Lender under Section 2.19, the Company shall
have the right, at its own expense (which shall include the
processing and recordation fee referred to in Section
9.04(b)), upon notice to such Lender and the Administrative
Agent, to require such Lender to transfer and assign without
recourse (in accordance with and subject to the restrictions
contained in Section 9.04) all interests, rights and
obligations contained hereunder to another financial
institution approved by the Administrative Agent (which
approval shall not be unreasonably withheld) which shall
assume such obligations; provided that (i) no such assignment
shall conflict with any law, rule or regulation or order of
any Governmental Authority and (ii) the assignee or the
Borrowers, as the case may be, shall pay to the affected
Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date
of payment on the Loans made by it hereunder and all other
amounts accrued for its account or owed to it hereunder.
SECTION 2.19. Taxes. (a) Any and all payments to the
Lenders hereunder shall be made, in accordance with Section
2.17, free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto,
excluding (i) income taxes imposed on the net income of the
Administrative Agent or any Lender (or any transferee or
assignee thereof, including a participation holder (any such
entity a "Transferee")) and (ii) franchise taxes imposed on
the net income of the Administrative Agent or any Lender (or
Transferee), in each case by the jurisdiction under the laws
of which the Administrative Agent or such Lender (or
Transferee) is organized or any political subdivision thereof
(all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively or
individually, "Taxes"). If any Borrower shall be required to
deduct any Taxes from or in respect of any sum payable
hereunder to any Lender (or any Transferee) or the
Administrative Agent, (i) the sum payable shall be increased
by the amount (an "additional amount") necessary so that after
making all required deductions (including deductions
applicable to additional sums payable under this Section 2.19)
such Lender (or Transferee) or the Administrative Agent (as
the case may be) shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii)
such Borrower shall make such deductions and (iii) such
Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay to the relevant
Governmental Authority in accordance with applicable law any
current or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise
from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement ("Other Taxes").
(c) The Borrowers shall indemnify each Lender (or
Transferee) and the Administrative Agent for the full amount
of Taxes and Other Taxes paid by such Lender (or Transferee)
or the Administrative Agent, as the case may be, and any
liability (including penalties, interest and expenses
(including reasonable attorney's fees and expenses)) arising
therefrom or with respect thereto. A certificate as to the
amount of such payment or liability prepared by a Lender, or
the Administrative Agent on its behalf, absent manifest error,
shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date
the Lender (or Transferee) or the Administrative Agent, as the
case may be, makes written demand therefor.
(d) If a Lender (or Transferee) or the Administrative
Agent shall become aware that it is entitled to claim a refund
from a Governmental Authority in respect of Taxes or Other
Taxes as to which it has been indemnified by the Borrowers, or
with respect to which the Borrowers have paid additional
amounts, pursuant to this Section 2.19, it shall promptly
notify the Borrowers of the availability of such refund claim
and shall, within 30 days after receipt of a request by the
Borrowers, make a claim to such Governmental Authority for
such refund at the Borrowers' expense. If a Lender (or
Transferee) or the Administrative Agent receives a refund
(including pursuant to a claim for refund made pursuant to the
preceding sentence) in respect of any Taxes or Other Taxes as
to which it has been indemnified by the Borrowers or with
respect to which the Borrowers have paid additional amounts
pursuant to this Section 2.19, it shall within 30 days from
the date of such receipt pay over such refund to the Borrowers
(but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrowers under this Section
2.19 with respect to the Taxes or Other Taxes giving rise to
such refund), without interest (other than interest paid by
the relevant Governmental Authority with respect to such
refund); provided, however, that the Borrowers, upon the
request of such Lender (or Transferee) or the Administrative
Agent, agree to repay the amount paid over to the Borrowers
(plus penalties, interest or other charges) to such Lender (or
Transferee) or the Administrative Agent in the event such
Lender (or Transferee) or the Administrative Agent is required
to repay such refund to such Governmental Authority.
(e) As soon as practicable after the date of any payment
of Taxes or Other Taxes by the Borrowers to the relevant
Governmental Authority, the Borrowers will deliver to the
Administrative Agent, at its address referred to in Section
9.01, the original or a certified copy of a receipt issued by
such Governmental Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations
contained in this Section 2.19 shall survive the payment in
full of the principal of and interest on all Loans made
hereunder for a period of 3 years.
(g) Each Lender (or Transferee) that is organized under
the laws of a jurisdiction other than the United States, any
State thereof or the District of Columbia (a "Non-U.S.
Lender") shall deliver to the Company and the Administrative
Agent two copies of either United States Internal Revenue
Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. Federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if
such Non-U.S. Lender delivers a Form W-8, a certificate
representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the Company and is not a controlled foreign
corporation related to the Company (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption
from, or reduced rate of, U.S. Federal withholding tax on
payments by the Company under this Agreement. Such forms
shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement (or, in the case of
a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder)
and on or before the date, if any, such Non-U.S. Lender
changes its applicable lending office by designating a
different lending office (a "New Lending Office"). In
addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. Notwithstanding
any other provision of this Section 2.19(g), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this
Section 2.19(g) that such Non-U.S. Lender is not legally able
to deliver.
(h) The Borrowers shall not be required to indemnify any
Non-U.S. Lender, or to pay any additional amounts to any Non-U.S.
Lender, in respect of United States Federal withholding
tax pursuant to paragraph (a) or (c) above to the extent that
(i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case
of a Transferee that is a participation holder, on the date
such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date
such Non-U.S. Lender designated such New Lending Office with
respect to a Loan; provided, however, that this clause (i)
shall not apply to any Transferee or New Lending Office that
becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the
request of the Company; and provided further, however, that
this clause (i) shall not apply to the extent the indemnity
payment or additional amounts any Transferee, or Lender (or
Transferee) through a New Lending Office, would be entitled to
receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the person making
the assignment, participation or transfer to such Transferee,
or Lender (or Transferee) making the designation of such New
Lending Office, would have been entitled to receive in the
absence of such assignment, participation, transfer or
designation or (ii) the obligation to pay such additional
amounts would not have arisen but for a failure by such Non-U.S.
Lender to comply with the provisions of paragraph (g)
above.
(i) Any Lender (or Transferee) claiming any indemnity
payment or additional amounts payable pursuant to this Section
2.19 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document
reasonably requested in writing by the Company or to change
the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for or
reduce the amount of any such indemnity payment or additional
amounts that may thereafter accrue and would not, in the sole
determination of such Lender (or Transferee), be otherwise
disadvantageous to such Lender (or Transferee).
(j) Nothing contained in this Section 2.19 shall require
any Lender (or Transferee) or the Administrative Agent to make
available any of its tax returns (or any other information
that it deems to be confidential or proprietary).
ARTICLE III
Representations and Warranties
The Company represents and warrants to each of the
Lenders that:
SECTION 3.01. Corporate Existence and Power. The
Company and each Borrowing Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted.
SECTION 3.02. Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the
Company of this Agreement (a) is within the Company's
corporate powers, (b) has been duly authorized by all
necessary corporate action, (c) requires no action by or in
respect of, or filing with, any Governmental Authority and (d)
does not (i) contravene, or constitute a default under, any
applicable provision of law or regulation either of the United
States or a particular state thereof or of the certificate of
incorporation or by-laws of the Company or of any agreement,
judgment, injunction, order, decree or other instrument
binding upon the Company or (ii) result in the creation or
imposition of any Lien on any asset of the Company or any of
its Subsidiaries.
SECTION 3.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of the rights of its
creditors generally and subject to general legal and equitable
principles with respect to the availability of particular
remedies.
SECTION 3.04. Financial Information. (a) The
consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of January 3, 1993 and the related
consolidated statements of earnings and changes in financial
position for the fiscal year then ended, reported on by Arthur
Andersen & Co. and set forth in the Company's annual report on
Form 10-K for the fiscal year ended January 3, 1993, a copy of
which has been delivered to each of the Lenders, fairly
present, in conformity with GAAP, the consolidated financial
position of the Company and its Consolidated Subsidiaries as
of such date and their consolidated results of operations and
changes in financial position for such fiscal year.
(b) The unaudited consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of October 3,
1993 and the related unaudited consolidated statements of
earnings and changes in financial position for the nine months
then ended, set forth in the Company's quarterly report on
Form 10-Q for the fiscal quarter ended October 3, 1993, a copy
of which has been delivered to each of the Lenders, fairly
present, in conformity with GAAP applied on a basis consistent
with the financial statements referred to in paragraph (a) of
this Section 3.04, the consolidated financial position of the
Company and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and changes in
financial position for such nine month period (subject to
normal year-end adjustments).
SECTION 3.05. Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Company
threatened against or affecting, the Company or any of its
Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a
reasonable possibility of a final adverse decision which could
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Company and its Consolidated Subsidiaries taken as a whole
or which in any manner draws into question the validity of
this Agreement.
SECTION 3.06. Compliance with ERISA. The Company and
each ERISA Affiliate has fulfilled its obligations under the
minimum funding standards of ERISA and the Code with respect
to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code
relating to the Plans, and has not incurred any liability to
the PBGC or a Plan under Title IV of ERISA.
SECTION 3.07. Taxes. United States Federal income tax
returns of the Company and its Subsidiaries have been examined
and closed through the fiscal year ended January 3, 1988. The
Company and its Subsidiaries have filed all United States
Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all
material taxes due pursuant to such returns or pursuant to any
assessment received by the Company or any Subsidiary which the
Company or any Subsidiary is not disputing in a good faith
manner. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Company,
adequate.
SECTION 3.08. Subsidiaries. Attached hereto as Schedule
3.08 is a schedule which correctly identifies all
Subsidiaries as of the date of this Agreement. Except as
noted on Schedule 3.08, all of the issued and outstanding
shares of the capital stock of each Subsidiary is duly issued
and outstanding, fully paid and non-assessable and except for
directors' qualifying shares and shares issued solely for the
purpose of satisfying local requirements concerning the
minimum number of shareholders is owned by the Company or a
Subsidiary free and clear of any mortgage, pledge, lien or
encumbrance.
SECTION 3.09. Representations and Warranties of Each
Borrowing Subsidiary. Each Borrowing Subsidiary shall be
deemed by the execution and delivery of a Borrowing Subsidiary
Agreement to have represented and warranted as of the date
thereof as follows:
(a) It is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to do business and in good
standing in each other jurisdiction in which it owns property
and/or conducts its business and in which failure to be so
qualified and in good standing would have a materially adverse
effect on the business of such Borrowing Subsidiary.
(b) The execution, delivery and performance by it of its
Borrowing Subsidiary Agreement, and the performance by it of
the provisions of this Agreement applicable to it, are within
its corporate powers, have been duly authorized by all
necessary corporate action and do not contravene (i) its
charter or by-laws (or the equivalent thereof) or (ii) any law
or regulation or any agreement, judgment, injunction, order,
decree or other instrument binding on or affecting it.
(c) No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by it
of its Borrowing Subsidiary Agreement or for the performance
by it of the provisions of this Agreement applicable to it,
except for those which have been duly obtained or made and are
in full force and effect.
(d) It is not in breach of or default under any
agreement to which it is a party or which is binding on it or
any of its assets to an extent or in a manner which would have
a material adverse effect on its ability to perform its
obligations hereunder after taking into consideration its
other financial obligations.
(e) This Agreement is a legal, valid and binding
obligation of such Borrowing Subsidiary enforceable against it
in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of the rights of its creditors
generally and subject to general legal and equitable
principles with respect to the availability of particular
remedies.
(f) The proceeds of each Loan made to it will be used
solely for general corporate purposes, including the
acquisition of new businesses.
SECTION 3.10. Federal Reserve Regulations. (a) Neither
any Borrower nor any Subsidiary is engaged principally, or as
a substantial part of its activities, in the business of
extending credit for the purpose of purchasing or carrying
Margin Stock (within the meaning of Regulation U).
(b) No part of the proceeds of any Loan has been or will
be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, in any manner or for
any purpose that has resulted or will result in a violation of
Regulation U.
SECTION 3.11. Investment Company Act; Public Utility
Holding Company Act. Neither any Borrower nor any Subsidiary
is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.12. Environmental and Safety Matters. (a)
With respect to all facilities owned and operated by the
Company and its Subsidiaries, or at which the Company or any
of its Subsidiaries has a leasehold interest, other than any
facilities referred to in (b) below, except as set forth in
Schedule 3.12(a) (i) the Company and each Subsidiary is in
compliance in all material respects with all Federal, state,
local and other statutes, ordinances, orders, judgments,
rulings and regulations relating to environmental pollution or
to environmental regulation or control or to employee health
or safety (collectively "Environmental Laws") except where the
failure to be in compliance so would not be reasonably likely,
individually or in the aggregate, to result in a Material
Adverse Effect; (ii) neither the Company nor any Subsidiary
has received notice of any material failure so to comply,
which non-compliance neither has been remedied nor is the
subject of the Company's good faith efforts to achieve
compliance, except where the failure to be in compliance would
not be reasonably likely, individually or in the aggregate, to
result in a Material Adverse Effect and (iii) the Company is
aware of no events, conditions or circumstances involving
environmental pollution or contamination or employee health or
safety that in its judgment would be reasonably likely to
result in a Material Adverse Effect.
(b) With respect to the Federally owned or operated
facilities listed on Schedule 3.12(b) at which the Company
and/or its Subsidiaries are the management and operations
contractor or such facilities at which the Company and/or its
Subsidiaries may act as such after the date of this Agreement,
except as set forth in Schedule 3.12(c) neither the Company
nor any of its Subsidiaries has received notice of any claim
under any Environmental Laws which in its judgment would be
reasonably likely to result in a Material Adverse Effect.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans hereunder
are subject to the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each
Borrowing:
(a) The Administrative Agent shall have received a
notice of such Borrowing as required by Section 2.03 or
Section 2.04, as applicable.
(b) The representations and warranties set forth in
Article III (except in the case of a refinancing that does not
increase the aggregate principal amount of Loans of any Lender
outstanding, the representations set forth in Section 3.05 and
3.12) hereof shall be true and correct in all material
respects on and as of the date of such Borrowing with the same
effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to
an earlier date.
(c) At the time of and immediately after such Borrowing
no Event of Default or Default shall have occurred and be
continuing.
Each Borrowing shall be deemed to constitute a representation
and warranty by the applicable Borrower on the date of such
Borrowing as to the matters specified in paragraphs (b) and
(c) of this Section 4.01.
SECTION 4.02. Closing Date. On the Closing Date:
(a) The Administrative Agent shall have received the
favorable written opinion of Murray Gross, Esq., dated the
Closing Date and addressed to the Lenders and satisfactory to
Cravath, Swaine & Moore, counsel for the Administrative Agent,
to the effect set forth in Exhibit D-1 hereto.
(b) The Administrative Agent shall have received (i) a
copy of the certificate of incorporation, including all
amendments thereto, of the Company, certified as of a recent
date by the Secretary of State of its state of incorporation,
and a certificate as to the good standing of the Company as of
a recent date from such Secretary of State; (ii) a certificate
of the Clerk or an Assistant Clerk of the Company dated the
Closing Date and certifying (A) that attached thereto is a
true and complete copy of the by-laws of the Company as in
effect on the Closing Date and at all times since a date prior
to the date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of the
Company authorizing the execution, delivery and performance of
this Agreement and the Borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and
are in full force and effect, (C) that the certificate of
incorporation referred to in clause (i) above has not been
amended since the date of the last amendment thereto shown on
the certificate of good standing furnished pursuant to such
clause (i) and (D) as to the incumbency and specimen signature
of each officer executing this Agreement or any other document
delivered in connection herewith on behalf of the Company; and
(iii) a certificate of another officer of the Company as to
the incumbency and specimen signature of the Clerk or
Assistant Clerk executing the certificate pursuant to (ii)
above.
(c) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial
Officer of the Company, confirming compliance with the
conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01.
(d) The Administrative Agent shall have received
evidence of the termination of the Existing Facilities.
SECTION 4.03. First Borrowing by Each Borrowing
Subsidiary. On the first date on which Loans are made to each
Borrowing Subsidiary:
(a) The Administrative Agent shall have received the
favorable written opinion of Murray Gross, Esq., dated the
date of such Loans, addressed to the Lenders and satisfactory
to Cravath, Swaine & Moore, counsel for the Administrative
Agent, to the effect set forth in Exhibit D-2 hereto.
(b) Each Lender shall have received a copy of the
Borrowing Subsidiary Agreement executed by such Borrowing
Subsidiary.
(c) Such Loans shall not violate any law, rule or
regulation binding on any of the Lenders.
(d) Each Lender shall have received from the Company an
unaudited consolidated balance sheet and related consolidated
statements of earnings and changes in financial position for
the fiscal year most recently ended of such Borrowing
Subsidiary.
ARTICLE V
Covenants
The Company covenants and agrees with each Lender and the
Administrative Agent that so long as this Agreement shall
remain in effect or the principal of or interest on any Loan,
any Facility Fees or any other amounts payable hereunder shall
be unpaid, unless the Required Lenders shall otherwise consent
in writing:
SECTION 5.01. Information. The Company will deliver to
each of the Lenders:
(a) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of earnings and cash flows for such
fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on by
Arthur Andersen & Co. or other independent public accountants
of nationally recognized standing acceptable to the Required
Lenders and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the
effect that such consolidated financial statements fairly
present the financial condition and results of operations of
the Company and the Consolidated Subsidiaries in accordance
with GAAP;
(b) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each
fiscal year of the Company, a consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of the end of
such quarter and the related consolidated statements of
earnings and cash flows for such quarter and for the portion
of the Company's fiscal year ended at the end of such quarter,
setting forth in each case in comparative form the figures for
the corresponding quarter and the corresponding portion of the
Company's previous fiscal year, all certified (subject to
normal year-end adjustments) as to fairness of presentation,
compliance with GAAP and consistency by a Financial Officer of
the Company;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above,
a certificate of a Financial Officer of the Company (i)
setting forth in reasonable detail the calculations required
to establish whether the Company was in compliance with the
requirements of Sections 5.06 and 5.07 on the date of such
financial statements and (ii) stating whether there exists on
the date of such certificate any Default and, if any Default
then exists, setting forth the details thereof and the action
which the Company is taking or proposes to take with respect
thereto;
(d) forthwith upon the occurrence of any Default, a
certificate of the chief financial officer or the chief
accounting officer of the Company setting forth the details
thereof and the action which the Company is taking or proposes
to take with respect thereto;
(e) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all financial
statements, reports and proxy statements so mailed;
(f) promptly upon the filing thereof, copies of all
annual or quarterly reports and upon request by any Lender
copies of all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or its
equivalent) which the Company shall have filed with the
Securities and Exchange Commission;
(g) (i) as soon as possible after, and in any event
within 30 days after the Company or any ERISA Affiliate knows
or has reason to know that, any Reportable Event has occurred
that alone or together with any other Reportable Event could
reasonably be expected to result in liability of the Company
to the PBGC in an aggregate amount exceeding $5,000,000, a
statement of a Financial Officer setting forth details as to
such Reportable Event and the action that the Company proposes
to take with respect thereto, together with a copy of the
notice, if any, of such Reportable Event given to the PBGC,
(ii) promptly after receipt thereof, a copy of any notice that
the Company or any ERISA Affiliate may receive from the PBGC
relating to the intention of the PBGC to terminate any Plan or
Plans (other than a Plan maintained by an ERISA Affiliate that
is considered an ERISA Affiliate only pursuant to subsection
(m) or (o) of Code Section 414) or to appoint a trustee to
administer any such Plan, (iii) within 10 days after the due
date for filing with the PBGC pursuant to Section 412(n) of
the Code a notice of failure to make a required installment or
other payment with respect to a Plan, a statement of a
Financial Officer setting forth details as to such failure and
the action that the Company proposes to take with respect
thereto, together with a copy of any such notice given to the
PBGC and (iv) promptly and in any event within 30 days after
receipt thereof by the Company or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, a copy of each notice
received by the Company or any ERISA Affiliate concerning (A)
the imposition of Withdrawal Liability or (B) a determination
that a Multiemployer Plan is, or is expected to be, terminated
or in reorganization, both within the meaning of Title IV of
ERISA; and
(h) from time to time such additional information
regarding the financial position or business of the Company as
any Lender may reasonably request.
SECTION 5.02. Corporate Existence; Businesses and
Properties. (a) The Company will, and will cause each
Borrowing Subsidiary to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect
its corporate existence.
(b) Except to the extent that failure to do so would not
have a Material Adverse Effect, the Company will, and will
cause each Borrowing Subsidiary to, (i) do or cause to be done
all things necessary to preserve, renew and keep in full force
and effect all rights, licenses, permits and franchises
material to the conduct of the business of the Company and the
Subsidiaries, taken as a whole, (ii) comply with all laws and
regulations applicable to it and (iii) conduct its business in
substantially the same manner as heretofore conducted or as at
the time permitted under applicable law.
SECTION 5.03. Insurance. The Company will, and will
cause each Subsidiary to, keep its insurable properties
adequately insured at all times by financially sound and
reputable insurers, and maintain such other insurance, to such
extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with
companies similarly situated and in the same or similar
businesses.
SECTION 5.04. Litigation and Other Notices. The Company
will give each Lender prompt written notice of the following:
(a) the filing or commencement of, or any written threat
or written notice of intention of any person to file or
commence, any action, suit or proceeding which could
reasonably be expected to result in a Material Adverse Effect;
and
(b) any development in the business or affairs of the
Company or any Subsidiary that has resulted in a Material
Adverse Effect.
SECTION 5.05. Maintaining Records; Access to Properties
and Inspections. The Company will, and will cause each
Subsidiary to, maintain financial records in accordance with
GAAP and, upon reasonable notice, at all reasonable times,
permit (a) any authorized representative designated by any
Lender to discuss the affairs, finances and condition of the
Company and the Subsidiaries with a Financial Officer of the
Company and such other officers as the Company shall deem
appropriate and (b) any authorized representative designated
by the Administrative Agent or the Required Lenders to visit
and inspect the properties of the Company and of any
Subsidiary.
SECTION 5.06. Fixed Charge Coverage. The Company will
not permit the ratio of (a) Consolidated EBIT to (b)
Consolidated Net Interest Expense for any period of four
consecutive fiscal quarters ending on the last day of any
fiscal quarter to be less than 5:1.
SECTION 5.07. Net Debt to Capitalization Ratio. The
Company will not permit on any date the ratio of (a)
Consolidated Net Indebtedness on such date to (b) the sum of
(i) Shareholders' Equity on such date and (ii) Consolidated
Net Indebtedness on such date to be greater than 0.35:1.00.
SECTION 5.08. Negative Pledge. Neither the Company nor
any Consolidated Subsidiary will create, assume or suffer to
exist any Lien securing Indebtedness on any asset now owned or
hereafter acquired by it, except:
(a) Liens on all or part of the assets of Consolidated
Subsidiaries securing Indebtedness owing by Consolidated
Subsidiaries to the Company and Consolidated Subsidiaries;
(b) mortgages on real property or security interests in
personal property securing Indebtedness of the Company and
Consolidated Subsidiaries in an aggregate amount not exceeding
ten percent (10%) of the consolidated total assets of the
Company and the Consolidated Subsidiaries;
(c) Liens to secure taxes, assessments and other
governmental charges or claims for labor, material or supplies
to the extent that payment thereof shall not at the time be
required to be made in accordance with Section 3.07 hereof;
(d) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment
insurance, old age, pension or other social security
obligations;
(e) Liens in respect of judgments or awards not
exceeding $1,000,000 in the aggregate at any time, and any
other Liens with respect to which the execution or enforcement
thereof is being effectively stayed and the claims secured
thereby are being contested in good faith by appropriate
proceedings;
(f) Liens of carriers, warehousemen, mechanics and
materialmen, and other like Liens, in existence less than 120
days from the date of creation thereof;
(g) encumbrances consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property
and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Company
or a Consolidated Subsidiary is a party, and other similar
encumbrances none of which in the opinion of the Company
interferes materially with the use of the property in the
ordinary conduct of the business of the Company and the
Consolidated Subsidiaries; and similar encumbrances on
interests in real estate located outside the United States,
which defects do not individually or in the aggregate have a
material adverse effect on the business of the Company
individually or of the Company and the Consolidated
Subsidiaries on a consolidated basis; and
(h) notwithstanding the provisions of subsection (b)
hereof, security interests in Margin Stock if, and to the
extent that, the value of all such Margin Stock owned by the
Company and its Consolidated Subsidiaries exceeds 25% of the
value of the total assets of the Company and its Consolidated
Subsidiaries subject to this Section 5.08.
SECTION 5.09. Consolidations, Mergers and Sales of
Assets. (a) The Company will not (i) consolidate or merge
with or into any other person unless (A) the Company shall be
the surviving entity and (B) immediately thereafter no Default
or Event of Default shall have occurred and be continuing or
(ii) sell, lease or otherwise transfer all or any substantial
part of its assets to any other person. The Company will not
sell, lease or otherwise transfer any of its assets to any
other person except for full and adequate consideration.
(b) No Borrowing Subsidiary will (i) consolidate or
merge with or into any other person unless (A) if the
surviving entity shall be other than such Borrowing
Subsidiary, (x) such surviving entity or the Company shall
have assumed in writing all obligations of such Borrowing
Subsidiary relating to this Agreement and (y) such surviving
entity shall be 100% owned by the Company and (B) no Default
or Event of Default shall have occurred and be continuing
either before or immediately after such consolidation or
merger or (ii) sell, lease or otherwise transfer all or any
substantial part of its assets to any other person. No
Borrowing Subsidiary will sell, lease or otherwise transfer
any of its assets to any other person except for full and
adequate consideration.
ARTICLE VI
Events of Default
In case of the happening of any of the following events
(each an "Event of Default"):
(a) any representation or warranty made or deemed made in
or in connection with the execution and delivery of this
Agreement or the Borrowings hereunder or any representation,
warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished
in connection with this Agreement shall prove to have been
incorrect in any material respect when so made, deemed made or
furnished;
(b) default shall be made in the payment of any principal
of any Loan when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest
on any Loan or any Facility Fee or any other amount (other
than an amount referred to in paragraph (b) above) due
hereunder, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of
three Business Days;
(d) default shall be made in the due observance or
performance of any covenant, condition or agreement contained
in Sections 5.02 or 5.06 through 5.09;
(e) default shall be made in the due observance or
performance of any covenant, condition or agreement contained
herein (other than those specified in paragraphs (b), (c) or
(d) above) and such default shall continue unremedied for a
period of 10 days after notice thereof from the Administrative
Agent or any Lender to the Company;
(f) the Company or any Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in
respect of any Indebtedness in an aggregate principal amount
in excess of $15,000,000, when and as the same shall become
due and payable, or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this
clause (ii) is to cause, or to permit the holder or holders of
such Indebtedness or a trustee on its or their behalf (with or
without the giving of notice, the lapse of time or both) to
cause, such Indebtedness to become due prior to its stated
maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Company or
any Subsidiary, or of a substantial part of the property or
assets of the Company or a Subsidiary, under Title 11 of the
United States Code, as now constituted or hereafter amended,
or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Subsidiary or for a
substantial part of the property or assets of the Company or
a Subsidiary or (iii) the winding up or liquidation of the
Company or any Subsidiary; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(h) the Company or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii)
consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any
petition described in paragraph (g) above, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company
or any Subsidiary or for a substantial part of the property or
assets of the Company or any Subsidiary, (iv) file an answer
admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for
the benefit of creditors, (vi) become unable, admit in writing
its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of
effecting any of the foregoing;
(i) one or more final and nonappealable judgments for the
payment of money in an aggregate amount in excess of
$5,000,000 shall be rendered against the Company, any
Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon
assets or properties of the Company or any Subsidiary to
enforce any such final and nonappealable judgment or judgments
aggregating in excess of $5,000,000;
(j) a Reportable Event or Reportable Events, or a failure
to make a required installment or other payment (within the
meaning of Section 412(n)(l) of the Code), shall have occurred
with respect to any Plan or Plans that reasonably could be
expected to result in liability of the Company to the PBGC or
to a Plan in an aggregate amount exceeding $5,000,000 and,
within 30 days after the reporting of any such Reportable
Event to the Administrative Agent, the Administrative Agent
shall have notified the Company in writing that (i) the
Required Lenders have made a determination that, on the basis
of such Reportable Event or Reportable Events or the failure
to make a required payment, there are reasonable grounds (A)
for the termination of such Plan or Plans by the PBGC, (B) for
the appointment by the appropriate United States District
Court of a trustee to administer such Plan or Plans or (C) for
the imposition of a lien in favor of a Plan and (ii) as a
result thereof an Event of Default exists hereunder; or a
trustee shall be appointed by a United States District Court
to administer any such Plan or Plans; or the PBGC shall
institute proceedings to terminate any Plan or Plans;
(k) (i) the Company or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it
has incurred Withdrawal Liability to such Multiemployer Plan,
(ii) the Borrower or such ERISA Affiliate does not have
reasonable grounds for contesting such Withdrawal Liability or
is not in fact contesting such Withdrawal Liability in a
timely and appropriate manner and (iii) the amount of the
Withdrawal Liability specified in such notice, when aggregated
with all other amounts required to be paid to Multiemployer
Plans in connection with Withdrawal Liabilities (determined as
of the date or dates of such notification), exceeds $5,000,000
or requires payments exceeding $1,000,000 in any year;
(1) the Company or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if solely
as a result of such reorganization or termination the
aggregate annual contributions of the Company and its ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been
or will be increased over the amounts required to be
contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding
$1,000,000; or
(m) a Change in Control shall occur; then, and in every
such event (other than an event with respect to the Company
described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the
Administrative Agent, at the request of the Required Lenders,
shall, by notice to the Company, take either or both of the
following actions, at the same or different times: (i)
terminate forthwith the Commitments and (ii) declare the Loans
then outstanding to be forthwith due and payable in whole or
in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and
any unpaid accrued Facility Fees and all other liabilities of
the Borrowers accrued hereunder, shall become forthwith due
and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived
anything contained herein to the contrary notwithstanding;
and, in any event with respect to the Company described in
paragraph (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any
unpaid accrued Facility Fees and all other liabilities of the
Borrowers accrued hereunder shall automatically become due and
payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived
anything contained herein to the contrary notwithstanding.
ARTICLE VII
Guarantee
The Company unconditionally and irrevocably guarantees
the due and punctual payment and performance, when and as due,
whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, of the Guaranteed
Obligations. The Company further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part,
without notice or further assent from it and that it will
remain bound upon its guarantee notwithstanding any extension
or renewal of any Guaranteed Obligations.
The Company waives presentment to, demand of payment from
and protest to the Borrowing Subsidiaries of any of the
Guaranteed Obligations, and also waives notice of acceptance
of its guarantee and notice of protest for nonpayment. The
obligations of the Company hereunder shall not be affected by
(a) the failure of any Lender or the Administrative Agent to
assert any claim or demand or to enforce any right or remedy
against the Borrowing Subsidiaries under the provisions of
this Agreement or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of
this Agreement, any guarantee or any other agreement; or (c)
the failure of any Lender or the Administrative Agent to
exercise any right or remedy against any other guarantor of
the Guaranteed Obligations.
The Company further agrees that its guarantee constitutes
a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the
Administrative Agent or any Lender to any security, if any,
held for payment of the Guaranteed Obligations or to any
balance of any deposit account or credit on its books, in
favor of the Borrowing Subsidiaries or any other person.
The obligations of the Company hereunder shall not be
subject to any reduction, limitation, impairment or
termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the Company
hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Administrative Agent or any
Lender to assert any claim or demand or to enforce any remedy
under this Agreement, any guarantee or any other agreement, by
any waiver or modification of any provision of any thereof, by
any default, failure or delay, wilful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act
or omission which may or might in any manner or to any extent
vary the risk of the Company or otherwise operate as a
discharge of the Company as a matter of law or equity.
To the extent permitted by applicable law, the Company
waives any defense based on or arising out of any defense
available to the Borrowing Subsidiaries, including any defense
based on or arising out of any disability of the Borrowing
Subsidiaries, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrowing
Subsidiaries, other than final payment in full of the
Guaranteed Obligations. The Administrative Agent and the
Lenders may, at their election, foreclose on any security held
by one or more of them by one or more judicial or non-judicial
sales, or exercise any other right or remedy available to them
against the Borrowing Subsidiaries, or any security without
affecting or impairing in any way the liability of the Company
hereunder except to the extent the Guaranteed Obligations have
been fully and finally paid. The Company waives any defense
arising out of any such election even though such election
operates to impair or to extinguish any right of reimbursement
or subrogation or other right or remedy of the Company against
any Borrowing Subsidiary or any security.
The Company further agrees that its guarantee shall
continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of principal of
or interest on any Guaranteed Obligation is rescinded or must
otherwise be restored by any Lender upon the bankruptcy or
reorganization of any Borrowing Subsidiary or otherwise.
In furtherance of the foregoing and not in limitation of
any other right which the Administrative Agent or any Lender
may have at law or in equity against the Company by virtue
hereof, upon the failure of any Borrowing Subsidiary to pay
any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, the Company hereby promises to and
will, upon receipt of written demand by the Administrative
Agent or any Lender, forthwith pay or cause to be paid to the
Administrative Agent or such Lender in cash the amount of such
unpaid Guaranteed Obligation.
Upon payment by the Company of any sums to the
Administrative Agent or any Lender, as provided above, all
rights of the Company against the other Borrowers arising as
a result thereof by way of right of subrogation or otherwise
shall in all respects be subordinated and junior in right of
payment to the prior indefeasible payment in full of all the
Guaranteed Obligations to the Administrative Agent and the
Lenders; provided, however, that to the extent any right of
subrogation that the Company might have pursuant to this
Agreement or otherwise would constitute the Company a
"creditor" of any Borrower within the meaning of Section 547
of Title 11 of the United States Code as now in effect or
hereafter amended, or any comparable provision of any
successor statute, the Company hereby irrevocably waives and
releases such right of subrogation.
ARTICLE VIII
The Administrative Agent
In order to expedite the transactions contemplated by
this Agreement, Chemical Bank is hereby appointed to act as
Administrative Agent on behalf of the Lenders. Each of the
Lenders hereby irrevocably authorizes the Administrative Agent
to take such actions on behalf of such Lender or holder and to
exercise such powers as are specifically delegated to the
Administrative Agent by the terms and provisions hereof,
together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby
expressly authorized by the Lenders, without hereby limiting
any implied authority, (a) to receive on behalf of the Lenders
all payments of principal of and interest on the Loans and all
other amounts due to the Lenders hereunder, and promptly to
distribute to each Lender its proper share of each payment so
received; (b) to give notice on behalf of each of the Lenders
to the Borrowers of any Event of Default of which the
Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute
promptly to each Lender copies of all notices, financial
statements and other materials delivered by the Borrowers
pursuant to this Agreement as received by the Administrative
Agent.
Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable as
such for any action taken or omitted by any of them except for
its or his or her own gross negligence or willful misconduct,
or be responsible for any statement, warranty or
representation herein or the contents of any document
delivered in connection herewith, or be required to ascertain
or to make any inquiry concerning the performance or
observance by the Borrowers of any of the terms, conditions,
covenants or agreements contained in this Agreement. The
Administrative Agent shall not be responsible to the Lenders
for the due execution, genuineness, validity, enforceability
or effectiveness of this Agreement or other instruments or
agreements. The Administrative Agent may deem and treat the
Lender that makes any Loan as the holder of the indebtedness
resulting therefrom for all purposes hereof until it shall
have received notice from such Lender, given as provided
herein, of the transfer thereof. The Administrative Agent
shall in all cases be fully protected in acting, or refraining
from acting, in accordance with written instructions signed by
the Required Lenders and, except as otherwise specifically
provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. The
Administrative Agent shall, in the absence of knowledge to the
contrary, be entitled to rely on any instrument or document
believed by it in good faith to be genuine and correct and to
have been signed or sent by the proper person or persons.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall have any responsibility to
the Borrowers on account of the failure of or delay in
performance or breach by any other Lender of any of its
obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other
Lender or the Borrowers of any of their respective obligations
hereunder or in connection herewith. The Administrative Agent
may execute any and all duties hereunder by or through agents
or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken
or suffered in good faith by it in accordance with the advice
of such counsel.
The Lenders hereby acknowledge that the Administrative
Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this
Agreement unless it shall be requested in writing to do so by
the Required Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative
Agent may resign at any time by notifying the Lenders and the
Company. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative
Agent reasonably acceptable to the Company. If no successor
shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation,
then, the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall
be a bank with an office in New York, New York, having a
combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor
bank, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder.
After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.05 shall continue in
effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as
Administrative Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as
Administrative Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were
not the Administrative Agent, and the Administrative Agent and
its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrowers or
any Subsidiary or other Affiliate thereof as if it were not
the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative
Agent, on demand, in the amount of its pro rata share (based
on its Commitment hereunder or, if the Commitments shall have
been terminated, the amount of its outstanding Loans) of any
out-of-pocket expenses incurred for the benefit of the Lenders
by the Administrative Agent, including reasonable counsel fees
and compensation of agents paid for services rendered on
behalf of the Lenders, which shall not have been reimbursed by
the Borrowers and (ii) to indemnify and hold harmless the
Administrative Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata
share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted
against it in its capacity as the Administrative Agent in any
way relating to or arising out of this Agreement or any action
taken or omitted by it under this Agreement to the extent the
same shall not have been reimbursed by the Borrowers; provided
that no Lender shall be liable to the Administrative Agent for
any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent or any of its
directors, officers, employees or agents. Each Lender agrees
that any allocation made in good faith by the Administrative
Agent of expenses or other amounts referred to in this
paragraph between this Agreement and the Facility A Credit
Agreement shall be conclusive and binding for all purposes.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender also acknowledges
that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement or any
related agreement or any document furnished hereunder or
thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except as otherwise expressly
provided herein, notices and other communications provided for
herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, as
follows:
(a) if to any Borrower, to EG&G, Inc., 45 William Street,
Wellesley, Massachusetts 02181, Attention of Treasurer,
(Telecopy No. 617-431-4279);
(b) if to the Administrative Agent, to it at 270 Park
Avenue, New York, New York 10017, Attention of Ted Swimmer,
(Telecopy No. 212-270-2625); and
(c) if to a Lender, to it at its address (or telecopy
number) set forth in Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender became a party
hereto.
All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if delivered
by hand or overnight courier service or sent by telecopy to
such party as provided in this Section 9.01 or in accordance
with the latest unrevoked direction from such party given in
accordance with this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the
Borrowers herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the
Lenders and shall survive the making by the Lenders of the
Loans regardless of any investigation made by the Lenders or
on their behalf, and shall continue in full force and effect
as long as the principal of or any accrued interest on any
Loan or any Facility Fee or any other amount payable under
this Agreement is outstanding and unpaid or the Commitments
have not been terminated.
SECTION 9.03. Binding Effect. This Agreement shall
become effective when it shall have been executed by the
Company and the Administrative Agent and when the
Administrative Agent shall have received copies hereof
(telecopied or otherwise) which, when taken together, bear the
signature of each Lender, and thereafter shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrowers
shall not have the right to assign any rights hereunder or any
interest herein without the prior consent of all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in
this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and
agreements by or on behalf of any party that are contained in
this Agreement shall bind and inure to the benefit of its
successors and assigns.
(b) Each Lender may assign to one or more assignees all
or a portion of its interests, rights and obligations under
this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it); provided, however,
that (i) except in the case of an assignment to a Lender or a
domestic Affiliate of a Lender, the Company must give its
prior written consent to such assignment (which consent shall
not be unreasonably withheld), (ii) the amount of the
Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $10,000,000,
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Accep-
tance, and a processing and recordation fee of $3,000 and (iv)
the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire.
Upon acceptance and recording pursuant to paragraph (e) of
this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall
be at least five Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under
this Agreement and (B) the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto (but shall continue to be entitled
to the benefits of Sections 2.12, 2.14, 2.19 and 9.05, as well
as to any Facility Fees accrued for its account hereunder and
not yet paid)). Notwithstanding the foregoing, any Lender
assigning its rights and obligations under this Agreement may
retain any Competitive Loans made by it outstanding at such
time, and in such case shall retain its rights hereunder in
respect of any Loans so retained until such Loans have been
repaid in full in accordance with this Agreement.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of
any adverse claim, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished
pursuant hereto or the financial condition of the Borrowers or
the performance or observance by the Borrowers of any
obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements
delivered pursuant to Section 5.01 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender
or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of
its offices in the City of New York a copy of each Assignment
and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the
Commitment of, and the principal amount of the Loans owing to,
each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be
conclusive in the absence of manifest error and the Borrowers,
the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by
each party hereto, at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee
together with an Administrative Questionnaire completed in
respect of the assignee (unless the assignee shall already be
a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) above and, if required, the
written consent of the Company to such assignment, the
Administrative Agent shall (i) accept such Assignment and
Acceptance and (ii) record the information contained therein
in the Register.
(f) Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided,
however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) each participating bank
or other entity shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.12, 2.14 and
2.19 to the same extent as if it was the selling Lender (but
limited to the amount that could have been claimed by the
selling Lender had it continued to hold the interest of such
participating bank or other entity), except that all claims
made pursuant to such Sections shall be made through such
selling Lender, and (iv) the Borrowers, the Administrative
Agent and the other Lenders shall continue to deal solely and
directly with such selling Lender in connection with such
Lender's rights and obligations under this Agreement, and such
selling Lender shall retain the sole right to enforce the
obligations of the Borrowers relating to the Loans and to
approve any amendment, modification or waiver of any provision
of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder or the amount of
principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans or changing or
extending the Commitments).
(g) Any Lender or participant may, in connection with
any assignment or participation or proposed assignment or
participation pursuant to this Section, disclose to the
assignee or participant or proposed assignee or participant
any information relating to the Borrowers furnished to such
Lender; provided that, prior to any such disclosure, each such
assignee or participant or proposed assignee or participant
shall execute an agreement whereby such assignee or
participant shall agree (subject to customary exceptions) to
preserve the confidentiality of any such information.
(h) The Borrowers shall not assign or delegate any
rights and duties hereunder without the prior written consent
of all Lenders.
(i) Any Lender may at any time pledge all or any portion
of its rights under this Agreement to a Federal Reserve Bank;
provided that no such pledge shall release any Lender from its
obligations hereunder or substitute any such Bank for such
Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, each Borrower shall, at
the request of the assigning Lender, duly execute and deliver
to the assigning Lender a promissory note or notes evidencing
the Loans made to such Borrower by the assigning Lender
hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrowers
agree, jointly and severally, to pay the fees and
disbursements of counsel for the Administrative Agent in
connection with entering into this Agreement and in connection
with any amendments, modifications or waivers of the
provisions hereof, and agree, jointly and severally, to pay
the reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender in connection with the
enforcement or protection of their rights in connection with
this Agreement or the Loans made hereunder, including the
reasonable fees and disbursements of counsel for the
Administrative Agent or any Lender.
(b) The Borrowers agree, jointly and severally, to
indemnify the Administrative Agent, each Lender, each of their
Affiliates and the directors, officers, employees and agents
of the foregoing (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against any Indemnitee
arising out of (i) the execution or delivery of this Agreement
or any agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective
obligations thereunder or the consummation of the transactions
contemplated thereby, (ii) the use of the proceeds of the
Loans or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not
any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or
related expenses are finally determined by a court of
competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee or from
such Indemnitee's violation of the Federal securities laws
prohibiting insider trading.
(c) The provisions of this Section shall remain
operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of
the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any investigation made by or on
behalf of the Administrative Agent or any Lender. All amounts
due under this Section shall be payable on written demand
therefor.
SECTION 9.06. Applicable Law. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 9.07. Waivers; Amendment. (a) No failure or
delay of the Administrative Agent or any Lender in exercising
any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps
to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Administrative Agent
and the Lenders hereunder are cumulative and are not exclusive
of any rights or remedies which they would otherwise have. No
waiver of any provision of this Agreement or consent to any
departure therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such
waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or
demand on any Borrower or any Subsidiary in any case shall
entitle such party to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may
be waived, amended or modified except pursuant to an agreement
or agreements in writing entered into by the Borrowers and the
Required Lenders; provided, however, that no such agreement
shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date
for the payment of any interest on any Loan, or waive or
excuse any such payment or any part thereof, or decrease the
rate of interest on any Loan, without the prior written
consent of each Lender affected thereby, (ii) increase the
Commitment or decrease the Facility Fee of any Lender or
extend any date for payment thereof without the prior written
consent of such Lender, (iii) amend or modify the provisions
of Section 2.15 or Section 9.04(h), the provisions of this
Section or the definition of the "Required Lenders," or (iv)
release the Company from any of its obligations under Article
VII hereof without the prior written consent of each Lender;
provided further, however, that no such agreement shall amend,
modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written
consent of the Administrative Agent. Each Lender shall be
bound by any waiver, amendment or modification authorized by
this Section and any consent by any Lender pursuant to this
Section shall bind any assignee of its rights and interests
hereunder.
SECTION 9.08. Entire Agreement. This Agreement
constitutes the entire contract among the parties relative to
the subject matter hereof. Any previous agreement among the
parties with respect to the subject matter hereof is
superseded by this Agreement. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party
other than the parties hereto any rights, remedies, obliga-
tions or liabilities under or by reason of this Agreement.
SECTION 9.09. Severability. In the event any one or
more of the provisions contained in this Agreement should be
held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected
or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 9.10. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become effective
as provided in Section 9.03.
SECTION 9.11. Headings. Article and Section headings
and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration
in interpreting, this Agreement.
SECTION 9.12. Right of Setoff. If an Event of Default
shall have occurred and be continuing, each Lender is hereby
authorized at any time and from time to time, 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 and other indebtedness at any time
owing by such Lender to or for the credit or account of the
Company and any Borrowing Subsidiary now or hereafter existing
under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under
this Agreement and although such obligations may be unmatured.
Each Lender agrees promptly to notify the Company after such
setoff and application made by such Lender, but the failure to
give such notice shall not affect the validity of such setoff
and application. The rights of each Lender under this Section
are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which such Lender
may have.
SECTION 9.13. Jurisdiction; Consent to Service of
Process. (a) Each Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Subject to
the foregoing and to paragraph (b) below, nothing in this
Agreement shall affect any right that any party hereto may
otherwise have to bring any action or proceeding relating to
this Agreement against any other party hereto in the courts of
any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out
of or relating to this Agreement in any New York State or
Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 9.14. Waiver of Jury Trial. Each party hereto
hereby waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of
any litigation directly or indirectly arising out of, under or
in connection with this Agreement. Each party hereto (a)
certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to
enforce the foregoing waiver and (b) acknowledges that it and
other parties hereto have been induced to enter into this
Agreement by, among other things, the mutual waivers and
certification in this Section.
SECTION 9.15. Addition of Borrowing Subsidiaries. Each
wholly owned Subsidiary of the Company which shall deliver to
the Administrative Agent a Borrowing Subsidiary Agreement
executed by such Subsidiary and the Company shall, upon such
delivery and without further act, become a party hereto and a
Borrower hereunder with the same effect as if it had been an
original party to this Agreement.
SECTION 9.16. Confidentiality. Each Lender and the
Administrative Agent agree to keep confidential the
Information (as defined below), except that any such Lender
and the Administrative Agent shall be permitted to disclose
Information (a) to such of its officers, directors, employees,
agents and representatives as need to know such Information;
(b) to the extent required by applicable laws and regulations
or by any subpoena or similar legal process, including with
respect to the enforcement of this Agreement, provided that
such Lender and the Administrative Agent shall use reasonable
efforts to notify the Company of such prospective disclosure
a reasonable time prior to any such disclosure and shall take
such actions reasonably requested by the Company to assist the
Company in obtaining a protective order or confidential
treatment with respect to such Information (it being
understood that failure to give such notice after having made
any such reasonable efforts shall not result in any liability
hereunder to such Lender or the Administrative Agent, as the
case may be); (c) to the extent requested by any bank
regulatory authority; (d) to the extent such Information (i)
becomes publicly available other than as a result of a breach
of this Agreement, (ii) becomes available to such Lender or
the Administrative Agent on a non-confidential basis from a
source other than the Company and its Affiliates or (iii) was
available to such Lender or the Administrative Agent on a
non-confidential basis prior to its disclosure to such Lender or
the Administrative Agent by the Company or its Affiliates; (e)
to any actual or prospective assignee or participant in any
rights of such Lender or the Administrative Agent under this
Agreement, provided that such assignee or participant delivers
to the Administrative Agent or such Lender, as applicable, a
confidentiality letter containing substantially the
undertakings set forth in this Section 9.16 and (f) to the
extent the Company shall have consented to such disclosure in
writing. As used in this Section 9.16, "Information" shall
mean any materials, documents and information (other than
annual reports, prospectuses, proxy statements and other
materials distributed to the Company's shareholders) that the
Company or any of its Subsidiaries may have furnished or may
hereafter furnish to the Administrative Agent or any Lender in
connection with Sections 4.03(d), 5.01, 5.04 and 5.05 of this
Agreement.
SECTION 9.17. Collateral. Each of the Lenders
represents to each of the other Lenders that it in good faith
is not relying upon any Margin Stock (as defined in Regulation
U) as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.18. Interest Rate Limitation. Notwith-standing
anything herein to the contrary, if at any time the
applicable interest rate, together with all fees and charges
which are treated as interest under applicable law
(collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by any
Lender, shall exceed the maximum lawful rate (the "Maximum
Rate") which may be contracted for, charged, taken, received
or reserved by such Lender in accordance with applicable law,
all Charges payable to such Lender shall be limited to the
Maximum Rate.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
EG&G, INC.,
by
/s/ John F. Alexander, II
John F. Alexander, II
Corporate Controller
Acting Chief Financial Officer
<PAGE>
CHEMICAL BANK, individually and as
Administrative Agent,
by
/s/ John J. Huber III
John J. Huber III
Managing Director
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Thomas Farley Jr.
Thomas Farley Jr.
Vice President
DRESDNER BANK A.G., NEW YORK BRANCH
AND GRAND CAYMAN BRANCH,
by
/s/ Ernest Fung
Ernest Fung
Vice President
by
/s/J. M. Leffler
J. M. Leffler
First Vice President
THE NORTHERN TRUST COMPANY,
by
/s/Greg Werd
Greg Werd
Vice President
<PAGE>
ROYAL BANK OF CANADA,
by
SOCIETE GENERALE,
by
/s/Jan Wertlieb
Jan Wertlieb
Vice President
WACHOVIA BANK OF GEORGIA, N.A.,
by
/s/Linda M. Harris
Linda M. Harris
Senior Vice President
<PAGE>
EXHIBIT A-1
FORM OF
COMPETITIVE BID REQUEST
Chemical Bank, as Administrative Agent for
the Lenders referred to below
270 Park Avenue
New York, NY 10017
[Date]
Attention: Ted Swimmer
Ladies and Gentlemen:
The undersigned, EG&G, Inc., a Massachusetts corporation (the
"Company"), refers to the [3-Year] [364-Day] Competitive
Advance and Revolving Credit Facility Agreement dated as of
March 21, 1994 (as amended, modified, extended or restated
from time to time, collectively, the "Credit Agreement"),
among the Company, the Lenders named therein and Chemical
Bank, as Administrative Agent. Capitalized terms used herein
and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. The Company
hereby gives you notice pursuant to Section 2.03(a) of the
Credit Agreement that it requests a Competitive Borrowing
under the Credit Agreement, and in that connection sets forth
below the terms on which such Competitive Borrowing is
requested to be made:
<TABLE>
<S> <C> <C> <C>
(A) Interest Rate Basis 1/ ____________ ____________ ___________
(B) Date of Competitive Borrowing
(which is a Business Day) ____________ ____________ ___________
(C) Interest Period and the last
day thereof 2/ ____________ ____________ ___________
(D) Principal Amount of
Competitive Borrowing 3/ $____________ $____________ $__________
</TABLE>
<PAGE>
Upon acceptance of any or all of the Loans offered by the
Lenders in response to this request, the Company shall be
deemed to affirm as of such date the representations and
warranties made in the Credit Agreement to the extent
specified in Article IV thereof.
Very truly yours,
EG&G, INC.
by__________________________
Title: (Responsible Officer)
Copy to:
Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave
1/ Eurodollar Competitive Loan or Fixed Rate Loan.
2/ Which shall be subject to the definition of "Interest
Period" and end not later than the Maturity Date.
3/ Not less than $5,000,000 and in integral multiples of
$1,000,000.
<PAGE>
EXHIBIT A-2
FORM OF
COMPETITIVE BID INVITATION
[Name of Lender]
[Address]
[Date]
Ladies and Gentlemen:
Reference is made to the [3-Year] [364-Day] Competitive
Advance and Revolving Credit Facility Agreement dated as of
March 21, 1994 (as amended, modified, extended or restated
from time to time, collectively, the "Credit Agreement"),
among EG&G, Inc., a Massachusetts corporation (the "Company"),
the Lenders named therein and Chemical Bank, as Administrative
Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms
in the Credit Agreement. The Company made a Competitive Bid
Request on [date], 19 , pursuant to Section 2.03(a) of the
Credit Agreement, and in that connection you are invited to
submit a Competitive Bid by [Date]/[Time]. 1/ Your Competitive
Bid must comply with Section 2.03(b) of the Credit Agreement
and the terms set forth below on which the Competitive Bid
Request was made:
<TABLE>
<S> <C>
(A) Interest Rate Basis
(B) Date of Competitive Borrowing
(C) Interest Period and the last
day thereof
(D) Principal Amount of
Competitive Borrowing $
</TABLE>
Very truly yours,
CHEMICAL BANK, as Administrative
Agent,
by
________________________________
Title:
1/ The Competitive Bid must be received by the
Administrative Agent (i) in the case of Eurodollar
Competitive Loans, not later than 9:30 a.m., New York
City time, three Business Days before a proposed
Competitive Borrowing, and (ii) in the case of Fixed Rate
Loans, no later than 9:30 a.m., New York City time, on
the Business Day of a proposed Competitive Borrowing.
<PAGE>
EXHIBIT A-3
FORM OF
COMPETITIVE BID
Chemical Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, NY 10017
[Date]
Attention: Ted Swimmer
Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the [3-Year]
[364-Day] Competitive Advance and Revolving Credit Facility
Agreement dated as of March 21, 1994 (as amended, modified,
extended or restated from time to time, collectively, the
"Credit Agreement"), among EG&G, Inc., a Massachusetts
corporation (the "Company"), the Lenders named therein and
Chemical Bank, as Administrative Agent. Capitalized terms
used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The
undersigned hereby makes a Competitive Bid pursuant to Section
2.03(b) of the Credit Agreement, in response to the
Competitive Bid Request made by the Company on [date], 19 ,
and in that connection sets forth below the terms on which
such Competitive Bid is made:
<TABLE>
<S> <C> <C> <C>
(A) Interest Period and
last day thereof ______________ __________________ _____________
(B) Principal Amount 1/ $______________ $__________________ $_____________
(C) Competitive Bid
Rate 2/ ______________ __________________ _____________
</TABLE>
The undersigned hereby confirms that it is prepared,
subject to the conditions set forth in the Credit Agreement,
to extend credit to the Company upon acceptance by the Company
of this bid in accordance with Section 2.03(d) of the Credit
Agreement.
Very truly yours,
[NAME OF LENDER],
by
________________________________
Title:
Copy to:
Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave
1/ Not less than $5,000,000 or greater than the requested Com-
petitive Borrowing and in integral multiples of $1,000,000.
Multiple bids will be accepted by the Administrative Agent.
2/ i.e., LIBOR + or - %, in the case of Eurodollar
Competitive Loans or %, in the case of Fixed Rate Loans.
<PAGE>
EXHIBIT A-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
Chemical Bank, as Administrative Agent
for the Lenders referred to below
270 Park Avenue
New York, NY 10017
Attention: Ted Swimmer
Ladies and Gentlemen:
The undersigned, EG&G, Inc. (the "Company"), refers to
the [3-Year] [364-Day] Competitive Advance and Revolving
Credit Facility Agreement dated as of March 21, 1994 (as
amended, modified, extended or restated from time to time,
collectively, the "Credit Agreement"), among the Company, the
Lenders named therein and Chemical Bank, as Administrative
Agent.
In accordance with Section 2.03(c) of the Credit
Agreement, we have received a summary of bids in connection
with our Competitive Bid Request dated ___________ and in
accordance with Section 2.03(d) of the Credit Agreement, we
hereby accept the following bids for maturity on [date]:
Principal Amount
$
$
Fixed Rate/Margin
[%]/[+/-. %]
Lender
<PAGE>
We hereby reject the following bids:
Principal Amount
$
$
Fixed Rate/Margin
[%]/[+/-. %]
Lender
The $ should be deposited in Chemical Bank
account number [ ] on [date].
Very truly yours,
EG&G, INC.
by
Name:
Title:
Copy To:
Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, NY 10017
Attention: Sandra Miklave
<PAGE>
EXHIBIT A-5
FORM OF
STANDBY BORROWING REQUEST
Chemical Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, NY 10017
[Date]
Attention: Ted Swimmer
Ladies and Gentlemen:
The undersigned, EG&G, Inc., a Massachusetts
corporation (the "Company"), refers to the [3-Year] [364-Day]
Competitive Advance and Revolving Credit Facility
Agreement dated as of March 21, 1994 (as amended, modified,
extended or restated from time to time, collectively, the
"Credit Agreement"), among the Company, the Lenders named
therein and Chemical Bank, as Administrative Agent.
Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the
Credit Agreement. The Company hereby gives you notice
pursuant to Section 2.04 of the Credit Agreement that it
requests a Standby Borrowing under the Credit Agreement, and
in that connection sets forth below the terms on which such
Standby Borrowing is requested to be made:
<TABLE>
<S> <C> <C>
(A) Date of Standby Borrowing
(which is a Business Day) _________________________________
(B) Principal Amount of
Standby Borrowing 1/ $_________________________________
(C) Interest rate basis 2/ _________________________________
(D) Interest Period and the
last day thereof 3/ _________________________________
</TABLE>
Upon acceptance of any or all of the Loans made by the
Lenders in response to this request, the Company shall be
deemed to have represented and warranted (but only to the
extent required by Section 4.01 of the Credit Agreement) that
the conditions to lending specified in Section 4.01(b) and (c)
of the Credit Agreement have been satisfied.
Very truly yours,
EG&G, INC.
by
___________________________
Title: [Responsible Officer]
Copy to:
Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave
1/ Not less than $5,000,000 and in integral multiples of
$1,000,000.
2/ Eurodollar Standby Loan or ABR Loan.
3/ Which shall be subject to the definition of "Interest
Period" and end not later than the Maturity Date.
<PAGE>
EXHIBIT B
ADMINISTRATIVE QUESTIONNAIRE
EG&G, INC.
Please accurately complete the following information and
return via FAX to the attention of Sandra Miklave at Chemical
Bank Agency Services Corporation as soon as possible.
FAX Number: 212-622-0002
LEGAL NAME OF YOUR INSTITUTION TO APPEAR IN DOCUMENTATION:
GENERAL INFORMATION - DOMESTIC RATE LENDING OFFICE:
Institution Name:
Street Address:
City, State, Zip Code:
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:
Street Address:
City, State, Zip Code:
CREDIT CONTACTS/NOTIFICATION METHODS:
Primary Contact:
Street Address:
City, State, Zip Code:
Phone Number:
FAX Number:
Backup Credit Contact:
Street Address:
City, State, Zip Code:
Phone Number:
FAX Number:
TAX WITHHOLDING:
UNITED STATES
Non-Resident Alien or Foreign Corporation or Other Foreign
Entity __________ YES __________ NO
If yes, please enclose Form 4224, 1001 or W-8. If no,
please enclose Form W-9.
Tax ID Number _________________________________
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST,
FEES, ETC.
Contact:
Street Address:
City, State, Zip Code:
Phone Number:
FAX Number:
Telex & Answer Back:
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be
transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
BID LOAN NOTIFICATIONS:
Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Fax Number:
<PAGE>
MAILINGS:
Please specify who should receive financial information:
Name:
Street Address:
City, State, Zip Code:
It is very important that all of the above information is
accurately filled in and returned promptly. If there is
someone other than yourself who should receive this
questionnaire, please notify us of their name and FAX number
and we will FAX them a copy of the questionnaire. If you have
any questions, please call Sandra Miklave at 212-622-0005,
telecopy 212-622-0002.
<PAGE>
EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the [3-Year] [364-Day] Competitive
Advance and Revolving Credit Facility Agreement dated as of
March 21, 1994, (as amended, modified, extended or restated
from time to time, collectively, the "Credit Agreement"),
among EG&G, Inc., a Massachusetts corporation, the Lenders
named therein and Chemical Bank, as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the
same meanings.
1. The Assignor hereby sells and assigns, without
recourse, to the Assignee, and the Assignee hereby purchases
and assumes, without recourse, from the Assignor, effective as
of the Effective Date set forth on the following page, the
interests set forth on the following page (the "Assigned
Interest") in the Assignor's rights and obligations under the
Credit Agreement, including, without limitation, the interests
set forth on the following page in the Commitment of the
Assignor on the Effective Date and the Loans owing to the
Assignor which are outstanding on the Effective Date, together
with unpaid interest accrued on the assigned Loans to the
Effective Date and the amount, if any, set forth on the
following page of the Fees accrued to the Effective Date for
the account of the Assignor. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in
Section 9.04(c) of the Credit Agreement, a copy of which has
been received by each such party. From and after the
Effective Date (i) the Assignee shall be a party to and be
bound by the provisions of the Credit Agreement and, to the
extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Lender
thereunder and under the Credit Agreement or any other
document issued in connection therewith and (ii) the Assignor
shall, to the extent of the interests assigned by this
Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being delivered to
the Administrative Agent together with (i) if the Assignee is
organized under the laws of a jurisdiction outside the United
States, the forms prescribed by the Internal Revenue Service
of the United States certifying as to the Assignee's exemption
from withholding taxes with respect to all payments to be made
to the Assignee under the Credit Agreement or such other
documents as are necessary to indicate that all such payments
are subject to such tax at a rate reduced by an applicable tax
treaty, all duly completed and executed by such Assignee, (ii)
if the Assignee is not already a Lender under the Credit
Agreement, an Administrative Questionnaire and (iii) a
processing and recordation fee of $3,000.
3. This Assignment and Acceptance shall be governed by
and construed in accordance with the laws of the State of New
York.
<PAGE>
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
<TABLE>
Percentage Assigned of
Facility and Commitment
(set forth, to at least
8 decimals, as a percentage
Principal Amount Assigned (and of the Facility and the
identifying information as to aggregate Commitments of
Facility individual Competitive Loans) all Lenders therunder)
- ------------------------------------------------------------------------------
<S> <C> <C>
Commitment Assigned: $ %
Standby Loans: $ %
Competitive Loans: $ %
Fees Assigned (if any): $ %
The terms set forth above and on the preceding
page are hereby agreed to: [Accepted
________________, as Assignor CHEMICAL BANK, as Administrative Agent
By:__________________________ By:__________________________
Name: Name:
Title: Title:
________________, as Assignee
EG&G, INC.
By:__________________________ By:__________________________
Name: Name:
Title: Title: ]
]
<PAGE>
EXHIBIT D-1
FORM OF OPINION OF MURRAY GROSS, ESQ.
[Date]
To the Lenders party to the Credit
Agreements referred to below and
Chemical Bank, as Administrative Agent
Ladies and Gentlemen:
I am the General Counsel of EG&G, Inc., a Massachusetts
corporation (the "Company"), and have acted in the capacity of
General Counsel in connection with each of the 3-Year and 364-Day
Competitive Advance and Revolving Credit Facility
Agreements dated as of March 21, 1994 (collectively, the
"Credit Agreements"), among the Company, the lenders listed in
Schedule 2.01 thereto (the "Lenders"), and Chemical Bank, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent"). This opinion letter is being
furnished to you at the request of the Company pursuant to
Section 4.02(a) of the Credit Agreements. Capitalized terms
used but not defined herein shall have the meanings assigned
to such terms in the Credit Agreements.
In connection with the opinions expressed below, I have
examined the Credit Agreements (including the Exhibits
thereto) and originals or copies, certified or otherwise
identified to my satisfaction, of (a) such corporate records
of the Company as I have considered appropriate, including
copies of the articles of incorporation, as amended, and by-laws,
as amended, of the Company certified as in effect on the
date hereof (collectively, the "Charter Documents") and
certified copies of resolutions of the board of directors of
the Company and (b) such other certificates, agreements,
documents and other instruments of the Company as I have
deemed relevant and necessary as a basis for the opinions
hereinafter expressed, and I have assumed the genuineness of
all signatures therein. The documents listed above are
collectively referred to herein as the "Documents".
Based upon the foregoing, and subject to the
assumptions, limitations and qualifications set forth herein,
I am of the opinion that:
1. The Company (a) is a corporation duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and is qualified to do business
in every jurisdiction where such qualification is necessary
except where the failure to so qualify would not have a
material adverse effect on the business, consolidated
financial position or consolidated results of operations of
the Company and its Consolidated Subsidiaries taken as a
whole, (b) has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and (c) has
the corporate power to execute, deliver and perform its
obligations under each of the Documents to which it is a party
and to borrow under the Credit Agreements.
2. The execution, delivery and performance by the
Company of each of the Documents to which it is a party and
the borrowings under the Credit Agreements (a) are within the
Company's corporate powers, (b) have been duly authorized by
all necessary corporate action, (c) require no action by or in
respect of, or filing with, any Governmental Authority, (d) do
not (i) contravene, or constitute a default under, any
applicable provision of statutory law or regulation either of
the United States or the Commonwealth of Massachusetts or of
the Charter Documents of the Company or of any existing
agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or (ii) result in the
creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries and (e) do not and will not (i)
violate any order of any Governmental Authority binding upon
the Company, (ii) violate, conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a
default under any existing indenture, mortgage, agreement for
borrowed money, bond, note or similar instrument or any other
material agreement to which the Company is a party or by which
the Company or any of its property is bound.
3. There is no action, suit or proceeding pending
against, or to my knowledge threatened against the Company or
any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a
reasonable probability of a final adverse decision which would
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Company and its Consolidated Subsidiaries taken as a whole
or which in any manner draws into question the validity of any
Document to which the Company is a party.
4. Each of the Documents to which the Company is a
party has been duly executed and delivered by the Company and
is a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and to general equitable
principles from time to time in effect.
5. Assuming that the proceeds of the Loans are used for
the purposes set forth in the Credit Agreements, the making of
the Loans and such use will not violate or be inconsistent
with Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System of the United States.
6. The Company is not (a) an "investment company" as
defined in, or subject to regulation under, the Investment
Company Act of 1940 or (b) a "holding company" as defined in,
or subject to regulation under, the Public Utility Holding
Company Act of 1935, as amended.
The opinions expressed herein are limited to the laws of
the Commonwealth of Massachusetts and of the United States of
America.
This letter is furnished by me solely for your benefit
and for the benefit of assignees of your rights and
obligations under the Credit Agreements in connection with the
transactions referred to in the Documents and may not, without
my prior written consent, be circulated to, or relied upon by,
any other person or used in any other context.
Very truly yours,
263A<PAGE>
EXHIBIT D-2
FORM OF OPINION OF MURRAY GROSS, ESQ.
[Date]
To the Lenders party to the Credit
Agreements referred to below and
Chemical Bank, as Administrative Agent
Ladies and Gentlemen:
I am the General Counsel of EG&G, Inc., a Massachusetts
corporation (the "Company"), and have acted in the capacity of
General Counsel in connection with (a) each of the 3-Year and
364-Day Competitive Advance and Revolving Credit Facility
Agreements dated as of March 21, 1994 (collectively, as in
effect on the date hereof, the "Credit Agreements"), among the
Company, the lenders listed in Schedule 2.01 thereof (together
with their successors and assigns, the "Lenders"), and
Chemical Bank, as administrative agent for the Lenders (in
such capacity, the "Administrative Agent") and (b) the
Borrowing Subsidiary Agreement dated as of the date hereof
(the "Borrowing Subsidiary Agreement") among the Company, [New
Borrower], a [ ] corporation (the "New Borrower"), the
Lenders and the Administrative Agent. This opinion letter is
being furnished to you at the request of the Company pursuant
to Section 4.03(a) of the Credit Agreements. Capitalized
terms used but not defined herein shall have the meanings
assigned to such terms in the Credit Agreements.
In connection with the opinions expressed below, I have
examined (a) the Credit Agreements (including the Exhibits
thereto), (b) the Borrowing Subsidiary Agreement and (c)
originals or copies, certified or otherwise identified to my
satisfaction, of (i) such corporate records of the New
Borrower as I have considered appropriate, including copies of
the articles of incorporation, as amended, and by-laws, as
amended, of the New Borrower certified as in effect on the
date hereof (collectively, the "Charter Documents") and
certified copies of resolutions of the board of directors of
the New Borrower and (ii) such other certificates, agreements,
documents and other instruments of the New Borrower as I have
deemed relevant and necessary as a basis for the opinions
hereinafter expressed. The documents listed above are
collectively referred to herein as the "Documents".
Based upon the foregoing, and subject to the
assumptions, limitations and qualifications set forth herein,
I am of the opinion that:
1. The New Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do
business and in good standing in each other jurisdiction in
which it owns property and/or conducts its business and in
which failure to be so qualified and in good standing would
have a materially adverse effect on the business of the New
Borrower.
2. The execution, delivery and performance by the New
Borrower of its Borrowing Subsidiary Agreement, and the
performance by the New Borrower of the provisions of the
Credit Agreements applicable to it, are within its corporate
powers, have been duly authorized by all necessary corporate
action and do not contravene (a) its Charter Documents or (b)
any law or any contractual restriction binding on or affecting
it.
3. No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by
the New Borrower of its Borrowing Subsidiary Agreement or for
the performance by the New Borrower of the provisions of the
Credit Agreements applicable to it, except for those which
have been duly obtained or made and are in full force and
effect.
4. The Borrowing Subsidiary Agreement and the Credit
Agreements are legal, valid and binding obligations of the New
Borrower enforceable against it in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the enforcement of the rights of creditors generally
and subject to general equitable principles from time to time
in effect.
The opinions expressed herein are limited to the laws of
the Commonwealth of Massachusetts and of the United States of
America.
This letter is furnished by me solely for your benefit
and for the benefit of assignees of your rights and
obligations under the Credit Agreements in connection with the
transactions referred to in the Documents and may not, without
my prior written consent, be circulated to, or relied upon by,
any other person or used in any other context.
Very truly yours,
263A<PAGE>
EXHIBIT E
BORROWING SUBSIDIARY AGREEMENT dated as of _________ ,
19__, among EG&G, INC., a Massachusetts corporation (the
"Company"), [Name of Subsidiary], a [ ] corporation
(the "New Subsidiary"), the Lenders named in Schedule 2.01 to
the Credit Agreements referred to below (together with their
successors and assigns, the "Lenders") and CHEMICAL BANK, a
New York banking corporation, as Administrative Agent for the
Lenders (in such capacity, the Administrative Agent).
Reference is hereby made to each of the 3-Year and 364-Day
Competitive Advance and Revolving Credit Facility
Agreements dated as of March 21, 1994 (collectively, the
"Credit Agreements") between the Company, the Borrowing
Subsidiaries (as such term is defined therein; together with
the Company, the "Borrowers"), the Lenders and the
Administrative Agent. Capitalized terms used herein but not
otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreements. Under the Credit
Agreements, the Lenders have agreed, upon the terms and
subject to the conditions therein set forth, to make revolving
credit loans to the Company and to wholly owned Subsidiaries
that execute and deliver to the Lenders Borrowing Subsidiary
Agreements in the form of this Agreement. The Company
represents that the New Subsidiary is a wholly owned
Subsidiary. The parties hereto agree that the guarantee of
the Company contained in the Credit Agreements applies to the
obligations of the New Subsidiary. In consideration of being
permitted to borrow under the Credit Agreements upon the terms
and subject to the conditions set forth therein, the New
Subsidiary agrees that from and after the date of this
Agreement it will be, and will be liable for the observance
and performance of all the obligations of, a Borrowing
Subsidiary under the Credit Agreements (including as a
Borrower thereunder), as the same may be amended from time to
time, to the same extent as if it had been one of the original
parties to the Credit Agreements including, without
limitation, Section 9.13 thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their authorized officers as
of the date first appearing above.
[New Subsidiary]
by _________________________
Name:
Title:
EG&G, INC.,
by _________________________
Name:
Title:
CHEMICAL BANK, as Administrative
Agent on behalf of the Lenders,
by _________________________
Name:
Title:
<PAGE>
Schedule 2.01
to Credit Agreement
Lenders and Commitments
Lender Commitment
Chemical Bank $28,000,000
270 Park Avenue, 9th Floor
New York, New York 10017
Attention: Theodore Swimmer
Telephone: (212) 270-5720
Telecopy: (212) 270-3504
The First National Bank of Boston 28,000,000
100 Federal Street
Boston, MA 02110
Attention: Mr. Thomas F. Farley, Jr.
Telephone: (617) 434-5812
Telecopy: (617) 434-0637
Dresdner Bank A.G., New York Branch 21,000,000
and Grand Cayman Branch
75 Wall Street
New York, NY 10005-2889
Attention: Mr. Ernest Fung
Telephone: (212) 575-0237
Telecopy: (212) 921-9416
The Northern Trust Company 21,000,000
50 South LaSalle Street
Chicago, IL 60675
Attention: Mr. Gregory F. Werd, Jr.
Telephone: (312) 444-3504
Telecopy: (312) 444-3508
Royal Bank of Canada 21,000,000
New York Branch
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Attention: Manager, Loans Administration
Telephone: (212) 858-7168
Telecopy: (718) 522-6292/3
with a copy to:
Royal Bank of Canada
Financial Square
New York, New York 10005-3531
Attention: Sheryl L. Greenberg
Telephone: (212) 428-6476
Telecopy: (212) 428-6459
Societe Generale 28,000,000
50 Rockefeller Plaza
New York, NY 10020
Attention: Ms. Jan Wertlieb
Telephone: (212) 830-6881
Telecopy: (212) 581-8752
Wachovia Bank of Georgia, N.A. $28,000,000
191 Peachtree Street, N.E.
Atlanta, GA 30303
Attention: Ms. Elizabeth Colt
Telephone: (404) 332-4089
Telecopy: (404) 332-6898
<PAGE>
CONFORMED COPY
AMENDMENT No. 1 (this "Amendment"), dated as of March 15, 1995, to
the 364-Day Competitive Advance and Revolving Credit Facility Agreement
(the "364-Day Agreement"), dated as of March 21, 1994, among EG&G, INC.,
a Massachusetts corporation (the "Company"), the Borrowing Subsidiaries
(as such term is defined herein; together with the Company, the
"Borrowers"), the Lenders listed in Schedule 2.01 thereof (the
"Lenders") and CHEMICAL BANK, a New York banking corporation, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent"). Capitalized terms used herein and defined in
the 364-Day Agreement have the meanings set forth in the 364-Day
Agreement.
WHEREAS, the Borrowers have requested and the Administrative Agent
and the Lenders are willing to amend certain provisions of the 364-Day
Agreement for the limited purposes described and on the terms and
conditions set forth herein;
NOW, THEREFORE, for and in consideration of the premises and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, subject to Section 5
below, as follows:
1. The definition of the term "Maturity Date" in Section 1.01 of
the 364-Day Agreement is hereby deleted and replaced by the following
sentence: "Maturity Date" shall mean March 19, 1996.
2. The representations and warranties in the 364-Day Agreement are
correct in all material respects on and as of the date hereof, before
and after the execution and delivery of this Amendment, as though made
on and as of the date hereof and no event has occurred and is
continuing, or would result from the execution and delivery of this
Amendment, that constitutes a Default or Event of Default.
3. Except as otherwise expressly modified hereby, all terms and
provisions of the 364-Day Agreement shall be and shall remain unchanged
and the 364-Day Agreement is hereby ratified and confirmed and shall be
and shall remain in full force and effect, enforceable in accordance
with its terms. Any reference in the 364-Day Agreement, or in any
documents or instruments required thereunder or annexes or schedules
thereto, referring to the 364-Day Agreement shall be deemed to refer to
the 364-Day Agreement as amended by this Amendment.
4. This Amendment may be executed in two or more counterparts, any
one of which need not contain the signatures of more than one party, but
all such counterparts taken together will constitute one and the same
Amendment.
5. The Company represents and warrants that it has all requisite
power and authority to enter into this Amendment, that this Amendment
has been duly and validly authorized, executed and delivered by such
party and this Amendment is the legal, valid and binding obligation of
such party. This Amendment shall become effective only upon the receipt
by the Administrative Agent of an opinion of counsel for the Company
confirming the representation and warranty set forth in the preceding
sentence together with evidence of the Company's authority to enter into
this Amendment, in each case satisfactory to the Administrative Agent.
6. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK AS THOUGH
WHOLLY-MADE
AND PERFORMED WITHIN SUCH STATE.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
EG&G, INC.,
by
/s/ Tom Sauser
Name: Tom Sauser
Title: CFO
CHEMICAL BANK, individually and
as Administrative Agent for the
Lenders,
by
/s/ Claude Setton
Name: Claude Setton
Title: Vice President
<PAGE>
THE FIRST NATIONAL BANK OF
BOSTON,
by
/s/ Thomas F. Farley, Jr.
Name: Thomas F. Farley, Jr.
Title: Director
DRESDNER BANK A.G., NEW YORK
BRANCH AND GRAND CAYMAN BRANCH,
by
/s/ Ernest Fung
Name: Ernest Fung
Title: VP
by
/s/ J.M. Leffler
Name: J.M. Leffler
Title: SVP
THE NORTHERN TRUST COMPANY,
by
/s/ Curtis C. Tatham, III
Name: Curtis C. Tatham, III
Title: Commercial Banking
Officer
ROYAL BANK OF CANADA,
by
/s/ T.L. Gleason
Name: T.L. Gleason
Title: Vice President
<PAGE>
SOCIETE GENERALE,
by
/s/ Jan Wertlieb
Name: Jan Wertlieb
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.,
by
/s/ Linda M. Harris
Name: Linda M. Harris
Title: SVP
<PAGE>
CONFORMED COPY
AMENDMENT No. 2 (this "Amendment"), dated as of March 14, 1996, to
the 364-Day Competitive Advance and Revolving Credit Facility Agreement,
dated as of March 21, 1994, as amended by Amendment No. 1 thereto dated
as of March 15, 1995 (as so amended, the "Agreement"), among EG&G, INC.,
a Massachusetts corporation (the "Company"), the Borrowing Subsidiaries
(as such term is defined therein; together with the Company, the
"Borrowers"), the Lenders listed in Schedule 2.01 thereof (the
"Lenders") and CHEMICAL BANK, a New York banking corpora-tion, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent"). Capitalized terms used herein and defined in
the Agreement have the meanings set forth in the Agreement.
WHEREAS the Borrowers have requested and the Administrative Agent
and the Lenders are willing to amend certain provisions of the Agreement
for the limited purposes described and on the terms and conditions set
forth herein.
NOW, THEREFORE, for and in consideration of the premises and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, on the terms and subject
to the conditions set forth herein, as follows:
SECTION 1. Amendments. (a) The preamble of the Agreement is
hereby amended by deleting therefrom the reference to "$175,000,000" and
replacing it with a reference to "$100,000,000".
(b) Section 1.01 of the Agreement is hereby amended by:
(i) Adding the following new definitions in their proper
alphabetical order:
"'Amendment Effective Date' shall mean the date on which each
condition to effectiveness set forth in Section 3 of Amendment No.
2 to this Agreement dated as of March 14, 1996, has been
satisfied".
"'Applicable Percentage' shall mean on any date, with respect
to Eurodollar Standby Loans or with respect to the Facility Fee,
as the case may be, the applicable percentage set forth below
under the caption 'Eurodollar Spread' or 'Facility Fee
Percentage', as the case may be, based upon the Ratings in effect
on such date:
Category 1
Eurodollar Spread
Facility Fee Percentage
Aa3 or higher by Moody's;
AA- or higher by S&P
.150%
.050%
Category 2
A1 or A2 by Moody's;
A+ or A by S&P
.170%
.055%
Category 3
A3 by Moody's;
A- by S&P
.190%
.060%
Category 4
Baa1 by Moody's;
BBB+ by S&P
.220%
.080%
Category 5
Baa2 by Moody's;
BBB by S&P
.225%
.125%
Category 6
Baa3 by Moody's;
BBB- by S&P
.250%
.150%
Category 7
Ba1 or lower by Moody's;
BB+ or lower by S&P
.375%
.250%
For purposes of the foregoing, (i) if the Ratings shall fall
within different Categories, the Applicable Percentage shall be
based upon the higher of the two Categories; provided, however,
that if the difference in the Ratings is greater than one
Category, the Applicable Percentage will be based on the Category
which is one Category below the higher Rating; (ii) if no Ratings
exist, the Applicable Percentage shall be based upon Category 7,
and (iii) if any Rating shall be changed (other than as a result
of a change in the rating system of Moody's or S&P), such change
shall be effective as of the date on which it is first announced
by the rating agency making such change. Each such change in the
Applicable Percentage shall apply during the period commencing on
the effective date of such change and ending on the date
immediately preceding the effective date of the next such change.
If the rating system of Moody's or S&P shall change, or if either
such rating agency shall cease to be in the business of rating
corporate debt obligations, the parties hereto shall negotiate in
good faith to amend the references to specific ratings in this
definition to reflect such changed rating system or the non-
availability of ratings from such rating agency, and pending the
effectiveness of any such amendment the Applicable Percentage
shall be determined by reference to the rating most recently in
effect prior to such change or cessation."
"'Moody's' shall mean Moody's Investors Service, Inc., or any
of its successors."
"'Ratings' shall mean the ratings from time to time
established by Moody's and S&P for senior, unsecured, non-credit-
enhanced long-term debt of the Company."
"'S&P' shall mean Standard and Poor's Rating Group, a division
of The McGraw-Hill Companies, Inc., or any of its successors."
(ii) Deleting therefrom the definition of "Consolidated Net
Indebtedness" and replacing it with the following definition:
"'Consolidated Net Indebtedness' shall mean, for any date, (a)
the sum of all outstanding Indebtedness of the Company and its
Consolidated Subsidiaries as of such date less (b) the lesser of
(i) $50,000,000 and (ii) Eligible Investments as of such date, all
determined on a consolidated basis in accordance with GAAP."
(iii) Deleting therefrom the definition of "Facility A Credit
Agreement" and replacing it with the following definition:
"'Facility A Credit Agreement' shall mean the 3-Year
Competitive Advance and Revolving Credit Facility Agreement dated
the date hereof among the parties hereto, as amended from time to
time."
(iv) Deleting therefrom the definition of "Maturity Date" and
replacing it with the following definition:
"'Maturity Date' shall mean March 12, 1997."
(c) Section 2.05(a) of the Agreement is hereby deleted in its
entirety and replaced with the following sentences:
"The Company agrees to pay to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and
December 31 (with the first payment being due on March 31, 1996)
and on the date on which the Commitment of such Lender shall be
terminated as provided herein, a facility fee (a 'Facility Fee'),
at a rate per annum equal to the Applicable Percentage from time
to time in effect on the average daily amount of the Commitment of
such Lender, whether used or unused, during the preceding quarter
(or other period commencing on the Amendment Effective Date, or
ending with the Maturity Date or the date on which the Commitment
of such Lender shall be terminated). All Facility Fees shall be
computed on the basis of the actual number of days elapsed in a
year of 360 days. The Facility Fee due to each Lender shall
commence to accrue on the Amendment Effective Date, and shall
cease to accrue on the earlier of the Maturity Date and the
termination of the Commitment of such Lender as provided herein."
(d) Section 2.07(a)(i) of the Agreement is hereby amended by
replacing the reference to "1/4 of 1%" with a reference to "the
Applicable Percentage from time to time in effect".
(e) Each reference in Section 3.04(a) of the Agreement to "January
3, 1993" is hereby replaced with a reference to "January 1, 1995", and
each reference in Section 3.04(b) of the Agreement to "October 3, 1993"
is hereby replaced with a reference to "October 1, 1995".
(f) Schedule 2.01 to the Agreement is hereby deleted and replaced
with Schedule 2.01 to this Amendment. It is understood and agreed that
immediately prior to the effectiveness of this Amendment the Company
shall have terminated all the Commitments then outstanding and that upon
the effectiveness of this Amendment, notwithstanding the provisions of
Section 2.10(b) of the Agreement, the outstanding Commitments shall be
as set forth on Schedule 2.01 to this Amendment.
(g) Schedule 3.08 and Schedule 3.12(b) to the Agreement are hereby
deleted and replaced, respectively, with Schedule 3.08 and Schedule
3.12(b) to this Amendment.
SECTION 2. Representations and Warranties. The Company represents
and warrants as of the Amendment Effective Date to each of the Lenders
and the Administrative Agent that:
(a) This Amendment has been duly authorized, executed and
delivered by the Company, and this Amendment is, and the Agreement, as
amended hereby, will upon the Amendment Effective Date be, the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable
principles relating to enforceability (whether enforcement is sought by
proceedings in equity or at law).
(b) The representations and warranties set forth in Article III
of the Agreement, as amended hereby, are true and correct in all
material respects with the same effect as if made on the Amendment
Effective Date, except to the extent such representations and warranties
expressly relate to an earlier date.
(c) Immediately before and immediately after the effectiveness of
this Amendment, no Event of Default or Default has occurred and is
continuing.
SECTION 3. Conditions to Effectiveness. This Amendment shall
become effective as of and from the Amendment Effective Date when (a)
the Administrative Agent shall have received counterparts of this
Amendment that, when taken together, bear the signatures of all the
parties hereto and (b) each of the following conditions precedent shall
have been satisfied in respect of this Amendment:
(i) immediately prior to the effectiveness of this Amendment, the
Company shall have effectively terminated all the Commitments then
outstanding in accordance with Section 2.10 of the Agreement (and,
solely for purposes of permitting each termination, the notice
requirements of Section 2.10 are hereby waived);
(ii) the Administrative Agent shall have received the payment in
full of all obligations of the Borrowers outstanding under the
Agreement, this Amendment or any related agreement;
(iii) the Administrative Agent shall have received a certificate,
dated the Amendment Effective Date and signed by a Financial Officer of
the Company, confirming (i) that the representations and warranties set
forth in Article III of the Agreement, as amended hereby, are true and
correct in all material respects, with the same effect as though made on
and as of the Amendment Effective Date, except to the extent that such
representations and warranties expressly relate to an earlier date, and
(ii) that no Event of Default or Default has occurred and is continuing;
(iv) the Administrative Agent shall have received certified copies
of the resolutions of the Board of Directors of the Company approving or
authorizing approval of the execution and delivery of this Amendment and
the performance of the Agreement as amended hereby;
(v) the Administrative Agent shall have received a certificate of
the Clerk or an Assistant Clerk of the Company, dated the Amendment
Effective Date, (A) as to the absence of amendments to the certificate
of incorporation or the by-laws of the Company since March 21, 1994 (or,
in the event there shall have been any such amendments, setting forth
copies thereof certified by the Secretary of State of Massachusetts in
the case of amendments to the certificate of incorporation and by the
Clerk or an Assistant Clerk of the Company in the case of amendments to
the by-laws), and (B) certifying the incumbency and signatures of the
officer or officers of the Company signing this Amendment;
(vi) the Administrative Agent shall have received a favorable
written opinion of the General Counsel for the Company, dated the
Amendment Effective Date and addressed to the Lenders, to the effect set
forth in Exhibit D-1 of the Agreement, provided that, for purposes of
the foregoing, references in such Exhibit to execution and delivery of
the Agreement shall be deemed to refer to execution and delivery of this
Amendment and other references therein to the Agreement shall be deemed
to refer to the Agreement as amended hereby;
(vii) the Amendment Effective Date shall have occurred on or prior
to March 19, 1996.
SECTION 4. Agreement. Except as specifically stated herein, the
provisions of the Agreement are and shall remain in full force and
effect. As used therein, the terms "Agreement", "herein", "hereunder",
"hereinafter", "hereto", "hereof" and words of similar import shall,
unless the context otherwise requires, refer to the Agreement as amended
hereby.
SECTION 5. Applicable Law. THIS AMENDMENT SHALL BE
GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW
YORK.
SECTION 6. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall constitute an original but all
of which when taken together shall constitute but one contract.
<PAGE>
SECTION 7. Expenses. The Company agrees to reimburse the
Administrative Agent for all reasonable out-of-pocket expenses incurred
by it in connection with this Amendment, including, but not limited to,
the reasonable fees, charges and disbursements of Cravath, Swaine &
Moore, counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment
to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
EG&G, INC.,
by
______________________________
Name:
Title:
CHEMICAL BANK, individually and as
Administrative Agent for the Lenders,
by
______________________________
Name:
Title:
DRESDNER BANK A.G., NEW YORK BRANCH AND
GRAND CAYMAN BRANCH,
by
/s/ J. Michael Leffler
Name: J. Michael Leffler
Title: Senior Vice President
by
/s/ Ernest Fung
Name: Ernest Fung
Title: Vice President
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON,
by
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
by
Name:
Title:
THE NORTHERN TRUST COMPANY,
by
/s/ Lawson E. Whiting
Name: Lawson E. Whiting
Title: Commercial Banking Officer
ROYAL BANK OF CANADA,
by
/s/ Sheryl L. Greenberg
Name: Sheryl L. Greenberg
Title: Manager
SOCIETE GENERALE,
by
/s/ Michelle Martin
Name: Michelle Martin
Title: Assistant Vice President
STANDARD CHARTERED BANK,
by
/s/ William R. Leute, II
Name: William R. Leute, III
Title: Senior Vice President
by
/s/ Gerard Lob
Name: Gerard Lob
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.,
by
Name:
Title:
<PAGE>
Schedule 2.01
Lenders and Commitments
Lender Commitment
Chemical Bank $16,000,000
140 E. 45th Street
29th Floor
New York, NY 10017
Attention: Sandra Miklave
Telephone: (212) 622-0005
Telecopy: (212) 622-0002
Dresdner Bank A.G., New York Branch $10,500,000
and Grand Cayman Branch
75 Wall Street
New York, NY 10005-2889
Attention: Mr. Ernest Fung
Telephone: (212) 574-0237
Telecopy: (212) 574-0130
The First National Bank of Boston $10,500,000
100 Federal Street
Boston, MA 02110
Attention: Mr. Christopher Francis
Telephone: (617) 434-2203
Telecopy: (617) 434-0637
The First National Bank of Chicago $10,500,000
153 W. 51st St.
Equitable Building, 8th Floor
Suite 4000
New York, NY 10019
Attention: Mr. Thomas M. Harkless
Telephone: (212) 373-1175
Telecopy: (212) 373-1388
The Northern Trust Company $10,500,000
50 South LaSalle Street
Chicago, IL 60675
Attention: Mr. J. Chip McCall
Telephone: (312) 444-3504
Telecopy: (312) 444-3508
<PAGE>
Royal Bank of Canada $10,500,000
New York Branch
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, NY 11201-2701
Attention: Manager, Loan Administration
Telephone: (212) 858-7168
Telecopy: (718) 522-6292/3
with a copy to:
Royal Bank of Canada
One Financial Square, 12th Floor
New York, NY 10005-3531
Attention: Sheryl L. Greenberg
Telephone: (212) 428-6476
Telecopy: (212) 428-6459
Societe Generale $10,500,000
1221 Avenue of the Americas
New York, NY 10020
Attention: Ms. Michelle Martin
Telephone: (212) 278-7126
Telecopy: (212) 278-7430
Standard Chartered Bank $10,500,000
7 World Trade Center
New York, NY 10048
Attention: Mr. Gerard Lob
Telephone: (212) 667-0501
Telecopy: (212) 667-0225
Wachovia Bank of Georgia, N.A. $10,500,000
191 Peachtree Street, N.E.
Atlanta, GA 30303
Attention: Ms. Elizabeth Colt
Telephone: (404) 332-4089
Telecopy: (404) 332-6898
<PAGE>
SCHEDULE 3.12 (a)
None
<PAGE>
SCHEDULE 3.12 (b)
- Mound Facility, Miamisburg, Ohio
- Tooele Chemical Demilitarization Facility, Tooele, Utah
- Kennedy Space Center, Florida
- Langley Research Center, Langley, Virginia
<PAGE>
SCHEDULE 3.12 (c)
None
<PAGE>
SCHEDULE 3.08 Subsidiaries
</TABLE>
<TABLE>
<CAPTION>
State or Country Number
of Incorporation of
Name of Company or Organization Parent
- -------------------------------------------------------------------------------
<S> <C> <C>
1 EG&G, Inc. Massachusetts N/A
2 EG&G Alabama, Inc. Alabama 1
3 EG&G Aluminum, Inc. Delaware 33
4 EG&G Astrophysics Research
Corporation California 1
5 EG&G Automotive Research, Inc. Texas 22
6 EG&G Birtcher, Inc. California 33
7 EG&G Benelux B.V. Netherlands 73 (77%) 1 (23%)
8 EG&G Canada Investments, Inc. Canada 86
9 EG&G Canada Limited Canada 1 (10%) 28 (43.5%)
38 (46.5%)
10 EG&G Chandler Engineering Company Oklahoma 1
11 EG&G Defense Materials, Inc. Utah 1
12 EG&G do Brasil Ltda. Brazil 22 (95%) 85 (5%)
13 EG&G Dynatrend, Inc. Delaware 1
14 EG&G E.C. Bahrain 22
15 EG&G Energy Measurements, Inc. Nevada 1
16 EG&G Environmental, Inc. Delaware 1
17 EG&G Exporters Ltd. U.S. Virgin Islands 22
18 EG&G Florida, Inc. Florida 1
19 EG&G Flow Technology, Inc. Arizona 1
20 EG&G Gamma Scientific,
Incorporated Delaware 22
21 EG&G GmbH Germany 22
22 EG&G Holdings, Inc. Massachusetts 1 (87%) 24 ( 6%)
71 (5%) 10 (2%)
23 EG&G Idaho, Inc. Idaho 22
24 EG&G Instruments, Inc. Delaware 22
25 EG&G Instruments GmbH Germany 1
26 EG&G International, Ltd. Cayman Islands 22
27 EG&G Japan, Inc. Delaware 22
28 EG&G Judson Infrared, Inc. Pennsylvania 1
29 EG&G KT Aerofab, Inc. California 22
30 EG&G Langley, Inc. Virginia 18
31 EG&G Ltd. United Kingdom 22 (80.9%) 4 (19.1%)
32 EG&G Management Systems, Inc. New Mexico 1
33 EG&G Metals, Inc. Massachusetts 1
34 EG&G Missouri Metal
Shaping Company Missouri 22
35 EG&G Mound Applied
Technologies, Inc. Ohio 1
36 EG&G Omni, Inc. Philippines 22
37 EG&G Power Systems, Inc. California 1
38 EG&G Pressure Science Incorporated Maryland 22
39 EG&G Rocky Flats, Inc. Colorado 1
40 EG&G Sealol Eagle, Inc. Delaware 42 (51%)
41 EG&G Sealol Ltd. (Sealol Egypt) Egypt 22 (22%) 26 (78%)
42 EG&G Sealol, Inc. Delaware 22
43 EG&G Services, Inc. Delaware 1
44 EG&G Special Projects, Inc. Nevada 1
45 EG&G Star City, Inc. Ohio 2
46 EG&G Structural Kinematics, Inc. Michigan 1
47 EG&G S.A. France 26
48 EG&G SpA Italy 22
49 EG&G Technical Services of
West Virginia, Inc. West Virginia 51
50 EG&G Ventures, Inc. Massachusetts 1
51 EG&G Washington Analytical District of Columbia 1
Services Center, Inc.
52 EG&G Watertown, Inc. Massachusetts 73
53 Antarctic Support Associates
(Partnership) Colorado 1 (40%)
54 Benelux Analytical
Instruments S.A. Belgium 1 (92.3%)
55 Berthold Analytical
Instruments, Inc. Delaware 1
56 Berthold A.G. Switzerland 58
57 Berthold France S.A. France 47
58 Berthold GmbH Germany 1
59 Berthold Munchen GmbH Germany 67 (60%)
60 Biozone Oy Finland 83
61 B.A.I. GmbH Austria 58
62 Eagle EG&G Aerospace Co. Ltd. Japan 1 (49%)
63 EC III, Inc. New Mexico 1 (50%)
64 Heimann Optoelectronics GmbH Germany 67
65 Heimann Shenzhen
Optoelectronics Co. Ltd. China 64 (90%)
66 IC Sensors, Inc. California 1
67 Laboratorium Prof. Dr. Rudolf Germany 21 (58.0%) 25 (2.3%)
Berthold GmbH & Co. KG 5 (39.7%)
68 NOK EG&G Optoelectronics
Corporation Japan 1 (49%)
69 Pribori Oy Finland 83
70 PT EG&G Heimann Optoelectronics Indonesia 22
71 Reticon Corporation California 1
72 Reynolds Electrical &
Engineering Co., Inc. Texas 1
73 Rotron Incorporated New York 1
74 Science Support Corporation Delaware 1
75 Sealol Hindustan Limited India 42 (20%)
76 Sealol S.A. Venezuela 42
77 Seiko EG&G Co. Ltd. Japan 1 (49%)
78 Shanghai EG&G Reticon
Optoelectronics Co. Ltd. China 71 (50%)
79 Societe Civile Immobiliere France 1 (82.5%) 57 (17.5%)
80 Vactec, Inc. Missouri 1
81 WALLAC A/S Denmark 83
82 WALLAC Norge AS Norway 83
83 WALLAC Oy Finland 22
84 WALLAC Sverige AB Sweden 83
85 WALLAC, Inc. Maryland 1
86 Wellesley B.V. Netherlands 87
87 Wickford N.V. Netherlands Antillies 26
88 Wright Components, Inc. New York 1
89 ZAO Pribori Russia 69
</TABLE>
<PAGE>
EXECUTION COPY
3-YEAR
COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of March 21, 1994
among
EG&G, INC.,
THE LENDERS NAMED HEREIN
and
CHEMICAL BANK,
as Administrative Agent
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Page
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . .1
SECTION 1.01. Defined Terms. . . . . . . . . . . . . . . .1
SECTION 1.02. Terms Generally. . . . . . . . . . . . . . 12
ARTICLE II. THE CREDITS . . . . . . . . . . . . . . . . . . 12
SECTION 2.01. Commitments. . . . . . . . . . . . . . . . 12
SECTION 2.02. Loans. . . . . . . . . . . . . . . . . . . 13
SECTION 2.03. Competitive Bid Procedure. . . . . . . . . 15
SECTION 2.04. Standby Borrowing Procedure. . . . . . . . 18
SECTION 2.05. Facility Fees. . . . . . . . . . . . . . . 19
SECTION 2.06. Repayment of Loans; Evidence of Debt . . . 19
SECTION 2.07. Interest on Loans . . . . . . . . . . . . 20
SECTION 2.08. Default Interest . . . . . . . . . . . . . 21
SECTION 2.09. Alternate Rate of Interest . . . . . . . . 21
SECTION 2.10. Termination and Reduction
of Commitments . . . . . . . . . . . . . 22
SECTION 2.11. Prepayment . . . . . . . . . . . . . . . . 22
SECTION 2.12. Reserve Requirements; Change
in Circumstances . . . . . . . . . . . . 23
SECTION 2.13. Change in Legality . . . . . . . . . . . . 25
SECTION 2.14. Indemnity. . . . . . . . . . . . . . . . . 26
SECTION 2.15. Pro Rata Treatment.. . . . . . . . . . . . 26
SECTION 2.16. Sharing of Setoffs . . . . . . . . . . . . 27
SECTION 2.17. Payments . . . . . . . . . . . . . . . . . 28
SECTION 2.18. Duty to Mitigate; Assignment of
Commitments Under Certain
Circumstances. . . . . . . . . . . . . . 28
SECTION 2.19. Taxes. . . . . . . . . . . . . . . . . . . . 29
ARTICLE III. REPRESENTATIONS AND WARRANTIES. . . . . . . . . 33
SECTION 3.01. Corporate Existence and Power. . . . . . . 33
SECTION 3.02. Corporate and Governmental
Authorization; Contravention . . . . . . 33
SECTION 3.03. Binding Effect . . . . . . . . . . . . . . 33
SECTION 3.04. Financial Information. . . . . . . . . . . 34
SECTION 3.05. Litigation . . . . . . . . . . . . . . . . 34
SECTION 3.06. Compliance with ERISA. . . . . . . . . . . 34
SECTION 3.07. Taxes. . . . . . . . . . . . . . . . . . . 35
SECTION 3.08. Subsidiaries . . . . . . . . . . . . . . . 35
SECTION 3.09. Representations and Warranties of
Each Borrowing Subsidiary. . . . . . . . 35
SECTION 3.10. Federal Reserve Regulations. . . . . . . . 36
SECTION 3.11. Investment Company Act; Public
Utility Holding Company Act. . . . . . . 37
SECTION 3.12. Environmental and Safety Matters . . . . . 37
ARTICLE IV. CONDITIONS OF LENDING . . . . . . . . . . . . . 38
SECTION 4.01. All Borrowings. . . . . . . . . . . . . . . . 38
SECTION 4.02. Closing Date. . . . . . . . . . . . . . . . . 38
SECTION 4.03. First Borrowing by Each
Borrowing Subsidiary . . . . . . . . . . 39
ARTICLE V. COVENANTS . . . . . . . . . . . . . . . . . . . 40
SECTION 5.01. Information. . . . . . . . . . . . . . . . 40
SECTION 5.02. Corporate Existence; Businesses and
Properties . . . . . . . . . . . . . . . 42
SECTION 5.03. Insurance. . . . . . . . . . . . . . . . . 42
SECTION 5.04. Litigation and Other Notices . . . . . . . 43
SECTION 5.05. Maintaining Records; Access to
Properties and Inspections . . . . . . . 43
SECTION 5.06. Fixed Charge Coverage. . . . . . . . . . . 43
SECTION 5.07. Net Debt to Capitalization Ratio . . . . . 43
SECTION 5.08. Negative Pledge. . . . . . . . . . . . . . 43
SECTION 5.09. Consolidations, Mergers and
Sales of Assets. . . . . . . . . . . . . 45
ARTICLE VI. EVENTS OF DEFAULT . . . . . . . . . . . . . . . 45
ARTICLE VII. GUARANTEE . . . . . . . . . . . . . . . . . . . 49
ARTICLE VIII. THE ADMINISTRATIVE AGENT. . . . . . . . . . . . 51
ARTICLE IX. MISCELLANEOUS . . . . . . . . . . . . . . . . . 55
SECTION 9.01. Notices. . . . . . . . . . . . . . . . . . 55
SECTION 9.02. Survival of Agreement. . . . . . . . . . . 55
SECTION 9.03. Binding Effect . . . . . . . . . . . . . . 56
SECTION 9.04. Successors and Assigns . . . . . . . . . . 56
SECTION 9.05. Expenses; Indemnity. . . . . . . . . . . . 59
SECTION 9.06. Applicable Law . . . . . . . . . . . . . . 60
SECTION 9.07. Waivers; Amendment . . . . . . . . . . . . 60
SECTION 9.08. Entire Agreement . . . . . . . . . . . . . 61
SECTION 9.09. Severability . . . . . . . . . . . . . . . 62
SECTION 9.10. Counterparts . . . . . . . . . . . . . . . 62
SECTION 9.11. Headings . . . . . . . . . . . . . . . . . 62
SECTION 9.12. Right of Setoff. . . . . . . . . . . . . . 62
SECTION 9.13. Jurisdiction; Consent to
Service of Process . . . . . . . . . . . 62
SECTION 9.14. Waiver of Jury Trial . . . . . . . . . . . 63
SECTION 9.15. Addition of Borrowing Subsidiaries . . . . 63
SECTION 9.16. Confidentiality. . . . . . . . . . . . . . 64
SECTION 9.17. Collateral . . . . . . . . . . . . . . . . 65
SECTION 9.18. Interest Rate Limitation. . . . . . . . . . . 65
Exhibits
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid Accept/Reject Letter
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Opinion of Murray Gross, Esq.
Exhibit D-2 Form of Opinion of Murray Gross, Esq.
Exhibit E Form of Borrowing Subsidiary Agreement
Schedules
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries
Schedule 3.12(a) Environmental and Safety Matters
Schedule 3.12(b) Environmental and Safety Matters
Schedule 3.12(c) Environmental and Safety Matters
</TABLE>
<PAGE>
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY
AGREEMENT (the "Agreement") dated as of March 21, 1994, among
EG&G, INC., a Massachusetts corporation (the "Company"), the Borrowin
Subsidiaries (as such term is defined herein; together with the Company,
the "Borrowers"), the lenders listed in Schedule 2.01 (the "Lenders") and
CHEMICAL BANK, a New York banking corporation, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent").
The Lenders have been requested to extend credit to the Borrowers to
enable them to borrow on a standby revolving credit basis on and after the
date hereof and at any time and from time to time prior to the Maturity Date
a principal amount not in excess of $75,000,000 at any time outstanding.
The Lenders have also been requested to provide a procedure pursuant to
which the Borrowers may invite the Lenders to bid on an uncommitted basis
on short-term borrowings by the Borrowers. The proceeds of all such
borrowings are to be used for general corporate purposes, including
commercial paper back-up and to finance acquisitions. The Lenders are
willing to extend such credit on the terms and subject to the conditions
herein set forth. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in Article I.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Standby Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly or indirectly controls or is controlled by or is
under common control with the person specified.
<PAGE>
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof,
"Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Administrative Agent as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall
be effective on the date such change is publicly announced as effective.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
released on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so released for any day which is a
Business Day, the arithmetic average (rounded upwards to the next 1/100th
of 1%), as determined by the Administrative Agent, of the quotations for
the day of such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it. If for any
reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the Alternate Base Rate
shall be determined without regard to clause (b) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee in the form of Exhibit C.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Board of Directors" shall mean the Board of Directors of the Company or
any duly authorized committee thereof.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders to a single Borrower (or, in the case of a Competitive Borrowing, by
the Lender or Lenders whose Competitive Bids have been accepted pursuant to
Section 2.03) on a single date and as to which a single Interest Period is
in effect.
"Borrowing Subsidiary" shall mean any Subsidiary which shall have
executed and delivered to the Administrative Agent and each Lender a Borrowing
Subsidiary Agreement.
"Borrowing Subsidiary Agreement" shall mean an agreement, in the form
of Exhibit E hereto, duly executed by the Company and a Subsidiary.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City; provided, however, that, when used in connection
with a Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"A Change in Control" shall be deemed to have occurred if (a) any person
or group of persons shall have acquired beneficial ownership of more than 50%
of the outstanding Voting Shares of the Company (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations thereunder), or (b) during any period of
12 consecutive months, commencing before or after the date of this Agreement,
individuals who on the first day of such period were directors of the Company
(together with any replacement or additional directors who were nominated or
elected by a majority of directors then in office) cease to constitute a
majority of the Board of Directors of the Company.
"Closing Date" shall mean the date hereof.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender hereunder as set forth as of the Closing Date in Schedule 2.01
hereto as such Lender's Commitment may be permanently terminated or reduced
from time to time pursuant to Section 2.10. The Commitment of each Lender
shall automatically and permanently terminate on the Maturity Date if
not terminated earlier pursuant to the terms hereof.
"Competitive Bid" shall mean an offer by a Lender to make a Competitive
Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a notification made by
a Borrower pursuant to Section 2.03(d) in the form of Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid, (i) in
the case of a Eurodollar Loan, the Margin, and (ii) in the case of a Fixed Rate
Loan, the fixed rate of interest offered by the Lender making such Competitive
Bid.
<PAGE>
"Competitive Bid Request" shall mean a request made pursuant to
Section 2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted under the bidding
procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan made pursuant to the bidding
procedure described in Section 2.03. Each Competitive Loan shall be a
Eurodollar Competitive Loan or a Fixed Rate Loan.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income
of the Company and its Consolidated Subsidiaries excluding the effect of
non-cash extraordinary items and accounting changes for such period, plus
income taxes during such period, plus the aggregate amount deducted in
determining such Consolidated Net Income for such period in respect of
Consolidated Net Interest Expense of the Company and its Consolidated
Subsidiaries for such period, all determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, the consolidated
net income (or loss) of the Company and its Consolidated Subsidiaries for such
period, determined in accordance with GAAP.
"Consolidated Net Indebtedness" shall mean, for any date, (a) the sum
of all outstanding Indebtedness of the Company and its Consolidated Subsidiaries
as of such date less (b) Eligible Investments as of such date, all determined
on a consolidated basis in accordance with GAAP.
"Consolidated Net Interest Expense" shall mean, for any period, (a) the
gross interest expense of the Company and its Consolidated Subsidiaries
(excluding the amortization of transaction costs) in respect of Indebtedness
included within clauses (i) through (iv) of the definition of Indebtedness for
such period minus (b) interest income for such period, all determined
in accordance with GAAP.
"Consolidated Subsidiary" shall mean, at any date, any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Company in its consolidated financial statements as of such date.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"dollars" or "$" shall mean lawful money of the United States of
America. <PAGE>
"Eligible Investments" shall mean:
(a) cash and cash equivalents;
(b) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof by the Company or any Subsidiary;
(c) investments in money market funds the assets of which are invested
in obligations of the type described in (b) above (irrespective of maturity);
and
(d) other money market investments offered by any of the Lenders or a
commercial bank having the highest credit rating available from Standard &
Poor's Corporation or Moody's Investors Service, Inc. and having maturities of
less than 90 days.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan or
Eurodollar Standby Loan.
"Eurodollar Standby Loan" shall mean any Standby Loan bearing interest
at a rate determined by reference to the LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VI.
"Existing Facilities" shall mean (i) the $150,000,000 Credit Agreement
dated July 1, 1988 among the Company and the lenders named therein and (ii) the
$150,000,000 Credit Agreement dated August 19, 1988 among the Company, the
lenders named therein and the Bank of New England as agent.
"Facility B Credit Agreement" shall mean the 364-Day Competitive Advance
and Revolving Credit Facility Agreement dated the date hereof among the parties
hereto.
"Facility Fee" shall have the meaning assigned to such term in Section
2.05(a).
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer or assistant treasurer of such
corporation.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed Rate
Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"GAAP" shall mean generally accepted accounting principles, applied on a
consistent basis.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guaranteed Obligations" shall mean the principal of and interest on the
Loans made to, and the other obligations, monetary or otherwise, of, the
Borrowing Subsidiaries under this Agreement.
"Indebtedness" of any person shall mean at any date, without
duplication, (i) all obligations of such person for borrowed money (but not
including non-recourse obligations of such person), (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar
instruments, except trade payables and reimbursement obligations in respect
of performance bonds and standby letters of credit to the extent the
obligations underlying such letters of credit would not be considered
Indebtedness, all of which arise in the ordinary course of business, (iii)
all obligations of such person to pay the deferred purchase price of property
or services, except trade accounts payable and accrued expenses arising in the
ordinary course of business, (iv) all obligations of such person as lessee under
capital leases, (v) all Indebtedness of others secured by a Lien on any asset
of such person (but not including non-recourse obligations of such person) and
(vi) all Indebtedness of others guaranteed by such person.
"Interest Payment Date" shall mean (i) as to any Eurodollar Loan for
which the Interest Period is 1, 2 or 3 months, the last day of the Interest
Period, (ii) as to any Eurodollar Loan for which the Interest Period is 6
months, the last day of the Interest Period and the date that would be the
last day of an Interest Period commencing on the same date but having a
duration of 3 months, (iii) as to any ABR Loan, the last day of March, June,
September and December in each year, or if such day is not a Business Day,
the next succeeding Business Day and (iv) as to any Fixed Rate Loan, the
last day of the Interest Period applicable thereto.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the
case may be, and ending on the numerically corresponding day (or, if there
is no numerically corresponding day, on the last day) in the calendar month
that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect, (b) as to
any ABR Borrowing, the period commencing on the date of such Borrowing or on
the last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the Maturity
Date, and (iii) the date such Borrowing is repaid or prepaid in accordance
with Section 2.06 or Section 2.11 and (c) as to any Fixed Rate Borrowing,
the period commencing on the date of such Borrowing and ending on the date
specified in the Competitive Bids in which the offers to make the Fixed Rate
Loans comprising such Borrowing were extended, which shall not be earlier
than seven days after the date of such Borrowing or later than 360 days
after the date of such Borrowing; provided,
however, that if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless, in the case of Eurodollar Loans only, such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day. Interest shall accrue from and
including the first day of an Interest Period to but excluding the last day of
such Interest Period.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the arithmetic average of the rates at which
dollar deposits approximately equal in principal amount to (i) in the case of
a Standby Borrowing, the Administrative Agent's portion of such Eurodollar
Borrowing and (ii) in the case of a Competitive Borrowing, a principal amount
that would have been the Administrative Agent's portion of such Competitive
Borrowing had such Competitive Borrowing been a Standby Borrowing, and for a
maturity comparable to such Interest Period are offered to the principal
London offices of the Administrative Agent (or, if the Administrative Agent
does not at the time maintain a London office, the principal London office
of any Affiliate of the Administrative Agent) in immediately available funds
in the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind whatsoever (including any conditional sale or other
title retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction).
"Loan" shall mean a Competitive Loan or a Standby Loan, whether made as
a Eurodollar Loan, an ABR Loan or a Fixed Rate Loan, as permitted hereby.
"Margin" shall mean, as to any Eurodollar Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal to no more
than four decimal places) to be added to or subtracted from the LIBO Rate in
order to determine the interest rate applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.
"Margin Regulations" shall mean Regulations G, T, U and X of the Board
as from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Margin Stock" shall have the meaning given such term under Regulation
U of the Board.
"Material Adverse Effect" shall mean a materially adverse effect on the
business, assets, operations or condition, financial or otherwise, of the
Company and its Consolidated Subsidiaries taken as a whole.
"Maturity Date" shall mean March 21, 1997.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to subsection (m) or
(o) of Code Section 414) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
<PAGE>
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code that is maintained for current or former employees, or any
beneficiary thereof, of the Company or any ERISA Affiliate.
"Register" shall have the meaning given such term in Section 9.04(d).
"Regulation D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
"Required Lenders" shall mean, at any time, Lenders having Commitments
representing more than 50% of the Total Commitment or, for purposes of
acceleration pursuant to clause (ii) of Article VI, Lenders holding Loans
representing more than 50% of the aggregate principal amount of the Loans
outstanding.
"Shareholders' Equity" shall mean, with respect to the Company at any
date, (a) the sum of (i) common stock and preferred stock taken at par or
stated value at such date, (ii) capital in excess of par value at such date,
(iii) cumulative translation adjustments and other adjustments required by
GAAP at such date and (iv) retained earnings (or deficit) at such date minus
(b) treasury stock at such date, all determined in accordance with GAAP.
"Standby Borrowing" shall mean a Borrowing consisting of simultaneous
Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made pursuant to
Section 2.04 in the form of Exhibit A-5.
"Standby Loans" shall mean the revolving loans made pursuant to
Section 2.04. Each Standby Loan shall be a Eurodollar Standby Loan or an ABR
Loan.
"subsidiary" shall mean, with respect to any person (the "parent"), any
corporation, association or other business entity of which securities or other
ownership interests representing more than 50% of the ordinary voting power are,
at the time as of which any determination is being made, owned or controlled by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" shall mean a subsidiary of the Company.
"Total Commitment" shall mean, at any time, the aggregate amount of
Commitments of all the Lenders, as in effect at such time.
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate"
shall include the LIBO Rate, the Alternate Base Rate and the Fixed Rate.
"Voting Shares" shall mean, as to any corporation, outstanding shares of
stock of any class of such corporation entitled to vote in the election of
directors, excluding shares entitled so to vote only upon the happening of
some contingency.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan,
as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided,
however, that for purposes of determining compliance with any covenant set
forth in Article V, such terms shall be construed in accordance with GAAP as
in effect on the date hereof applied on a basis consistent with the
application used in preparing the Company's audited financial statements
referred to in Section 3.04.
<PAGE>
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
and
relying upon the representations and warranties herein set forth, each
Lender
agrees, severally and not jointly, to make Standby Loans to the Borrowers,
at
any time and from time to time on and after the Closing Date hereof and
until
the earlier of the Maturity Date and the termination of the Commitment of
such
Lender, in an aggregate principal amount at any time outstanding not to
exceed
such Lender's Commitment minus the amount by which the Competitive
Loans
outstanding at such time shall be deemed to have used such Commitment
pursuant to Section 2.15, subject, however, to the conditions that (i) at no
time shall (A) the sum of (x) the outstanding aggregate principal amount of
all
Standby Loans made by all Lenders plus (y) the outstanding aggregate
principal
amount of all Competitive Loans made by all Lenders exceed (B) the Total
Commitment and (ii) at all times the outstanding aggregate principal amount
of all Standby Loans made by each Lender shall equal the product of (A) the
percentage which its Commitment represents of the Total Commitment times
(B)
the outstanding aggregate principal amount of all Standby Loans.
Within the foregoing limits, the Borrowers may borrow, pay or prepay
and reborrow Standby Loans hereunder, on and after the Closing Date and
prior
to the Maturity Date, subject to the terms, conditions and limitations set
forth herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Commitments; provided, however, that the
failure of any Lender to make any Standby Loan shall not in itself relieve
any other Lender of its obligation to lend hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other
Lender to make any Loan required to be made by such other Lender). Each
Competitive Loan shall be made in accordance with the procedures set forth
in Section 2.03. The Standby Loans or Competitive Loans comprising any
Borrowing shall be in an aggregate principal amount which is an integral
multiple of $1,000,000 and not less than $5,000,000 (or an aggregate
principal amount equal to the remaining balance of the available
Commitments). (b) Each Competitive Borrowing shall be
comprised entirely of Eurodollar Competitive Loans or Fixed Rate Loans,
and each Standby Borrowing shall be comprised entirely of Eurodollar
Standby Loans or ABR Loans, as any Borrower may request pursuant to
Section 2.03 or 2.04, as applicable. Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that (i) any exercise of such
option shall not affect the obligation of such Borrower to repay such Loan
in accordance with the terms of this Agreement and (ii) the Borrowers shall
not be liable for increased costs under Section 2.12 or 2.13 to the extent that
(A) such costs could be avoided by the use of a different branch or Affiliate
to make Eurodollar Loans and (B) such use would not, in the judgment of
such Lender, entail any expense for which such Lender shall not be
indemnified hereunder. Borrowings of more than one Type may be
outstanding at the same time; provided, however, that no Borrowing shall
be requested which, if made, would result in an aggregate of more than 10
separate Standby Borrowings comprised of Eurodollar Loans being
outstanding hereunder at any one time. For purposes of the foregoing, Loans
having different Interest Periods, regardless of whether they commence on
the same date, shall be considered separate Loans.
(c) Subject to Section 2.02(d), each Lender shall make each Loan to be
made by it
hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Administrative Agent in New York, New York, not
later than 12:00 noon, New York City time, and the Administrative Agent
shall by 3:00 p.m., New York City time, credit the amounts so received to
the general deposit account of the applicable Borrower with the
Administrative Agent or, if a Borrowing shall not occur on such date
because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders. Competitive
Loans shall be made by the Lender or Lenders whose Competitive Bids
therefor are accepted pursuant to Section 2.03 in the amounts so accepted.
Standby Loans shall be made by the Lenders pro rata in accordance with
Section 2.15. Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the date of such
Borrowing in accordance with this paragraph (c) and the Administrative
Agent may, in reliance upon such assumption, make available to the
applicable Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the applicable Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to such Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of such
Borrower, the interest rate applicable at the time to the Loans comprising
such Borrowing and (ii) in the case of such Lender, the Federal Funds
Effective Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement. (d)
Any Borrower may refinance all or any part of any Borrowing with a
Borrowing of the same or a different Type made pursuant to Section 2.03 or
Section 2.04, subject to the conditions and limitations set forth herein and
elsewhere in this Agreement, including refinancings of Competitive
Borrowings with Standby Borrowings and Standby Borrowings with
Competitive Borrowings. Any Borrowing or part thereof so refinanced
shall be deemed to be repaid in accordance with Section 2.06 with the
proceeds of a new Borrowing hereunder and the proceeds of the new
Borrowing, to the extent they do not exceed the principal amount of the
Borrowing being refinanced, shall not be paid by the Lenders to the
Administrative Agent or by the Administrative Agent to the applicable
Borrower pursuant to Section 2.02(c); provided, however, that (i) if the
principal amount extended by a Lender in a refinancing is greater than the
principal amount extended by such Lender in the Borrowing being
refinanced, then such Lender shall pay such difference to the Administrative
Agent for distribution to the Lender described in (ii) below, (ii) if the
principal amount extended by a Lender in the Borrowing being refinanced is
greater than the principal amount being extended by such Lender in the
refinancing, the Administrative Agent shall return the difference to such
Lender out of amounts received pursuant to (i) above and (iii) to the extent
any Lender fails to pay the Agent amounts due from it pursuant to (i) above,
any Loan or portion thereof being refinanced with such amounts shall not be
deemed repaid in accordance with Section 2.06 and shall be payable by the
Company.
SECTION 2.03. Competitive Bid Procedure. (a) In
order to request Competitive Bids, a Borrower shall hand deliver or
telecopy to the Administrative Agent a duly completed Competitive Bid
Request in the form of Exhibit A-1 hereto, to be received by the
Administrative Agent (i) in the case of a Eurodollar Competitive
Borrowing, not later than 10:00 a.m., New York City time, four Business
Days before a proposed Competitive Borrowing and (ii) in the case of a
Fixed Rate Borrowing, not later than 10:00 a.m., New York City time, one
Business Day before a proposed Competitive Borrowing. No ABR Loan
shall be requested in, or made pursuant to, a Competitive Bid Request. A
Competitive Bid Request that does not conform substantially to the format
of Exhibit A-1 may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall promptly notify the
applicable Borrower of such rejection by telecopy. Each Competitive Bid
Request shall refer to this Agreement and specify whether the Borrowing
then being requested is to be a Eurodollar Borrowing or a Fixed Rate
Borrowing, the date of such Borrowing (which shall be a Business Day),
the aggregate principal amount thereof, which shall be in a minimum
principal amount of $5,000,000 and in an integral multiple of $1,000,000,
and the Interest Period with respect thereto (which may not end after the
Maturity Date). Promptly after its receipt of a Competitive Bid Request that
is not rejected as aforesaid, the Administrative Agent shall invite by
telecopy (in the form set forth in Exhibit A-2 hereto) the Lenders to bid, on
the terms and conditions of this Agreement, to make Competitive Loans.
(b) Each Lender invited to bid may, in its sole discretion, make one
or more Competitive Bids to the applicable Borrower responsive to such
Borrower's Competitive Bid Request. Each Competitive Bid by a Lender
must be received by the Administrative Agent by telecopy, in the form of
Exhibit A-3 hereto, (i) in the case of a Eurodollar Competitive Borrowing,
not later than 9:30 a.m., New York City time, three Business Days before a
proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 9:30 a.m., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be accepted by the
Administrative Agent. Competitive Bids that do not conform substantially to
the format of Exhibit A-3 may be rejected by the Administrative Agent, and
the Administrative Agent shall notify the Lender making such
nonconforming bid of such rejection as soon as practicable. Each
Competitive Bid shall refer to this Agreement and specify (x) the principal
amount (which shall be in a minimum principal amount of $5,000,000 and
in an integral multiple of $1,000,000 and which may equal the entire
principal amount of the Competitive Borrowing requested) of the
Competitive Loan or Loans that the Lender is willing to make, (y) the
Competitive Bid Rate or Rates at which the Lender is prepared to make the
Competitive Loan or Loans and (z) the Interest Period and the last day
thereof. If any Lender invited to bid shall elect not to make a Competitive
Bid, such Lender shall so notify the Administrative Agent by telecopy (I) in
the case of Eurodollar Competitive Loans, not later than 9:30 a.m., New
York City time, three Business Days before a proposed Competitive
Borrowing, and (II) in the case of Fixed Rate Loans not later than 9:30 a.m.,
New York City time, on the day of a proposed Competitive Borrowing;
provided, however, that failure by any Lender to give such notice shall not
cause such Lender to be obligated to make any Competitive Loan as part of
such Competitive Borrowing. A Competitive Bid submitted by a Lender
pursuant to this paragraph (b) shall be irrevocable. (c) The
Administrative Agent shall promptly notify the applicable Borrower, by
telecopy, of all the Competitive Bids made, the Competitive Bid Rate and
the principal amount of each Competitive Loan in respect of which a
Competitive Bid was made and the identity of the Lender that made each
bid. The Administrative Agent shall send a copy of all Competitive Bids to
such Borrower for its records as soon as practicable after completion of the
bidding process set forth in this Section 2.03. (d) The applicable
Borrower may in its sole and absolute discretion, subject only to the
provisions of this paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. Such Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in the form of a
Competitive Bid Accept/Reject Letter, whether and to what extent it has
decided to accept or reject any of or all the bids referred to in paragraph (c)
above, (x) in the case of a Eurodollar Competitive Borrowing, not later than
10:30 a.m., New York City time, three Business Days before a proposed
Competitive Borrowing, and (y) in the case of a Fixed Rate Borrowing, not
later than 10:30 a.m., New York City time, on the day of a proposed
Competitive Borrowing; provided, however, that (i) the failure of such
Borrower to give such notice shall be deemed to be a rejection of all the
bids referred to in paragraph (c) above, (ii) such Borrower shall not accept
a bid made at a particular Competitive Bid Rate if it has decided to reject a
bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the
Competitive Bids accepted by such Borrower shall not exceed the principal
amount specified in the Competitive Bid Request, (iv) if such Borrower
shall accept a bid or bids made at a particular Competitive Bid Rate but the
amount of such bid or bids shall cause the total amount of bids to be
accepted to exceed the amount specified in the Competitive Bid Request,
then such Borrower shall accept a portion of such bid or bids in an amount
equal to the amount specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted with respect to such
Competitive Bid Request, which acceptance, in the case of multiple bids at
such Competitive Bid Rate, shall be made pro rata in accordance with the
amount of each such bid at such Competitive Bid Rate, and (v) except
pursuant to clause (iv) above, no bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of
$5,000,000 and an integral multiple of $1,000,000; provided further,
however, that if a Competitive Loan must be in an amount less than
$5,000,000 because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $1,000,000 or any integral
multiple thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple bids at a particular Competitive Bid Rate pursuant to
clause (iv) the amounts shall be rounded to integral multiples of $1,000,000
in a manner which shall be in the discretion of the applicable Borrower. A
notice given pursuant to this paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender
whether or not its Competitive Bid has been accepted (and if so, in what
amount and at what Competitive Bid Rate) by telecopy, and each successful
bidder will thereupon become bound, subject to the other applicable
conditions hereof, to make the Competitive Loan or Loans in respect of
which its bid has been accepted.
(f) A Competitive Bid Request
shall not be made within five Business Days after the date of any previous
Competitive Bid Request.
(g) If the Administrative Agent shall
elect to submit a Competitive Bid in its capacity as a Lender, it shall
submit such bid directly to the applicable Borrower one quarter of an hour
earlier than the latest time at which the other Lenders are required to
submit their bids to the Administrative Agent pursuant to paragraph (b)
above. (h) All notices required by this Section 2.03 shall be
given in accordance with Section 9.01. SECTION 2.04.
Standby Borrowing Procedure. In order to request a Standby Borrowing, a
Borrower shall hand deliver or telecopy to the Administrative Agent a duly
completed Standby Borrowing Request in the form of Exhibit A-5 (a) in the
case of a Eurodollar Standby Borrowing, not later than 10:30 a.m., New
York City time, three Business Days before such Borrowing, and (b) in the
case of an ABR Borrowing, not later than 10:30 a.m., New York City time,
on the day of such Borrowing. No Fixed Rate Loan shall be requested or
made pursuant to a Standby Borrowing Request. Such notice shall be
irrevocable and shall in each case specify (i) whether the Borrowing then
being requested is to be a Eurodollar Standby Borrowing or an ABR
Borrowing; (ii) the date of such Standby Borrowing (which shall be a
Business Day) and the amount thereof; and (iii) if such Borrowing is to be a
Eurodollar Standby Borrowing, the Interest Period with respect thereto,
which shall not end after the Maturity Date. If no election as to the Type of
Standby Borrowing is specified in any such notice, then the requested
Standby Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Standby Borrowing is specified in any such
notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. Notwithstanding any other provision of this
Agreement to the contrary, no Standby Borrowing shall be requested if the
Interest Period with respect thereto would end after the Maturity Date. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.04 and of each Lender's portion of the requested
Borrowing. SECTION 2.05. Facility Fees. (a) The Company
agrees to pay to each Lender, through the Administrative Agent, on each
March 31, June 30, September 30 and December 31 (with the first payment
being due on March 31, 1994) and on the date on which the Commitment of
such Lender shall be terminated as provided herein, a facility fee (a
"Facility Fee"), at a rate per annum equal to .125% per annum on the
average daily amount of the Commitment of such Lender, whether used or
unused, during the preceding quarter (or other period commencing on the
date of this Agreement, or ending with the Maturity Date or the date on
which the Commitment of such Lender shall be terminated). All Facility
Fees shall be computed on the basis of the actual number of days elapsed in
a year of 360 days The Facility Fee due to each Lender shall commence to
accrue on the date of this Agreement, and shall cease to accrue on the
earlier of the Maturity Date and the termination of the Commitment of such
Lender as provided herein. (b) All Facility Fees shall be
paid on the dates due, in immediately available funds, to the
Administrative
Agent for distribution, if and as appropriate, among the Lenders. Once
paid, none of the Facility Fees shall be refundable under any
circumstances. SECTION 2.06 Repayment of Loans;
Evidence of Debt. (a) Each Borrower hereby agrees that the outstanding
principal balance of each Standby Loan shall be payable on the last day of
the Interest Period applicable thereto and on the Maturity Date and that the
outstanding principal balance of each Competitive Loan shall be payable
on the last day of the Interest Period applicable thereto. Each Loan shall
bear interest on the outstanding principal balance thereof as set forth in
Section 2.07. (b) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness
to such Lender resulting from each Loan made by such Lender from time to
time, including the amounts of principal and interest payable and paid such
Lender from time to time under this Agreement. (i) the
amount of each Loan made hereunder, the Type of each Loan made and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower
to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from each Borrower and each Lender's
share thereof.
(d) The entries made in the accounts maintained
pursuant to paragraphs (b) and (c) of this Section 2.06 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that
the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations
of the Borrowers to repay the Loans in accordance with their terms.
<TABLE>
<S> <C>
SECTION 2.07. Interest on Loans. (a) Subject to the provisions of
Section 2.08, the Loans comprising each Eurodollar Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to (i) in the case of each
Eurodollar Standby Loan, the LIBO Rate for the Interest Period in effect for
such Borrowing plus 1/4 of 1% and (ii) in the case of each Eurodollar
Competitive Loan, the LIBO Rate for the Interest Period in effect for such
Borrowing plus the Margin offered by the Lender making such Loan and
accepted by the applicable Borrower pursuant to Section 2.03.
(b) Subject to the provisions of Section 2.08, the Loans comprising each
ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be,
for periods during which the Alternate Base Rate is determined by
reference to the Prime Rate and 360 days for other periods) at a rate per
annum equal to the Alternate Base Rate.
(c) Subject to the provisions of Section 2.08, each Fixed Rate Loan shall
bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed
over a year of 360 days) equal to the fixed rate of interest offered by the
Lender making such Loan and accepted by the Borrower pursuant to Section
2.03.
(d) Interest on each Loan shall be payable on each Interest Payment
Date applicable to such Loan except as otherwise provided in this
Agreement. The applicable LIBO Rate or Alternate Base Rate for each
Interest Period or day within an Interest Period, as the case may be,
shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.08. Default Interest. If a Borrower shall default in the
payment of the principal of or interest on any Loan or any other
amount becoming due hereunder, whether by scheduled maturity, notice of
prepayment, acceleration or otherwise, such Borrower shall owe interest,
payable on demand, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment (after as well as
before judgment) at a rate per annum (computed as provided in Section
2.07(b)) equal to the Alternate Base Rate plus 2%.
SECTION 2.09. Alternate Rate of Interest. (a) In the event, and on
each occasion, that
on the day two Business Days prior to the commencement of any Interest
Period for a Eurodollar Borrowing the Administrative Agent shall have
determined (i) that dollar deposits in the principal amounts of the
Eurodollar Loans comprising such Borrowing are not generally available in
the London interbank market or (ii) that reasonable means do not exist for
ascertaining the LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give telecopy notice of such determination to the
Borrowers and the Lenders. In the event of any such determination under
clauses (i) or (ii) above, until the Administrative Agent shall have advised
the Borrowers and the Lenders that the circumstances giving rise to such
notice no longer exist, (x) any request by a Borrower for a Eurodollar
Competitive Borrowing pursuant to Section 2.03 shall be of no force and
effect and shall be denied by the Administrative Agent and (y) any request
by a Borrower for a Eurodollar Standby Borrowing pursuant to Section
2.04 shall be deemed to be a request for an ABR Borrowing.
(b)
In the event a Lender notifies the Administrative Agent that the rates at
which dollar deposits are being offered will not adequately and fairly
reflect the cost to such Lender of making or maintaining its Eurodollar Loan
during such Interest Period, the Administrative Agent shall notify the
applicable Borrower of such notice and until the Lender shall have advised
the Administrative Agent that the circumstances giving rise to such notice no
longer exist, any request by such Borrower for a Eurodollar Standby
Borrowing shall be deemed a request for an ABR Borrowing for the same
Interest Period with respect to such Lender. (c) Each
determination by the Administrative Agent hereunder shall be made in good
faith and shall be conclusive absent manifest error. SECTION
2.10. Termination and Reduction of Commitments. (a) The Commitments
shall be automatically terminated on the Maturity Date. (b) Upon at least
three Business Days' prior irrevocable telecopy notice to the
Administrative Agent, the Company may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Total
Commitment; provided, however, that (i) each partial reduction of the Total
Commitment shall be in an integral multiple of $1,000,000 and in a
minimum principal amount of $5,000,000 and (ii) no such termination or
reduction shall be made which would reduce the Total Commitment to an
amount less than the aggregate outstanding principal amount of the
Competitive Loans. (c) Each reduction in the Total Commitment
hereunder shall be made ratably among the Lenders in accordance with their
respective Commitments. The Company shall pay to the Administrative
Agent for the account of the Lenders, on each date of reduction of any
portion of the Total Commitment, the Facility Fees on the amount of the
Commitments so terminated accrued through the date of such termination or
reduction. SECTION 2.11. Prepayment. (a) Each Borrower
shall have the right at any time and from time to time to prepay any Standby
Borrowing, in whole or in part, upon giving telecopy notice (or telephone
notice promptly confirmed by telecopy) to the Administrative Agent: (i)
before 10:00 a.m., New York City time, three Business Days prior to
prepayment, in the case of Eurodollar Loans, and (ii) before 10:00 a.m.,
New York City time, one Business Day prior to prepayment, in the case of
ABR Loans; provided, however, that each partial prepayment shall be in an
amount which is an integral multiple of $1,000,000 and not less than
$5,000,000. No prepayment may be made in respect of any Competitive
Borrowing. (b) On the date of any termination or reduction of
the Commitments pursuant to Section 2.10, the Borrowers shall pay or
prepay so much of the Standby Borrowings as shall be necessary in order
that the aggregate principal amount of the Competitive Loans and Standby
Loans outstanding will not exceed the Total Commitment, after giving effect
to such termination or reduction. (c) Each notice of prepayment
shall specify the prepayment date and the principal amount of each
Borrowing (or portion thereof) to be prepaid, shall be irrevocable and shall
commit the applicable Borrower to prepay such Borrowing (or portion
thereof) by the amount stated therein on the date stated therein. All
prepayments under this Section 2.11 shall be subject to Section 2.14 but
otherwise without premium or penalty. All prepayments under this Section
2.11 shall be accompanied by accrued interest on the principal amount
being prepaid to the date of payment. SECTION 2.12. Reserve
Requirements; Change in Circumstances. (a) Notwithstanding any other
provision herein, if after the date of this Agreement any change in
applicable law or regulation or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) shall result
in the imposition, modification or applicability of any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by any Lender, or shall result in the
imposition on any Lender or the London interbank market of any other
condition affecting this Agreement, such Lender's Commitment or any
Eurodollar Loan or Fixed Rate Loan made by such Lender, and the result of
any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any Eurodollar Loan or Fixed Rate Loan or to reduce the
amount of any sum received or receivable by such Lender with respect to
any Eurodollar Loan or Fixed Rate Loan hereunder (whether of principal,
interest or otherwise) by an amount deemed by such Lender to be material,
then such additional amount or amounts as will compensate such Lender for
such additional costs or reduction will be paid by the Borrowers to such
Lender upon demand. Notwithstanding the foregoing, no Lender shall be
entitled to request compensation under this paragraph with respect to any
Competitive Loan if the change giving rise to such request was applicable
to such Lender at the time of submission of the Competitive Bid pursuant to
which such Competitive Loan was made.
(b) If any Lender
shall have determined that the adoption after the date hereof of any law,
rule, regulation or guideline arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards," or the adoption after the date hereof of any other law, rule,
regulation or guideline regarding capital adequacy, or any change in any of
the foregoing or in the interpretation or administration of any of the
foregoing by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
compliance by any Lender (or any lending office of such Lender) with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender's
capital as a consequence of this Agreement, such Lender's Commitment or
the Loans made by such Lender pursuant hereto to a level below that which
such Lender could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then
from time to time such additional amount or amounts as will compensate
such Lender for such reduction will be paid by the Borrowers to such
Lender. (c) A certificate of each Lender setting forth such
amount or amounts as shall be necessary to compensate such Lender as
specified in paragraph (a) or (b) above, as the case may be, shall be
delivered to the Company promptly by such Lender upon becoming aware
of any costs pursuant to paragraphs (a) or (b) above and shall be conclusive
absent manifest error. The Company shall pay each Lender the amount
shown as due on any such certificate delivered by it within 10 days after its
receipt of the same. (d) Failure on the part of any Lender to
demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with respect to any
period shall not constitute a waiver of such Lender's right to demand
compensation with respect to such period or any other period. The
protection of this Section shall be available to each Lender regardless of
any possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have
occurred or been imposed. No Lender shall be entitled to compensation
under this Section 2.12 for any costs incurred or reduction suffered with
respect to any date unless such Lender shall have notified the Company that
it will demand compensation for such costs or reductions not more than 90
days after the later of (i) such date and (ii) the date on which such Lender
shall have become aware of such costs or reductions. Notwithstanding any
other provision of this Section 2.12, no Lender shall demand compensation
for any increased cost or reduction referred to above if it shall not at the
time be the general policy or practice of such Lender to demand such
compensation in similar circumstances under comparable provisions of
other credit agreements, if any. SECTION 2.13. Change in
Legality. (a) Notwithstanding any other provision herein, if any change in
any law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation thereof shall
make it unlawful for any Lender to make or maintain any Eurodollar Loan or
to give effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, by written notice to the Company and to the
Administrative Agent, such Lender may: (i) declare that
Eurodollar Loans will not thereafter be made by such Lender hereunder,
whereupon such Lender shall not submit a Competitive Bid in response to a
request for Eurodollar Competitive Loans and any request for a Eurodollar
Standby Borrowing shall, as to such Lender only, be deemed a request for
an ABR Loan unless such declaration shall be subsequently withdrawn; and
<PAGE>
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below. In the event any
Lender shall exercise its rights under (i) or (ii) above, all payments and
prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or
the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans. (b) For purposes of this
Section 2.13, a notice by any Lender shall be effective as to each
Eurodollar Loan, if lawful, on the last day of the Interest Period currently
applicable to such Eurodollar Loan; in all other cases such notice shall be
effective on the date of receipt. SECTION 2.14. Indemnity. The
Borrowers shall indemnify each Lender against any out-of-pocket loss or
expense which such Lender may sustain or incur as a consequence of (a)
any failure to borrow or to refinance any Loan hereunder after irrevocable
notice of such borrowing or refinancing has been given pursuant to Section
2.03 or 2.04, (b) any payment, prepayment or conversion, or assignment
required under Section 2.18, of a Eurodollar Loan required by any other
provision of this Agreement (other than Section 2.13) or otherwise made or
deemed made on a date other than the last day of the Interest Period, if any,
applicable thereto, (c) any default in payment or prepayment of the
principal amount of any Loan or any part thereof or interest accrued thereon,
as and when due and payable (at the due date thereof, whether by scheduled
maturity, acceleration, irrevocable notice of prepayment or otherwise) or
(d) the occurrence of any Event of Default, including, in each such case, any
loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a Eurodollar Loan or a
Fixed Rate Loan. Such loss or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Lender, of (i)
its cost of obtaining the funds for the Loan being paid, prepaid, refinanced
or not borrowed or so assigned (assumed to be the LIBO Rate applicable
thereto or, in the case of a Fixed Rate Loan, the fixed rate of interest
applicable thereto) for the period from the date of such payment,
prepayment, refinancing or failure to borrow or refinance or such
assignment, to the last day of the Interest Period for such Loan (or, in the
case of a failure to borrow or refinance the Interest Period for such Loan
which would have commenced on the date of such failure) over (ii) the
amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in reemploying in similar investments the funds so
paid, prepaid or not borrowed or refinanced or so assigned for the
remainder of such period or Interest Period, as the case may be. A
certificate of any Lender setting forth any amount or amounts which such
Lender is entitled to receive pursuant to this Section 2.14 shall be delivered
to the Borrowers and shall be conclusive absent manifest error.
SECTION 2.15. Pro Rata Treatment. Except as required under Section
2.12, each payment or prepayment of principal of any Standby Borrowing,
each payment of interest on the Standby Loans, each payment of the Facility
Fees, each reduction of the Commitments and each refinancing of any
Borrowing with a Standby Borrowing of any Type, shall be allocated pro
rata among the Lenders in accordance with their respective Commitments
(or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding
Standby Loans). Each payment of principal of any Competitive Borrowing
shall be allocated pro rata among the Lenders participating in such
Borrowing in accordance with the respective principal amounts of their
outstanding Competitive Loans comprising such Borrowing. Each payment
of interest on any Competitive Borrowing shall be allocated pro rata among
the Lenders participating in such Borrowing in accordance with the
respective amounts of accrued and unpaid interest on their outstanding
Competitive Loans comprising such Borrowing. For purposes of
determining the available Commitments of the Lenders at any time, each
outstanding Competitive Borrowing shall be deemed to have utilized the
Commitments of the Lenders (including those Lenders which shall not have
made Loans as part of such Competitive Borrowing) pro rata in accordance
with such respective Commitments. Each Lender agrees that in computing
such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage
of such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.16. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim, or
pursuant to a secured claim under Section 506 of Title 11 of the United
States Code or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Standby Loan or Loans
as a result of which the unpaid principal portion of its Standby Loans shall
be proportionately less than the unpaid principal portion of the Standby
Loans of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to
such other Lender the purchase price for, a participation in the Standby
Loans of such other Lender, so that the aggregate unpaid principal amount of
the Standby Loans and participations in the Standby Loans held by each
Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Standby Loans then outstanding as the principal amount of its
Standby Loans prior to such exercise of banker's lien, setoff or counterclaim
or other event was to the principal amount of all Standby Loans outstanding
prior to such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that, if any such purchase or purchases or adjustments
shall be made pursuant to this Section 2.16 and the payment giving rise
thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the
purchase price or prices or adjustment restored without interest. Any
Lender holding a participation in a Standby Loan deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing to such Lender by
reason thereof as fully as if such Lender had made a Standby Loan in the
amount of such participation. SECTION 2.17. Payments. (a)
The Borrowers shall make each payment (including principal of or interest
on any Borrowing and any Facility Fees or other amounts) hereunder from
an account in the United States not later than 12:00 noon, New York City
time, on the date when due in dollars to the Administrative Agent at its
offices at 270 Park Avenue, New York, New York, in immediately
available funds. (b) Whenever any payment (including principal
of or interest on any Borrowing or any Facility Fees or other amounts)
hereunder shall become due, or otherwise would occur, on a day that is not
a Business Day, such payment may 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 Facility Fees, if applicable. SECTION
2.18. Duty to Mitigate; Assignment of Commitments Under Certain
Circumstances. (a) Any Lender (or Transferee) claiming any additional
amounts payable pursuant to Section 2.12 or Section 2.19 or exercising its
rights under Section 2.13 shall use reasonable efforts (consistent with legal
and regulatory restrictions) to file any certificate or document requested by
the Company or to change the jurisdiction of its applicable lending office if
the making of such a filing or change would avoid the need for or reduce the
amount of any such additional amounts which may thereafter accrue or
avoid the circumstances giving rise to such exercise and would not, in the
sole determination of such Lender (or Transferee), be otherwise
disadvantageous to such Lender (or Transferee). (b) In the event
that any Lender shall have delivered a notice or certificate pursuant to
Section 2.09(b), 2.12 or 2.13, or the Borrower shall be required to make
additional payments to any Lender under Section 2.19, the Company shall
have the right, at its own expense (which shall include the processing and
recordation fee referred to in Section 9.04(b)), upon notice to such Lender
and the Administrative Agent, to require such Lender to transfer and assign
without recourse (in accordance with and subject to the restrictions
contained in Section 9.04) all interests, rights and obligations contained
hereunder to another financial institution approved by the Administrative
Agent (which approval shall not be unreasonably withheld) which shall
assume such obligations; provided that (i) no such assignment shall conflict
with any law, rule or regulation or order of any Governmental Authority and
(ii) the assignee or the Borrowers, as the case may be, shall pay to the
affected Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date of payment on
the Loans made by it hereunder and all other amounts accrued for its
account or owed to it hereunder. SECTION 2.19. Taxes. (a) Any
and all payments to the Lenders hereunder shall be made, in accordance
with Section 2.17, free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding (i) income taxes imposed
on the net income of the Administrative Agent or any Lender (or any
transferee or assignee thereof, including a participation holder (any such
entity a "Transferee")) and (ii) franchise taxes imposed on the net income of
the Administrative Agent or any Lender (or Transferee), in each case by the
jurisdiction under the laws of which the Administrative Agent or such
Lender (or Transferee) is organized or any political subdivision thereof (all
such nonexcluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities, collectively or individually, "Taxes"). If any Borrower
shall be required to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender (or any Transferee) or the Administrative Agent,
(i) the sum payable shall be increased by the amount (an "additional
amount") necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.19)
such Lender (or Transferee) or the Administrative Agent (as the case may
be) shall receive an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law. (b)
In addition, the Borrowers shall pay to the relevant Governmental Authority
in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
("Other Taxes"). (c) The Borrowers shall indemnify each Lender
(or Transferee) and the Administrative Agent for the full amount of Taxes
and Other Taxes paid by such Lender (or Transferee) or the Administrative
Agent, as the case may be, and any liability (including penalties, interest
and expenses (including reasonable attorney's fees and expenses)) arising
therefrom or with respect thereto. A certificate as to the amount of such
payment or liability prepared by a Lender, or the Administrative Agent on
its behalf, absent manifest error, shall be final, conclusive and binding for
all purposes. Such indemnification shall be made within 30 days after the
date the Lender (or Transferee) or the Administrative Agent, as the case
may be, makes written demand therefor. (d) If a Lender (or
Transferee) or the Administrative Agent shall become aware that it is
entitled to claim a refund from a Governmental Authority in respect of
Taxes or Other Taxes as to which it has been indemnified by the
Borrowers, or with respect to which the Borrowers have paid additional
amounts, pursuant to this Section 2.19, it shall promptly notify the
Borrowers of the availability of such refund claim and shall, within 30 days
after receipt of a request by the Borrowers, make a claim to such
Governmental Authority for such refund at the Borrowers' expense. If a
Lender (or Transferee) or the Administrative Agent receives a refund
(including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrowers or with respect to which the Borrowers have
paid additional amounts pursuant to this Section 2.19, it shall within 30
days from the date of such receipt pay over such refund to the
Borrowers (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrowers under this Section 2.19 with respect to the
Taxes or Other Taxes giving rise to such refund), without interest (other
than interest paid by the relevant Governmental Authority with respect to
such refund); provided, however, that the Borrowers, upon the request of
such Lender (or Transferee) or the Administrative Agent, agree to repay the
amount paid over to the Borrowers (plus penalties, interest or other
charges) to such Lender (or Transferee) or the Administrative Agent in the
event such Lender (or Transferee) or the Administrative Agent is required
to repay such refund to such Governmental Authority. (e)
As soon as practicable after the date of any payment of Taxes or Other
Taxes by the Borrowers to the relevant Governmental Authority, the
Borrowers will deliver to the Administrative Agent, at its address referred
to in Section 9.01, the original or a certified copy of a receipt issued by
such Governmental Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.19 shall
survive the payment in full of the principal of and interest on all Loans
made hereunder for a period of 3 years. (g) Each Lender
(or Transferee) that is organized under the laws of a jurisdiction other
than the United States, any State thereof or the District of Columbia (a
"Non-U.S. Lender") shall deliver to the Company and the Administrative
Agent two copies of either United States Internal Revenue Service Form
1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest", a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such
Non-U.S. Lender delivers a Form W-8, a certificate representing that such
Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code,
is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B)
of the Code) of the Company and is not a controlled foreign corporation
related to the Company (within the meaning of Section 864(d)(4) of the
Code)), properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or reduced rate of, U.S. Federal
withholding tax on payments by the Company under this Agreement. Such
forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on or before the date such participation holder
becomes a Transferee hereunder) and on or before the date, if any, such
Non-U.S. Lender changes its applicable lending office by designating a
different lending office (a "New Lending Office"). In addition, each
Non-U.S. Lender shall deliver such forms promptly upon the obsolescence
or invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.19(g), a Non-U.S.
Lender shall not be required to deliver any form pursuant to this Section
2.19(g) that such Non-U.S. Lender is not legally able to deliver.
(h) The Borrowers shall not be required to indemnify any Non-U.S.
Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect
of United States Federal withholding tax pursuant to paragraph (a) or (c)
above to the extent that (i) the obligation to withhold amounts with respect
to United States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on the date such participation
holder became a Transferee hereunder) or, with respect to payments to a
New Lending Office, the date such Non-U.S. Lender designated such New
Lending Office with respect to a Loan; provided, however, that this clause
(i) shall not apply to any Transferee or New Lending Office that becomes a
Transferee or New Lending Office as a result of an assignment,
participation, transfer or designation made at the request of the Company;
and provided further, however, that this clause (i) shall not apply to the
extent the indemnity payment or additional amounts any Transferee, or
Lender (or Transferee) through a New Lending Office, would be entitled to
receive (without regard to this clause (i)) do not exceed the indemnity
payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee)
making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would
not have arisen but for a failure by such Non-U.S. Lender to comply with
the provisions of paragraph (g) above. (i) Any Lender (or
Transferee) claiming any indemnity payment or additional amounts
payable pursuant to this Section 2.19 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document reasonably requested in writing by the Company or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such
indemnity payment or additional amounts that may thereafter accrue and
would not, in the sole determination of such Lender (or Transferee), be
otherwise disadvantageous to such Lender (or Transferee). (j)
Nothing contained in this Section 2.19 shall require any Lender (or
Transferee) or the Administrative Agent to make available any of its tax
returns (or any other information that it deems to be confidential or
proprietary). ARTICLE III
Representations and Warranties The Company represents
and warrants to each of the Lenders that: SECTION 3.01.
Corporate Existence and Power. The Company and each Borrowing
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has
all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted. <PAGE>
SECTION 3.02. Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the Company
of this Agreement (a) is within the Company's corporate powers, (b)
has been duly authorized by all necessary corporate action, (c)
requires no action by or in respect of, or filing with, any Governmental
Authority and (d) does not (i) contravene, or constitute a default under, any
applicable provision of law or regulation either of the United States or a
particular state thereof or of the certificate of incorporation or by-laws
of the Company or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Company or (ii) result in
the creation or imposition of any Lien on any asset of the Company or
any of its Subsidiaries. SECTION 3.03. Binding Effect.
This Agreement constitutes a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of the rights of its creditors generally
and subject to general legal and equitable principles with respect to
the availability of particular remedies. SECTION 3.04.
Financial Information. (a) The consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of January 3, 1993 and the
related consolidated statements of earnings and changes in financial
position for the fiscal year then ended, reported on by Arthur Andersen
& Co. and set forth in the Company's annual report on Form 10-K for
the fiscal year ended January 3, 1993, a copy of which has been delivered
to each of the Lenders, fairly present, in conformity with GAAP, the
consolidated financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results of
operations and changes in financial position for such fiscal year.
(b) The unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of October 3, 1993 and the related
unaudited consolidated statements of earnings and changes in financial
position for the nine months then ended, set forth in the Company's
quarterly report on Form 10-Q for the fiscal quarter ended October 3,
1993, a copy of which has been delivered to each of the Lenders, fairly
present, in conformity with GAAP applied on a basis consistent with
the financial statements referred to in paragraph (a) of this Section
3.04, the consolidated financial position of the Company and its
Consolidated Subsidiaries as of such date and their consolidated results
of operations and changes in financial position for such nine month period
(subject to normal year-end adjustments). SECTION
3.05. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Company threatened against or affecting,
the Company or any of its Subsidiaries before any court or arbitrator
or any governmental body, agency or official in which there is a
reasonable possibility of a final adverse decision which could
materially adversely affect the business, consolidated financial position or
consolidated results of operations of the Company and its
Consolidated Subsidiaries taken as a whole or which in any manner
draws into question the validity of this Agreement.
SECTION 3.06. Compliance with ERISA. The Company and each ERISA
Affiliate has fulfilled its obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and is in
compliance in all material respects with the presently applicable
provisions of ERISA and the Code relating to the Plans, and has not
incurred any liability to the PBGC or a Plan under Title IV of ERISA.
SECTION 3.07. Taxes. United States Federal income tax returns
of the Company and its Subsidiaries have been examined and closed
through the fiscal year ended January 3, 1988. The Company and its
Subsidiaries have filed all United States Federal income tax returns
and all other material tax returns which are required to be filed by them
and have paid all material taxes due pursuant to such returns or pursuant to
any assessment received by the Company or any Subsidiary which the
Company or any Subsidiary is not disputing in a good faith manner.
The charges, accruals and reserves on the books of the Company and
its Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Company, adequate. SECTION 3.08.
Subsidiaries. Attached hereto as Schedule 3.08 is a schedule which
correctly identifies all Subsidiaries as of the date of this Agreement.
Except as noted on Schedule 3.08, all of the issued and outstanding
shares of the capital stock of each Subsidiary is duly issued and
outstanding, fully paid and non-assessable and except for directors'
qualifying shares and shares issued solely for the purpose of satisfying local
requirements concerning the minimum number of shareholders is owned
by the Company or a Subsidiary free and clear of any mortgage,
pledge, lien or encumbrance. SECTION 3.09.
Representations and Warranties of Each Borrowing Subsidiary. Each
Borrowing Subsidiary shall be deemed by the execution and delivery of
a Borrowing Subsidiary Agreement to have represented and warranted as
of the date thereof as follows: (a) It is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation and is duly qualified to do business
and in good standing in each other jurisdiction in which it owns property
and/or conducts its business and in which failure to be so qualified and
in good standing would have a materially adverse effect on the
business of such Borrowing Subsidiary. (b) The execution,
delivery and performance by it of its Borrowing Subsidiary
Agreement, and the performance by it of the provisions of this Agreement
applicable to it, are within its corporate powers, have been duly
authorized by all necessary corporate action and do not contravene (i)
its charter or by-laws (or the equivalent thereof) or (ii) any law or
regulation or any agreement, judgment, injunction, order, decree or other
instrument binding on or affecting it. (c) No authorization
or approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery and
performance by it of its Borrowing Subsidiary Agreement or for the
performance by it of the provisions of this Agreement applicable to it,
except for those which have been duly obtained or made and are in full
force and effect. (d) It is not in breach of or default under
any agreement to which it is a party or which is binding on it or any of
its assets to an extent or in a manner which would have a material
adverse effect on its ability to perform its obligations hereunder after taking
into consideration its other financial obligations. (e)
This Agreement is a legal, valid and binding obligation of such
Borrowing Subsidiary enforceable against it in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of the rights of
its creditors generally and subject to general legal and equitable
principles with respect to the availability of particular remedies.
(f) The proceeds of each Loan made to it will be used solely for
general corporate purposes, including the acquisition of new
businesses. SECTION 3.10. Federal Reserve Regulations.
(a) Neither any Borrower nor any Subsidiary is engaged principally,
or as a substantial part of its activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock (within
the meaning of Regulation U). (b) No part of the proceeds
of any Loan has been or will be used, whether directly or indirectly,
and whether immediately, incidentally or ultimately, in any manner or
for any purpose that has resulted or will result in a violation of Regulation
U. SECTION 3.11. Investment Company Act; Public
Utility Holding Company Act. Neither any Borrower nor any
Subsidiary is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935. SECTION 3.12.
Environmental and Safety Matters. (a) With respect to all facilities
owned and operated by the Company and its Subsidiaries, or at which the
Company or any of its Subsidiaries has a leasehold interest, other than any
facilities referred to in (b) below, except as set forth in Schedule
3.12(a) (i) the Company and each Subsidiary is in compliance in all
material respects with all Federal, state, local and other statutes,
ordinances, orders, judgments, rulings and regulations relating to
environmental pollution or to environmental regulation or control or to
employee health or safety (collectively "Environmental Laws") except
where the failure to be in compliance so would not be reasonably
likely, individually or in the aggregate, to result in a Material Adverse
Effect; (ii) neither the Company nor any Subsidiary has received notice
of any material failure so to comply, which non-compliance neither has
been remedied nor is the subject of the Company's good faith efforts to
achieve compliance, except where the failure to be in compliance
would not be reasonably likely, individually or in the aggregate, to result in
a Material Adverse Effect and (iii) the Company is aware of no
events, conditions or circumstances involving environmental pollution
or contamination or employee health or safety that in its judgment
would be reasonably likely to result in a Material Adverse Effect.
(b) With respect to the Federally owned or operated facilities listed
on Schedule 3.12(b) at which the Company and/or its Subsidiaries are
the management and operations contractor or such facilities at which
the Company and/or its Subsidiaries may act as such after the date of
this Agreement, except as set forth in Schedule 3.12(c) neither the
Company nor any of its Subsidiaries has received notice of any claim under
any Environmental Laws which in its judgment would be reasonably
likely to result in a Material Adverse Effect.
ARTICLE IV Conditions of Lending The
obligations of the Lenders to make Loans hereunder are subject to the
satisfaction of the following conditions: SECTION 4.01.
All Borrowings. On the date of each Borrowing: (a) The
Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 or Section 2.04, as applicable.
(b) The representations and warranties set forth in Article III
(except in the case of a refinancing that does not increase the
aggregate principal amount of Loans of any Lender outstanding,
the representations set forth in Section 3.05 and 3.12) hereof
shall be true and correct in all material respects on and as of the date of
such Borrowing with the same effect as though made on and as
of such date, except to the extent such representations and
warranties expressly relate to an earlier date. (c) At the
time of and immediately after such Borrowing no Event of
Default or Default shall have occurred and be continuing. Each
Borrowing shall be deemed to constitute a representation and warranty by
the applicable Borrower on the date of such Borrowing as to the
matters specified in para- graphs (b) and (c) of this Section 4.01.
SECTION 4.02. Closing Date. On the Closing Date:
(a) The Administrative Agent shall have received the favorable written
opinion of Murray Gross, Esq., dated the Closing Date and addressed to
the Lenders and satisfactory to Cravath, Swaine & Moore, counsel for
the Administrative Agent, to the effect set forth in Exhibit D-1 hereto.
(b) The Administrative Agent shall have received (i) a copy
of the certificate of incorporation, including all amendments thereto, of
the Company, certified as of a recent date by the Secretary of State of
its state of incorporation, and a certificate as to the good standing of
the Company as of a recent date from such Secretary of State; (ii) a
certificate of the Clerk or an Assistant Clerk of the Company dated the
Closing Date and certifying (A) that attached thereto is a true and
complete copy of the by-laws of the Company as in effect on the
Closing Date and at all times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the Board of Directors
of the Company authorizing the execution, delivery and performance of
this Agreement and the Borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that the certificate of incorporation referred to in
clause (i) above has not been amended since the date of the last
amendment thereto shown on the certificate of good standing furnished
pursuant to such clause (i) and (D) as to the incumbency and specimen
signature of each officer executing this Agreement or any other document
delivered in connection herewith on behalf of the Company; and (iii) a
certificate of another officer of the Company as to the incumbency and
specimen signature of the Clerk or Assistant Clerk executing the
certificate pursuant to (ii) above. (c) The Administrative
Agent shall have received a certificate, dated the Closing Date and
signed by a Financial Officer of the Company, confirming compliance with
the conditions precedent set forth in paragraphs (b) and (c) of Section
4.01. (d) The Administrative Agent shall have received
evidence of the termination of the Existing Facilities.
SECTION 4.03. First Borrowing by Each Borrowing Subsidiary. On the
first date on which Loans are made to each Borrowing Subsidiary:
(a) The Administrative Agent shall have received the favorable
written opinion of Murray Gross, Esq., dated the date of such
Loans, addressed to the Lenders and satisfactory to Cravath,
Swaine & Moore, counsel for the Administrative Agent, to the
effect set forth in Exhibit D-2 hereto. (b) Each Lender
shall have received a copy of the Borrowing Subsidiary
Agreement executed by such Borrowing Subsidiary. (c)
Such Loans shall not violate any law, rule or regulation binding on any
of the Lenders. (d) Each Lender shall have received
from the Company an unaudited consolidated balance sheet and
related consolidated statements of earnings and changes in
financial position for the fiscal year most recently ended of such
Borrowing Subsidiary. ARTICLE V
Covenants The Company covenants and agrees with each
Lender and the Administrative Agent that so long as this Agreement
shall remain in effect or the principal of or interest on any Loan, any
Facility Fees or any other amounts payable hereunder shall be unpaid,
unless the Required Lenders shall otherwise consent in writing:
SECTION 5.01. Information. The Company will deliver to each of
the Lenders: (a) as soon as available and in any event
within 90 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of earnings and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year,
all reported on by Arthur Andersen & Co. or other independent public
accountants of nationally recognized standing acceptable to the
Required Lenders and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition
and results of operations of the Company and the Consolidated
Subsidiaries in accordance with GAAP; (b) as soon as
available and in any event within 45 days after the end of each of the
first three quarters of each fiscal year of the Company, a consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of
the end of such quarter and the related consolidated statements of
earnings and cash flows for such quarter and for the portion of the
Company's fiscal year ended at the end of such quarter, setting forth in each
case in comparative form the figures for the corresponding quarter and
the corresponding portion of the Company's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, compliance with GAAP and consistency by a Financial
Officer of the Company; (c) simultaneously with the
delivery of each set of financial statements referred to in clauses (a)
and (b) above, a certificate of a Financial Officer of the Company (i)
setting forth in reasonable detail the calculations required to establish
whether the Company was in compliance with the requirements of
Sections 5.06 and 5.07 on the date of such financial statements and (ii)
stating whether there exists on the date of such certificate any Default
and, if any Default then exists, setting forth the details thereof and the
action which the Company is taking or proposes to take with respect
thereto; <PAGE>
(d) forthwith upon the occurrence of any Default, a certificate of
the chief financial officer or the chief accounting officer of the
Company setting forth the details thereof and the action which the
Company is taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and
proxy statements so mailed; (f) promptly upon the filing
thereof, copies of all annual or quarterly reports and upon request by
any Lender copies of all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or its equivalent) which
the Company shall have filed with the Securities and Exchange
Commission; (g) (i) as soon as possible after, and in any
event within 30 days after the Company or any ERISA Affiliate knows
or has reason to know that, any Reportable Event has occurred that
alone or together with any other Reportable Event could reasonably be
expected to result in liability of the Company to the PBGC in an aggregate
amount exceeding $5,000,000, a statement of a Financial Officer
setting forth details as to such Reportable Event and the action that the
Company proposes to take with respect thereto, together with a copy of
the notice, if any, of such Reportable Event given to the PBGC, (ii)
promptly after receipt thereof, a copy of any notice that the Company or any
ERISA Affiliate may receive from the PBGC relating to the intention
of the PBGC to terminate any Plan or Plans (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Code Section 414) or to
appoint a trustee to administer any such Plan, (iii) within 10 days after
the due date for filing with the PBGC pursuant to Section 412(n) of the
Code a notice of failure to make a required installment or other
payment with respect to a Plan, a statement of a Financial Officer
setting forth details as to such failure and the action that the Company
proposes to take with respect thereto, together with a copy of any such
notice given to the PBGC and (iv) promptly and in any event within 30
days after receipt thereof by the Company or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, a copy of each notice received
by the Company or any ERISA Affiliate concerning (A) the imposition of
Withdrawal Liability or (B) a determination that a Multiemployer Plan
is, or is expected to be, terminated or in reorganization, both within the
meaning of Title IV of ERISA; and (h) from time to time
such additional information regarding the financial position or
business of the Company as any Lender may reasonably request.
SECTION 5.02. Corporate Existence; Businesses and Properties.
(a) The Company will, and will cause each Borrowing Subsidiary to,
do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its corporate existence. <PAGE>
(b) Except to the extent that failure to do so would not
have a Material Adverse Effect, the Company will, and will cause
each Borrowing Subsidiary to, (i) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect all
rights, licenses, permits and franchises material to the conduct of the
business of the Company and the Subsidiaries, taken as a whole, (ii)
comply with all laws and regulations applicable to it and (iii) conduct
its business in substantially the same manner as heretofore conducted
or as at the time permitted under applicable law. SECTION
5.03. Insurance. The Company will, and will cause each Subsidiary
to, keep its insurable properties adequately insured at all times by
financially sound and reputable insurers, and maintain such other
insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage, as is customary with
companies similarly situated and in the same or similar businesses.
SECTION 5.04. Litigation and Other Notices. The Company will
give each Lender prompt written notice of the following:
(a) the filing or commencement of, or any written threat or written notice
of intention of any person to file or commence, any action, suit
or proceeding which could reasonably be expected to result in
a Material Adverse Effect; and (b) any development in the
business or affairs of the Company or any Subsidiary that has
resulted in a Material Adverse Effect. SECTION 5.05.
Maintaining Records; Access to Properties and Inspections. The
Company will, and will cause each Subsidiary to, maintain financial
records in accordance with GAAP and, upon reasonable notice, at all
reasonable times, permit (a) any authorized representative designated
by any Lender to discuss the affairs, finances and condition of the
Company and the Subsidiaries with a Financial Officer of the
Company and such other officers as the Company shall deem appropriate
and (b) any authorized representative designated by the Administrative
Agent or the Required Lenders to visit and inspect the properties of the
Company and of any Subsidiary. SECTION 5.06. Fixed
Charge Coverage. The Company will not permit the ratio of (a)
Consolidated EBIT to (b) Consolidated Net Interest Expense for any period
of four consecutive fiscal quarters ending on the last day of any fiscal
quarter to be less than 5:1. SECTION 5.07. Net Debt
to Capitalization Ratio. The Company will not permit on any date the
ratio of (a) Consolidated Net Indebtedness on such date to (b) the sum
of (i) Shareholders' Equity on such date and (ii) Consolidated Net
Indebtedness on such date to be greater than 0.35:1.00.
<PAGE>
SECTION 5.08. Negative Pledge. Neither the Company nor any
Consolidated Subsidiary will create, assume or suffer to exist any Lien
securing Indebtedness on any asset now owned or hereafter acquired
by it, except: (a) Liens on all or part of the assets of
Consolidated Subsidiaries securing Indebtedness owing by
Consolidated Subsidiaries to the Company and Consolidated
Subsidiaries; (b) mortgages on real property or security
interests in personal property securing Indebtedness of the Company
and Consolidated Subsidiaries in an aggregate amount not exceeding
ten percent (10%) of the consolidated total assets of the Company and
the Consolidated Subsidiaries; (c) Liens to secure taxes,
assessments and other governmental charges or claims for labor,
material or supplies to the extent that payment thereof shall not at the time
be required to be made in accordance with Section 3.07 hereof;
(d) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old
age, pension or other social security obligations; (e)
Liens in respect of judgments or awards not exceeding $1,000,000 in
the aggregate at any time, and any other Liens with respect to which the
execution or enforcement thereof is being effectively stayed and the
claims secured thereby are being contested in good faith by
appropriate proceedings; (f) Liens of carriers,
warehousemen, mechanics and materialmen, and other like Liens, in
existence less than 120 days from the date of creation thereof;
(g) encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Company or a Consolidated Subsidiary is a party,
and other similar encumbrances none of which in the opinion of the
Company interferes materially with the use of the property in the ordinary
conduct of the business of the Company and the Consolidated
Subsidiaries; and similar encumbrances on interests in real estate
located outside the United States, which defects do not individually or
in the aggregate have a material adverse effect on the business of the
Company individually or of the Company and the Consolidated
Subsidiaries on a consolidated basis; and (h)
notwithstanding the provisions of subsection (b) hereof, security
interests in Margin Stock if, and to the extent that, the value of all such
Margin Stock owned by the Company and its Consolidated
Subsidiaries exceeds 25% of the value of the total assets of the
Company and its Consolidated Subsidiaries subject to this Section 5.08.
SECTION 5.09. Consolidations, Mergers and Sales of Assets.
(a) The Company will not (i) consolidate or merge with or into any
other person unless (A) the Company shall be the surviving entity and
(B) immediately thereafter no Default or Event of Default shall have
occurred and be continuing or (ii) sell, lease or otherwise transfer all
or any substantial part of its assets to any other person. The Company will
not sell, lease or otherwise transfer any of its assets to any other
person except for full and adequate consideration. (b)
No Borrowing Subsidiary will (i) consolidate or merge with or into any
other person unless (A) if the surviving entity shall be other than such
Borrowing Subsidiary, (x) such surviving entity or the Company shall
have assumed in writing all obligations of such Borrowing Subsidiary
relating to this Agreement and (y) such surviving entity shall be 100%
owned by the Company and (B) no Default or Event of Default shall
have occurred and be continuing either before or immediately after such
consolidation or merger or (ii) sell, lease or otherwise transfer all or
any substantial part of its assets to any other person. No Borrowing
Subsidiary will sell, lease or otherwise transfer any of its assets to any
other person except for full and adequate consideration.
ARTICLE VI Events of Default
In case of the happening of any of the following events (each an
"Event of Default"): (a) any representation or
warranty made or deemed made in or in connection with the
execution and delivery of this Agreement or the Borrowings hereunder or
any representation, warranty, statement or information contained
in any report, certificate, financial statement or other instrument
furnished in connection with this Agreement shall prove to
have been incorrect in any material respect when so made,
deemed made or furnished; (b) default shall be made in the
payment of any principal of any Loan when and as the same
shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or by acceleration thereof or
otherwise; (c) default shall be made in the payment of any
interest on any Loan or any Facility Fee or any other amount
(other than an amount referred to in paragraph (b) above) due
hereunder, when and as the same shall become due and payable, and
such default shall continue unremedied for a period of three Business
Days; (d) default shall be made in the due observance or
performance of any covenant, condition or agreement contained
in Sections 5.02 or 5.06 through 5.09; <PAGE>
(e) default shall be made in the due observance or performance
of any covenant, condition or agreement contained herein
(other than those specified in paragraphs (b), (c) or (d) above)
and such default shall continue unremedied for a period of 10
days after notice thereof from the Administrative Agent or any Lender
to the Company; (f) the Company or any Subsidiary
shall (i) fail to pay any principal or interest, regardless of
amount, due in respect of any Indebtedness in an aggregate
principal amount in excess of $15,000,000, when and as the same shall
become due and payable, or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this clause (ii) is to
cause, or to permit the holder or holders of such Indebtedness
or a trustee on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such Indebtedness to
become due prior to its stated maturity; (g) an involuntary
proceeding shall be commenced or an involuntary petition shall
be filed in a court of competent jurisdiction seeking (i) relief in respect of
the Company or any Subsidiary, or of a substantial part of the
property or assets of the Company or a Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Company or any Subsidiary or for a substantial part of the
property or assets of the Company or a Subsidiary or (iii) the
winding up or liquidation of the Company or any Subsidiary;
and such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing
shall be entered; (h) the Company or any Subsidiary shall
(i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described
in paragraph (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Subsidiary or for a
substantial part of the property or assets of the Company or any
Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become
unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing; (i) one or more
final and nonappealable judgments for the payment of money in
an aggregate amount in excess of $5,000,000 shall be rendered against the
Company, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to levy
upon assets or properties of the Company or any Subsidiary to enforce any
such final and nonappealable judgment or judgments aggregating
in excess of $5,000,000; (j) a Reportable
Event or Reportable Events, or a failure to make a required
installment or other payment (within the meaning of Section 412(n)(l) of the
Code), shall have occurred with respect to any Plan or Plans
that reasonably could be expected to result in liability of the
Company to the PBGC or to a Plan in an aggregate amount
exceeding $5,000,000 and, within 30 days after the reporting of
any such Reportable Event to the Administrative Agent, the Administrative
Agent shall have notified the Company in writing that (i) the
Required Lenders have made a determination that, on the basis
of such Reportable Event or Reportable Events or the failure to
make a required payment, there are reasonable grounds (A) for the
termination of such Plan or Plans by the PBGC, (B) for the appointment
by the appropriate United States District Court of a trustee to
administer such Plan or Plans or (C) for the imposition of a
lien in favor of a Plan and (ii) as a result thereof an Event of
Default exists hereunder; or a trustee shall be appointed by a United
States District Court to administer any such Plan or Plans; or the PBGC
shall institute proceedings to terminate any Plan or Plans;
(k) (i) the Company or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan, (ii)
the Borrower or such ERISA Affiliate does not have
reasonable grounds for contesting such Withdrawal Liability or is not in
fact contesting such Withdrawal Liability in a timely and
appropriate manner and (iii) the amount of the Withdrawal
Liability specified in such notice, when aggregated with all
other amounts required to be paid to Multiemployer Plans in connection
with Withdrawal Liabilities (determined as of the date or dates
of such notification), exceeds $5,000,000 or requires payments
exceeding $1,000,000 in any year; (1) the Company or any
ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization
or is being terminated, within the meaning of Title IV of ERISA, if
solely as a result of such reorganization or termination the
aggregate annual contributions of the Company and its ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been or will be
increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan
years by an amount exceeding $1,000,000; or (m) a
Change in Control shall occur; then, and in every such event (other than an
event with respect to the Company described in paragraph (g) or
(h) above), and at any time thereafter during the continuance of
such event, the Administrative Agent, at the request of the Required
Lenders, shall, by notice to the Company, take either or both of the
following actions, at the same or different times: (i)
terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part,
whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued
Facility Fees and all other liabilities of the Borrowers accrued hereunder,
shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby
expressly waived anything contained herein to the contrary
notwithstanding; and, in any event with respect to the Company described in
paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon and any unpaid accrued Facility Fees and all
other liabilities of the Borrowers accrued hereunder shall
automatically become due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby
expressly waived anything contained herein to the contrary
notwithstanding. ARTICLE VII
Guarantee The Company
unconditionally and irrevocably guarantees the due and punctual
payment and performance, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise,
of the Guaranteed Obligations. The Company further agrees that the
Guaranteed Obligations may be extended or renewed, in whole or in
part, without notice or further assent from it and that it will remain bound
upon its guarantee notwithstanding any extension or renewal of any
Guaranteed Obligations. The Company waives
presentment to, demand of payment from and protest to the Borrowing
Subsidiaries of any of the Guaranteed Obligations, and also waives notice
of acceptance of its guarantee and notice of protest for nonpayment. The
obligations of the Company hereunder shall not be affected by (a) the
failure of any Lender or the Administrative Agent to assert any claim
or demand or to enforce any right or remedy against the Borrowing
Subsidiaries under the provisions of this Agreement or otherwise; (b)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Agreement, any guarantee or any other agreement; or
(c) the failure of any Lender or the Administrative Agent to exercise
any right or remedy against any other guarantor of the Guaranteed
Obligations. <PAGE>
The Company further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any
right to require that any resort be had by the Administrative Agent or
any Lender to any security, if any, held for payment of the Guaranteed
Obligations or to any balance of any deposit account or credit on its books,
in favor of the Borrowing Subsidiaries or any other person.
The obligations of the Company hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Guaranteed Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations
of the Company hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent or any
Lender to assert any claim or demand or to enforce any remedy under
this Agreement, any guarantee or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or
delay, wilful or otherwise, in the performance of the Guaranteed
Obligations, or by any other act or omission which may or might in any
manner or to any extent vary the risk of the Company or otherwise
operate as a discharge of the Company as a matter of law or equity.
To the extent permitted by applicable law, the Company waives any
defense based on or arising out of any defense available to the
Borrowing Subsidiaries, including any defense based on or arising out
of any disability of the Borrowing Subsidiaries, or the unenforceability
of the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrowing Subsidiaries,
other than final payment in full of the Guaranteed Obligations. The
Administrative Agent and the Lenders may, at their election, foreclose
on any security held by one or more of them by one or more judicial or
non-judicial sales, or exercise any other right or remedy available to them
against the Borrowing Subsidiaries, or any security without affecting
or impairing in any way the liability of the Company hereunder except
to the extent the Guaranteed Obligations have been fully and finally
paid. The Company waives any defense arising out of any such
election even though such election operates to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of the
Company against any Borrowing Subsidiary or any security.
The Company further agrees that its guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time payment,
or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Lender
upon the bankruptcy or reorganization of any Borrowing Subsidiary or
otherwise. In furtherance of the foregoing and not in
limitation of any other right hich the Administrative Agent or any
Lender may have at law or in equity against the Company by virtue
hereof, upon the failure of any Borrowing Subsidiary to pay any Guaranteed
Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, the
Company hereby promises to and will, upon receipt of written demand
by the Administrative Agent or any Lender, forthwith pay or cause to
be paid to the Administrative Agent or such Lender in cash the amount of
such unpaid Guaranteed Obligation. Upon payment by
the Company of any sums to the Administrative Agent or any Lender,
as provided above, all rights of the Company against the other Borrowers
arising as a result thereof by way of right of subrogation or otherwise
shall in all respects be subordinated and junior in right of payment to
the prior indefeasible payment in full of all the Guaranteed Obligations to
the Administrative Agent and the Lenders; provided, however, that to the
extent any right of subrogation that the Company might have pursuant to this
Agreement or otherwise would constitute the Company a "creditor" of any
Borrower within the meaning of Section 547 of Title 11 of the United States
Code as now in effect or hereafter amended, or any comparable provision
of any successor statute, the Company hereby irrevocably waives and
releases such right of subrogation. ARTICLE
VIII The Administrative Agent
In order to expedite the transactions contemplated by this Agreement,
Chemical Bank is hereby appointed to act as Administrative Agent on
behalf of the Lenders. Each of the Lenders hereby irrevocably
authorizes the Administrative Agent to take such actions on behalf of
such Lender or holder and to exercise such powers as are specifically
delegated to the Administrative Agent by the terms and provisions hereof,
together with such actions and powers as are reasonably incidental
thereto. The Administrative Agent is hereby expressly authorized by
the Lenders, without hereby limiting any implied authority, (a) to
receive on behalf of the Lenders all payments of principal of and interest on
the Loans and all other amounts due to the Lenders hereunder, and
promptly to distribute to each Lender its proper share of each payment
so received; (b) to give notice on behalf of each of the Lenders to the
Borrowers of any Event of Default of which the Administrative Agent
has actual knowledge acquired in connection with its agency hereunder; and
(c) to distribute promptly to each Lender copies of all notices,
financial statements and other materials delivered by the Borrowers
pursuant to this Agreement as received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its or his or her own gross
negligence or willful misconduct, or be responsible for any statement,
warranty or representation herein or the contents of any document delivered
in connection herewith, or be required to ascertain or to make any
inquiry concerning the performance or observance by the Borrowers of
any of the terms, conditions, covenants or agreements contained in this
Agreement. The Administrative Agent shall not be responsible to the
Lenders for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or other instruments or agreements.
The Administrative Agent may deem and treat the Lender that makes
any Loan as the holder of the indebtedness resulting therefrom for all
purposes hereof until it shall have received notice from such Lender, given
as provided herein, of the transfer thereof. The Administrative Agent
shall in all cases be fully protected in acting, or refraining from acting,
in accordance with written instructions signed by the Required
Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on
all the Lenders. The Administrative Agent shall, in the absence of
knowledge to the contrary, be entitled to rely on any instrument or
document believed by it in good faith to be genuine and correct and to
have been signed or sent by the proper person or persons. Neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrowers on account of the failure
of or delay in performance or breach by any other Lender of any of its
obligations hereunder or to any Lender on account of the failure of or
delay in performance or breach by any other Lender or the Borrowers
of any of their respective obligations hereunder or in connection herewith.
The Administrative Agent may execute any and all duties hereunder by
or through agents or employees and shall be entitled to rely upon the
advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative
Agent shall be under no duty to take any discretionary action permitted
to be taken by it pursuant to the provisions of this Agreement unless it
shall be requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent
may resign at any time by notifying the Lenders and the Company.
Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Administrative Agent reasonably acceptable to the
Company. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30
days after the retiring Administrative Agent gives notice of its
resignation, then, the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank
with an office in New York, New York, having a combined capital and
surplus of at least $500,000,000 or an Affiliate of any such bank.
Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor bank, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After the
Administrative Agent's resignation hereunder, the provisions of this
Article and Section 9.05 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as
Administrative Agent. <PAGE>
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as
Administrative Agent shall have the same rights and powers as any
other Lender and may exercise the same as though it were not the
Administrative Agent, and the Administrative Agent and its Affiliates may
accept deposits from, lend money to and generally engage in any kind
of business with the Borrowers or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent. Each
Lender agrees (i) to reimburse the Administrative Agent, on demand,
in the amount of its pro rata share (based on its Commitment hereunder or, if
the Commitments shall have been terminated, the amount of its
outstanding Loans) of any out-of-pocket expenses incurred for the
benefit of the Lenders by the Administrative Agent, including
reasonable counsel fees and compensation of agents paid for services
rendered on behalf of the Lenders, which shall not have been
reimbursed by the Borrowers and (ii) to indemnify and hold harmless
the Administrative Agent and any of its directors, officers, employees
or agents, on demand, in the amount of such pro rata share, from and against
any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or
asserted against it in its capacity as the Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or omitted
by it under this Agreement to the extent the same shall not have been
reimbursed by the Borrowers; provided that no Lender shall be liable
to the Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or
willful misconduct of the Administrative Agent or any of its directors,
officers, employees or agents. Each Lender agrees that any allocation
made in good faith by the Administrative Agent of expenses or other
amounts referred to in this paragraph between this Agreement and the
Facility B Credit Agreement shall be conclusive and binding for all
purposes. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement
or any related agreement or any document furnished hereunder or
thereunder.
<PAGE>
ARTICLE IX
Miscellaneous SECTION 9.01. Notices. Except as
otherwise expressly provided herein, notices and other
communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed or sent by telecopy,
as follows: (a) if to any Borrower, to EG&G, Inc., 45
William Street, Wellesley, Massachusetts 02181, Attention of
Treasurer, (Telecopy No. 617-431-4279); (b) if to the
Administrative Agent, to it at 270 Park Avenue, New York,
New York 10017, Attention of Ted Swimmer, (Telecopy No.
212-270-2625); and (c) if to a Lender, to it at its address
(or telecopy number) set forth in Schedule 2.01 or in the
Assignment and Acceptance pursuant to which such Lender
became a party hereto. All notices and other communications
given to any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by telecopy to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this
Section 9.01. SECTION 9.02. Survival of Agreement.
All covenants, agreements, representations and warranties made by the
Borrowers herein and in the certificates or other instruments prepared
or delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the Lenders and shall survive the
making by the Lenders of the Loans regardless of any investigation
made by the Lenders or on their behalf, and shall continue in full force
and effect as long as the principal of or any accrued interest on any
Loan or any Facility Fee or any other amount payable under this Agreement
is outstanding and unpaid or the Commitments have not been
terminated. SECTION 9.03. Binding Effect. This
Agreement shall become effective when it shall have been executed by
the Company and the Administrative Agent and when the
Administrative Agent shall have received copies hereof (telecopied or
otherwise) which, when taken together, bear the signature of each
Lender, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except
that the Borrowers shall not have the right to assign any rights hereunder or
any interest herein without the prior consent of all the Lenders.
<PAGE>
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any party that
are contained in this Agreement shall bind and inure to the benefit of
its successors and assigns. (b) Each Lender may assign to
one or more assignees all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided, however, that
(i) except in the case of an assignment to a Lender or a domestic
Affiliate of a Lender, the Company must give its prior written consent
to such assignment (which consent shall not be unreasonably
withheld), (ii) the amount of the Commitment of the assigning Lender
subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than
$10,000,000, (iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance,
and a processing and recordation fee of $3,000 and (iv) the assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date
specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto (but shall continue to be entitled to the benefits of Sections 2.12,
2.14, 2.19 and 9.05, as well as to any Facility Fees accrued for its
account hereunder and not yet paid)). Notwithstanding the foregoing, any
Lender assigning its rights and obligations under this Agreement may
retain any Competitive Loans made by it outstanding at such time, and
in such case shall retain its rights hereunder in respect of any Loans so
retained until such Loans have been repaid in full in accordance with
this Agreement. (c) By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the
assignee thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, (ii) except as set
forth in (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement,
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto or the financial condition of the
Borrowers or the performance or observance by the Borrowers of any
obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee represents and warrants
that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of
this Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.01 and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(v) such assignee will independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender and based
on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together
with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required to be
performed by it as a Lender. (d) The Administrative
Agent shall maintain at one of its offices in the City of New York a
copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the
Commitment of, and the principal amount of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive in the absence of
manifest error and the Borrowers, the Administrative Agent and the Lenders
may treat each person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by each
party hereto, at any reasonable time and from time to time upon
reasonable prior notice. (e) Upon its receipt of a duly
completed Assignment and Acceptance executed by an assigning
Lender and an assignee together with an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) above and, if required, the written consent of the
Company to such assignment, the Administrative Agent shall (i) accept
such Assignment and Acceptance and (ii) record the information
contained therein in the Register. (f) Each Lender may
sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans owing to it); provided,
however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
each participating bank or other entity shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.12, 2.14 and 2.19 to
the same extent as if it was the selling Lender (but limited to the
amount that could have been claimed by the selling Lender had it
continued to hold the interest of such participating bank or other
entity), except that all claims made pursuant to such Sections shall be made
through such selling Lender, and (iv) the Borrowers, the
Administrative Agent and the other Lenders shall continue to deal
solely and directly with such selling Lender in connection with such
Lender's rights and obligations under this Agreement, and such selling
Lender shall retain the sole right to enforce the obligations of the
Borrowers relating to the Loans and to approve any amendment,
modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any fees payable
hereunder or the amount of principal of or the rate at which interest is
payable on the Loans, extending any scheduled principal payment date
or date fixed for the payment of interest on the Loans or changing or
extending the Commitments). (g) Any Lender or
participant may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section, disclose to
the assignee or participant or proposed assignee or participant any
information relating to the Borrowers furnished to such Lender;
provided that, prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of any such information.
(h) The Borrowers shall not assign or delegate any rights and
duties hereunder without the prior written consent of all Lenders.
(i) Any Lender may at any time pledge all or any portion of its
rights under this Agreement to a Federal Reserve Bank; provided that
no such pledge shall release any Lender from its obligations hereunder
or substitute any such Bank for such Lender as a party hereto. In order
to facilitate such an assignment to a Federal Reserve Bank, each
Borrower shall, at the request of the assigning Lender, duly execute and
deliver to the assigning Lender a promissory note or notes evidencing
the Loans made to such Borrower by the assigning Lender hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrowers
agree, jointly and severally, to pay the fees and disbursements of
counsel for the Administrative Agent in connection with entering into
this Agreement and in connection with any amendments, modifications
or waivers of the provisions hereof, and agree, jointly and severally, to pay
the reasonable out-of-pocket expenses incurred by the Administrative
Agent or any Lender in connection with the enforcement or protection
of their rights in connection with this Agreement or the Loans made
hereunder, including the reasonable fees and disbursements of counsel
for the Administrative Agent or any Lender. (b) The
Borrowers agree, jointly and severally, to indemnify the
Administrative Agent, each Lender, each of their Affiliates and the
directors, officers, employees and agents of the foregoing (each such
person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against any Indemnitee arising out of
(i) the execution or delivery of this Agreement or any agreement or
instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
transactions contemplated thereby, (ii) the use of the proceeds of the
Loans or (iii) any claim, litigation, investigation or proceeding relating
to any of the foregoing, whether or not any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are finally determined by a court of competent
jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnitee or from such Indemnitee's violation of
the Federal securities laws prohibiting insider trading. (c)
The provisions of this Section shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment
of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any investigation made by or on behalf
of the Administrative Agent or any Lender. All amounts due under this
Section shall be payable on written demand therefor.
SECTION 9.06. Applicable Law. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 9.07. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Administrative Agent and the Lenders
hereunder are cumulative and are not exclusive of any rights or
remedies which they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure therefrom
shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given. No notice or demand on any Borrower or any Subsidiary in any
case shall entitle such party to any other or further notice or demand in
similar or other circumstances. (b) Neither this
Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered
into by the Borrowers and the Required Lenders; provided, however,
that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal payment date or date
for the payment of any interest on any Loan, or waive or excuse any
such payment or any part thereof, or decrease the rate of interest on any
Loan, without the prior written consent of each Lender affected
thereby, (ii) increase the Commitment or decrease the Facility Fee of
any Lender or extend any date for payment thereof without the prior
written consent of such Lender, (iii) amend or modify the provi- sions
of Section 2.15 or Section 9.04(h), the provisions of this Section or the
definition of the "Required Lenders," or (iv) release the Company from
any of its obligations under Article VII hereof without the prior written
consent of each Lender; provided further, however, that no such
agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent hereunder without the prior written consent of
the Administrative Agent. Each Lender shall be bound by any waiver,
amendment or modification authorized by this Section and any consent
by any Lender pursuant to this Section shall bind any assignee of its
rights and interests hereunder. SECTION 9.08. Entire
Agreement. This Agreement constitutes the entire contract among the
parties relative to the subject matter hereof. Any previous agreement
among the parties with respect to the subject matter hereof is superseded by
this Agreement. Nothing in this Agreement, expressed or implied, is
intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement. SECTION 9.09. Severability. In the event any
one or more of the provisions contained in this Agreement should be
held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions. SECTION 9.10. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together
shall constitute but one contract, and shall become effective as provided in
Section 9.03. SECTION 9.11. Headings. Article and
Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and are
not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement. SECTION 9.12. Right of
Setoff. If an Event of Default shall have occurred and be continuing,
each Lender is hereby authorized at any time and from time to time, 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 and other indebtedness at any time owing by such Lender to or for
the credit or account of the Company and any Borrowing Subsidiary
now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand
under this Agreement and although such obligations may be unmatured.
Each Lender agrees promptly to notify the Company after such setoff
and application made by such Lender, but the failure to give such
notice shall not affect the validity of such setoff and application. The rights
of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which
such Lender may have. SECTION 9.13. Jurisdiction;
Consent to Service of Process. (a) Each Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law.
Subject to the foregoing and to paragraph (b) below, nothing in this
Agreement shall affect any right that any party hereto may otherwise
have to bring any action or proceeding relating to this Agreement against
any other party hereto in the courts of any jurisdiction. (b)
Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any New
York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in
any such court. (c) Each party to this Agreement
irrevocably consents to service of process in the manner provided for
notices in Section 9.01. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other manner
permitted by law. SECTION 9.14. Waiver of Jury
Trial. Each party hereto hereby waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of
any litigation directly or indirectly arising out of, under or in connection
with this Agreement. Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (b) acknowledges that it
and other parties hereto have been induced to enter into this Agreement
by, among other things, the mutual waivers and certification in this
Section. SECTION 9.15. Addition of Borrowing
Subsidiaries. Each wholly owned Subsidiary of the Company which
shall deliver to the Administrative Agent a Borrowing Subsidiary
Agreement executed by such Subsidiary and the Company shall, upon such
delivery and without further act, become a party hereto and a Borrower
hereunder with the same effect as if it had been an original party to this
Agreement. <PAGE>
SECTION 9.16. Confidentiality. Each Lender and the
Administrative Agent agree to keep confidential the Information (as
defined below), except that any such Lender and the Administrative
Agent shall be permitted to disclose Information (a) to such of its
officers, directors, employees, agents and representatives as need to know
such Information; (b) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, including with
respect to the enforcement of this Agreement, provided that such
Lender and the Administrative Agent shall use reasonable efforts to
notify the Company of such prospective disclosure a reasonable time prior
to any such disclosure and shall take such actions reasonably requested
by the Company to assist the Company in obtaining a protective order
or confidential treatment with respect to such Information (it being
understood that failure to give such notice after having made any such
reasonable efforts shall not result in any liability hereunder to such Lender
or the Administrative Agent, as the case may be); (c) to the extent
requested by any bank regulatory authority; (d) to the extent such
Information (i) becomes publicly available other than as a result of a
breach of this Agreement, (ii) becomes available to such Lender or the
Administrative Agent on a non-confidential basis from a source other than
the Company and its Affiliates or (iii) was available to such Lender or
the Administrative Agent on a non-confidential basis prior to its
disclosure to such Lender or the Administrative Agent by the Company
or its Affiliates; (e) to any actual or prospective assignee or participant in
any rights of such Lender or the Administrative Agent under this
Agreement, provided that such assignee or participant delivers to the
Administrative Agent or such Lender, as applicable, a confidentiality
letter containing substantially the undertakings set forth in this Section 9.16
and (f) to the extent the Company shall have consented to such disclosure
in writing. As used in this Section 9.16, "Information" shall mean any
materials, documents and information (other than annual reports,
prospectuses, proxy statements and other materials distributed to the
Company's shareholders) that the Company or any of its Subsidiaries may
have furnished or may hereafter furnish to the Administrative Agent or any
Lender in connection with Sections 4.03(d), 5.01, 5.04 and 5.05 of this
Agreement. SECTION 9.17. Collateral. Each of the
Lenders represents to each of the other Lenders that it in good faith is
not relying upon any Margin Stock (as defined in Regulation U) as
collateral in the extension or maintenance of the credit provided for in this
Agreement. SECTION 9.18. Interest Rate Limitation.
Notwith-standing anything herein to the contrary, if at any time the
applicable interest rate, together with all fees and charges which are
treated as interest under applicable law (collectively the "Charges"), as
provided for herein or in any other document executed in connection
herewith, or otherwise contracted for, charged, received, taken or
reserved by any Lender, shall exceed the maximum lawful rate (the
"Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, all
Charges payable to such Lender shall be limited to the Maximum Rate.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement
to be duly executed by their respective authorized officers as of the
day and
year first above
written.
EG&G, INC.,
by
/s/ John F. Alexander, II
Name: John F. Alexander, II
Title: Corporate Controller Acting Chief Financial
Officer
</TABLE>
<PAGE>
CHEMICAL BANK, individually and as Administrative
Agent,
by
/s/ John J. Huber, III
Name: John J. Huber, III
Title: Managing Director
THE FIRST NATIONAL
BANK OF BOSTON,
by
/s/ Thomas F. Farley, Jr.
Name: Thomas F. Farley, Jr.
Title: Vice President
DRESDNER BANK A.G., NEW YORK
BRANCH AND GRAND CAYMAN BRANCH,
by
/s/ Ernest Fung
Name: Ernest Fung
Title: Vice President
by
/s/ J. M. Leffler
Name: J. M. Leffler
Title: First Vice President
THE NORTHERN TRUST COMPANY,
by
/s/ Greg Werd
Name: Greg Werd
Title: Vice President
<PAGE>
ROYAL BANK OF CANADA,
by
/s/ Sheryl L. Greenberg
Name: Sheryl L. Greenberg
Title: Manager
SOCIETE GENERALE,
by
/s/ Jan Wertlieb
Name: Jan Wertlieb
Title: Vice President
WACHOVIA BANK OF GEORGIA,
N.A.,
by
/s/ Linda M. Harris
Name: Linda M. Harris
Title: Senior Vice President
<PAGE>
EXHIBIT A-1
FORM OF
COMPETITIVE BID REQUEST
Chemical Bank, as Administrative Agent for
the Lenders referred to below
270 Park Avenue
New York, NY 10017
[Date]
Attention: Ted Swimmer
Ladies and Gentlemen:
The undersigned, EG&G, Inc., a Massachusetts corporation (the
"Company"), refers to the [3-Year] [364-Day] Competitive Advance and
Revolving Credit Facility Agreement dated as of March 21, 1994 (as
amended, modified, extended or restated from time to time,
collectively, the "Credit Agreement"), among the Company, the
Lenders named therein and Chemical Bank, as Administrative Agent.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit
Agreement. The Company hereby gives you notice pursuant to
Section 2.03(a) of the Credit Agreement that it requests a
Competitive Borrowing under the Credit Agreement, and in that
connection sets forth below the terms on which such Competitive
Borrowing is requested to be made:
<TABLE>
<S> <C>
(A) Interest Rate Basis ____________ ____________ ___________
(B) Date of Competitive Borrowing
(which is a Business Day) ____________ ____________ ___________
(C) Interest Period and the last
day thereof ____________ ____________ ___________
(D) Principal Amount of
Competitive Borrowing $____________$____________$___________
</TABLE>
Upon acceptance of any or all of the Loans offered by
the Lenders in response to this request, the Company shall be
deemed to affirm as of such date the representations and warranties
made in the Credit Agreement to the extent specified in Article IV
thereof.
Very truly yours,
EG&G, INC.
by
___________________________
Title: [Responsible
Officer]
Copy to:
Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave
<PAGE>
EXHIBIT A-2
FORM OF
COMPETITIVE BID INVITATION
[Name of Lender]
[Address]
[Date]
Ladies and Gentlemen:
Reference is made to the [3-Year] [364-Day] Competitive Advance and
Revolving Credit Facility Agreement dated as of March 21, 1994 (as amended,
modified, extended or restated from time to time, collectively, the "Credit
Agreement"), among EG&G, Inc., a Massachusetts corporation (the
"Company"), the Lenders named therein and Chemical Bank, as Administrative
Agent. Capitalized terms used herein and not otherwise defined herein shall
have
the meanings assigned to such terms in the Credit Agreement. The Company made a
Competitive Bid Request on [date], 19 , pursuant to Section 2.03(a) of the
Credit
Agreement, and in that connection you are invited to submit a Competitive Bid by
[Date]/[Time]. Your Competitive Bid must comply with Section 2.03(b) of the
Credit Agreement and the terms set forth below on which the Competitive Bid
Request was made:
<TABLE>
<S> <C> <C>
(A) Interest Rate Basis
(B) Date of Competitive Borrowing
(C) Interest Period and the last
day thereof
(D) Principal Amount of
Competitive Borrowing $
</TABLE>
Very truly yours,
CHEMICAL BANK, as
Administrative Agent,
by
_____________________________________
Title:
<PAGE>
EXHIBIT A-3
FORM OF
COMPETITIVE BID
Chemical Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, NY 10017
[Date]
Attention: Ted Swimmer
Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the [3-Year]
[364-Day] Competitive Advance and Revolving Credit Facility
Agreement dated as of March 21, 1994 (as amended, modified,
extended or restated from time to time, collectively, the "Credit
Agreement"), among EG&G, Inc., a Massachusetts corporation (the
"Company"), the Lenders named therein and Chemical Bank, as
Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement. The undersigned hereby makes a
Competitive Bid pursuant to Section 2.03(b) of the Credit Agree-
ment, in response to the Competitive Bid Request made by the
Company on [date], 19 , and in that connection sets forth below the
terms on which such Competitive Bid is made:
<TABLE>
<S> <C> <C> <C> <C>
(A) Interest Period and last
day thereof __________ ___________ _____________
(B) Principal Amount $__________ $___________ $_____________
(C) Competitive Bid Rate __________ ___________ _____________
</TABLE>
The undersigned hereby confirms that it is prepared, subject
to the conditions set forth in the Credit Agreement, to extend
credit to the Company upon acceptance by the Company of this bid in
accordance with Section 2.03(d) of the Credit Agreement.
Very truly yours,
[NAME OF LENDER],
by
________________________________
Title:
Copy to:
Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave
<PAGE>
EXHIBIT A-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
Chemical Bank, as Administrative Agent
for the Lenders referred to below
270 Park Avenue
New York, NY 10017
Attention: Ted Swimmer
Ladies and Gentlemen:
The undersigned, EG&G, Inc. (the "Company"), refers to
the [3-Year] [364-Day] Competitive Advance and Revolving
Credit Facility Agreement dated as of March 21, 1994 (as amended,
modified, extended or restated from time to time, collectively, the
"Credit Agreement"), among the Company, the Lenders named
therein and Chemical Bank, as Administrative Agent.
In accordance with Section 2.03(c) of the Credit Agreement, we
have received a summary of bids in connection with our Competitive
Bid Request dated ___________ and in accordance with Section
2.03(d) of the Credit Agreement, we hereby accept the following
bids for maturity on [date]:
Principal Amount
$
$
Fixed Rate/Margin
[%]/[+/-. %]
Lender
We hereby reject the following bids:
<PAGE>
Principal Amount
$
$
Fixed Rate/Margin
[%]/[+/-. %]
Lender
The $ should be deposited in Chemical Bank
account number [ ] on [date].
Very truly yours,
EG&G, INC.<PAGE>
by
Name:
Title:
Copy To:
Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, NY 10017
Attention: Sandra Miklave
<PAGE>
EXHIBIT A-5
FORM OF
STANDBY BORROWING REQUEST
Chemical Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, NY 10017
[Date]
Attention: Ted Swimmer
Ladies and Gentlemen:
The undersigned, EG&G, Inc., a Massachusetts corporation (the "Company"),
refers to the [3-Year] [364-Day] Competitive Advance and Revolving Credit
Facility Agreement dated as of March 21, 1994 (as amended, modified, extended or
restated from time to time, collectively, the "Credit Agreement"), among the
Company, the Lenders named therein and Chemical Bank, as Administrative Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Company hereby
gives you notice pursuant to Section 2.04 of the Credit Agreement that it
requests a
Standby Borrowing under the Credit Agreement, and in that connection sets forth
below the terms on which such Standby Borrowing is requested to be made:
<TABLE>
<S> <C> <C>
(A) Date of Standby Borrowing
(which is a Business Day) _________________________________
(B) Principal Amount of
Standby Borrowing $_________________________________
(C) Interest rate basis _________________________________
<PAGE>
(D) Interest Period and the
last day thereof _________________________________
</TABLE>
Upon acceptance of any or all of the Loans made by the Lenders in response
to this request, the Company shall be deemed to have represented and warranted
(but only to the extent required by Section 4.01 of the Credit Agreement) that
the conditions to lending specified in Sec- tion 4.01(b) and (c) of the Credit
Agreement have been satisfied.
Very truly yours,
EG&G, INC.
by
___________________________
Title: [Responsible Officer]
Copy to:
Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave<PAGE>
EXHIBIT B
ADMINISTRATIVE QUESTIONNAIRE
EG&G, INC.
Please accurately complete the following information and return via FAX to the
attention of Sandra Miklave at Chemical Bank Agency Services Corporation as
soon as possible.
FAX Number: 212-622-0002
LEGAL NAME OF YOUR INSTITUTION TO APPEAR IN DOCUMENTATION:
GENERAL INFORMATION - DOMESTIC RATE LENDING OFFICE:
Institution Name:
Street Address:
City, State, Zip Code:
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:
Street Address:
City, State, Zip Code:
CREDIT CONTACTS/NOTIFICATION METHODS:
Primary Contact:
Street Address:
City, State, Zip Code:
Phone Number:
FAX Number:
Backup Credit Contact:
Street Address:
City, State, Zip Code:
Phone Number:
FAX Number:
TAX WITHHOLDING:
UNITED STATES
Non-Resident Alien or Foreign Corporation or Other Foreign Entity
__________ YES __________ NO
If yes, please enclose Form 4224, 1001 or W-8. If no, please enclose
Form W-9.
Tax ID Number _________________________________
CONTACTS/NOTIFICATION METHODS: ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:
Street Address:
City, State, Zip Code:
Phone Number:
FAX Number:
Telex & Answer Back:
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
BID LOAN NOTIFICATIONS:
Contact:
Street Address:
City, State, Zip Code:
Phone Number:
Fax Number:
<PAGE>
MAILINGS:
Please specify who should receive financial information:
Name:
Street Address:
City, State, Zip Code:
It is very important that all of the above information is accurately filled in
and returned promptly.If there is someone other than yourself who should
receive this questionnaire, please notify us of their name and FAX number
and we will FAX them a copy of the questionnaire. If you have any questions,
please call Sandra Miklave at 212-622-0005, telecopy 212-622-0002.
<PAGE>
EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the [3-Year] [364-Day] Competitive Advance and
Revolving Credit Facility Agreement dated as of March 21, 1994, (as amended,
modified, extended or restated from time to time, collectively, the "Credit
Agreement"), among EG&G, Inc., a Massachusetts corporation, the Lenders named
therein and Chemical Bank, as Administrative Agent. Terms defined in the Credit
Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the Assignee,
and the Assignee hereby purchases and assumes, without recourse, from the
Assignor, effective as of the Effective Date set forth on the following page,
the
interests set forth on the following page (the "Assigned Interest") in the
Assignor's
rights and obligations under the Credit Agreement, including, without
limitation, the
interests set forth on the following page in the Commitment of the Assignor on
the
Effective Date and the Loans owing to the Assignor which are outstanding on the
Effective Date, together with unpaid interest accrued on the assigned Loans to
the
Effective Date and the amount, if any, set forth on the following page of the
Fees
accrued to the Effective Date for the account of the Assignor. Each of the
Assignor
and the Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 9.04(c) of the Credit Agreement,
a
copy of which has been received by each such party. From and after the
Effective
Date (i) the Assignee shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests assigned by this Assignment
and
Acceptance, have the rights and obligations of a Lender thereunder and under the
Credit Agreement or any other document issued in connection therewith and (ii)
the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement.
2. This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is organized under the laws of a
jurisdiction
outside the United States, the forms prescribed by the Internal Revenue Service
of
the United States certifying as to the Assignee's exemption from withholding
taxes
with respect to all payments to be made to the Assignee under the Credit
Agreement
or such other documents as are necessary to indicate that all such payments are
subject to such tax at a rate reduced by an applicable tax treaty, all duly
completed
and executed by such Assignee, (ii) if the Assignee is not already a Lender
under
the Credit Agreement, an Administrative Questionnaire and (iii) a processing and
recordation fee of $3,000. 3. This Assignment and Acceptance shall be
governed by and construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
<TABLE>
<CAPTION>
Percentage Assigned of
Facility and Commitment
(set forth, to at least 8
decimals, as a percentage of
Principal Amount Assigned the Facility and the
(and identifying information aggregate Commitments of
Facility as to individual Competitive Loans) all Lenders thereunder)
<S> <C> <C>
Commitment Assigned: $ %
Standby Loans: $ %
Competitive Loans: $ %
Fees Assigned (if any): $ %
</TABLE>
The terms set forth above and on the preceding
page are hereby agreed to: [Accepted
___________________________, as Assignor CHEMICAL BANK, as Administrative
Agent
By:_______________________________ By:__________________________
Name: Name:
Title: Title:
___________________________, as EG&G, INC.
Assignee
By:_______________________________ By:__________________________
Name: Name:
Title: Title:
<PAGE>
EXHIBIT D-1
FORM OF OPINION OF MURRAY GROSS, ESQ.
[Date]
To the Lenders party to the Credit
Agreements referred to below and
Chemical Bank, as Administrative Agent
Ladies and Gentlemen:
I am the General Counsel of EG&G, Inc., a Massachusetts
corporation (the "Company"), and have acted in the capacity of
General Counsel in connection with each of the 3-Year and 364-Day
Competitive Advance and Revolving Credit Facility
Agreements dated as of March 21, 1994 (collectively, the
"Credit Agreements"), among the Company, the lenders listed in
Schedule 2.01 thereto (the "Lenders"), and Chemical Bank, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent"). This opinion letter is being
furnished to you at the request of the Company pursuant to
Section 4.02(a) of the Credit Agreements. Capitalized terms
used but not defined herein shall have the meanings assigned
to such terms in the Credit Agreements.
In connection with the opinions expressed below, I have
examined the Credit Agreements (including the Exhibits
thereto) and originals or copies, certified or otherwise
identified to my satisfaction, of (a) such corporate records
of the Company as I have considered appropriate, including
copies of the articles of incorporation, as amended, and by-laws,
as amended, of the Company certified as in effect on the
date hereof (collectively, the "Charter Documents") and
certified copies of resolutions of the board of directors of
the Company and (b) such other certificates, agreements,
documents and other instruments of the Company as I have
deemed relevant and necessary as a basis for the opinions
hereinafter expressed, and I have assumed the genuineness of
all signatures therein. The documents listed above are
collectively referred to herein as the "Documents".
Based upon the foregoing, and subject to the
assumptions, limitations and qualifications set forth herein,
I am of the opinion that:
1. The Company (a) is a corporation duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and is qualified to do business
in every jurisdiction where such qualification is necessary
except where the failure to so qualify would not have a
material adverse effect on the business, consolidated
financial position or consolidated results of operations of
the Company and its Consolidated Subsidiaries taken as a
whole, (b) has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and (c) has
the corporate power to execute, deliver and perform its
obligations under each of the Documents to which it is a party
and to borrow under the Credit Agreements.
2. The execution, delivery and performance by the
Company of each of the Documents to which it is a party and
the borrowings under the Credit Agreements (a) are within the
Company's corporate powers, (b) have been duly authorized by
all necessary corporate action, (c) require no action by or in
respect of, or filing with, any Governmental Authority, (d) do
not (i) contravene, or constitute a default under, any
applicable provision of statutory law or regulation either of
the United States or the Commonwealth of Massachusetts or of
the Charter Documents of the Company or of any existing
agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or (ii) result in the
creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries and (e) do not and will not (i)
violate any order of any Governmental Authority binding upon
the Company, (ii) violate, conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a
default under any existing indenture, mortgage, agreement for
borrowed money, bond, note or similar instrument or any other
material agreement to which the Company is a party or by which
the Company or any of its property is bound.
3. There is no action, suit or proceeding pending
against, or to my knowledge threatened against the Company or
any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a
reasonable probability of a final adverse decision which would
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Company and its Consolidated Subsidiaries taken as a whole
or which in any manner draws into question the validity of any
Document to which the Company is a party.
4. Each of the Documents to which the Company is a
party has been duly executed and delivered by the Company and
is a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and to general equitable
principles from time to time in effect.
5. Assuming that the proceeds of the Loans are used for
the purposes set forth in the Credit Agreements, the making of
the Loans and such use will not violate or be inconsistent
with Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System of the United States.
6. The Company is not (a) an "investment company" as
defined in, or subject to regulation under, the Investment
Company Act of 1940 or (b) a "holding company" as defined in,
or subject to regulation under, the Public Utility Holding
Company Act of 1935, as amended.
The opinions expressed herein are limited to the laws of
the Commonwealth of Massachusetts and of the United States of
America.
This letter is furnished by me solely for your benefit
and for the benefit of assignees of your rights and
obligations under the Credit Agreements in connection with the
transactions referred to in the Documents and may not, without
my prior written consent, be circulated to, or relied upon by,
any other person or used in any other context.
Very truly yours,
263A<PAGE>
EXHIBIT D-2
FORM OF OPINION OF MURRAY GROSS, ESQ.
[Date]
To the Lenders party to the Credit
Agreements referred to below and
Chemical Bank, as Administrative Agent
Ladies and Gentlemen:
I am the General Counsel of EG&G, Inc., a Massachusetts
corporation (the "Company"), and have acted in the capacity of
General Counsel in connection with (a) each of the 3-Year and
364-Day Competitive Advance and Revolving Credit Facility
Agreements dated as of March 21, 1994 (collectively, as in
effect on the date hereof, the "Credit Agreements"), among the
Company, the lenders listed in Schedule 2.01 thereof (together
with their successors and assigns, the "Lenders"), and
Chemical Bank, as administrative agent for the Lenders (in
such capacity, the "Administrative Agent") and (b) the
Borrowing Subsidiary Agreement dated as of the date hereof
(the "Borrowing Subsidiary Agreement") among the Company, [New
Borrower], a [ ] corporation (the "New Borrower"), the
Lenders and the Administrative Agent. This opinion letter is
being furnished to you at the request of the Company pursuant
to Section 4.03(a) of the Credit Agreements. Capitalized
terms used but not defined herein shall have the meanings
assigned to such terms in the Credit Agreements.
In connection with the opinions expressed below, I have
examined (a) the Credit Agreements (including the Exhibits
thereto), (b) the Borrowing Subsidiary Agreement and (c)
originals or copies, certified or otherwise identified to my
satisfaction, of (i) such corporate records of the New
Borrower as I have considered appropriate, including copies of
the articles of incorporation, as amended, and by-laws, as
amended, of the New Borrower certified as in effect on the
date hereof (collectively, the "Charter Documents") and
certified copies of resolutions of the board of directors of
the New Borrower and (ii) such other certificates, agreements,
documents and other instruments of the New Borrower as I have
deemed relevant and necessary as a basis for the opinions
hereinafter expressed. The documents listed above are
collectively referred to herein as the "Documents".
Based upon the foregoing, and subject to the
assumptions, limitations and qualifications set forth herein,
I am of the opinion that:
1. The New Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do
business and in good standing in each other jurisdiction in
which it owns property and/or conducts its business and in
which failure to be so qualified and in good standing would
have a materially adverse effect on the business of the New
Borrower.
2. The execution, delivery and performance by the New
Borrower of its Borrowing Subsidiary Agreement, and the
performance by the New Borrower of the provisions of the
Credit Agreements applicable to it, are within its corporate
powers, have been duly authorized by all necessary corporate
action and do not contravene (a) its Charter Documents or (b)
any law or any contractual restriction binding on or affecting
it.
3. No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by
the New Borrower of its Borrowing Subsidiary Agreement or for
the performance by the New Borrower of the provisions of the
Credit Agreements applicable to it, except for those which
have been duly obtained or made and are in full force and
effect.
4. The Borrowing Subsidiary Agreement and the Credit
Agreements are legal, valid and binding obligations of the New
Borrower enforceable against it in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the enforcement of the rights of creditors generally
and subject to general equitable principles from time to time
in effect.
The opinions expressed herein are limited to the laws of
the Commonwealth of Massachusetts and of the United States of
America.
This letter is furnished by me solely for your benefit
and for the benefit of assignees of your rights and
obligations under the Credit Agreements in connection with the
transactions referred to in the Documents and may not, without
my prior written consent, be circulated to, or relied upon by,
any other person or used in any other context.
Very truly yours,
263A<PAGE>
EXHIBIT E
BORROWING SUBSIDIARY AGREEMENT dated as of , 19 ,
among EG&G, INC., a Massachusetts corporation (the "Company"), [Name of
Subsidiary], a [ ] corporation (the "New Subsidiary"), the Lenders
named in Schedule 2.01 to the Credit Agreements referred to below (together
with their successors and assigns, the "Lenders") and CHEMICAL BANK, a New
York banking corporation, as Administrative Agent for the Lenders (in such
capacity, the Administrative Agent).
Reference is hereby made to each of the 3-Year and 364-Day
Competitive Advance and Revolving Credit Facility Agreements dated as of
March 21, 1994 (collectively, the "Credit Agreements") between the Company,
the Borrowing Subsidiaries (as such term is defined therein; together with the
Company, the "Borrowers"), the Lenders and the Administrative Agent.
Capitalized terms used herein but not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreements. Under the
Credit Agreements, the Lenders have agreed, upon the terms and subject to the
conditions therein set forth, to make revolving credit loans to the
Company and to wholly owned Subsidiaries that execute and deliver
to the Lenders Borrowing Subsidiary Agreements in the form of this Agreement.
The Company represents that the New Subsidiary is a wholly owned Subsidiary.
The parties hereto agree that the guarantee of the Company contained in the
Credit Agreements applies to the obligations of the New Subsidiary. In
consideration of being permitted to borrow under the Credit Agreements upon
the terms and subject to the conditions set forth therein, the New Subsidiary
agrees that from and after the date of this Agreement it will be, and will be
liable for the observance and performance of all the obligations of, a
Borrowing Subsidiary under the Credit Agreements (including as a Borrower
thereunder), as the same may be amended from time to time, to the same extent
as if it had been one of the original parties to the Credit Agreements
including, without limitation, Section 9.13 thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their authorized officers as of the date first appearing
above.
[New Subsidiary]
by _________________________
Name:
Title:
EG&G, INC.,
by _________________________
Name:
Title:
CHEMICAL BANK, as Administrative
Agent on behalf of the Lenders,
by _________________________
Name:
Title:
<PAGE>
Schedule 2.01
to Credit Agreement
Lenders and Commitments
Lender Commitment
Chemical Bank $12,000,000
270 Park Avenue, 9th Floor
New York, New York 10017
Attention: Theodore Swimmer
Telephone: (212) 270-5720
Telecopy: (212) 270-3504
The First National Bank of Boston 12,000,000
100 Federal Street
Boston, MA 02110
Attention: Mr. Thomas F. Farley, Jr.
Telephone: (617) 434-5812
Telecopy: (617) 434-0637
Dresdner Bank A.G., New York Branch 9,000,000
and Grand Cayman Branch
75 Wall Street
New York, NY 10005-2889
Attention: Mr. Ernest Fung
Telephone: (212) 575-0237
Telecopy: (212) 921-9416
The Northern Trust Company 9,000,000
50 South LaSalle Street
Chicago, IL 60675
Attention: Mr. Gregory F. Werd, Jr.
Telephone: (312) 444-3504
Telecopy: (312) 444-3508
Royal Bank of Canada 9,000,000
New York Branch
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Attention: Manager, Loans Administration
Telephone: (212) 858-7168
Telecopy: (718) 522-6292/3
with a copy to:
Royal Bank of Canada
Financial Square
New York, New York 10005-3531
Attention: Sheryl L. Greenberg
Telephone: (212) 428-6476
Telecopy: (212) 428-6459
Societe Generale 12,000,000
50 Rockefeller Plaza
New York, NY 10020
Attention: Ms. Jan Wertlieb
Telephone: (212) 830-6881
Telecopy: (212) 581-8752
Wachovia Bank of Georgia, N.A. $12,000,000
191 Peachtree Street, N.E.
Atlanta, GA 30303
Attention: Ms. Elizabeth Colt
Telephone: (404) 332-4089
Telecopy: (404) 332-6898
<PAGE>
CONFORMED COPY
AMENDMENT No. 1 (this "Amendment"), dated as of March 15, 1995, to the
3-Year Competitive Advance and Revolving Credit Facility
Agreement (the "3-Year Agreement"), dated as of March 21,
1994, among EG&G, INC., a Massachusetts corporation (the
"Company"), the Borrowing Subsidiaries (as such term is
defined herein; together with the Company, the "Borrowers"),
the Lenders listed in Schedule 2.01 thereof (the "Lenders")
and CHEMICAL BANK, a New York banking corporation, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent"). Capitalized terms used herein and
defined in the 3-Year Agreement have the meanings set forth
in the 3-Year Agreement.
WHEREAS, the Borrowers have requested and the Administrative Agent
and the Lenders are willing to amend certain provisions of the 3-Year
Agreement for the limited purposes described and on the terms and conditions
set forth herein;
NOW, THEREFORE, for and in consideration of the premises and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, subject to Section 5 below,
as follows:
1. The definition of the term "Maturity Date" in Section 1.01 of
the 3-Year Agreement is hereby deleted and replaced by the following
sentence: "Maturity Date" shall mean March 21, 1998.
2. The representations and warranties in the 3-Year Agreement
are correct in all material respects on and as of the date hereof, before
and after the execution and delivery of this Amendment, as though made
on and as of the date hereof and no event has occurred and is continuing,
or would result from the execution and delivery of this Amendment, that
constitutes a Default or Event of Default.
3. Except as otherwise expressly modified hereby, all terms and
provisions of the 3-Year Agreement shall be and shall remain unchanged and
the 3-Year Agreement is hereby ratified and confirmed and shall be
and shall remain in full force and effect, enforceable in accordance with
its terms. Any reference in the 3-Year Agreement, or in any documents or
instruments required thereunder or annexes or schedules thereto, referring
to the 3-Year Agreement shall be deemed to refer to the 3-Year Agreement as
amended by this Amendment.
4. This Amendment may be executed in two or more counterparts,
any one of which need not contain the signatures of more than one party,
but all such counterparts taken together will constitute one and the
same Amendment.
5. The Company represents and warrants that it has all requisite
power and authority to enter into this Amendment, that this Amendment has
been duly and validly authorized, executed and delivered by such
party and this Amendment is the legal, valid and binding obligation of
such party. This Amendment shall become effective only upon the receipt
by the Administrative Agent of an opinion of counsel for the Company
confirming the representation and warranty set forth in the preceding
sentence together with evidence of the Company's authority to enter into
this Amendment, in each case satisfactory to the Administrative Agent.
6. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK AS
THOUGH WHOLLY-MADE AND PERFORMED WITHIN SUCH STATE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
EG&G, INC.,
by
/s/ Tom Sauser
Name: Tom Sauser
Title: CFO
CHEMICAL BANK, individually and
as Administrative Agent for the
Lenders,
by
/s/ Claude Setton
Name: Claude Setton
Title: Vice President
THE FIRST NATIONAL BANK OF
BOSTON,
by
/s/ Thomas F. Farley, Jr.
Name: Thomas F. Farley, Jr.
Title: Director
DRESDNER BANK A.G., NEW YORK
BRANCH AND GRAND CAYMAN BRANCH,
by
/s/ Ernest Fung
Name: Ernest Fung
Title: Vice President
by
/s/ J.M. Leffler
Name: J.M. Leffler
Title: SVP
THE NORTHERN TRUST COMPANY,
by
/s/ Curtis C. Tatham, III
Name: Curtis C. Tatham, III
Title: Commercial Banking
Officer
ROYAL BANK OF CANADA,
by
/s/ T.L. Gleason
Name: T.L. Gleason
Title: Vice President
SOCIETE GENERALE,
by
/s/ Jan Wertlieb
Name: Jan Wertlieb
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.,
by
/s/ Linda M. Harris
Name: Linda M. Harris
Title: SVP
<PAGE>
CONFORMED COPY
AMENDMENT No. 2 (this "Amendment"), dated as of March 14,
1996, to the 3-Year Competitive Advance and Revolving Credit Facility
Agreement,
dated as of March 21, 1994, as amended by Amendment No. 1 thereto dated as of
March 15, 1995 (as so amended, the "Agreement"), among EG&G, INC., a
Massachusetts corporation (the "Company"), the Borrowing Subsidiaries (as
such term is defined therein; together with the Company, the "Borrowers"),
the Lenders listed in Schedule 2.01 thereof (the "Lenders") and CHEMICAL
BANK, a New York banking corpora-tion, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"). Capitalized terms
used herein and defined in the Agreement have the meanings set forth in the
Agreement.
WHEREAS the Borrowers have requested and the Administrative Agent
and the Lenders are willing to amend certain provisions of the Agreement for
the limited purposes described and on the terms and conditions set forth
herein.
NOW, THEREFORE, for and in consideration of the premises and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, on the terms and subject to
the conditions set forth herein, as follows:
SECTION 1. Amendments. (a) All references to "3-Year" in the
Agreement are hereby deleted and replaced by references to "5-Year".
(b) The preamble of the Agreement is hereby amended by deleting
therefrom the reference to "$75,000,000" and replacing it with a
reference to "$100,000,000".
(c) Section 1.01 of the Agreement is hereby amended by:
(i) Adding the following new definitions in their proper
alphabetical order:
"'Amendment Effective Date' shall mean the date on which each condition
to effectiveness set forth in Section 3 of Amendment No. 2 to this Agreement
dated as of March 14, 1996, has been satisfied".
<PAGE>
"'Applicable Percentage' shall mean on any date, with respect to
Eurodollar Standby Loans or with respect to the Facility Fee, as the case
may be, the applicable percentage set forth below under the caption
'Eurodollar Spread' or 'Facility Fee Percentage', as the case may be,
based upon the Ratings in effect on such date:
Category 1
Eurodollar Spread
Facility Fee Percentage
Aa3 or higher by Moody's;
AA- or higher by S&P
.130%
.070%
Category 2
A1 or A2 by Moody's;
A+ or A by S&P
.145%
.080%
Category 3
A3 by Moody's;
A- by S&P
.160%
.090%
Category 4
Baa1 by Moody's;
BBB+ by S&P
.175%
.125%
Category 5
Baa2 by Moody's;
BBB by S&P
.200%
.150%
Category 6
Baa3 by Moody's;
BBB- by S&P
.2125%
.1875%
Category 7
Ba1 or lower by Moody's;
BB+ or lower by S&P
.375%
.250%
For purposes of the foregoing, (i) if the Ratings shall fall
within different Categories, the Applicable Percentage shall
be based upon the higher of the two Categories; provided,
however, that if the difference in the Ratings is greater
than one Category, the Applicable Percentage will be based
on the Category which is one Category below the higher
Rating; (ii) if no Ratings exist, the Applicable Percentage
shall be based upon Category 7, and (iii) if any Rating
shall be changed (other than as a result of a change in the
rating system of Moody's or S&P), such change shall be
effective as of the date on which it is first announced by
the rating agency making such change. Each such change in
the Applicable Percentage shall apply during the period
commencing on the effective date of such change and ending
on the date immediately preceding the effective date of the
next such change. If the rating system of Moody's or S&P
shall change, or if either such rating agency shall cease to
be in the business of rating corporate debt obligations, the
parties hereto shall negotiate in good faith to amend the
references to specific ratings in this definition to reflect
such changed rating system or the non-availability of
ratings from such rating agency, and pending the
effectiveness of any such amendment the Applicable
Percentage shall be determined by reference to the rating
most recently in effect prior to such change or cessation."
"'Moody's' shall mean Moody's Investors Service, Inc.,
or any of its successors."
"'Ratings' shall mean the ratings from time to time
established by Moody's and S&P for senior, unsecured,
non-credit-enhanced long-term debt of the Company."
"'S&P' shall mean Standard and Poor's Rating Group, a
division of The McGraw-Hill Companies, Inc., or any of its
successors."
(ii) Deleting therefrom the definition of "Consolidated Net
Indebtedness" and replacing it with the following definition:
"'Consolidated Net Indebtedness' shall mean, for any
date, (a) the sum of all outstanding Indebtedness of the
Company and its Consolidated Subsidiaries as of such date
less (b) the lesser of (i) $50,000,000 and (ii) Eligible
Investments as of such date, all determined on a
consolidated basis in accordance with GAAP."
(iii) Deleting therefrom the definition of "Facility B Credit
Agreement" and replacing it with the following definition:
"'Facility B Credit Agreement' shall mean the 364-Day
Competitive Advance and Revolving Credit Facility Agreement
dated the date hereof among the parties hereto, as amended
from time to time."
(iv) Deleting therefrom the definition of "Maturity Date"
and replacing it with the following definition:
"'Maturity Date' shall mean the fifth anniversary of
the Amendment Effective Date."
(d) Section 2.05(a) of the Agreement is hereby deleted in
its entirety and replaced with the following sentences:
"The Company agrees to pay to each Lender, through the
Administrative Agent, on each March 31, June 30,
September 30 and December 31 (with the first payment being
due on March 31, 1996) and on the date on which the
Commitment of such Lender shall be terminated as provided
herein, a facility fee (a 'Facility Fee'), at a rate per
annum equal to the Applicable Percentage from time to time
in effect on the average daily amount of the Commitment of
such Lender, whether used or unused, during the preceding
quarter (or other period commencing on the Amendment
Effective Date, or ending with the Maturity Date or the date
on which the Commitment of such Lender shall be terminated).
All Facility Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. The
Facility Fee due to each Lender shall commence to accrue on
the Amendment Effective Date, and shall cease to accrue on
the earlier of the Maturity Date and the termination of the
Commitment of such Lender as provided herein."
(e) Section 2.07(a)(i) of the Agreement is hereby amended
by replacing the reference to "1/4 of 1%" with a reference to "the
Applicable Percentage from time to time in effect".
(f) Each reference in Section 3.04(a) of the Agreement to
"January 3, 1993" is hereby replaced with a reference to "January 1,
1995", and each reference in Section 3.04(b) of the Agreement to
"October 3, 1993" is hereby replaced with a reference to "October 1,
1995".
(g) Schedule 2.01 to the Agreement is hereby deleted and
replaced with Schedule 2.01 to this Amendment. It is understood and
agreed that immediately prior to the effectiveness of this Amendment
the Company shall have terminated all the Commitments then outstanding
and that upon the effectiveness of this Amendment, notwithstanding the
provisions of Section 2.10(b) of the Agreement, the outstanding
Commitments shall be as set forth on Schedule 2.01 to this Amendment.
(h) Schedule 3.08 and Schedule 3.12(b) to the Agreement are
hereby deleted and replaced, respectively, with Schedule 3.08 and
Schedule 3.12(b) to this Amendment.
SECTION 2. Representations and Warranties. The Company
represents and warrants as of the Amendment Effective Date to each of
the Lenders and the Administrative Agent that:
(a) This Amendment has been duly authorized, executed and
delivered by the Company, and this Amendment is, and the
Agreement, as amended hereby, will upon the Amendment Effective
Date be, the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating
to enforceability (whether enforcement is sought by proceedings
in equity or at law).
(b) The representations and warranties set forth in
Article III of the Agreement, as amended hereby, are true and
correct in all material respects with the same effect as if made
on the Amendment Effective Date, except to the extent such
representations and warranties expressly relate to an earlier
date.
(c) Immediately before and immediately after the
effectiveness of this Amendment, no Event of Default or Default
has occurred and is continuing.
SECTION 3. Conditions to Effectiveness. This Amendment
shall become effective as of and from the Amendment Effective Date
when (a) the Administrative Agent shall have received counterparts of
this Amendment that, when taken together, bear the signatures of all
the parties hereto and (b) each of the following conditions precedent
shall have been satisfied in respect of this Amendment:
(i) immediately prior to the effectiveness of this
Amendment, the Company shall have effectively terminated all the
Commitments then outstanding in accordance with Section 2.10 of
the Agreement (and, solely for purposes of permitting each
termination, the notice requirements of Section 2.10 are hereby
waived);
(ii) the Administrative Agent shall have received the payment
in full of all obligations of the Borrowers outstanding under the
Agreement, this Amendment or any related agreement;
(iii) the Administrative Agent shall have received a
certificate, dated the Amendment Effective Date and signed by a
Financial Officer of the Company, confirming (i) that the
representations and warranties set forth in Article III of the
Agreement, as amended hereby, are true and correct in all
material respects, with the same effect as though made on and as
of the Amendment Effective Date, except to the extent that such
representations and warranties expressly relate to an earlier
date, and (ii) that no Event of Default or Default has occurred
and is continuing;
(iv) the Administrative Agent shall have received certified
copies of the resolutions of the Board of Directors of the
Company approving or authorizing approval of the execution and
delivery of this Amendment and the performance of the Agreement
as amended hereby;
(v) the Administrative Agent shall have received a
certificate of the Clerk or an Assistant Clerk of the Company,
dated the Amendment Effective Date, (A) as to the absence of
amendments to the certificate of incorporation or the by-laws of
the Company since March 21, 1994 (or, in the event there shall
have been any such amendments, setting forth copies thereof
certified by the Secretary of State of Massachusetts in the case
of amendments to the certificate of incorporation and by the
Clerk or an Assistant Clerk of the Company in the case of
amendments to the by-laws), and (B) certifying the incumbency and
signatures of the officer or officers of the Company signing this
Amendment;
(vi) the Administrative Agent shall have received a
favorable written opinion of the General Counsel for the Company,
dated the Amendment Effective Date and addressed to the Lenders,
to the effect set forth in Exhibit D-1 of the Agreement, provided
that, for purposes of the foregoing, references in such Exhibit
to execution and delivery of the Agreement shall be deemed to
refer to execution and delivery of this Amendment and other
references therein to the Agreement shall be deemed to refer to
the Agreement as amended hereby;
(vii) the Amendment Effective Date shall have occurred on or
prior to March 19, 1996.
SECTION 4. Agreement. Except as specifically stated
herein, the provisions of the Agreement are and shall remain in full
force and effect. As used therein, the terms "Agreement", "herein",
"hereunder", "hereinafter", "hereto", "hereof" and words of similar
import shall, unless the context otherwise requires, refer to the
Agreement as amended hereby.
SECTION 5. Applicable Law. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
SECTION 6. Counterparts. This Amendment may be executed in
two or more counterparts, each of which shall constitute an original
but all of which when taken together shall constitute but one
contract.
SECTION 7. Expenses. The Company agrees to reimburse the
Administrative Agent for all reasonable out-of-pocket expenses
incurred by it in connection with this Amendment, including, but not
limited to, the reasonable fees, charges and disbursements of Cravath,
Swaine & Moore, counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
EG&G, INC.,
by
Name:
Title:
CHEMICAL BANK, individually and as
Administrative Agent for the Lenders,
by
Name:
Title:
DRESDNER BANK A.G., NEW YORK BRANCH
AND GRAND CAYMAN BRANCH,
by
/s/ J. Michael Leffler
Name: J. Michael Leffler
Title: Senior Vice President
by
/s/ Ernest Fung
Name: Ernest Fung
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
by
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
by
Name:
Title:
THE NORTHERN TRUST COMPANY,
by
/s/ Lawson E. Whiting
Name: Lawson E. Whiting
Title: Commercial Banking
Officer
ROYAL BANK OF CANADA,
by
/s/ Sheryl L. Greenberg
Name: Sheryl L. Greenberg
Title: Manager
SOCIETE GENERALE,
by
/s/ Michelle Martin
Name: Michelle Martin
Title: Assistant Vice President
STANDARD CHARTERED BANK,
by
/s/ William R. Leute, III
Name: William R. Leute III
Title: Senior Vice President
by
/s/ Gerard Lob
Name: Gerard Lob
Title: Vice President
WACHOVIA BANK OF GEORGIA,
N.A.,
by
Name:
Title:
<PAGE>
Schedule 2.01
Lenders and Commitments
Lender Commitment
Chemical Bank $16,000,000
140 E. 45th Street
29th Floor
New York, NY 10017
Attention: Sandra Miklave
Telephone: (212) 622-0005
Telecopy: (212) 622-0002
Dresdner Bank A.G., New York Branch $10,500,000
and Grand Cayman Branch
75 Wall Street
New York, NY 10005-2889
Attention: Mr. Ernest Fung
Telephone: (212) 574-0237
Telecopy: (212) 574-0130
The First National Bank of Boston $10,500,000
100 Federal Street
Boston, MA 02110
Attention: Mr. Christopher Francis
Telephone: (617) 434-2203
Telecopy: (617) 434-0637
The First National Bank of Chicago $10,500,000
153 W. 51st Street
Equitable Building, 8th Floor
Suite 4000
New York, NY 10019
Attention: Mr. Thomas M. Harkless
Telephone: (212) 373-1175
Telecopy: (212) 373-1388
The Northern Trust Company $10,500,000
50 South LaSalle Street
Chicago, IL 60675
Attention: Mr. J. Chip McCall
Telephone: (312) 444-3504
Telecopy: (312) 444-3508
<PAGE>
Royal Bank of Canada $10,500,000
New York Branch
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, NY 11201-2701
Attention: Manager, Loan Administration
Telephone: (212) 858-7168
Telecopy: (718) 522-6292/3
with a copy to:
Royal Bank of Canada
One Financial Square, 12th Floor
New York, NY 10005-3531
Attention: Sheryl L. Greenberg
Telephone: (212) 428-6476
Telecopy: (212) 428-6459
Societe Generale $10,500,000
1221 Avenue of the Americas
New York, NY 10020
Attention: Ms. Michelle Martin
Telephone: (212) 278-7126
Telecopy: (212) 278-7430
Standard Chartered Bank $10,500,000
7 World Trade Center
New York, NY 10048
Attention: Mr. Gerard Lob
Telephone: (212) 667-0501
Telecopy: (212) 667-0225
Wachovia Bank of Georgia, N.A. $10,500,000
191 Peachtree Street, N.E.
Atlanta, GA 30303
Attention: Ms. Elizabeth Colt
Telephone: (404) 332-4089
Telecopy: (404) 332-6898
<PAGE>
SCHEDULE 3.12 (a)
None<PAGE>
SCHEDULE 3.12 (b)
- Mound Facility, Miamisburg, Ohio
- Tooele Chemical Demilitarization Facility, Tooele, Utah
- Kennedy Space Center, Florida
- Langley Research Center, Langley, Virginia
<PAGE>
SCHEDULE 3.12 (c)
None
<PAGE>
SCHEDULE 3.08 Subsidiaries
<TABLE>
<CAPTION>
State or Country Number
of Incorporation of
Name of Company or Organization Parent
- -------------------------------------------------------------------------------
<S> <C> <C>
1 EG&G, Inc. Massachusetts N/A
2 EG&G Alabama, Inc. Alabama 1
3 EG&G Aluminum, Inc. Delaware 33
4 EG&G Astrophysics Research
Corporation California 1
5 EG&G Automotive Research, Inc. Texas 22
6 EG&G Birtcher, Inc. California 33
7 EG&G Benelux B.V. Netherlands 73 (77%) 1 (23%)
8 EG&G Canada Investments, Inc. Canada 86
9 EG&G Canada Limited Canada 1 (10%) 28 (43.5%)
38 (46.5%)
10 EG&G Chandler Engineering Company Oklahoma 1
11 EG&G Defense Materials, Inc. Utah 1
12 EG&G do Brasil Ltda. Brazil 22 (95%) 85 (5%)
13 EG&G Dynatrend, Inc. Delaware 1
14 EG&G E.C. Bahrain 22
15 EG&G Energy Measurements, Inc. Nevada 1
16 EG&G Environmental, Inc. Delaware 1
17 EG&G Exporters Ltd. U.S. Virgin Islands 22
18 EG&G Florida, Inc. Florida 1
19 EG&G Flow Technology, Inc. Arizona 1
20 EG&G Gamma Scientific,
Incorporated Delaware 22
21 EG&G GmbH Germany 22
22 EG&G Holdings, Inc. Massachusetts 1 (87%) 24 ( 6%)
71 (5%) 10 (2%)
23 EG&G Idaho, Inc. Idaho 22
24 EG&G Instruments, Inc. Delaware 22
25 EG&G Instruments GmbH Germany 1
26 EG&G International, Ltd. Cayman Islands 22
27 EG&G Japan, Inc. Delaware 22
28 EG&G Judson Infrared, Inc. Pennsylvania 1
29 EG&G KT Aerofab, Inc. California 22
30 EG&G Langley, Inc. Virginia 18
31 EG&G Ltd. United Kingdom 22 (80.9%) 4 (19.1%)
32 EG&G Management Systems, Inc. New Mexico 1
33 EG&G Metals, Inc. Massachusetts 1
34 EG&G Missouri Metal
Shaping Company Missouri 22
35 EG&G Mound Applied
Technologies, Inc. Ohio 1
36 EG&G Omni, Inc. Philippines 22
37 EG&G Power Systems, Inc. California 1
38 EG&G Pressure Science Incorporated Maryland 22
39 EG&G Rocky Flats, Inc. Colorado 1
40 EG&G Sealol Eagle, Inc. Delaware 42 (51%)
41 EG&G Sealol Ltd. (Sealol Egypt) Egypt 22 (22%) 26 (78%)
42 EG&G Sealol, Inc. Delaware 22
43 EG&G Services, Inc. Delaware 1
44 EG&G Special Projects, Inc. Nevada 1
45 EG&G Star City, Inc. Ohio 2
46 EG&G Structural Kinematics, Inc. Michigan 1
47 EG&G S.A. France 26
48 EG&G SpA Italy 22
49 EG&G Technical Services of
West Virginia, Inc. West Virginia 51
50 EG&G Ventures, Inc. Massachusetts 1
51 EG&G Washington Analytical District of Columbia 1
Services Center, Inc.
52 EG&G Watertown, Inc. Massachusetts 73
53 Antarctic Support Associates
(Partnership) Colorado 1 (40%)
54 Benelux Analytical
Instruments S.A. Belgium 1 (92.3%)
55 Berthold Analytical
Instruments, Inc. Delaware 1
56 Berthold A.G. Switzerland 58
57 Berthold France S.A. France 47
58 Berthold GmbH Germany 1
59 Berthold Munchen GmbH Germany 67 (60%)
60 Biozone Oy Finland 83
61 B.A.I. GmbH Austria 58
62 Eagle EG&G Aerospace Co. Ltd. Japan 1 (49%)
63 EC III, Inc. New Mexico 1 (50%)
64 Heimann Optoelectronics GmbH Germany 67
65 Heimann Shenzhen
Optoelectronics Co. Ltd. China 64 (90%)
66 IC Sensors, Inc. California 1
67 Laboratorium Prof. Dr. Rudolf Germany 21 (58.0%) 25 (2.3%)
Berthold GmbH & Co. KG 5 (39.7%)
68 NOK EG&G Optoelectronics
Corporation Japan 1 (49%)
69 Pribori Oy Finland 83
70 PT EG&G Heimann Optoelectronics Indonesia 22
71 Reticon Corporation California 1
72 Reynolds Electrical &
Engineering Co., Inc. Texas 1
73 Rotron Incorporated New York 1
74 Science Support Corporation Delaware 1
75 Sealol Hindustan Limited India 42 (20%)
76 Sealol S.A. Venezuela 42
77 Seiko EG&G Co. Ltd. Japan 1 (49%)
78 Shanghai EG&G Reticon
Optoelectronics Co. Ltd. China 71 (50%)
79 Societe Civile Immobiliere France 1 (82.5%) 57 (17.5%)
80 Vactec, Inc. Missouri 1
81 WALLAC A/S Denmark 83
82 WALLAC Norge AS Norway 83
83 WALLAC Oy Finland 22
84 WALLAC Sverige AB Sweden 83
85 WALLAC, Inc. Maryland 1
86 Wellesley B.V. Netherlands 87
87 Wickford N.V. Netherlands Antillies 26
88 Wright Components, Inc. New York 1
89 ZAO Pribori Russia 69
</TABLE>
<PAGE>
EXHIBIT 10.5
EG&G, Inc.
EMPLOYMENT AGREEMENT
This Agreement made as of the 1st day of November, 1993, between EG&G, Inc., a
Massachusetts corporation (hereinafter called the "Company"), and John F.
Alexander, II of Southborough, Massachusetts (hereinafter referred to as the
"Employee").
WITNESSETH:
WHEREAS, the Employee has been employed in a management position with the
Company; and
WHEREAS, the Employee hereby agrees to continue to perform such services
and duties of a management nature as shall be assigned to him; and
WHEREAS, the Employee hereby agrees to the compensation herein provided
and agrees to serve the Company to the best of his ability during the period
of this Agreement.
NOW, THEREFORE, in consideration of the sum of One Dollar, and of the
mutual covenants herein contained, the parties agree as follows:
1. a) Except as hereinafter otherwise provided, the Company agrees
to continue to employ the Employee in a management position with the
Company, and the Employee agrees to remain in the employment of the
Company in that capacity for a period of one year from the date
hereof and from year to year thereafter until such time as this
Agreement is terminated.
b) The Company will, during each year of the term of this Agreement,
place in nomination before the Board of Directors of the Company the
name of the Employee for election as an Officer of the Company except
when a notice of termination has been given in accordance with
Paragraph 5(b).
2. The Employee agrees that, during the specified period of employment,
he shall, to the best of his ability, perform his duties, and shall not
engage in any business, profession or occupation which would conflict with
the rendition of the agreed upon services, either directly or indirectly,
without the prior approval of the Board of Directors.
3. During the period of his employment under this Agreement, the
Employee shall be compensated for his services as follows:
a) Except as otherwise provided in this Agreement, he shall be paid
a salary during the period of this Agreement at a base rate to be
determined by the Company on an annual basis. Except as provided in
Subparagraph 3d, such annual base salary shall under no circumstances
be fixed at a rate below the annual base rate then currently in
effect.
b) He shall be reimbursed for any and all monies expended by him in
connection with his employment for reasonable and necessary expenses
on behalf of the Company in accordance with the policies of the
Company then in effect;
c) He shall be eligible to participate under any and all bonus,
benefit, pension, compensation, and option plans which are, in
accordance with company policy, available to persons in his position
(within the limitation as stipulated by such plans). Such
eligibility shall not automatically entitle him to participate in
any such plan;
d) if, because of adverse business conditions or for other reasons,
the Company at any time puts into effect salary reductions applicable
to all management employees of the Company generally, the salary
payments required to be made under this Agreement to the Employee
during any period in which such general reduction is in effect may be
reduced by the same percentage as is applicable to all management
employees of the Company generally. Any benefits made available to
the Employee which are related to base salary shall also be reduced
in accordance with any salary reduction;
4. a) During the period of his employment by the Company or for any
period which the Company shall continue to pay the Employee his
salary under this Agreement, whichever shall be the longer, the
Employee shall not directly or indirectly own, manage, control,
operate, be employed by, participate in or be connected with the
ownership, management, operation or control of any business which
competes with the Company or its subsidiaries, provided, however,
that the foregoing shall not apply to ownership of stock in a
publicly held corporation which ownership is disclosed to the Board
of Directors nor shall it apply to any other relationship which is
disclosed to and approved by the Board of Directors.
b) During the period of his employment by the Company and two years
following the Company's last payment of salary to him, the Employee
shall not utilize or disclose to others any proprietary or
confidential information of any type or description which term shall
be construed to mean any information developed or identified by the
Company which is intended to give it an advantage over its
competitors or which could give a competitor an advantage if obtained
by him. Such information includes, but is not limited to, product
or process design, specifications, manufacturing methods, financial
or statistical information about the Company, marketing or sales
information about the Company, sources or supply, lists of customers,
and the Company's plans, strategies, and contemplated actions.
c) During the period of his employment by the Company or for any
period during which the Company shall continue to pay the Employee
his salary under this Agreement, whichever shall be longer, the
Employee shall not in any way whatsoever aid or assist any party
seeking to cause, initiate or effect a Change in Control of the
Company as defined in Paragraph 6 without the prior approval of the
Board of Directors.
5. Except for the Employee covenants set forth in Paragraph 4 which
covenants shall remain in effect for the periods stated therein, and
subject to Paragraph 6, this Agreement shall terminate upon the happening
of any of the following events and (except as provided herein) all the
Company's obligation under this Agreement, including, but not limited to,
making payments to the Employee shall cease and terminate:
a) On the effective date set forth in any resignation submitted by
the Employee and accepted by the Company, or if no effective date is
agreed upon, the date of receipt of such letter.
b) One year after written notice of termination is given by either
party to the other party.
c) At the end of the month in which the Employee shall have
attained the age of sixty-five years;
d) At the death of the Employee;
e) At the termination of the Employee for cause. As used in the
Agreement, the term "cause" shall mean:
1) Misappropriating any funds or property of the Company;
2) Unreasonable refusal to perform the duties assigned to him
under this Agreement;
3) Conviction of a felony;
4) Continuous conduct bringing notoriety to the Company and
having an adverse effect on the name or public image of the
Company;
5) Violation of the Employee's covenants as set forth in
Paragraph 4 above; or
6) Continued failure by the Employee to observe any of the
provisions of this Agreement after being informed of such
breach.
f) At termination of the Employee by the Company without cause.
g) Twelve months after written notice of termination is given by
the Company to the Employee based on a determination by the Board of
Directors that the Employee is disabled (which, for purposes of this
Agreement, shall mean that the Employee is unable to perform his
regular duties, with such determination to be made by the Board of
Directors, in reliance upon the opinion of the Employee's physician
or upon the opinion of one or more physicians selected by the
Company). Such notice shall be given by the Company to the Employee
on the 106th day of continuous disability of the Employee.
Notwithstanding the foregoing, if, during the twelve-month notice
period referred to above, the Employee is no longer disabled and is
able to return to work, such notice of employment termination shall
be rescinded, and the employment of the Employee shall continue in
accordance with the terms of this Agreement. During the first 106
days of continuous disability of the Employee, the Company will make
periodic payments to the Employee in an amount equal to the
difference between his base salary and the benefits provided by the
Company's Short-Term Disability Income Plan. During the twelve-month
notice period following 106 days of continuous disability, the
Company will make periodic payments to the Employee in an amount
equal to the difference between his base salary and the benefits
provided by the Company's Long-Term Disability Plan. If the
employment of the Employee terminates at the end of such twelve-month
notice period, the Company will make periodic payments to the
Employee, up to the amount remaining in his sick leave reserve
account, in an amount equal to the difference between his base pay
and the post-employment benefits provided to him under the Company's
Long-Term Disability Plan. Due to the fact that payments to the
Employee under the Company's Long-Term Disability Plan are not
subject to federal income taxes, the payments to be made directly by
the Company pursuant to the two preceding sentences shall be reduced
such that the total amount received by the Employee (from the Company
and from the Long-Term Disability Plan), after payment of any income
taxes, is equal to the amount that the Employee would have received
had he been paid his base salary, after payment of any income taxes
on such base salary.
h) Notwithstanding the foregoing provisions, in the event of the
termination of the Employee by the Company without cause, the
Employee shall, until the expiration of his then current employment
term or one year from the date of such termination, whichever is
later, (i) continue to receive his Full Salary (as defined below),
which shall be payable in accordance with the payment schedule in
effect immediately prior to his employment termination, and (ii)
continue to be entitled to participate in all employee benefit plans
and arrangements of the Company (such as life, health and disability
insurance and automobile arrangements) to the same extent (including
coverage of dependents, if any) and upon the same terms as were in
effect immediately prior to his termination. For purposes of this
Agreement, "Full Salary" shall mean the Employee's annual base
salary, plus the amount of any bonus or incentive payments received
by the Employee with respect to the last full fiscal year of the
Company for which all bonus or incentive payments to be made have
been made.
6. a) In the event that there is a Change in Control of the Company
(as defined below), the provisions of this Agreement shall be amended
as follows:
1) Paragraph 1a shall be amended to read in its entirety as
follows:
"Except as hereinafter otherwise provided, the
Company agrees to continue to employ the Employee
in a management position with the Company, and the
Employee agrees to remain in the employment in the
Company in that capacity, for a period of five (5) years
less one day from the date of the Change in Control.
Except as provided in Paragraph 3d, the Employee's
salary as set forth in Paragraph 3a and his other
employee benefits pursuant to the plans described in
Paragraph 3c shall not be decreased during such
period."
2) Paragraph 5a shall be amended by the addition of the
following provision at the end of such paragraph:
", provided that the Employee agrees not to resign,
except for Good Reason (as defined below), during the
one-year period following the date of the Change in
Control."
3) Paragraph 5b shall be deleted in its entirety.
<PAGE>
4) Paragraph 5h shall be amended to read in its entirety as
follows:
"Notwithstanding the foregoing provisions, in the event
of the termination of the Employee by the Company
without cause, or the resignation of the Employee for
Good Reason, the Employee shall (i) receive, on the
date of his employment termination, a cash payment in
an amount equal to his Full Salary (as defined below)
multiplied by the number of years (including any
portions thereof) remaining until the expiration of his
then current employment term or five years from the
date of such termination, whichever is later (it being
agreed that such amount shall not be discounted based
upon the present value of such amount), and (ii)
continue to be entitled to participate in all employee
benefit plans and arrangements of the Company (such
as life, health and disability insurance and automobile
arrangements) to the same extent (including coverage
of dependents, if any) and upon the same terms as
were in effect immediately prior to his termination. For
purposes of this Agreement, "Full Salary" shall mean
the Employee's annual base salary, plus the amount of
any bonus or incentive payments received by the
Employee with respect to the last full fiscal year of the
Company for which all bonus or incentive payments to
be made have been made. Payments under this
Paragraph 5h shall be made without regard to whether
the deductibility of such payments (or any other
"parachute payments," as that term is defined in
Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), to or for the benefit of the
Employee) would be limited or precluded by Section
280G and without regard to whether such payments
(or any other "parachute payments" as so defined)
would subject the Employee to the federal excise tax
levied on certain "excess parachute payments" under
Section 4999 of the Code; provided that if the total of
all "parachute payments" to or for the benefit of the
Employee, after reduction for all federal, state and local
taxes (including the tax described in Section 4999 of
the Code, if applicable) with respect to such payments
(the "Total After-Tax Payments"), would be increased
by the limitation or elimination of any payment under
this Paragraph 5h, amounts payable under this
Paragraph 5h shall be reduced to the extent, and only
to the extent, necessary to maximize the Total
After-Tax Payments. The determination as to whether
and to what extent payments under this Paragraph 5h
are required to be reduced in accordance with the
preceding sentence shall be made at the Company's
expense by Arthur Andersen LLP or by such other
certified public accounting firm as the Board of
Directors of the Company may designate prior to a
Change in Control of the Company. In the event of any
underpayment or overpayment under this Paragraph 5h
as determined by Arthur Andersen LLP (or such other
firm as may have been designated in accordance with
the preceding sentence), the amount of such
underpayment or overpayment shall forthwith be paid
to the Employee or refunded to the Company, as the
case may be, with interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code."
5) Paragraph 8 shall be amended to read in its entirety as
follows:
"The Employee may pursue any lawful remedy he
deems necessary or appropriate for enforcing his rights
under this Agreement following a Change in Control of
the Company, and all costs incurred by the Employee in
connection therewith (including without limitation
attorneys' fees) shall be promptly reimbursed to him by
the Company, regardless of the outcome of such
endeavor."
b) For purposes of this Agreement, a "Change in Control of the
Company" shall occur or be deemed to have occurred only if (i) any
"person", as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportion as their ownership of
stock in the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding
securities; (ii) during any period of two consecutive years ending
during the term of this Agreement, individuals who at the beginning
of such period constitute the Board of Directors of the Company, and
any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of the period or
whose election or whose nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board
of Directors; (iii) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation; or (iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially
all of the Company's assets.
c) For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following events, except as provided in
Paragraph 3d: (i) a reduction in the Employee's base salary as in
effect on the date hereof or as the same may be increased from time
to time; (ii) a failure by the Company to pay annual cash bonuses to
the Employees in an amount at least equal to the most recent annual
cash bonuses paid to the Employee; (iii) a failure by the Company to
maintain in effect any material compensation or benefit plan in which
the Employee participated immediately prior to the Change in Control,
unless an equitable arrangement has been made with respect to such
plan, or a failure to continue the Employee's participation therein
on a basis not materially less favorable than existed immediately
prior to the Change in Control; (iv) any significant and substantial
diminution in the Employee's position, duties, responsibilities or
title as in effect immediately prior to the Change in Control;
(v) any requirement by the Company that the location at which the
Employee performs his principal duties be changed to a new location
outside a radius of 25 miles from the Employee's principal place of
employment immediately prior to the Change in Control; or (vi) any
requirement by the Company that the Employee travel on an overnight
basis to an extent not substantially consistent with the Employee's
business travel obligations immediately prior to the Change in
Control. Notwithstanding the foregoing, the resignation shall not be
considered to be for Good Reason if any such circumstances are fully
corrected prior to the date of resignation.
7. Neither the Employee nor, in the event of his death, his legal
representative, beneficiary or estate, shall have the power to
transfer, assign, mortgage or otherwise encumber in advance any of
the payments provided for in this Agreement, nor shall any payments
nor assets or funds of the Company be subject to seizure for the
payment of any debts, judgments, liabilities, bankruptcy or other
actions.
8. Any controversy relating to this Agreement and not resolved by the
Board of Directors and the Employee shall be settled by arbitration in the
City of Boston, Commonwealth of Massachusetts, pursuant to the rules then
obtaining of the American Arbitration Association, and judgment upon the
award may be entered in any court having jurisdiction, and the Board of
Directors and Employee agree to be bound by the arbitration decision on
any such controversy. Unless otherwise agreed by the parties hereto,
arbitration will be by three arbitrators selected from the panel of the
American Arbitration Association. The full cost of any such arbitration
shall be borne by the Company.
9. Failure to insist upon strict compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times by either
party.
10. All notices or other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered personally to
the Employee or to the General Counsel of the Company or when mailed by
registered or certified mail to the other party (if to the Company, at
45 William Street, Wellesley, Massachusetts 02181, attention General
Counsel; if to the Employee, at the last known address of the Employee
as set forth in the records of the Company).
11. This Agreement has been executed and delivered and shall be construed
in accordance with the laws of the Commonwealth of Massachusetts. This
Agreement is and shall be binding on the respective legal representatives
or successors of the parties, but shall not be assignable except to a
successor to the Company by virtue of a merger, consolidation or
acquisition of all or substantially all of the assets of the
<PAGE>
Company. All previous employment contracts between the Employee and the
Company or any of the Company's present or former subsidiaries or
affiliates is hereby canceled and of no effect.
IN WITNESS WHEREOF, the Company has caused its seal to be hereunto
affixed and these presents to be signed by its proper officers, and the
Employee has hereunto set his hand and seal the day and year first above
written.
EG&G, INC.
(SEAL) By:/s/John M. Kucharski
John M. Kucharski,
Chairman and Chief
Executive Officer
Employee:/s/John F. Alexander, II
John F. Alexander, II
<PAGE>
EXHIBIT 21
Subsidiaries of the Registrant
<TABLE>
<CAPTION>
As of March 22, 1996, the following is a list of the parent (Registrant)
and its subsidiaries, together with their subsidiaries. Except as noted,
all voting securities of the listed subsidiaries are 100% beneficially
owned by the Registrant or a subsidiary thereof.
State or Country Number
of Incorporation of
Name of Company or Organization Parent
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
1 EG&G, Inc. Massachusetts N/A
2 EG&G Alabama, Inc. Alabama 1
3 EG&G Aluminum, Inc. Delaware 33
4 EG&G Astrophysics Research Corporation California 1
5 EG&G Automotive Research, Inc. Texas 22
6 EG&G Birtcher, Inc. California 33
7 EG&G Benelux B.V. Netherlands 73 (77%) 1 (23%)
8 EG&G Canada Investments, Inc. Canada 86
9 EG&G Canada Limited Canada 1 (10%) 28 (43.5%) 38(46.5%)
10 EG&G Chandler Engineering Company Oklahoma 1
11 EG&G Defense Materials, Inc. Utah 1
12 EG&G do Brasil Ltda. Brazil 22 (95%) 85 (5%)
13 EG&G Dynatrend, Inc. Delaware 1
14 EG&G E.C. Bahrain 22
15 EG&G Energy Measurements, Inc. Nevada 1
16 EG&G Environmental, Inc. Delaware 1
17 EG&G Exporters Ltd. U.S. Virgin Islands 22
18 EG&G Florida, Inc. Florida 1
19 EG&G Flow Technology, Inc. Arizona 1
20 EG&G Gamma Scientific, Incorporated Delaware 22
21 EG&G GmbH Germany 22
22 EG&G Holdings, Inc. Massachusetts 1 (87%) 24 ( 6%) 71 (5%)
10(2%)
23 EG&G Idaho, Inc. Idaho 22
24 EG&G Instruments, Inc. Delaware 22
25 EG&G Instruments GmbH Germany 1
26 EG&G International, Ltd. Cayman Islands 22
27 EG&G Japan, Inc. Delaware 22
28 EG&G Judson Infrared, Inc. Pennsylvania 1
29 EG&G KT Aerofab, Inc. California 22
30 EG&G Langley, Inc. Virginia 18
31 EG&G Ltd. United Kingdom 22 (80.9%) 4 (19.1%)
32 EG&G Management Systems, Inc. New Mexico 1
33 EG&G Metals, Inc. Massachusetts 1
34 EG&G Missouri Metal Shaping Company Missouri 22
35 EG&G Mound Applied Technologies, Inc. Ohio 1
36 EG&G Omni, Inc. Philippines 22
37 EG&G Power Systems, Inc. California 1
38 EG&G Pressure Science Incorporated Maryland 22
39 EG&G Rocky Flats, Inc. Colorado 1
40 EG&G Sealol Eagle, Inc. Delaware 42 (51%)
41 EG&G Sealol Ltd. (Sealol Egypt) Egypt 22 (22%) 26 (78%)
42 EG&G Sealol, Inc. Delaware 22
43 EG&G Services, Inc. Delaware 1
44 EG&G Special Projects, Inc. Nevada 1
45 EG&G Star City, Inc. Ohio 2
46 EG&G Structural Kinematics, Inc. Michigan 1
47 EG&G S.A. France 26
48 EG&G SpA Italy 22
49 EG&G Technical Services West Virginia 51
of West Virginia, Inc.
50 EG&G Ventures, Inc. Massachusetts 1
51 EG&G Washington Analytical District of Columbia 1
Services Center, Inc.
52 EG&G Watertown, Inc. Massachusetts 73
53 Antarctic Support Associates (Partnership) Colorado 1 (40%)
54 Benelux Analytical Instruments S.A. Belgium 1 (92.3%)
55 Berthold Analytical Instruments, Inc. Delaware 1
56 Berthold A.G. Switzerland 58
57 Berthold France S.A. France 47
58 Berthold GmbH Germany 1
59 Berthold Munchen GmbH Germany 67 (60%)
60 Biozone Oy Finland 83
61 B.A.I. GmbH Austria 58
62 Eagle EG&G Aerospace Co. Ltd. Japan 1 (49%)
63 EC III, Inc. New Mexico 1 (50%)
64 Heimann Optoelectronics GmbH Germany 67
65 Heimann Shenzhen Optoelectronics Co. Ltd. China 64 (90%)
66 IC Sensors, Inc. California 1
67 Laboratorium Prof. Dr. Rudolf Germany 21 (58.0%) 25 (2.3%)
5(39.7%)
Berthold GmbH & Co. KG
68 NOK EG&G Optoelectronics Corporation Japan 1 (49%)
69 Pribori Oy Finland 83
70 PT EG&G Heimann Optoelectronics Indonesia 22
71 Reticon Corporation California 1
72 Reynolds Electrical & Engineering Co., Inc. Texas 1
73 Rotron Incorporated New York 1
74 Science Support Corporation Delaware 1
75 Sealol Hindustan Limited India 42 (20%)
76 Sealol S.A. Venezuela 42
77 Seiko EG&G Co. Ltd. Japan 1 (49%)
78 Shanghai EG&G Reticon China 71 (50%)
Optoelectronics Co. Ltd
79 Societe Civile Immobiliere France 1 (82.5%) 57 (17.5%)
80 Vactec, Inc. Missouri 1
81 WALLAC A/S Denmark 83
82 WALLAC Norge AS Norway 83
83 WALLAC Oy Finland 22
84 WALLAC Sverige AB Sweden 83
85 WALLAC, Inc. Maryland 1
86 Wellesley B.V. Netherlands 87
87 Wickford N.V. Netherlands Antillies 26
88 Wright Components, Inc. New York 1
89 ZAO Pribori Russia 69
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 76,204
<SECURITIES> 0
<RECEIVABLES> 211,903
<ALLOWANCES> 4,356
<INVENTORY> 114,199
<CURRENT-ASSETS> 468,686
<PP&E> 417,566
<DEPRECIATION> 270,026
<TOTAL-ASSETS> 803,915
<CURRENT-LIABILITIES> 250,451
<BONDS> 115,222
<COMMON> 60,102
0
0
<OTHER-SE> 306,844
<TOTAL-LIABILITY-AND-EQUITY> 803,915
<SALES> 1,419,578
<TOTAL-REVENUES> 1,419,578
<CGS> 512,970
<TOTAL-COSTS> 1,052,046
<OTHER-EXPENSES> 284,859
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,514
<INCOME-PRETAX> 86,059
<INCOME-TAX> 31,755
<INCOME-CONTINUING> 54,304
<DISCONTINUED> 13,736
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,040
<EPS-PRIMARY> 1.32
<EPS-DILUTED> 1.32
</TABLE>
