<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the quarterly period ended July 3, 1999 or
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from __________ to _________
Commission file number 1-10068
ACUSON CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2784998
------------------------ ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
1220 Charleston Road
P. O. Box 7393
Mountain View, CA 94039-7393
(Address of principal executive offices)
Registrant's telephone number, including area code, is (650) 969-9112
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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $0.0001 par value 26,797,732 shares
-------------------------------- -----------------------------
(Class) Outstanding at August 7, 1999
<PAGE>
________________________________________________________________________________
FORM 10-Q
ACUSON CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
Number
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of
July 3, 1999 and December 31, 1998 1
Condensed Consolidated Statements of Operations
and Comprehensive Income for the Three Months
Ended July 3, 1999 and July 4, 1998 and for the Six
Months Ended July 3, 1999 and July 4, 1998 2
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended July 3, 1999 and
July 4, 1998 3
Notes to Condensed Consolidated Financial Statements 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 13
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 14
ITEM 4. Submission of Matters to a Vote of Security Holders 14
ITEM 6. Exhibits and Reports on Form 8-K 15
Signature 16
</TABLE>
<PAGE>
________________________________________________________________________________
ACUSON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
July 3, December 31,
1999 1998
_____________________________________________________________________________________________________________________
Assets
Current Assets
<S> <C> <C>
Cash and cash equivalents $ 21,998 $ 11,914
Accounts receivable, net of allowance for doubtful accounts
of $3,534 in 1999 and $3,561 in 1998 141,663 153,672
Inventories 96,556 82,794
Deferred income taxes 22,024 21,441
Other current assets 21,209 19,059
-------- --------
Total current assets 303,450 288,880
Property and Equipment, at cost, net of accumulated depreciation and
amortization of $158,054 and $150,984 in 1999 and 1998, respectively 77,126 79,009
Other Assets, net 29,100 27,183
-------- --------
Total Assets $409,676 $395,072
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Short-term borrowings $ -- $ 65,000
Current portion of long-term debt 800 --
Accounts payable 29,777 26,629
Other accrued liabilities 90,417 97,855
-------- --------
Total current liabilities 120,994 189,484
-------- --------
Long-term debt 74,200 --
-------- --------
Commitments and Contingencies (Notes 6 and 7)
Stockholders' Equity
Preferred stock, par value $0.0001:
authorized, 10,000 shares; outstanding, none -- --
Common stock and additional paid-in capital, common stock par value
$0.0001: authorized, 50,000 shares; outstanding, 26,787 shares
and 26,746 shares in 1999 and 1998, respectively 127,870 125,015
Accumulated other comprehensive loss (2,006) (1,099)
Retained earnings 88,618 81,672
-------- --------
Total stockholders' equity 214,482 205,588
-------- --------
Total Liabilities and Stockholders' Equity $409,676 $395,072
======== ========
_______________________________________________________________________________________________________________________
</TABLE>
The accompanying notes are an integral part of these statements.
1
<PAGE>
________________________________________________________________________________
ACUSON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------------------------------------------------
July 3, July 4, July 3, July 4,
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales
Product $ 97,072 $ 90,961 $ 193,699 $ 184,540
Service 22,848 22,332 45,188 44,531
-------- -------- --------- ---------
Total net sales 119,920 113,293 238,887 229,071
-------- -------- --------- ---------
Cost of sales
Product 53,259 48,124 105,867 96,575
Service 11,421 11,629 22,770 23,642
-------- -------- --------- ---------
Total cost of sales 64,680 59,753 128,637 120,217
-------- -------- --------- ---------
Gross profit 55,240 53,540 110,250 108,854
-------- -------- --------- ---------
Operating expenses
Selling, general and administrative 32,643 32,497 64,340 64,527
Product development 15,205 14,933 29,883 29,823
-------- -------- --------- ---------
Total operating expenses 47,848 47,430 94,223 94,350
-------- -------- --------- ---------
Income from operations 7,392 6,110 16,027 14,504
Interest expense (1,278) (650) (2,492) (1,224)
Interest income 443 453 632 843
-------- -------- --------- ---------
Income before income taxes 6,557 5,913 14,167 14,123
Provision for income taxes 1,803 1,774 3,896 4,237
-------- -------- --------- ---------
Net income $ 4,754 $ 4,139 $ 10,271 $ 9,886
======== ======== ========= =========
Earnings per share
Basic $ 0.18 $ 0.15 $ 0.38 $ 0.35
======== ======== ========= =========
Diluted $ 0.17 $ 0.14 $ 0.38 $ 0.34
======== ======== ========= =========
Weighted average common and common equivalent
shares outstanding
Basic 26,777 28,028 26,769 28,153
======== ======== ========= =========
Diluted 27,528 28,954 27,331 29,043
======== ======== ========= =========
- ------------------------------------------------------------------------------------------------------------------------------------
Net Income $ 4,754 $ 4,139 $ 10,271 $ 9,886
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments (295) 115 (907) (98)
-------- -------- --------- ---------
Comprehensive income $ 4,459 $ 4,254 $ 9,364 $ 9,788
======== ======== ========= =========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
________________________________________________________________________________
ACUSON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
--------------------------
July 3, July 4,
1999 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 10,271 $ 9,886
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 11,602 11,295
Tax benefit of employee stock transactions 55 592
Changes in:
Accounts receivable 11,346 (1,372)
Leases receivable (3,403) (3,425)
Inventories (13,670) (5,177)
Deferred income taxes (622) (253)
Other current assets (2,032) 1,757
Accounts payable 3,437 668
Other accrued liabilities (5,338) (2,834)
--------- --------
Net cash provided by operating activities 11,646 11,137
--------- --------
Cash flows from investing activities
Investment in property and equipment (10,919) (15,294)
Sale of fixed assets 233 134
Other 94 (109)
--------- --------
Net cash used in investing activities (10,592) (15,269)
--------- --------
Cash flows from financing activities
Repayments of short-term borrowings (106,400) (11,000)
Borrowings under short-term borrowing agreement 41,400 19,000
Issuance of long-term debt 75,000 --
Repurchase of common stock (4,846) (17,164)
Issuance of common stock under stock option and
stock purchase plans 4,320 7,423
--------- --------
Net cash provided by (used in) financing activities 9,474 (1,741)
--------- --------
Effect of exchange rate changes on cash (444) (110)
--------- --------
Net increase (decrease) in cash 10,084 (5,983)
Cash, beginning of period 11,914 22,735
--------- --------
Cash, end of period $ 21,998 $ 16,752
========= ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
________________________________________________________________________________
ACUSON CORPORATION
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Note 1 - Interim Statements
In the opinion of management, the unaudited interim condensed consolidated
financial statements include all adjustments, which include only normal
recurring adjustments, necessary to summarize fairly Acuson Corporation's (the
"Company's") condensed consolidated financial position as of July 3, 1999, and
its condensed consolidated results of operations and cash flows for the six-
month periods ended July 3, 1999, and July 4, 1998. The results of operations
for the three and six-month periods ended July 3, 1999, are not necessarily
indicative of the results to be expected for the entire year ending December 31,
1999. Certain information reported in the prior year has been reclassified to
conform to the 1999 presentation.
The Company's principal accounting policies are set forth in the financial
statements for the year ended December 31, 1998, and notes thereto, contained in
the Company's Annual Report filed with the Securities and Exchange Commission.
Note 2. Comprehensive Income (Loss)
Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income," requires that items defined as other comprehensive
income, such as changes in foreign currency translation adjustments, be
separately reported in the financial statements and that the accumulated balance
of other comprehensive income be reported separately from retained earnings and
additional paid-in capital in the equity section of the balance sheet.
The following is a summary, in thousands, of the accumulated other comprehensive
loss balance:
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive
Loss
--------------------
<S> <C>
Six months ended July 3, 1999
Beginning balance $(1,099)
Current-period change (907)
-------
Ending balance $(2,006)
=======
</TABLE>
The following is a summary, in thousands, of the related tax effect allocated to
each component of other comprehensive income (loss):
<TABLE>
<CAPTION>
Tax
Before-Tax (Expense) Net-of-Tax
Amount or Benefit Amount
--------------------------------------------------------------
<S> <C> <C> <C>
Three months ended July 4, 1998
Foreign currency translation adjustments $ 164 $ (49) $ 115
====== ====== =======
Six months ended July 4, 1998
Foreign currency translation adjustments $ (140) $ 42 $ (98)
====== ====== =======
Three months ended July 3, 1999
Foreign currency translation adjustments $ (407) $ 112 $ (295)
====== ====== =======
Six months ended July 3, 1999
Foreign currency translation adjustments $(1,251) $ 344 $ (907)
======= ====== =======
</TABLE>
4
<PAGE>
Note 3 - Earnings Per Share
Basic earnings per share excludes dilution and is computed by dividing net
income by the weighted average number of common shares outstanding. Diluted
earnings per share reflects the potential dilution that could occur if the
Company's outstanding, "in the money," stock options were exercised. Diluted
earnings per share is computed by dividing net income by the weighted average
number of common and common equivalent shares outstanding during the period.
Common equivalent shares are calculated using the treasury stock method and
represent incremental shares issuable upon the exercise of the Company's
outstanding options. The following table, in thousands except per share amounts,
provides reconciliations of the numerators and denominators used in calculating
basic and diluted earnings per share for the three and six-month periods ended
July 4, 1998 and July 3, 1999:
<TABLE>
<CAPTION>
Dilutive
Effect of
Options
Basic Outstanding Diluted
------------------------------------------------------------
<S> <C> <C> <C>
Three months ended July 4, 1998
Net income (numerator) $ 4,139 $ 4,139
Weighted average number of
shares outstanding (denominator) 28,028 926 28,954
Earnings per share $ 0.15 $ 0.14
======= =======
Six months ended July 4, 1998
Net income (numerator) $ 9,886 $ 9,886
Weighted average number of
shares outstanding (denominator) 28,153 890 29,043
Earnings per share $ 0.35 $ 0.34
======= =======
Three months ended July 3, 1999
Net income (numerator) $ 4,754 $ 4,754
Weighted average number of
shares outstanding (denominator) 26,777 751 27,528
Earnings per share $ 0.18 $ 0.17
======= =======
Six months ended July 3, 1999
Net income (numerator) $10,271 $10,271
Weighted average number of
shares outstanding (denominator) 26,769 562 27,331
Earnings per share $ 0.38 $ 0.38
======= =======
</TABLE>
For the three and six-month periods ended July 3, 1999 approximately 1,720,000
and 1,930,000 weighted average options to purchase shares of common stock,
respectively, were antidilutive and were therefore not included in the
computation of diluted earnings per share because the exercise prices were
greater than the average market price of the common shares. Approximately
570,000 and 677,000 antidilutive weighted average options were outstanding
during the three and six-month periods ended July 4, 1998, respectively.
Note 4 - Inventories
The components of inventories were as follows (in thousands):
<TABLE>
<CAPTION>
July 3, Dec. 31,
1999 1998
-----------------------------------
<S> <C> <C>
Raw materials $ 27,025 $ 25,052
Work-in-process 23,919 21,656
Finished goods 45,612 36,086
--------- --------
Total inventories $ 96,556 $ 82,794
========= ========
</TABLE>
5
<PAGE>
Note 5 - Short-Term Borrowings
On April 9, 1999, the Company repaid in full the outstanding balance under its
existing $100.0 million credit agreement. Also on April 9, 1999, the $100.0
million credit agreement was terminated and replaced with a new revolving
unsecured credit agreement for $40.0 million, which is in effect through March
2000. Under the terms of the agreement, no compensating balances are required
and the interest rate is determined at the time of borrowing based on the London
interbank offered rate plus a margin, or prime rate for overnight borrowings. At
July 3, 1999, there were no borrowings against this line of credit.
The Company also has an uncommitted line of credit for up to 90-day advances not
to exceed an aggregate total of $10.0 million. At July 3, 1999, there were no
borrowings against this uncommitted line of credit.
Note 6 - Long-Term Debt
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
July 3, December 31,
1999 1998
-----------------------------------------
<S> <C> <C>
Senior notes due 2004 $ 4,000 $ ---
Senior notes due 2006 71,000 ---
-------- -------
Total 75,000 ---
Current maturities (800) ---
-------- -------
Long-term debt $ 74,200 $ ---
======== =======
</TABLE>
On April 9, 1999, the Company issued an initial series of unsecured senior notes
for $75.0 million. Of this total, senior notes in the amount of $71.0 million
were issued with an effective coupon of 6.59 percent and a final maturity of
seven years with an average life of five years. The remaining senior notes,
totaling $4.0 million, were issued with an effective coupon of 6.39 percent and
a final maturity of five years with an average life of three years. Subsequent
series of senior notes totaling $5.0 million may be issued at the discretion of
the Company.
Maturities of the Company's long-term debt at July 3, 1999 are as follows (in
thousands):
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
2000 $ 800
2001 800
2002 15,000
2003 15,000
2004 15,000
Thereafter 28,400
Total -------
$75,000
=======
</TABLE>
Note 7 - Legal Contingencies
On October 27, 1994, the Company was sued in Ghent, Belgium, by Cormedica NV, in
connection with the Company's termination of its distributor relationship with
Cormedica. In the suit, Cormedica seeks indemnities and damages in the amount of
approximately $2.5 million, plus interest. The Company intends to defend this
suit vigorously. This suit is still in the fact-finding stage.
Note 8 - Industry Segment and Geographic Information
During 1998 the Company adopted Statement of Financial Accounting Standards No.
131 ("SFAS 131"), "Disclosures About Segments of an Enterprise and Related
Information."
6
<PAGE>
The Company is organized based upon the nature of the products and services it
offers. Under this organizational structure, the Company operates in two
fundamental business segments: product and service. The product segment includes
the development, manufacture and sale of the Company's systems that generate,
display, archive and retrieve medical diagnostic ultrasound images. The service
segment provides service and support for the Company's products in accordance
with the various service contracts and other purchase arrangements the Company
makes available to its customers. The Company's products are manufactured at its
world headquarters in Mountain View, California, and are sold through a direct
sales force in North America, Europe, Australia and Japan, and through
independent distributors in Europe, Asia, South America and the Middle East.
The information in the following tables, in thousands, is derived directly from
the Company's internal financial reporting used for corporate management
purposes. The Company evaluates its segments' performance based on several
factors, of which the primary financial measure is controllable contribution.
Controllable contribution is gross margin less selling expenses. Unallocated
costs include corporate and other costs not allocated to business segments for
management reporting purposes. The accounting policies followed by the Company's
business segments are the same as those set forth in the financial statements
for the year ended December 31, 1998, and notes thereto, contained in the
Company's Annual Report filed with the Securities and Exchange Commission.
Except for inventory, the Company does not allocate assets by segment for
management reporting purposes.
<TABLE>
<CAPTION>
Revenue from external customers
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
July 3, 1999 July 4, 1998 July 3, 1999 July 4, 1998
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Product $ 97,072 $ 90,961 $ 193,699 $ 184,540
Service 22,848 22,332 45,188 44,531
---------- --------- --------- ---------
Total revenue $ 119,920 $ 113,293 $ 238,887 $ 229,071
========== ========= ========= =========
Income before income taxes
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
July 3, 1999 July 4, 1998 July 3, 1999 July 4, 1998
- -----------------------------------------------------------------------------------------------------------------------------
Product $ 18,505 $ 17,733 $ 36,088 $ 36,834
Service 10,880 10,652 21,245 20,747
---------- --------- --------- ---------
Controllable contribution 29,385 28,385 57,333 57,581
Unallocated expense (21,993) (22,275) (41,306) (43,077)
Interest expense (1,278) (650) (2,492) (1,224)
Interest income 443 453 632 843
---------- --------- --------- ---------
Income before income taxes $ 6,557 $ 5,913 $ 14,167 $ 14,123
========== ========= ========= =========
Segment Assets-Inventory
July 3, 1999 December 31, 1998
- ---------------------------------------------------------------------------------------------------
Product $ 81,630 $ 69,381
Service 14,926 13,413
-------- --------
Total inventory 96,556 82,794
-------- --------
</TABLE>
7
<PAGE>
Geographic area information is as follows (in thousands):
<TABLE>
<CAPTION>
Revenue from external customers
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
July 3, 1999 July 4, 1998 July 3, 1999 July 4, 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
United States $ 85,689 $ 81,870 $166,498 $161,055
Europe 23,087 22,662 47,327 49,453
Other foreign 11,144 8,761 25,062 18,563
-------- -------- -------- --------
Total revenue $119,920 $113,293 $238,887 $229,071
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Total assets
July 3, 1999 December 31, 1998
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
United States $393,117 $370,115
Europe 68,353 72,454
Other foreign 19,689 18,677
Eliminations (71,483) (66,174)
-------- --------
Total assets $409,676 $395,072
======== ========
</TABLE>
Geographic revenue from external customers represents shipments to foreign
customers from both domestic and foreign operations. As of and for the three and
six-month periods ended July 3, 1999, and July 4, 1998, as well as for the year
ended December 31, 1998, operations in any single non-U.S. country did not
account for more than 10 percent of consolidated net sales or total assets.
Also, during 1999 and 1998, no single customer or group under common control
represented 10 percent or more of the Company's sales.
Note 9 - Disclosure of the Impact That Recently Issued Financial Standards Will
Have on the Financial Statements When Adopted in a Future Period
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." This statement will require companies to
recognize all derivatives, including those used for hedging foreign currency
exposures, on the balance sheet at fair value and is effective for all fiscal
years beginning after June 15, 2000. Management has not yet determined what
effect SFAS 133 will have on the Company's financial statements or results of
operations.
8
<PAGE>
_______________________________________________________________________________
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the quarter ended July 3, 1999, were $119.9 million, compared with
$113.3 million for the quarter ended July 4, 1998. For the first six months of
1999, net sales were $238.9 million, compared with $229.1 million for the same
period in 1998. Worldwide product revenue increased 6.7 percent to $97.1 million
and 5.0 percent to $193.7 million for the three and six-month periods ended July
3, 1999, respectively, largely as a result of stronger platform sales. Worldwide
service revenue increased 2.3 percent to $22.8 million and 1.5 percent to $45.2
million for the three and six-month periods ended July 3, 1999, respectively.
The increase in service revenue reflects a platform shift from the Company's
128XP(R) ultrasound systems to its Sequoia(R) and Aspen(TM) ultrasound systems.
Domestic revenue increased 4.7 percent to $85.7 million for the second quarter
of 1999, and 3.4 percent to $166.5 million for the six months ended July 3,
1999. The increases in domestic revenue were primarily due to greater sales of
new ultrasound systems. Sales of product options the Company offers on all of
its systems remained relatively consistent with the prior year but are
expected to increase during the second half of 1999 as the Company ramps up
shipments of its Native(TM) Tissue Harmonic Imaging option for its installed
base of 128XP systems. For the three and six-month periods ended July 3, 1999,
international revenues increased 8.9 percent and 6.4 percent to $34.2 million
and $72.4 million, respectively. The increases in international revenue were
primarily concentrated in a few select markets, notably Canada and Japan
during the second quarter of 1999 and China during the first quarter of 1999.
Although international revenues increased over the prior year periods, the
Company expects selected international markets to remain challenging.
Gross profit for the second quarter of 1999 decreased to 46.1 percent from 47.3
percent for the second quarter of 1998. For the six months ended July 3, 1999,
gross profit decreased to 46.2 percent from 47.5 percent for the same period in
1998. The decreases were primarily due to competitive pricing pressures and
declining margins related to the Company's used and refurbished systems
business.
Selling, general and administrative expenses for the second quarter of 1999 were
$32.6 million or 27.2 percent of net sales, compared with $32.5 million or 28.7
percent of net sales for the second quarter of 1998. For the six months ended
July 3, 1999, selling, general and administrative expenses were $64.3 million or
26.9 percent of net sales compared with $64.5 million or 28.2 percent of net
sales for the same period in 1998.
Product development spending for the second quarter of 1999 was $15.2 million or
12.7 percent of net sales, compared with $14.9 million or 13.2 percent of net
sales for the second quarter of 1998. For the six months ended July 3, 1999,
product development costs were $29.9 million or 12.5 percent of net sales,
compared with $29.8 million or 13.0 percent of net sales for the same period in
1998.
Selling, general and administrative expenses and product development spending
were relatively consistent with prior year amounts on both a quarter to quarter
and six-month to six-month basis. Future operating expenses are expected to
increase as the Company continues to invest in new product development and
related sales support.
Interest expense for the three and six-month periods ended July 3, 1999, was
$1.3 million and $2.5 million, respectively, compared with $0.7 million and $1.2
million for the three and six-month periods ended July 4, 1998. The increases
were the result of greater weighted average borrowings during both the first and
second quarters of 1999.
The provision for income taxes was $1.8 million for the second quarters of both
1999 and 1998. For the six months ended July 4, 1999, the provision for income
taxes was $3.9 million, compared with a provision of $4.2 million for the same
period in 1998. The effective tax rate for both the three and six-month periods
ended July 3, 1999, was 27.5 percent compared with an effective rate of 30.0
percent for both the three and six-month periods ending July 4, 1998.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." This statement will require
9
<PAGE>
companies to recognize all derivatives, including those used for hedging foreign
currency exposures, on the balance sheet at fair value and is effective for all
fiscal years beginning after June 15, 2000. Management has not yet determined
what effect SFAS 133 will have on the Company's financial statements or results
of operations.
Liquidity and Capital Resources
During the six months ended July 3, 1999, the Company's cash and cash
equivalents balance increased $10.1 million. The Company's operating activities
generated $11.6 million in cash. The primary sources of cash were net income and
a decrease in accounts receivable, which provided $10.3 million and $11.3
million in cash, respectively. The decrease in accounts receivable was mainly
the result of improved collection efforts. The primary use of cash was an
increase in inventory due to an increase in finished goods inventory and the
Company's continued support of its loaned systems programs.
The Company's investing and financing activities for the six months ended July
3, 1999, used $1.1 million in cash. The Company invested $10.9 million in
equipment during the first six months of 1999, a substantial portion of which
consisted of computer equipment, software, and other capitalized expenses
associated with its new enterprise-wide, integrated business information system.
Included in the financing activities for the first half of 1999 were net
borrowings of $10.0 million and $4.3 million raised through employee
participation in the Company's stock option and stock purchase plans. Also
included in the financing activities for the first half of 1999 was $4.8 million
used for share repurchases.
During 1996, the Board of Directors authorized the repurchase of 4,000,000
shares of common stock over an unspecified period of time. During the second
quarter of 1999, the Company repurchased 69,900 shares at a total cost of $1.1
million. As of July 3, 1999, the Company had repurchased 3,847,300 shares toward
the 1996 authorization at a cumulative cost of $67.3 million. During the first
quarter of 1999, the Board of Directors authorized the repurchase of an
additional 4,000,000 shares of common stock over an unspecified period of time.
As of July 3, 1999, there were no repurchases against this authorization.
Working capital at July 3, 1999 increased $83.1 million over the year ended
December 31, 1998. The increase was primarily the result of the Company
refinancing its short-term debt with long-term debt. At July 3, 1999, the
Company's working capital totaled $182.5 million.
On April 9, 1999, the Company issued an initial series of unsecured senior notes
for $75.0 million. Of this total, senior notes in the amount of $71.0 million
were issued with an effective coupon of 6.59 percent and a final maturity of
seven years with an average life of five years. The remaining senior notes,
totaling $4.0 million, were issued with an effective coupon of 6.39 percent and
a final maturity of five years with an average life of three years. Subsequent
series of senior notes totaling $5.0 million may be issued at the discretion of
the Company.
The proceeds from the issuance of the senior notes were used to refinance
existing debt and on April 9, 1999, the Company repaid in full the outstanding
balance under its existing $100.0 million credit agreement. Also on April 9,
1999, the $100.0 million credit agreement was terminated and replaced with a new
revolving unsecured credit agreement for $40.0 million, which is in effect
through March 2000. Under the terms of the agreement, no compensating balances
are required and the interest rate is determined at the time of borrowing based
on the London interbank offered rate plus a margin, or prime rate for overnight
borrowings. At July 3, 1999, there were no borrowings against this line of
credit.
The Company also has an uncommitted line of credit for up to 90-day advances not
to exceed an aggregate total of $10.0 million. At July 3, 1999, there were no
borrowings against this uncommitted line of credit.
Based on its current operating plan, the Company believes that the liquidity
provided by its existing cash, the borrowing arrangements described above and
cash generated from operations will be sufficient to meet the Company's
projected operating and capital requirements for fiscal 1999.
Investment Risks and Other Factors That May Affect Future Results
10
<PAGE>
The Management's Discussion and Analysis of Financial Condition and Results of
Operations section in this report contains forward-looking statements regarding
the Company and its products. These forward-looking statements are based on
current expectations and the Company assumes no obligation to update this
information. The Company's actual results could differ materially from those
discussed in this document. In evaluating the forward-looking statements
contained in this document, prospective investors and shareholders should
carefully consider the factors set forth below.
Increased product option sales during the second half of 1999 depend, among
other things, upon timely completion of a number of product capabilities
currently under development and market acceptance of upgrades currently
offered by the Company, including Native Tissue Harmonic Imaging for the 128XP
system, and those under development for introduction this year. In addition,
in general, the success of the Company's products in the market and the
Company's financial results depend upon the Company continuing to develop and
introduce products and software updates in a timely manner; upon the success
of product cost reduction designs and initiatives; upon the actual and
perceived levels of product performance and quality in a clinical environment
compared to other imaging modalities and competitive products; upon continued
market acceptance of the Company's products and upgrades and their respective
pricing; and upon competitor responses, including the introduction of
competitive products and upgrades, pricing, intellectual property allegations
and product positioning counter-strategies.
International Operations and International Receivables:
The Company's business is subject to risks from potential negative impacts of
weakness in certain markets in Asia, Latin America and Europe, and by adverse
economic impacts from currency fluctuations in its worldwide operations.
Political instability or other issues may impact the ability of the Company to
collect receivables in foreign countries. The following table, in thousands,
summarizes the Company's foreign accounts and leases receivable in excess of
$3.0 million at July 3, 1999.
<TABLE>
<CAPTION>
July 3, 1999
------------
<S> <C>
Italy $15,369
Brazil 12,155
France 5,786
Australia 5,600
Germany 4,471
Japan 4,243
Sweden 3,385
China 3,044
</TABLE>
Company's Computing Environment:
During 1997, the Company initiated a two-phase project to replace its outdated
computing environment with an enterprise-wide, integrated business information
system to control many of its operating systems including order administration,
service and financial and manufacturing processes. The first phase of this
project has been substantially completed and the second phase is currently
scheduled to be completed during the latter half of 2000. The Company has
retained an experienced consulting organization to assist in the conversion,
however, the Company's future shipments and results could be adversely impacted
if, during and following the conversion, there are significant problems with the
system.
Year 2000 Readiness:
The Company is taking steps to ensure its products and services will continue to
operate on and after January 1, 2000. In addition to the Company's new business
information system, which is year 2000 ready and will be replacing a significant
portion of the Company's critical systems, the Company is currently engaged in a
three-phase project to evaluate and remedy those systems not being replaced.
The first phase, completed in May 1998, included a comprehensive inventory of
the Company's systems by an experienced consulting firm and an analysis and
determination of the criticality of each system. This phase included the
evaluation of both information technology ("IT") and non-IT systems. Non-IT
systems include systems or hardware containing embedded technology such as
microcontrollers. The second phase was completed in March 1999, and focused on
confirming the year 2000 readiness of those systems identified in phase one. The
third and
11
<PAGE>
final phase, which is expected to be completed early in the fourth quarter of
1999, will involve taking any needed corrective action to make all remaining
critical systems and components year 2000 ready and to develop a contingency
plan in the event any non-compliant critical systems are not remedied by January
1, 2000.
The Company expects the project to be successfully completed during the fourth
quarter of 1999 and has established a year 2000 project team, comprised of
representatives from each of the Company's functional areas, which reports to
senior management. However, if by January 1, 2000, systems material to the
Company's operations have not been made year 2000 ready, or if the Company fails
to retain or recruit knowledgeable experts, the year 2000 issue could have a
material impact on the Company's financial statements. To date, the costs
incurred by the Company with respect to this project have not been material and,
except for the potential future purchase of additional inventory noted below,
future anticipated costs are not expected to be material. The costs of this
project have been charged against the budgets of the Company's various
functional areas and no material IT projects have been deferred in managing the
Company's year 2000 readiness efforts.
The Company's products being shipped today are year 2000 ready and the Company
believes its products previously shipped are either year 2000 ready or can be
made year 2000 ready by customer purchase of an upgrade.
The Company has also been communicating with suppliers and others it does
business with to coordinate year 2000 readiness. The Company believes that its
most reasonably likely worst case scenario relating to year 2000 readiness would
be if a critical supplier of the Company became unable to supply parts to the
Company based on the supplier's failure to be year 2000 ready, and that as a
result the Company's production of systems would be seriously affected. The
Company has contacted all of what it considers to be its key technology
suppliers and approximately 100 of its largest general suppliers. To date,
responses have been received from all but a few of those contacted and those
responses are currently being individually assessed to determine the potential
impact, if any, to the Company should one or more of the Company's suppliers not
be year 2000 ready. The Company expects to complete these assessments during the
third quarter of 1999, and, based on the results of these assessments, the
Company will develop any necessary contingency plans. These plans may include
the purchase of additional inventory as protection against a supplier being
unable to supply a critical component as a result of the year 2000 issue.
Based upon the steps being taken to address this issue and the progress to date,
the Company does not expect the financial impact of the year 2000 date
conversion to be material to its financial position or results of operations,
although at this stage the magnitude of any possible inventory purchases is not
known. However, if preventative and/or corrective actions by the Company or
those suppliers with whom the Company does business are not made in a timely
manner, the Company may not be able to provide its products to customers until
successful preventative and/or corrective actions have been taken, and as a
result, the year 2000 issue could have a material adverse effect on the
Company's financial statements.
The Company primarily sells its products to hospitals, clinics, and other
customers within the healthcare industry. Although no one customer is material
to the Company's business, should the year 2000 issue impact the ability and
willingness of these customers generally to purchase capital equipment,
including the Company's products, the year 2000 issue could have a material
adverse impact on the Company's consolidated financial statements.
Derivative Financial Instruments:
The Company operates internationally and is subject to market risk due to
fluctuations in foreign currency exchange rates. The Company manages this risk
through established policies and procedures that include the use of derivative
financial instruments. The Company routinely enters into forward foreign
currency exchange contracts to hedge amounts due from selected subsidiaries
denominated in foreign currencies against fluctuations in exchange rates.
Forward currency contract terms are typically not more than three months and the
counterparties to the exchange contracts are major domestic and international
financial institutions. The purpose of the hedging activities is to minimize the
effect of foreign exchange rate movements on the Company's operating results and
on the cash flows it receives from its foreign subsidiaries.
Currently, the Company neither engages in foreign currency speculation nor holds
or issues financial instruments for trading purposes. Because the Company only
enters into forward currency exchange contracts as hedges, any change in
currency rates would not result in a material gain or loss, as any gain or loss
on the underlying transaction being hedged would be offset by the gain or loss
on the forward currency contract. For this reason, the Company believes
12
<PAGE>
that neither its exposure to foreign currency exchange rate risk nor any
potential near-term losses in future earnings, fair values or cash flows from
reasonably possible near-term changes in market rates or prices would be
material. Refer to the Company's 1998 Form 10-K, filed with the Securities and
Exchange Commission for further discussion of the Company's market risk due to
fluctuations in foreign currency exchange rates.
Euro Conversion:
On January 1, 1999, eleven of the fifteen member countries of the European Union
adopted the Euro as their common legal currency. Following the introduction of
the Euro, the local currencies of the participating countries are scheduled to
remain legal tender until June 30, 2002. During this transition period goods and
services may be paid for in either Euros or the participating country's local
currency. Thereafter, only the Euro will be legal tender in the participating
countries. The Company's foreign subsidiaries that are part of the European
Union have not yet converted to the Euro and continue to use their respective
local currencies as their functional currency. However, the conversion will be
completed prior to the June 30, 2002 deadline. The Company believes its current
accounting systems are capable of accommodating the Euro conversion with minimal
intervention and that the conversion will not have a material impact on the
competitiveness of its products in Europe. The Company also believes any costs
of addressing the Euro conversion will not have a material impact on the
Company's financial statements.
For a description of the general investment considerations and risks surrounding
Acuson's overall business and financial prospects, refer to the Company's Form
10-K filed with the Securities and Exchange Commission for the year ended
December 31, 1998.
Acuson, Sequoia and 128XP are registered trademarks and Aspen and Native are
trademarks of Acuson Corporation.
________________________________________________________________________________
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See the "Derivative Financial Instruments" disclosure in "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
13
<PAGE>
________________________________________________________________________________
PART II
ITEM 1
LEGAL PROCEEDINGS
The current status is the same as previously reported in Company's Form 10-K for
the fiscal year ended December 31, 1998.
ITEM 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) The Annual Meeting of Stockholders of the Company was held on June 8, 1999.
b) The result of Stockholders' votes at the Annual Meeting were as follows:
(i) All nominees for director of the Company were elected by the
following vote:
<TABLE>
<CAPTION>
Name Votes For Votes Against
---- ----------- ---------------
<S> <C> <C>
Daniel R. Dugan 21,466,990 198,204
Albert L. Greene 21,468,086 197,108
Karl H. Johannsmeier 21,461,620 203,574
Samuel H. Maslak 21,444,234 220,960
William J. Mercer 21,467,353 197,841
</TABLE>
(ii) Ratification and approval of the Company's 1999 Senior Executive
Bonus Plan
<TABLE>
<CAPTION>
Votes For Votes Against Abstain
---------- ------------- ---------
<S> <C> <C>
20,922,321 609,593 133,280
</TABLE>
(iii) Ratification of appointment of Arthur Andersen LLP as independent
public accountants of the Company.
<TABLE>
<CAPTION>
Votes For Votes Against Abstain
---------- ------------- ---------
<S> <C> <C>
21,602,001 21,066 42,127
</TABLE>
14
<PAGE>
ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
a) Exhibits
--------
<S> <C>
The following Exhibits are filed as part of, or incorporated by reference into,
this Form 10-Q:
10.1 Credit Agreement, dated April 9, 1999, between Acuson Corporation and ABN
AMRO BANK N.V., as agent for lenders
10.2 Note Purchase Agreement, dated April 9, 1999, between Acuson Corporation and
each of the purchasers listed in Schedule A to this Agreement
10.3 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Cudd & Co.
10.4 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and J. Romeo & Co.
10.5 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Atwell & Co.
10.6 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Hare & Co.
10.7 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Northern Life Insurance Company
10.8 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Reliastar Life Insurance Company
10.9 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Sigler & Co.
10.10 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and American United Life Insurance Company
10.11 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and American United Life Insurance Company
10.12 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Modern Woodmen of America
10.13 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Nationwide Life Insurance Company
10.14 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Nationwide Life and Annuity Insurance Company
10.15 Series A Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Allied Life Insurance Company B
10.16 Series B Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Provident Mutual Life Insurance Company
10.17 Series B Senior Unsecured Note, dated April 9, 1999, between Acuson
Corporation and Provident Mutual Life & Annuity Company of America
27.1 Financial Data Schedule
b) Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the quarter ended July 3, 1999.
</TABLE>
________________________________________________________________________________
15
<PAGE>
- ------------------------------------------------------------------------------
SIGNATURE
Pursuant to the requirements 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.
ACUSON CORPORATION
(Registrant)
August 16, 1999 By /s/ Barry Zwarenstein
------------------------------------------
Barry Zwarenstein
Vice President, Chief Financial Officer
(Duly authorized Officer and Principal
Financial Officer)
<PAGE>
Exhibit 10.1
- -------------------------------------------------------------------------------
CREDIT AGREEMENT
among
ACUSON CORPORATION
and
THE LENDERS NAMED HEREIN
and
ABN AMRO BANK N.V.,
as Agent for the Lenders
April 9, 1999
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION I. INTERPRETATION.......................... 1
1.01. Definitions................................. 1
1.02. GAAP........................................ 16
1.03. Headings.................................... 17
1.04. Plural Terms................................ 17
1.05. Time........................................ 17
1.06. Governing Law............................... 17
1.07. Construction................................ 17
1.08. Entire Agreement............................ 17
1.09. Calculation of Interest and Fees............ 17
1.10. Other Interpretive Provisions............... 17
SECTION II. CREDIT FACILITY......................... 18
2.01. Revolving Loans............................. 18
2.02. Notice of Borrowing......................... 18
2.03. Interest Rates.............................. 19
2.04. LIBOR Loan Interest Periods................. 19
2.05. Scheduled Payments.......................... 20
2.06. Purpose..................................... 20
2.07. Commitment Reductions, Etc.................. 20
2.08. Fees........................................ 21
2.09. Prepayments................................. 21
2.10. Other Payment Terms......................... 22
2.11. Notes and Interest Account.................. 23
2.12. Loan Funding................................ 23
2.13. Pro Rata Treatment.......................... 24
2.14. Change of Circumstances..................... 25
2.15. Taxes on Payments........................... 27
2.16. Funding Loss Indemnification................ 30
2.17. Replacement of Lenders...................... 30
2.18. Maturity Date Extensions.................... 30
SECTION III. CONDITIONS PRECEDENT.................... 31
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(contnued)
<TABLE>
<CAPTION>
Page
<S> <C> <C>
3.01. Initial Conditions Precedent................ 31
3.02. Conditions Precedent to Each Credit Event... 31
3.03. Covenant to Deliver......................... 31
SECTION IV. REPRESENTATIONS AND WARRANTIES.......... 32
4.01. Borrower's Representations and Warranties... 32
4.02. Reaffirmation............................... 36
SECTION V. COVENANTS............................... 36
5.01. Affirmative Covenants....................... 36
5.02. Negative Covenants.......................... 39
5.03. Financial Covenants......................... 46
SECTION VI. DEFAULT................................. 47
6.01. Events of Default........................... 47
6.02. Remedies.................................... 49
SECTION VII. THE AGENT AND RELATIONS AMONG LENDERS... 49
7.01. Appointment, Powers and Immunities.......... 49
7.02. Reliance by Agent........................... 50
7.03. Defaults.................................... 50
7.04. Indemnification............................. 50
7.05. Non-Reliance................................ 51
7.06. Resignation or Removal of Agent............. 51
7.07. Authorization............................... 51
7.08. Agent in its Individual Capacity............ 52
SECTION VIII. MISCELLANEOUS........................... 52
8.01. Notices..................................... 52
8.02. Expenses.................................... 53
8.03. Indemnification............................. 54
8.04. Waivers; Amendments......................... 54
8.05. Successors and Assigns...................... 55
8.06. Setoff; Security Interest................... 58
8.07. No Third Party Rights....................... 58
8.08. Partial Invalidity.......................... 58
</TABLE>
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
Page
<S> <C> <C>
8.09. Jury Trial.................................. 58
8.10. Counterparts................................ 58
8.11. Confidentiality............................. 59
</TABLE>
SCHEDULES
I Lenders
1.01 Pricing Grid
3.01 Initial Conditions Precedent
4.01(p) Borrower's Subsidiaries
5.02(a) Existing Indebtedness
5.02(b) Existing Liens
5.02(e) Existing Investments
EXHIBITS
A Notice of Borrowing
B Notice of Interest Period Selection
C Note
D Investment Policy
E Assignment Agreement
F Confidentiality Letter
-iii-
<PAGE>
Acuson Corporation
- ------------------------------------------------------------------------------
CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT, dated as of April 9, 1999, is entered into by and
among:
(1) ACUSON CORPORATION, a Delaware corporation ("Borrower");
--------
(2) Each of the financial institutions from time to time listed
in Schedule I hereto, as amended from time to time (such financial
----------
institutions to be referred to herein collectively as the "Lenders"); and
-------
(3) ABN AMRO BANK N.V., acting through its San Francisco
International Branch, as agent for the Lenders (in such capacity, "Agent").
-----
RECITALS
--------
A. Borrower has requested the Lenders to provide a revolving credit
facility to Borrower.
B. The Lenders are willing to provide such credit facility upon the terms
and subject to the conditions set forth herein.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION I. INTERPRETATION
- ---------- --------------
1.01. Definitions. Unless otherwise indicated in this Agreement or any
-----------
other Credit Document, each term set forth below, when used in this Agreement or
any other Credit Document, shall have the respective meaning given to that term
below or in the provision of this Agreement or other document, instrument or
agreement referenced below.
"Affiliate" shall mean, with respect to any Person, (a) each
---------
Person that, directly or indirectly, owns or controls, whether beneficially
or as a trustee, guardian or other fiduciary, five percent (5%) or more of
any class of Equity Securities of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person or
any Affiliate of such Person or (c) each of such Person's officers,
directors, joint venturers and partners; provided, however, that in no case
-------- -------
shall Agent or any Lender be deemed to be an Affiliate of Borrower or any
of its Subsidiaries for purposes of this Agreement. For the purpose of
this definition, "control" of a Person shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of its
<PAGE>
management or policies, whether through the ownership of voting securities,
by contract or otherwise.
"Agent" shall have the meaning given to that term in clause (3)
----- ----------
of the introductory paragraph hereof.
-----------------------------
"Agent's Fee Letter" shall mean the letter agreement dated as of
------------------
March 16, 1999, between Borrower and Agent.
"Agreement" shall mean this Credit Agreement.
---------
"Applicable Lending Office" shall mean, with respect to any
-------------------------
Lender, (a) initially, its office designated as such in Schedule I (or, in
----------
the case of any Lender which becomes a Lender by an assignment pursuant to
Subparagraph 8.05(c), its office designated as such in the applicable
--------------------
Assignment Agreement) and (b) subsequently, such other office or offices as
such Lender may designate to Agent as the office at which such Lender's
Loans will thereafter be maintained and for the account of which all
payments of principal of, and interest on, such Lender's Loans will
thereafter be made.
"Applicable Margin" shall mean:
-----------------
(a) With respect to any Base Rate Loan, zero percent (0%); and
(b) With respect to any LIBOR Loan at any time, the per annum
margin which is determined pursuant to the Pricing Grid and added to
the LIBO Rate for such Loan;
provided, however, that each Applicable Margin set forth in subparagraphs
-------- ------- -------------
(a) and (b) of this definition shall be increased by two percent (2.0%)
------------------------------
immediately upon the occurrence of any Event of Default described in
Subparagraph 6.01(a), 6.01(e), 6.01(f), 6.01(g) or 6.01(k) or upon receipt
----------------------------------------------------------
of written notice from Agent after the occurrence of any other Event of
Default and shall continue at such increased rate unless and until such
Event of Default is waived in accordance with this Agreement.
"Assignee Lender" shall have the meaning given to that term in
---------------
Subparagraph 8.05(c).
--------------------
"Assignment" shall have the meaning given to that term in
----------
Subparagraph 8.05(c).
--------------------
"Assignment Agreement" shall have the meaning given to that term
--------------------
in Subparagraph 8.05(c).
--------------------
"Assignment Effective Date" shall have, with respect to each
-------------------------
Assignment Agreement, the meaning set forth therein.
2
<PAGE>
"Assignor Lender" shall have the meaning given to that term in
---------------
Subparagraph 8.05(c).
--------------------
"Base Rate" shall mean, on any day, the greater of (a) the Prime
---------
Rate in effect on such date and (b) the Federal Funds Rate for such day
plus one-half percent (0.50%).
----
"Base Rate Loan" shall mean, at any time, a Loan which then bears
--------------
interest as provided in Subparagraph 2.03(a).
--------------------
"Borrower" shall have the meaning given to that term in clause
-------- ------
(1) of the introductory paragraph hereof.
---------------------------------
"Borrowing" shall mean a borrowing by Borrower consisting of the
---------
Loans made by each of the Lenders on the same date and of the same Type
pursuant to a single Notice of Borrowing.
"Business Day" shall mean any day on which (a) commercial banks
------------
are not authorized or required to close in San Francisco, California or New
York, New York and (b) if such Business Day is related to a LIBOR Loan,
dealings in Dollar deposits are carried out in the London interbank market.
"Capital Adequacy Requirement" shall have the meaning given to
----------------------------
that term in Subparagraph 2.14(d).
--------------------
"Capital Leases" shall mean any and all lease obligations that,
--------------
in accordance with GAAP, are required to be capitalized on the books of a
lessee.
"Cash Equivalents" shall mean:
----------------
(a) Direct obligations of, or obligations the principal and
interest on which are unconditionally guaranteed by, the United States
of America or obligations of any agency of the United States of
America 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;
(b) Certificates of deposit maturing within one year from the
date of acquisition thereof issued by a commercial bank or trust
company organized under the laws of the United States of America or a
state thereof or that is a Lender, provided that (A) such deposits are
denominated in Dollars, (B) such bank or trust company has capital,
surplus and undivided profits of not less than $100,000,000 and (C)
such bank or trust company has certificates of deposit or other debt
obligations rated at least A-1 (or its equivalent) by Standard and
Poor's Ratings Group or P-1 (or its equivalent) by Moody's Investors
Service, Inc.;
3
<PAGE>
(c) Open market commercial paper maturing within 270 days from
the date of acquisition thereof issued by a corporation organized
under the laws of the United States of America or a state thereof,
provided such commercial paper is rated at least A-1 (or its
equivalent) by Standard and Poor's Ratings Group or P-1 (or its
equivalent) by Moody's Investors Service, Inc.; and
(d) Any repurchase agreement entered into with a commercial bank
or trust company organized under the laws of the United States of
America or a state thereof or that is a Lender, provided that (A) such
bank or trust company has capital, surplus and undivided profits of
not less than $100,000,000, (B) such bank or trust company has
certificates of deposit or other debt obligations rated at least A-1
(or its equivalent) by Standard and Poor's Ratings Group or P-1 (or
its equivalent) by Moody's Investors Service, Inc., (C) the repurchase
obligations of such bank or trust company under such repurchase
agreement are fully secured by a perfected security interest in a
security or instrument of the type described in clause (a), (b) or (c)
----------------------
above and (D) such security or instrument so securing the repurchase
obligations has a fair market value at the time such repurchase
agreement is entered into of not less than 100% of such repurchase
obligations.
"Change of Control" shall mean, with respect to Borrower, the
-----------------
acquisition by any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), but exclusive of the holdings of any person who is a
director of Borrower on the date of this Agreement and exclusive of the
holdings of any person or group of persons which has reported or may report
on Schedule 13G under the Exchange Act and has not ceased to be eligible to
report on Schedule 13G pursuant to Rule 13d-1 of the Exchange Act) of (i)
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of twenty-five
percent (25%) or more of the outstanding Equity Securities of Borrower
entitled to vote for members of the board of directors, or (ii) all or
substantially all of the assets of Borrower and its Subsidiaries taken as a
whole.
"Change of Law" shall have the meaning given to that term in
-------------
Subparagraph 2.14(b).
--------------------
"Closing Date" shall mean the date, not later than April 9, 1999,
------------
designated by Borrower in the initial Notice of Borrowing as the date for
the initial Borrowing hereunder.
"Commitment" shall mean, with respect to any Lender at any time,
----------
such Lender's Proportionate Share at such time of the Total Commitment at
such time.
"Commitment Fee Percentage" shall mean, with respect to the
-------------------------
Unused Commitment at any time, the per annum rate which is determined
pursuant to the Pricing Grid and used to calculate the Commitment Fees.
4
<PAGE>
"Commitment Fees" shall have the meaning given to that term in
---------------
Subparagraph 2.08(c).
--------------------
"Compliance Certificate" shall have the meaning given to that
----------------------
term in Subparagraph 5.01(a).
--------------------
"Contingent Obligation" shall mean, with respect to any Person,
---------------------
(a) any Guaranty Obligation of that Person; and (b) any direct or indirect
obligation or liability, contingent or otherwise, of that Person (i) in
respect of any Surety Instrument issued for the account of that Person or
as to which that Person is otherwise liable for reimbursement of drawings
or payments, (ii) as a partner or joint venturer in any partnership or
joint venture, (iii) to purchase any materials, supplies or other property
from, or to obtain the services of, another Person if the relevant contract
or other related document or obligation requires that payment for such
materials, supplies or other property, or for such services, shall be made
regardless of whether delivery of such materials, supplies or other
property is ever made or tendered, or such services are ever performed or
tendered, or (iv) in respect to any Rate Contract that is not entered into
in connection with a bona fide hedging operation that provides offsetting
benefits to such Person. The amount of any Contingent Obligation shall
(subject, in the case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the maximum
reasonably anticipated liability in respect thereof, and shall, with
respect to item (b)(iv) of this definition be marked to market on a current
------------
basis.
"Contractual Obligation" of any Person shall mean, any indenture,
----------------------
note, lease, loan agreement, security, deed of trust, mortgage, security
agreement, guaranty, instrument, contract, agreement or other form of
contractual obligation or undertaking to which such Person is a party or by
which such Person or any of its property is bound.
"Credit Documents" shall mean and include this Agreement, the
----------------
Notes and the Agent's Fee Letter; all other documents, instruments and
agreements delivered to Agent or any Lender pursuant to Paragraph 3.01; and
--------------
all other documents, instruments and agreements delivered by Borrower or
any of its Subsidiaries to Agent or any Lender in connection with this
Agreement on or after the date of this Agreement.
"Credit Event" shall mean the making of any Loan or the selection
------------
of a new Interest Period for any LIBOR Loan.
"Current Ratio" shall mean, with respect to Borrower at any time,
-------------
the ratio, determined on a consolidated basis in accordance with GAAP, of:
(a) The current assets of Borrower and its Subsidiaries at such
time;
to
--
5
<PAGE>
(b) The sum (without duplication) of (i) the current liabilities
of Borrower and its Subsidiaries at such time plus (ii) the
outstanding principal amount of the Loans at such time.
"Default" shall mean an Event of Default or any event or
-------
circumstance not yet constituting an Event of Default which, with the
giving of any notice or the lapse of any period of time or both, would
become an Event of Default.
"Defaulting Lender" shall mean (a) a Lender which has failed to
-----------------
fund its portion of any Borrowing which it is required to fund under this
Agreement and has continued in such failure for three (3) Business Days
after written notice from Agent or (b) a Lender for which a receiver or
conservator has been appointed.
"Disclosure Letter" shall mean the letter designated as such
-----------------
dated April 9, 1999 from Borrower to Agent.
"Dollars" and "$" shall mean the lawful currency of the United
------- -
States of America and, in relation to any payment under this Agreement,
same day or immediately available funds.
"EBIRT" shall mean, with respect to Borrower for any period, the
-----
sum, determined on a consolidated basis in accordance with GAAP, of the
following:
(a) The net income or net loss of Borrower and its Subsidiaries
for such period before provision for income taxes;
plus
----
(b) The sum (to the extent deducted in calculating net income or
loss in clause (a) above and without duplication) of (i) all Interest
----------
Expenses of Borrower and its Subsidiaries accruing during such period
and (ii) all operating lease and "synthetic" lease payments of
Borrower and its Subsidiaries accruing during such period.
"EBITDA" shall mean, with respect to Borrower for any period, the
------
sum, determined on a consolidated basis in accordance with GAAP, of the
following:
(a) The net income or net loss of Borrower and its Subsidiaries
for such period before provision for income taxes;
plus
----
(b) The sum (to the extent deducted in calculating net income or
loss in clause (a) above) of (i) all Interest Expenses of Borrower and
----------
its Subsidiaries
6
<PAGE>
accruing during such period and (ii) all depreciation and amortization
expenses of Borrower and its Subsidiaries accruing during such period.
"Eligible Assignee" shall mean (a) a commercial bank organized
-----------------
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; or (c) a Person
that is primarily engaged in the business of commercial banking and that is
(i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (iii) a Person of which a Lender is a
Subsidiary.
"Employee Benefit Plan" shall mean any employee benefit plan
---------------------
within the meaning of section 3(3) of ERISA maintained or contributed to by
Borrower or any ERISA Affiliate, other than a Multiemployer Plan.
"Environmental Laws" shall mean the Clean Air Act, 42 U.S.C.
------------------
Section 7401 et seq.; the Federal Water Pollution Control Act, 33 U.S.C.
------
Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976,
------
42 U.S.C. Section 6901 et seq.; the Comprehensive Environment Response,
------
Compensation and Liability Act of 1980 (including the Superfund Amendments
and Reauthorization Act of 1986, "CERCLA"), 42 U.S.C. Section 9601 et seq.;
------
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the
------
Occupational Safety and Health Act, 29 U.S.C. Section 651; the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001
et seq.; the Mine Safety and Health Act of 1977, 30 U.S.C. Section 801 et
------ --
seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all
--- ------
other Governmental Rules relating to the protection of human health and the
environment, including all Governmental Rules pertaining to reporting,
licensing, permitting, transportation, storage, disposal, investigation,
and remediation of emissions, discharges, releases, or threatened releases
of Hazardous Materials into the air, surface water, groundwater, or land,
or relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Hazardous Materials.
"Equity Securities" of any Person shall mean (a) all common
-----------------
stock, preferred stock, participations, shares, partnership interests or
other equity interests in and of such Person (regardless of how designated
and whether or not voting or non-voting) and (b) all warrants, options and
other rights to acquire any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as the same may from time to time be amended or supplemented,
including any rules or regulations issued in connection therewith.
7
<PAGE>
"ERISA Affiliate" shall mean any Person which is treated as a
---------------
single employer with Borrower under Section 414 of the IRC.
"Event of Default" shall have the meaning given to that term in
----------------
Paragraph 6.01.
--------------
"Federal Funds Rate" shall mean, for any day, the rate per annum
------------------
set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including
any such successor publication, "H.15 (519)") for such day opposite the
caption "Federal Funds (Effective)". If on any relevant day, such rate is
not yet published in H.15 (519), the rate for such day shall be the rate
set forth in the daily statistical release designated as the Composite 3:30
p.m. Quotations for U.S. Government Securities, or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor publication, the "Composite 3:30 p.m. Quotations") for
such day under the caption "Federal Funds Effective Rate". If on any
relevant day, such rate is not yet published in either H.15 (519) or the
Composite 3:30 p.m. Quotations, the rate for such day shall be the
arithmetic means, as determined by Agent, of the rates quoted to Agent for
such day by three (3) Federal funds brokers of recognized standing selected
by Agent.
"Federal Reserve Board" shall mean the Board of Governors of the
---------------------
Federal Reserve System.
"Financial Statements" shall mean, with respect to any accounting
--------------------
period for any Person, statements of income and cash flows of such Person
for such period, and a balance sheet of such Person as of the end of such
period, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year if such period is less
than a full fiscal year or, if such period is a full fiscal year,
corresponding figures from the preceding annual audit, all prepared in
reasonable detail and in accordance with GAAP.
"Fixed Charge Coverage Ratio" shall mean, with respect to
---------------------------
Borrower for any date of determination, the ratio, determined on a
consolidated basis in accordance with GAAP, of (a) EBIRT of Borrower and
its Subsidiaries for such period to (b) the Fixed Charges of Borrower and
its Subsidiaries for such period.
"Fixed Charges" shall mean with respect to Borrower, the sum
-------------
(without duplication), determined on a consolidated basis in accordance
with GAAP, of (a) all interest payments on all Funded Indebtedness paid or
scheduled to be paid by Borrower and its Subsidiaries during the four
fiscal-quarter period next preceding the date of determination, plus (b)
----
all principal on Funded Indebtedness scheduled to be repaid during the next
succeeding four fiscal-quarter period by Borrower and its Subsidiaries,
plus (c) all payments on operating leases and "synthetic" leases paid or
----
scheduled to be paid by such Person and its Subsidiaries during the four
fiscal-quarter period next preceding the date of determination.
8
<PAGE>
"Funded Indebtedness" of any Person shall mean, without
-------------------
duplication:
(a) All obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments and all other obligations of
such Person for borrowed money (including obligations to repurchase
receivables and other assets sold with recourse);
(b) All obligations of such Person for the deferred purchase
price of property or services (including obligations under letters of
credit and other credit facilities which secure or finance such
purchase price and obligations under "synthetic" leases), other than
trade payables incurred by such Person in the ordinary course of its
business on ordinary terms and not overdue;
(c) All obligations of such Person under conditional sale or
other title retention agreements with respect to property acquired by
such Person (to the extent of the value of such property if the rights
and remedies of the seller or lender under such agreement in the event
of default are limited solely to repossession or sale of such
property); and
(d) All obligations of such Person as lessee under or with
respect to Capital Leases.
"Funded Indebtedness/EBITDA Ratio" shall mean, with respect to
--------------------------------
Borrower for any date of determination, the ratio, determined on a
consolidated basis in accordance with GAAP, of (a) the Funded Indebtedness
of Borrower and its Subsidiaries as of such date to (b) the EBITDA of
Borrower and its Subsidiaries for the four fiscal-quarter period next
preceding such date.
"GAAP" shall mean generally accepted accounting principles and
----
practices as in effect in the United States of America from time to time,
consistently applied.
"Governmental Authority" shall mean any domestic or foreign
----------------------
national, state or local government, any political subdivision thereof, any
department, agency, authority or bureau of any of the foregoing, or any
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including, without
limitation, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, the Comptroller of the Currency, any central bank or any comparable
authority.
"Governmental Charges" shall mean, with respect to any Person,
--------------------
all levies, assessments, fees, claims or other charges imposed by any
Governmental Authority upon such Person or any of its property or otherwise
payable by such Person.
"Governmental Rule" shall mean any law, rule, regulation,
-----------------
ordinance, order, code interpretation, judgment, decree, directive,
guidelines, policy or similar form of decision of any Governmental
Authority.
9
<PAGE>
"Guaranty Obligation" shall mean, with respect to any Person, any
-------------------
direct or indirect liability of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"), including
any obligation of that Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary
obligation, or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, or (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation,
or (d) otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof. The amount of any Guaranty
Obligation shall be deemed equal to the stated or determinable amount of
the primary obligation in respect of which such Guaranty Obligation is made
or, if not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof.
"Hazardous Materials" shall mean all materials, substances and
-------------------
wastes which are classified or regulated as "hazardous," "toxic" or similar
descriptions under any Environmental Law or which are hazardous, toxic,
harmful or dangerous to human health.
"Indebtedness" of any Person shall mean, without duplication:
------------
(a) All obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments and all other obligations of
such Person for borrowed money (including obligations to repurchase
receivables and other assets sold with recourse);
(b) All obligations of such Person for the deferred purchase
price of property or services (including obligations under letters of
credit and other credit facilities which secure or finance such
purchase price and obligations under "synthetic" leases);
(c) All obligations of such Person under conditional sale or
other title retention agreements with respect to property acquired by
such Person (to the extent of the value of such property if the rights
and remedies of the seller or lender under such agreement in the event
of default are limited solely to repossession or sale of such
property);
(d) All obligations of such Person as lessee under or with
respect to Capital Leases;
(e) All non-contingent payment or reimbursement obligations of
such Person under or with respect to Surety Instruments;
10
<PAGE>
(f) All net obligations of such Person, contingent or otherwise,
under or with respect to Rate Contracts;
(g) All Guaranty Obligations of such Person with respect to the
obligations of other Persons of the types described in clauses (a) -
-------------
(f) above and all other Contingent Obligations of such Person; and
---
(h) All obligations of other Persons of the types described in
clauses (a) - (f) above to the extent secured by (or for which any
-----------------
holder of such obligations has an existing right, contingent or
otherwise, to be secured by) any Lien in any property (including
accounts and contract rights) of such Person, even though such Person
has not assumed or become liable for the payment of such obligations.
"Indemnitee" shall have the meaning given to that term in
----------
Paragraph 8.03.
--------------
"Interest Account" shall have the meaning given to that term in
----------------
Subparagraph 2.11(b).
--------------------
"Interest Expenses" shall mean, with respect to any Person for
-----------------
any period, the sum, determined on a consolidated basis in accordance with
GAAP, of (a) all interest accruing on the Indebtedness of such Person
during such period (including, without limitation, interest attributable to
Capital Leases) plus (b) all letter of credit fees payable by such Person
----
accruing during such period.
"Interest Period" shall mean, with respect to any LIBOR Loan, the
---------------
time period selected by Borrower pursuant to Subparagraph 2.02(c) which
--------------------
commences on the first day of such Loan and ends on the last day of such
time period, and thereafter, each subsequent time period selected by
Borrower pursuant to Subparagraph 2.04(b) which commences on the last day
--------------------
of the immediately preceding time period and ends on the last day of that
time period.
"Investment" of any Person shall mean any loan or advance of
----------
funds by such Person to any other Person (other than advances to employees
of such Person for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business), any purchase or other
acquisition of any Equity Securities or Indebtedness of any other Person,
any capital contribution by such Person to or any other investment by such
Person in any other Person (including any Guaranty Obligations of such
Person and any indebtedness of such Person of the type described in clause
------
(h) of the definition of "Indebtedness" on behalf of any other Person);
---
provided, however, that Investments shall not include (a) accounts
-------- -------
receivable or other indebtedness owed by customers of such Person which are
current assets and arose from sales of inventory and the rendering of
services in the ordinary course of such Person's business or (b) prepaid
expenses of such Person incurred and prepaid in the ordinary course of
business.
11
<PAGE>
"IRC" shall mean the Internal Revenue Code of 1986, as amended
---
from time to time.
"Lenders" shall have the meaning given to that term in clause (2)
------- ----------
of the introductory paragraph hereof.
------------------------------------
"LIBO Rate" shall mean, with respect to any Interest Period for
---------
the Loans in any Borrowing consisting of LIBOR Loans, a rate per annum
equal to the quotient of (a) the arithmetic mean (rounded upward if
necessary to the nearest 1/16 of one percent) of the rates per annum
appearing on Telerate Page 3750 (or any successor publication) on the
second Business Day prior to the first day of such Interest Period at or
about 11:00 a.m. (London time) (for delivery on the first day of such
Interest Period) for a term comparable to such Interest Period, divided by
----------
(b) one minus the Reserve Requirement for such Loans in effect from time to
time. If for any reason rates are not available as provided in clause (a)
----------
of the preceding sentence, the rate to be used in clause (a) shall be, at
----------
the Agent's discretion, (i) the rate per annum at which Dollar deposits are
offered to Agent in the London interbank eurodollar currency market or (ii)
the rate at which Dollar deposits are offered to Agent in, or by Agent to
major banks in, any offshore interbank eurodollar market selected by Agent,
in each case on the second Business Day prior to the commencement of such
Interest Period at or about 10:00 a.m. (New York time) (for delivery on the
first day of such Interest Period) for a term comparable to such Interest
Period and in an amount approximately equal to the amount of the Loan to be
made or funded by Agent as part of such Borrowing. The LIBO Rate shall be
adjusted automatically as to all LIBOR Loans then outstanding as of the
effective date of any change in the Reserve Requirement.
"LIBOR Loan" shall mean, at any time, a Loan which then bears
----------
interest as provided in Subparagraph 2.03(b).
--------------------
"Lien" shall mean, with respect to any property, any security
----
interest, mortgage, pledge, lien, charge or other encumbrance in, of, or on
such property or the income therefrom, including, without limitation, the
interest of a vendor or lessor under a conditional sale agreement, Capital
Lease or other title retention agreement, or any agreement to provide any
of the foregoing, and the filing of any financing statement or similar
instrument under the Uniform Commercial Code or comparable law of any
jurisdiction (other than the filing of a cautionary lessor financing
statement against a lessee covering the property subject to a true lease).
"Loan" shall have the meaning given to that term in Paragraph
---- ---------
2.01.
----
"Margin Period" shall mean (a) the period commencing on the date
-------------
of this Agreement and ending on May 31, 1999, (b) the three-calendar month
period commencing June 1, 1999 and ending August 31, 1999 and (c) each
consecutive three-calendar month period thereafter which commences on the
day following the last day of
12
<PAGE>
the immediately preceding three-calendar month period and ends on the last
day of that time period.
"Margin Stock" shall have the meaning given to that term in
------------
Regulation U issued by the Federal Reserve Board, as amended from time to
time, and any successor regulation thereto.
"Material Adverse Effect" shall mean a material adverse effect on
-----------------------
(a) the business, assets, operations or financial or other condition of
Borrower and its Subsidiaries, taken as a whole; (b) the ability of
Borrower to pay or perform the Obligations in accordance with the terms of
this Agreement and the other Credit Documents; or (c) the rights and
remedies of Agent or any Lender under this Agreement, the other Credit
Documents or any related document, instrument or agreement.
"maturity" shall mean, with respect to any Loan, interest, fee or
--------
other amount payable by Borrower under this Agreement or the other Credit
Documents, the date such Loan, interest, fee or other amount becomes due,
whether upon the stated maturity or due date, upon acceleration or
otherwise.
"Maturity Date" shall mean April 7, 2000 or, if such date is
-------------
extended from time to time pursuant to Paragraph 2.18, any later date to
--------------
which so extended.
"Multiemployer Plan" shall mean any multiemployer plan within the
------------------
meaning of section 3(37) of ERISA maintained or contributed to by Borrower
or any ERISA Affiliate.
"Net Proceeds" shall mean, with respect to any sale or issuance
------------
of any Equity Security by any Person, the aggregate consideration received
by such Person from such sale or issuance less the sum of the actual amount
----
of the reasonable fees and commissions payable to Persons other than such
Person or any Affiliate of such Person, the reasonable legal expenses and
the other reasonable costs and expenses directly related to such sale or
issuance that are to be paid by such Person.
"Note" shall have the meaning given to that term in Subparagraph
---- ------------
2.11(a).
-------
"Note Purchase Agreement" shall mean that certain Note Purchase
-----------------------
Agreement, dated as of the date hereof, between Borrower and each of the
Purchasers (as set forth and defined therein).
"Notice of Borrowing" shall have the meaning given to that term
-------------------
in Paragraph 2.02.
--------------
"Notice of Interest Period Selection" shall have the meaning
-----------------------------------
given to that term in Subparagraph 2.04(b).
--------------------
13
<PAGE>
"Obligations" shall mean and include, with respect to Borrower,
-----------
all loans, advances, debts, liabilities, and obligations, howsoever
arising, owed by Borrower to Agent or any Lender of every kind and
description (whether or not evidenced by any note or instrument and whether
or not for the payment of money), direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising
pursuant to the terms of this Agreement or any of the other Credit
Documents, including all interest, fees, charges, expenses, attorneys' fees
and accountants' fees chargeable to Borrower or payable by Borrower
hereunder or thereunder.
"Participant" shall have the meaning given to that term in
-----------
Subparagraph 8.05(b).
--------------------
"Participation Fees" shall have the meaning given to that term in
------------------
Subparagraph 2.08(b)
--------------------
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
----
any successor thereto.
"Permitted Indebtedness" shall have the meaning given to that
----------------------
term in Subparagraph 5.02(a).
--------------------
"Permitted Liens" shall have the meaning given to that term in
---------------
Subparagraph 5.02(b).
--------------------
"Person" shall mean and include an individual, a partnership, a
------
corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint venture, a
trust or other entity or a Governmental Authority.
"Pricing Grid" shall mean Schedule 1.01.
------------ -------------
"Prime Rate" shall mean the per annum rate publicly announced by
----------
Agent from time to time at its Chicago office as its prime rate. The Prime
Rate is determined by Agent from time to time as a means of pricing credit
extensions to some customers and is neither directly tied to any external
rate of interest or index nor necessarily the lowest rate of interest
charged by Agent at any given time for any particular class of customers or
credit extensions. Any change in the Base Rate resulting from a change in
the Prime Rate shall become effective on the Business Day on which each
change in the Prime Rate occurs.
"Prior Credit Agreement" shall have the meaning given to that
----------------------
term in Subparagraph 2.06.
-----------------
"Private Placement Notes" shall mean collectively (a) those
-----------------------
certain promissory notes issued by Borrower on the date of this Agreement
pursuant to the Note Purchase Agreement in an aggregate amount of
$75,000,000 which have a final maturity date
14
<PAGE>
(subject to amortization) of April 9, 2006 and a blended per annum interest
rate of 6.58%, and (b) any additional promissory notes issued by Borrower
during the term of this Agreement pursuant to the Note Purchase Agreement
in an aggregate amount of up to $25,000,000 which have a maturity date of
not more than ten (10) years after their date of issuance and an annual
interest rate of not more than eight percent (8%).
"Proportionate Share" shall mean, with respect to each Lender,
-------------------
the percentage set forth under the caption "Proportionate Share" opposite
such Lender's name on Schedule I, or, if changed, such percentage as may be
----------
set forth for such Lender in the Register.
"Rate Contracts" shall mean swap agreements (as that term is
--------------
defined in Section 101 of the Federal Bankruptcy Reform Act of 1978, as
amended) and any other agreements or arrangements designed to provide
protection against fluctuations in interest or currency exchange rates.
"Register" shall have the meaning given to that term in
--------
Subparagraph 8.05(d).
--------------------
"Reportable Event" shall have the meaning given to that term in
----------------
ERISA and applicable regulations thereunder.
"Required Lenders" shall mean (a) at any time Loans are
----------------
outstanding, Lenders holding more than sixty percent (60%) of the aggregate
principal amount of such Loans and (b) at any time no Loans are
outstanding, Lenders whose Proportionate Shares exceed sixty percent (60%).
"Requirement of Law" applicable to any Person shall mean (a) the
------------------
Articles or Certificate of Incorporation and By-laws, Partnership Agreement
or other organizational or governing documents of such Person, (b) any
Governmental Rule applicable to such Person, (c) any license, permit,
approval or other authorization granted by any Governmental Authority to or
for the benefit of such Person or (d) any judgment, decision or
determination of any Governmental Authority or arbitrator, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Reserve Requirement" shall mean, with respect to any day in an
-------------------
Interest Period for a LIBOR Loan, the aggregate of the reserve requirement
rates (expressed as a decimal) in effect on such day for eurocurrency
funding (currently referred to as "Eurocurrency liabilities" in Regulation
D of the Federal Reserve Board) maintained by a member bank of the Federal
Reserve System. As used herein, the term "reserve requirement" shall
include, without limitation, any basic, supplemental or emergency reserve
requirements imposed on Lender by any Governmental Authority.
"Solvent" shall mean, with respect to any Person on any date,
-------
that on such date (a) the fair value of the property of such Person is
greater than the fair value of the liabilities (including, without
limitation, contingent liabilities) of such Person, (b) the present fair
15
<PAGE>
saleable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature and (d)
such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital.
"Subsidiary" of any Person shall mean (a) any corporation of
----------
which more than 50% of the issued and outstanding Equity Securities having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency) is at the time directly or indirectly
owned or controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person's other Subsidiaries,
(b) any partnership, joint venture, or other association of which more than
50% of the equity interest having the power to vote, direct or control the
management of such partnership, joint venture or other association is at
the time owned and controlled by such Person, by such Person and one or
more of the other Subsidiaries or by one or more of such Person's other
Subsidiaries or (c) any other Person included in the Financial Statements
of such Person on a consolidated basis.
"Surety Instruments" shall mean all letters of credit (including
------------------
standby and commercial), banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"Tangible Net Worth" shall mean, with respect to any Person at
------------------
any time, the remainder at such time, determined on a consolidated basis in
accordance with GAAP, of (a) the total assets of such Person and its
Subsidiaries, minus (b) the sum (without limitation and without duplication
of deductions) of (i) the total liabilities of such Person and its
Subsidiaries, (ii) all reserves established by such Person and its
Subsidiaries for anticipated losses and expenses (to the extent not
deducted in calculating total assets in clause (a) above) and (iii) all
----------
intangible assets of such Person and its Subsidiaries (to the extent
included in calculating total assets in clause (a) above), including,
----------
without limitation, goodwill (including any amounts, however designated on
the balance sheet, representing the cost of acquisition of businesses and
investments in excess of underlying tangible assets), trademarks, trademark
rights, trade name rights, copyrights, patents, patent rights, licenses,
unamortized debt discount, marketing expenses, organizational expenses,
non-compete agreements and deferred research and development.
"Taxes" shall have the meaning given to such term in Subparagraph
----- ------------
2.15(a).
-------
"Total Commitment" shall mean, at any time, Forty Million Dollars
----------------
($40,000,000) or, if such amount is reduced pursuant to Subparagraph
------------
2.07(a), the amount to which so reduced and in effect at such time.
-------
16
<PAGE>
"Type" shall mean, with respect to any Loan or Borrowing at any
----
time, the classification of such Loan or Borrowing by the type of interest
rate it then bears, whether an interest rate based upon the Base Rate or
the LIBO Rate.
"Unused Commitment" shall mean, at any time, the remainder of (a)
-----------------
the Total Commitment at such time minus (b) the aggregate principal amount
of all Loans outstanding at such time.
1.02. GAAP. Unless otherwise indicated in this Agreement or any other
----
Credit Document, all accounting terms used in this Agreement or any other Credit
Document shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP. If GAAP
changes during the term of this Agreement such that any covenants contained
herein would then be calculated in a different manner or with different
components, Borrower, the Lenders and Agent agree to negotiate in good faith to
amend this Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating Borrower's financial condition to
substantially the same criteria as were effective prior to such change in GAAP;
provided, however, that, until Borrower, the Lenders and Agent so amend this
- -------- -------
Agreement, all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.
1.03. Headings. Headings in this Agreement and each of the other Credit
--------
Documents are for convenience of reference only and are not part of the
substance hereof or thereof.
1.04. Plural Terms. All terms defined in this Agreement or any other
------------
Credit Document in the singular form shall have comparable meanings when used in
the plural form and vice versa.
1.05. Time. All references in this Agreement and each of the other Credit
----
Documents to a time of day shall mean New York, New York time, unless otherwise
indicated.
1.06. Governing Law. This Agreement and each of the other Credit
-------------
Documents (unless otherwise provided in such other Credit Documents) shall be
governed by and construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
1.07. Construction. This Agreement is the result of negotiations among,
------------
and has been reviewed by, Borrower, each Lender, Agent and their respective
counsel. Accordingly, this Agreement shall be deemed to be the product of all
parties hereto, and no ambiguity shall be construed in favor of or against
Borrower, any Lender or Agent.
1.08. Entire Agreement. This Agreement and each of the other Credit
----------------
Documents, taken together, constitute and contain the entire agreement of
Borrower, the Lenders and Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the
17
<PAGE>
subject matter hereof (including the commitment letter dated as of March 16,
1999 between Borrower and ABN AMRO Bank N.V.).
1.09. Calculation of Interest and Fees. All calculations of interest and
--------------------------------
fees under this Agreement and the other Credit Documents for any period (a)
shall include the first day of such period and exclude the last day of such
period and (b) shall be calculated on the basis of a year of 360 days for actual
days elapsed, except that during any period any Loan bears interest based upon
the Prime Rate, such interest shall be calculated on the basis of a year of 365
or 366 days, as appropriate, for actual days elapsed.
1.10. Other Interpretive Provisions. References in this Agreement to
-----------------------------
"Recitals," "Sections," "Paragraphs," "Subparagraphs," "Exhibits" and
"Schedules" are to recitals, sections, paragraphs, subparagraphs, exhibits and
schedules herein and hereto unless otherwise indicated. References in this
Agreement and each of the other Credit Documents to any document, instrument or
agreement (a) shall include all exhibits, schedules and other attachments
thereto, (b) shall include all documents, instruments or agreements issued or
executed in replacement thereof, and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified and
supplemented from time to time and in effect at any given time. References in
this Agreement and each of the other Credit Documents to any statue or other law
(i) shall include any successor statue or law, (ii) shall include all rules and
regulations promulgated under such statue or law (or any successor statue or
law), and (iii) shall mean such statue or law (or successor statue or law) and
such rules and regulations, as amended, modified, codified or reenacted from
time to time and in effect at any given time. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement or any other
Credit Document shall refer to this Agreement or such other Credit Document, as
the case may be, as a whole and not to any particular provision of this
Agreement or such other Credit Document, as the case may be. The words
"include" and "including" and words of similar import when used in this
Agreement or any other Credit Document shall not be construed to be limiting or
exclusive. In the event of any inconsistency between the terms of this
Agreement and the terms of any other Credit Document, the terms of this
Agreement shall govern.
SECTION II. CREDIT FACILITY.
- ----------- ---------------
2.01. Revolving Loans. Subject to the terms and conditions of this
---------------
Agreement, each Lender severally agrees to advance to Borrower from time to time
during the period beginning on the Closing Date and ending on the Maturity Date
such loans as Borrower may request under this Section II (individually, a
----------
"Loan"); provided, however, that the aggregate principal amount of all Loans
---- -------- -------
outstanding at any time shall not exceed the Total Commitment at such time. All
Loans shall be made on a pro rata basis by the Lenders in accordance with their
respective Proportionate Shares, with each Borrowing to be comprised of a Loan
by each Lender equal to such Lender's Proportionate Share of such Borrowing.
Except as otherwise provided herein, Borrower may borrow, repay and reborrow
Loans until the Maturity Date.
2.02. Notice of Borrowing. Borrower shall request each Borrowing by
-------------------
delivering to Agent an irrevocable written notice in the form of Exhibit A,
---------
appropriately completed (a "Notice of Borrowing"), which specifies, among other
-------------------
things:
18
<PAGE>
(a) Amount. The principal amount of the requested Borrowing,
------
which shall be in the amount of (i) $1,000,000 or an integral multiple of
$100,000 in excess thereof in the case of a Borrowing consisting of Base
Rate Loans; or (ii) $2,000,000 or an integral multiple of $1,000,000 in
excess thereof in the case of a Borrowing consisting of LIBOR Loans;
(b) Type. Whether the requested Borrowing is to consist of Base
----
Rate Loans or LIBOR Loans;
(c) Interest Period. If the requested Borrowing is to consist of
---------------
LIBOR Loans, the initial Interest Period selected by Borrower for such
Loans in accordance with Subparagraph 2.04(a); and
--------------------
(d) Date. The date of the requested Borrowing, which shall be a
----
Business Day.
Borrower shall give each Notice of Borrowing to Agent at least three (3)
Business Days before the date of the requested Borrowing in the case of a
Borrowing consisting of LIBOR Loans and at least one (1) Business Day before the
date of the requested Borrowing in the case of a Borrowing consisting of Base
Rate Loans. Each Notice of Borrowing shall be delivered by first-class mail or
facsimile to Agent at the office or facsimile number and during the hours
specified in Paragraph 8.01; provided, however, that Borrower shall promptly
-------------- -------- -------
deliver to Agent the original of any Notice of Borrowing initially delivered by
facsimile. Agent shall promptly notify each Lender of the contents of each
Notice of Borrowing and of the amount and Type of (and, if applicable, the
Interest Period for) each Loan to be made by such Lender as part of the
requested Borrowing.
2.03. Interest Rates. Borrower shall pay interest on the unpaid principal
--------------
amount of each Loan from the date of such Loan until the maturity thereof, at
one of the following rates per annum:
(a) Base Rate Loans. During such periods as such Loan is a Base Rate
---------------
Loan, at a rate per annum equal to the Base Rate plus the Applicable
----
Margin therefor, such rate to change from time to time as the Applicable
Margin or Base Rate shall change; and
(b) LIBOR Loans. During such periods as such Loan is a LIBOR
-----------
Loan, at a rate per annum equal at all times during each Interest Period
for such LIBOR Loan to the LIBO Rate for such Interest Period plus the
----
Applicable Margin for such Loan (or in the case of any LIBOR Loan having an
Interest Period of less than one (1) month, the then applicable Rate for
one (1) month LIBOR Loans available on such date plus the Applicable Margin
for such Loan), such rate to change from time to time during such Interest
Period as the Applicable Margin shall change. (The Applicable Margins for
LIBOR Loans shall be determined as provided in the Pricing Grid and may
change for each Margin Period.)
19
<PAGE>
All Loans in each Borrowing shall, at any given time prior to maturity, bear
interest at one, and only one, of the above rates.
2.04. LIBOR Loan Interest Periods.
---------------------------
(a) Terms. The initial and each subsequent Interest Period
-----
selected by Borrower for a LIBOR Loan shall be one (1), two (2), three (3)
or six (6) months (or with the consent of each Lender from time to time,
any period of days seven (7) or greater but less than one (1) month);
provided, however, that (i) any Interest Period which would otherwise end
-------- -------
on a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such next Business Day falls in another
calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day; (ii) any Interest Period (other than an
Interest Period which is less than one (1) month) which begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar month;
and (iii) no Interest Period shall end after the Maturity Date.
(b) Notice of Interest Period Selection. Borrower shall notify
-----------------------------------
Agent by an irrevocable written notice in the form of Exhibit B,
---------
appropriately completed (a "Notice of Interest Period Selection"), at least
-----------------------------------
three (3) Business Days prior to the last day of each Interest Period for
LIBOR Loans of the Interest Period selected by Borrower for the next
succeeding Interest Period for such Loans. Each Notice of Interest Period
Selection shall be given by first-class mail or facsimile to the office or
the facsimile number and during the hours specified in Paragraph 8.01;
--------------
provided, however, that Borrower shall promptly deliver to Agent the
-------- -------
original of any Notice of Interest Period Selection initially delivered by
facsimile. If Borrower fails to notify Agent of the next Interest Period
for LIBOR Loans in accordance with this Subparagraph 2.04(b), such Loans
--------------------
shall automatically convert to Base Rate Loans on the last day of the
current Interest Period therefor.
2.05. Scheduled Payments.
------------------
(a) Principal. Borrower shall repay the principal amount of the
---------
Loans on the Maturity Date.
(b) Interest. Borrower shall pay accrued interest on the unpaid
--------
principal amount of each Loan in arrears (i) in the case of a Base Rate
Loan, on the last day in each calendar quarter, (ii) in the case of a LIBOR
Loan, on the last day of each Interest Period therefor (and (A) if any such
Interest Period is longer than three (3) months, every three (3) months, or
(B) if any such Interest Period is shorter than one (1) month, every
month); and (iii) in the case of all Loans, upon prepayment (to the extent
thereof) and at maturity.
2.06. Purpose. Borrower shall use the proceeds of the Loans, first, to
-------
repay on the Closing Date all Indebtedness outstanding under the Credit
Agreement dated as of March 28, 1997 among Borrower, the lending institutions
party thereto and ABN AMRO Bank N.V. as
20
<PAGE>
agent for such lending institutions (as amended from time to time, the "Prior
-----
Credit Agreement") and, thereafter, for Borrower's general corporate needs.
- ----------------
2.07. Commitment Reductions, Etc.
--------------------------
(a) Reduction or Cancellation of Commitments. Borrower may, upon
----------------------------------------
three (3) Business Days written notice to Agent, permanently reduce the
Total Commitment by the amount of five million Dollars ($5,000,000) or an
integral multiple of one million Dollars ($1,000,000) in excess thereof or
cancel the Total Commitment in its entirety; provided, however, that:
-------- --------
(i) Borrower may not reduce the Total Commitment prior to the
Maturity Date, if, after giving effect to such reduction, the
aggregate principal amount of all Loans then outstanding would exceed
the Total Commitment; and
(ii) Borrower may not cancel the Total Commitment prior to the
Maturity Date, if, after giving effect to such cancellation, any Loan
would then remain outstanding.
(b) Effect of Commitment Reductions. From the effective date of
-------------------------------
any reduction of the Total Commitment, the Commitment Fees payable pursuant
to Subparagraph 2.08(c) shall be computed on the basis of the Total
--------------------
Commitment as so reduced. Once reduced or cancelled, the Total Commitment
may not be increased or reinstated without the prior written consent of all
Lenders. Any reduction of the Total Commitment pursuant to Subparagraph
------------
2.07(a) shall be applied ratably to reduce each Lender's Commitment in
-------
accordance with clause (i) of Subparagraph 2.13(a).
----------------------------------
2.08. Fees.
----
(a) Agent's Fee. Borrower shall pay to Agent, for its own
-----------
account, agent's fees and other compensation in the amounts and at the
times set forth in the Agent's Fee Letter.
(b) Participation Fees. Borrower shall pay to Agent, for the
------------------
ratable benefit of the Lenders as provided in this Subparagraph 2.04(b),
--------------------
nonrefundable participation fees (the "Participation Fees") in amounts
------------------
equal to five one hundredths of one percent (.05%) of such Lender's
Proportionate Share of the Total Commitment on the Closing Date.
(c) Commitment Fees. Borrower shall pay to Agent, for the
---------------
ratable benefit of the Lenders as provided in clause (iv) of Subparagraph
---------------------------
2.13(a), commitment fees (the "Commitment Fees") equal to the Commitment
------- ---------------
Fee Percentage on the daily average Unused Commitment for the period
beginning on the date of this Agreement and ending on the Maturity Date.
(The Commitment Fee Percentage shall be determined as provided in the
Pricing Grid and may change for each Margin Period.) Borrower shall pay
the Commitment Fees in arrears on the last day in each March, June,
September and
21
<PAGE>
December (commencing June 30, 1999) and on the Maturity Date (or if the
Total Commitment is cancelled on a date prior to the Maturity Date, on such
prior date).
2.09. Prepayments.
-----------
(a) Terms of all Prepayments. Upon the prepayment of any Loan
------------------------
(whether such prepayment is an optional prepayment under Subparagraph
------------
2.09(b), a mandatory prepayment required by Subparagraph 2.09(c) or a
------- --------------------
mandatory prepayment required by any other provision of this Agreement or
the other Credit Documents, including, without limitation, a prepayment
upon acceleration), Borrower shall pay to the Lender which made such Loan
(i) all accrued interest to the date of such prepayment on the amount
prepaid and (ii) if such prepayment is the prepayment of a LIBOR Loan on a
day other than the last day of an Interest Period for such LIBOR Loan, all
amounts payable to such Lender pursuant to Paragraph 2.16.
--------------
(b) Optional Prepayments. At its option, Borrower may, upon
--------------------
three (3) Business Days notice to Agent, prepay the Loans in any Borrowing
in part, in an aggregate principal amount of $2,000,000 or more, or in
whole.
(c) Mandatory Prepayments. If, at any time, the aggregate principal
---------------------
amount of all Loans then outstanding exceeds the Total Commitment at such
time, Borrower shall immediately prepay Loans in an aggregate principal
amount equal to such excess.
2.10. Other Payment Terms.
-------------------
(a) Place and Manner. Borrower shall make all payments due to
----------------
each Lender or Agent hereunder by payments to Agent at Agent's office
located at the address specified in Paragraph 8.01, with each payment due
--------------
to a Lender to be for the account of such Lender and such Lender's
Applicable Lending Office. Borrower shall make all payments hereunder in
lawful money of the United States and in same day or immediately available
funds not later than 2:00 p.m. on the date due. Agent shall promptly
disburse to each Lender each payment received by Agent for the account of
such Lender.
(b) Date. Whenever any payment due hereunder shall fall due on a
----
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in
the computation of interest or fees, as the case may be.
(c) Late Payments. If any amounts required to be paid by
-------------
Borrower under this Agreement or the other Credit Documents (including,
without limitation, principal or interest payable on any Loan, any fees or
other amounts) remain unpaid after such amounts are due, Borrower shall pay
interest on the aggregate, outstanding balance of such amounts from the
date due until those amounts are paid in full at a per annum rate equal to
the Base Rate plus two percent (2.0%), such rate to change from time to
time as the Base Rate shall change.
22
<PAGE>
(d) Application of Payments. All payments hereunder shall be
-----------------------
applied first to unpaid fees, costs and expenses then due and payable under
this Agreement or the other Credit Documents, second to accrued interest
then due and payable under this Agreement or the other Credit Documents and
finally to reduce the principal amount of outstanding Loans.
(e) Failure to Pay Agent. Unless Agent shall have received
--------------------
notice from Borrower at least one (1) Business Day prior to the date on
which any payment is due to the Lenders hereunder that Borrower will not
make such payment in full, Agent shall be entitled to assume that Borrower
has made or will make such payment in full to Agent on such date and Agent
may, in reliance upon such assumption, cause to be paid to the Lenders on
such due date an amount equal to the amount then due such Lenders. If and
to the extent Borrower shall not have so made such payment in full to
Agent, each such Lender shall repay to Agent forthwith on demand such
amount distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date
such Lender repays such amount to Agent, at (i) the Federal Funds Rate for
the first three (3) days and (ii) the per annum rate applicable to Base
Rate Loans thereafter. A certificate of Agent submitted to any Lender with
respect to any amounts owing by such Lender under this Subparagraph 2.10(e)
--------------------
shall be conclusive absent manifest error.
2.11. Notes and Interest Account.
--------------------------
(a) Notes. The obligation of Borrower to repay the Loans made by
-----
each Lender and to pay interest thereon at the rates provided herein shall
be evidenced by a promissory note in the form of Exhibit C (individually, a
---------
"Note") which Note shall be (i) payable to the order of such Lender, (ii)
----
in the amount of such Lender's Commitment, (iii) dated the Closing Date and
(iv) otherwise appropriately completed. Borrower authorizes each Lender to
record on the schedule annexed to such Lender's Note the date and amount of
each Loan made by such Lender and of each payment or prepayment of
principal thereon made by Borrower, and agrees that all such notations
shall constitute prima facie evidence of the matters noted; provided,
--------
however, that any failure by a Lender to make any such notation shall not
-------
affect the Obligations. Borrower further authorizes each Lender to attach
to and make a part of such Lender's Note continuations of the schedule
attached thereto as necessary.
(b) Interest Account. Borrower authorizes Agent to record in an
----------------
account or accounts maintained by Agent on its books (the "Interest
--------
Account") (i) the interest rates applicable to all Loans and the effective
dates of all changes thereto, (ii) the Interest Period for each LIBOR Loan,
(iii) the date and amount of each principal and interest payment on each
Loan and (iv) such other information as Agent may determine is necessary
for the computation of interest payable by Borrower hereunder.
23
<PAGE>
2.12. Loan Funding.
------------
(a) Lender Funding and Disbursement to Borrower. Each Lender
-------------------------------------------
shall, before 2:00 p.m. on the date of each Borrowing, make available to
Agent at Agent's office specified in Paragraph 8.01, in same day or
--------------
immediately available funds, such Lender's Proportionate Share of such
Borrowing. After Agent's receipt of such funds and upon satisfaction of
the applicable conditions set forth in Section III, Agent shall promptly
-----------
disburse such funds to Borrower in same day or immediately available funds.
Unless otherwise directed by Borrower, Agent shall disburse the proceeds of
each Borrowing by disbursement to the account or accounts specified in the
applicable Notice of Borrowing.
(b) Lender Failure to Fund. Unless Agent shall have received
----------------------
notice from a Lender prior to the date of any Borrowing that such Lender
will not make available to Agent such Lender's Proportionate Share of such
Borrowing, Agent shall be entitled to assume that such Lender has made or
will make such portion available to Agent on the date of such Borrowing in
accordance with Subparagraph 2.12(a), and Agent may on such date, in
--------------------
reliance upon such assumption, disburse or otherwise credit to Borrower a
corresponding amount. If any Lender does not make the amount of its
Proportionate Share of any Borrowing available to Agent on or prior to the
date of such Borrowing, such Lender shall pay to Agent, on demand, interest
which shall accrue on such amount from the date of such Borrowing until
such amount is paid to Agent at rates equal to (i) the daily Federal Funds
Rate during the period from the date of such Borrowing through the third
Business Day thereafter and (ii) the rate applicable to Base Rate Loans
thereafter. A certificate of Agent submitted to any Lender with respect to
any amounts owing under this Subparagraph 2.12(b) shall be conclusive
--------------------
absent manifest error. If the amount of any Lender's Proportionate Share
of any Borrowing is not paid to Agent by such Lender within three (3)
Business Days after the date of such Borrowing, Borrower shall repay such
amount to Agent, on demand, together with interest thereon, for each day
from the date such amount was disbursed to Borrower until the date such
amount is repaid to Agent, at the interest rate applicable at the time to
the Loans comprising such Borrowing.
(c) Lenders' Obligations Several. The failure of any Lender to
----------------------------
make the Loan to be made by it as part of any Borrowing shall not relieve
any other Lender of its obligation hereunder to make its Loan on the date
of such Borrowing, but no Lender shall be obligated in any way to make any
Loan which another Lender has failed or refused to make or otherwise be in
any way responsible for the failure or refusal of any other Lender to make
any Loan required to be made by such other Lender on the date of any
Borrowing.
2.13. Pro Rata Treatment.
------------------
(a) Borrowings, Commitment Reductions, Etc. Except as otherwise
--------------------------------------
provided herein:
24
<PAGE>
(i) Each Borrowing and reduction of the Total Commitment shall be
made or shared among the Lenders pro rata according to their
respective Proportionate Shares;
(ii) Each payment of principal of Loans in any Borrowing shall be
shared among the Lenders which made or funded the Loans in such
Borrowing pro rata according to the respective unpaid principal
amounts of such Loans so made or funded by such Lenders;
(iii) Each payment of interest on Loans in any Borrowing shall
be shared among the Lenders which made or funded the Loans in such
Borrowing pro rata according to (A) the respective unpaid principal
amounts of such Loans so made or funded by such Lenders and (B) the
dates on which such Lenders so made or funded such Loans;
(iv) Each payment of Commitment Fees shall be shared among the
Lenders (except for Defaulting Lenders) pro rata according to (A)
their respective Proportionate Shares and (B) in the case of each
Lender which becomes a Lender hereunder after the date hereof, the
date upon which such Lender so became a Lender;
(v) Each payment of interest (other than interest on Loans) shall
be shared among the Lenders and Agent owed the amount upon which such
interest accrues pro rata according to (A) the respective amounts so
owed such Lenders and Agent and (B) the dates on which such amounts
became owing to such Lenders and Agent; and
(vi) All other payments under this Agreement and the other Credit
Documents shall be for the benefit of the Person or Persons specified.
(b) Sharing of Payments, Etc. If any Lender shall obtain any
------------------------
payment (whether voluntary, involuntary, through the exercise of any right
of setoff, or otherwise) on account of Loans owed to it in excess of its
ratable share of payments on account of such Loans obtained by all Lenders
entitled to such payments, such Lender shall forthwith purchase from the
other Lenders such participations in the Loans as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each
of them; provided, however, that if all or any portion of such excess
-------- -------
payment is thereafter recovered from such purchasing Lender, such purchase
shall be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an
amount equal to such other Lender's ratable share (according to the
proportion of (i) the amount of such other Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this
Subparagraph 2.13(b) may, to the fullest extent permitted by law, exercise
--------------------
all its rights of
25
<PAGE>
payment (including the right of setoff) with respect to such participation
as fully as if such Lender were the direct creditor of Borrower in the
amount of such participation.
2.14. Change of Circumstances.
-----------------------
(a) Inability to Determine Rates. If, on or before the first day
----------------------------
of any Interest Period for any LIBOR Loan, Agent shall determine that (i)
the LIBO Rate for such Interest Period cannot be adequately and reasonably
determined due to the unavailability of funds in or other circumstances
affecting the London interbank market or (ii) the rate of interest for such
Loan does not adequately and fairly reflect the cost to any Lender of
making or maintaining such LIBOR Loan, Agent shall immediately give notice
of such condition to Borrower and the other Lenders. After the giving of
any such notice and until Agent shall otherwise notify Borrower that the
circumstances giving rise to such condition no longer exist, Borrower's
right to request the making of, and the Lenders' obligations to make LIBOR
Loans shall be suspended. Any LIBOR Loans outstanding at the commencement
of any such suspension shall be converted at the end of the then current
Interest Period for such LIBOR Loans into Base Rate Loans unless such
suspension has then ended.
(b) Illegality. If, after the date of this Agreement, the
----------
adoption of any Governmental Rule, any change in any Governmental Rule or
the application or requirements thereof (whether such change occurs in
accordance with the terms of such Governmental Rule as enacted, as a result
of amendment or otherwise), any change in the interpretation or
administration of any Governmental Rule by any Governmental Authority, or
compliance by any Lender with any request or directive (whether or not
having the force of law) of any Governmental Authority (a "Change of Law")
-------------
shall make it unlawful or impossible for any Lender to make or maintain any
LIBOR Loan, such Lender shall immediately notify Agent and Borrower of such
Change of Law. Upon receipt of such notice, (i) Borrower's right to
request the making of, and such Lender's obligation to make LIBOR Loans
shall be terminated, and (ii) Borrower shall, at the request of such
Lender, either (A) repay any such then outstanding LIBOR Loans at the end
of the current Interest Period for such LIBOR Loans or (B) immediately
repay any such LIBOR Loans if such Lender shall notify Borrower that such
Lender may not lawfully continue to fund and maintain such LIBOR Loans.
Any prepayment of LIBOR Loans made pursuant to the preceding sentence prior
to the last day of an Interest Period for such LIBOR Loans shall be deemed
a prepayment thereof for purposes of Paragraph 2.16. After any Lender
--------------
notifies Agent and Borrower of such a Change of Law and until such Lender
notifies Agent and Borrower that it is no longer unlawful or impossible for
such Lender to make or maintain a LIBOR Loan, all Loans of such Lender
shall be Base Rate Loans.
(c) Increased Costs. If, after the date of this Agreement, any
---------------
Change of Law:
(i) Shall subject any Lender to any tax, duty or other charge
with respect to any LIBOR Loan, or shall change the basis of taxation
of payments by
26
<PAGE>
Borrower to any Lender on such a LIBOR Loan or in respect to such a
LIBOR Loan under this Agreement (except for changes in the rate of
taxation on the overall net income of any Lender imposed by its
jurisdiction of incorporation or the jurisdiction in which its
principal executive office is located); or
(ii) Shall impose, modify or hold applicable any reserve
(excluding any Reserve Requirement or other reserve to the extent
included in the calculation of the LIBO Rate for any Loans), special
deposit or similar requirement against assets held by, deposits or
other liabilities in or for the account of, advances or loans by, or
any other acquisition of funds by any Lender for any LIBOR Loan; or
(iii) Shall impose on any Lender any other condition related to
any LIBOR Loan or such Lender's Commitment;
And the effect of any of the foregoing is to increase the cost to such
Lender of making, renewing, or maintaining any such LIBOR Loan or its
Commitment or to reduce any amount receivable by such Lender hereunder;
then Borrower shall from time to time, within five (5) Business Days after
demand by such Lender, pay to such Lender additional amounts sufficient to
reimburse such Lender for such increased costs or to compensate such Lender
for such reduced amounts. A certificate as to the amount of such increased
costs or reduced amounts, submitted by such Lender to Borrower shall, in
the absence of manifest error, be conclusive and binding on Borrower for
all purposes. The obligations of Borrower under this Subparagraph 2.14(c)
--------------------
shall survive the payment and performance of the Obligations and the
termination of this Agreement.
(d) Capital Requirements. If, after the date of this Agreement,
--------------------
any Lender determines that (i) any Change of Law affects the amount of
capital required or expected to be maintained by such Lender or any Person
controlling such Lender (a "Capital Adequacy Requirement") and (ii) the
----------------------------
amount of capital maintained by such Lender or such Person which is
attributable to or based upon the Loans, the Commitments or this Agreement
must be increased as a result of such Capital Adequacy Requirement (taking
into account such Lender's or such Person's policies with respect to
capital adequacy), Borrower shall pay to such Lender or such Person, within
five (5) Business Days after demand by such Lender, such amounts as such
Lender or such Person shall determine are necessary to compensate such
Lender or such Person for the increased costs to such Lender or such Person
of such increased capital. A certificate of any Lender setting forth in
reasonable detail the computation of any such increased costs, delivered by
such Lender to Borrower shall, in the absence of manifest error, be
conclusive and binding on Borrower for all purposes. The obligations of
Borrower under this Subparagraph 2.14(d) shall survive the payment and
--------------------
performance of the Obligations and the termination of this Agreement.
(e) Mitigation. Any Lender which becomes aware of (i) any Change
----------
of Law which will make it unlawful or impossible for such Lender to make or
maintain any LIBOR Loan or (ii) any Change of Law or other event or
condition which will obligate
27
<PAGE>
Borrower to pay any amount pursuant to Subparagraph 2.14(c) or Subparagraph
-------------------- ------------
2.14(d) shall notify Borrower and Agent thereof as promptly as practical.
-------
If any Lender has given notice of any such Change of Law or other event or
condition and thereafter becomes aware that such Change of Law or other
event or condition has ceased to exist, such Lender shall notify Borrower
and Agent thereof as promptly as practical. Each Lender affected by any
Change of Law which makes it unlawful or impossible for such Lender to make
or maintain any LIBOR Loan or to which Borrower is obligated to pay any
amount pursuant to Subparagraph 2.14(c) or Subparagraph 2.14(d) shall use
-------------------- --------------------
reasonable commercial efforts (including changing the jurisdiction of its
Applicable Lending Office) to avoid the effect of such Change of Law or to
avoid or materially reduce any amounts which Borrower is obligated to pay
pursuant to Subparagraph 2.14(c) or Subparagraph 2.14(d) if, in the
-------------------- --------------------
reasonable opinion of such Lender, such efforts would not be
disadvantageous to such Lender or contrary to such Lender's normal banking
practices.
2.15. Taxes on Payments.
-----------------
(a) Payments Free of Taxes. All payments made by Borrower under
----------------------
this Agreement and the other Credit Documents shall be made free and clear
of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority (except net
income taxes and franchise taxes in lieu of net income taxes imposed on
Agent or any Lender by its jurisdiction of incorporation or the
jurisdiction in which its Applicable Lending Office is located) (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). Subject to Subparagraphs
-------------
2.15(c) and 2.15(d), if any Taxes are required to be withheld from any
-------------------
amounts payable to Agent or any Lender hereunder or under the other Credit
Documents, the amounts so payable to Agent or such Lender shall be
increased to the extent necessary to yield to Agent or such Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Agreement and the other
Credit Documents. Whenever any Taxes are payable by Borrower, as promptly
as possible thereafter, Borrower shall send to Agent for its own account or
for the account of such Lender, as the case may be, a certified copy of an
original official receipt received by Borrower showing payment thereof. If
Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Agent the required receipts or other
required documentary evidence, Borrower shall indemnify Agent and the
Lenders for any incremental taxes, interest or penalties that may become
payable by Agent or any Lender as a result of any such failure. The
obligations of Borrower under this Subparagraph 2.15(a) shall survive the
--------------------
payment and performance of the Obligations and the termination of this
Agreement.
(b) Withholding Exemption Certificates, Etc. If Agent or any
---------------------------------------
Lender is not organized under the laws of the United States of America or a
state thereof, such Person agrees as set forth below in this Subparagraph
------------
2.15(b).
-------
28
<PAGE>
(i) If any such Person is a "bank" within the meaning of Section
881(c)(3)(A) of the IRC, it shall, no later than the Closing Date (or,
in the case of a Lender which becomes a Lender hereunder pursuant to
Subparagraph 8.05(c) after the Closing Date, the date upon which such
--------------------
Lender so becomes a Lender hereunder) deliver to Borrower and Agent
two (2) accurate and complete signed originals of IRS Form 4224 or any
successor thereto ("Form 4224"), or two accurate and complete signed
originals of IRS Form 1001 or any successor thereto ("Form 1001"), as
appropriate, in each case indicating that such Person is, on the date
of delivery thereof, entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United
States Federal income tax. If at any time such Person makes any
changes necessitating a new Form 4224 or Form 1001, it shall, within
thirty (30) days after such change becomes effective, deliver to
Borrower and Agent in replacement for, or in addition to, the forms
previously delivered by it hereunder, two accurate and complete signed
originals of Form 4224, or two accurate and complete signed originals
of Form 1001, as appropriate, in each case indicating that such Person
is, on the date of delivery thereof, entitled to receive payments of
principal, interest and fees under this Agreement free from
withholding of United States Federal income tax.
(ii) If any such Person is not a "bank" within the meaning of
Section 881(c)(3)(A) of the IRC, it shall, no later than the Closing
Date (or, in the case of a Lender which becomes a Lender hereunder
pursuant to Subparagraph 8.05(c) after the Closing Date, the date upon
--------------------
which such Lender so becomes a Lender hereunder) deliver to Borrower
and Agent two (2) accurate and complete signed originals of IRS Form
W-8 or any successor thereto ("Form W-8") certifying to such Person's
legal entitlement (assuming compliance by Borrower with the terms of
this Agreement) to an exemption whereby such Person is on the date of
delivery thereof entitled to receive payments of principal, interest
and fees under this Agreement free from withholding of United States
Federal income tax. If at any time any such Person makes any changes
necessitating a new Form W-8, it shall, within thirty (30) days after
such change becomes effective, deliver to Borrower and Agent in
replacement for, or in addition to, the forms previously delivered by
it hereunder, two accurate and complete signed originals of Form W-8
certifying to such Person's legal entitlement (assuming compliance by
Borrower with the terms of this Agreement) to an exemption whereby
such Person is on the date of delivery thereof entitled to receive
payments of principal, interest and fees under this Agreement free
from withholding of United States Federal income tax.
(iii) Each such Person shall, before or within thirty (30) days
after the occurrence of any event (including the passing of time but
excluding any event mentioned in clause (i) or (ii) above) requiring a
change in or renewal of the most recent Form 4224, Form 1001 or Form
W-8 previously delivered by such Person, deliver to Borrower and Agent
two accurate and complete original signed copies of Form 4224, Form
1001 or Form W-8 in replacement for the forms previously delivered by
such Person.
29
<PAGE>
(iv) Each such Person shall, promptly upon the reasonable request
of Agent, deliver to Agent such other forms or similar documentation
as may be required from time to time by any applicable Governmental
Rule in order to establish such Lender's tax status for withholding
purposes.
(c) Non-Compliance, Etc. Borrower will not be required to pay
-------------------
any additional amounts in respect of United States Federal income tax
pursuant to Subparagraph 2.15(a) to Agent or any Lender subject to
--------------------
Subparagraph 2.15(b) if:
--------------------
(i) The obligation to pay such additional amounts would not have
arisen but for a failure by such Person to comply with its obligations
under Subparagraph 2.15(b); or
--------------------
(ii) Such Person is not entitled to exemption from deduction or
withholding of United States Federal income tax for payments by
Borrower to such Person hereunder for the account of its Applicable
Lending Office for any reason other than a Change of Law after the
date of delivery by such Person of Form 4224, Form 1001 or Form W-8,
as the case may be.
(d) Mitigation. If Agent or any Lender claims any additional
----------
amounts to be payable to it pursuant to this Paragraph 2.15, such Person
--------------
shall use reasonable commercial efforts to file any certificate or document
requested in writing by Borrower (including without limitation copies of
Internal Revenue Service Form 1001 (or successor forms) reflecting a
reduced rate of withholding) or to change the jurisdiction of its
Applicable Lending Office if the making of such a filing or such change in
the jurisdiction of its Applicable Lending Office would avoid the need for
or materially reduce the amount of any such additional amounts which may
thereafter accrue and if, in the reasonable opinion of such Person, in the
case of a change in the jurisdiction of its Applicable Lending Office, such
change would not be disadvantageous to such Person or contrary to such
Person's normal banking practices.
(e) Tax Returns. Nothing contained in this Paragraph 2.15 shall
----------- --------------
require Agent or any Lender to make available any of its tax returns (or
any other information relating to its taxes which it deems to be
confidential).
2.16. Funding Loss Indemnification. If Borrower shall (a) repay or
----------------------------
prepay any LIBOR Loan on any day other than the last day of an Interest Period
therefor (whether a scheduled payment, an optional prepayment, a mandatory
prepayment or a payment upon acceleration or otherwise) or (b) fail to borrow
any LIBOR Loan for which a Notice of Borrowing has been delivered to Agent
(whether as a result of the failure to satisfy any applicable conditions or
otherwise), Borrower shall, upon demand by any Lender, reimburse such Lender for
and hold such Lender harmless from all costs and losses incurred by such Lender
as a result of such repayment, prepayment or failure. Borrower understands that
such costs and losses may include losses incurred by a Lender as a result of
funding and other contracts entered into by such
30
<PAGE>
Lender to fund a LIBOR Loan. Each Lender demanding payment under this Paragraph
---------
2.16 shall deliver to Borrower, with a copy to Agent, a certificate setting
- ----
forth the amount of costs and losses for which demand is made, which certificate
shall set forth in reasonable detail the calculation of the amount demanded.
Such a certificate so delivered to Borrower shall constitute prima facie
evidence of such costs and losses. The obligations of Borrower under this
Paragraph 2.16 shall survive the payment and performance of the Obligations and
- --------------
the termination of this Agreement.
2.17. Replacement of Lenders. If any Lender shall (a) become a Defaulting
----------------------
Lender, (b) suspend its obligation to make or maintain LIBOR Loans pursuant to
Subparagraph 2.14(b) for a reason which is not applicable to any other Lender or
- --------------------
(c) demand any payment under Subparagraph 2.14(c), 2.14(d) or 2.15(a) for a
----------------------------------------
reason which is not applicable to any other Lender, then Agent may (or shall,
upon the written request of Borrower if no Event of Default has occurred and is
continuing) replace such Lender (the "affected Lender"), or cause such affected
Lender to be replaced, with another lender (the "replacement Lender") satisfying
the requirements of an Assignee Lender under Subparagraph 8.05(c), by having the
--------------------
affected Lender sell and assign all of its rights and obligations under this
Agreement and the other Credit Documents to the replacement Lender pursuant to
Subparagraph 8.05(c); provided, however, that if Borrower seeks to exercise such
- -------------------- -----------------
right, it must give Agent written notice of its intent to do so within thirty
(30) days after it first knows or should have known of the occurrence of the
event or events giving rise to such right and must effect such replacement
within sixty (60) days of giving such notice. Neither Agent nor any Lender
shall have any obligation to identify or locate a replacement Lender for
Borrower. Upon receipt by any affected Lender of a written notice from Agent
stating that Agent is exercising the replacement right set forth in this
Paragraph 2.17, such affected Lender shall sell and assign all of its rights and
- --------------
obligations under this Agreement and the other Credit Documents to the
replacement Lender pursuant to an Assignment Agreement and Subparagraph 8.05(c)
--------------------
for a purchase price equal to the sum of the principal amount of the affected
Lender's Loans so sold and assigned, all accrued and unpaid interest thereon and
its ratable share of all fees to which it is entitled.
2.18. Maturity Date Extensions. Borrower may, at any time, request the
------------------------
Lenders to extend the Maturity Date then in effect for an additional 364-day
period by delivering a written request to Agent. Agent shall promptly deliver
to each Lender a copy of any such extension request received by Agent. If a
Lender, in its sole and absolute discretion, consents to any Extension Request,
such Lender shall so notify Agent in writing not later than any time specified
by Agent. Any failure by any Lender so to notify Agent shall be deemed a denial
thereof. (Borrower acknowledges and agrees that no Lender has promised, either
expressly or impliedly, or has any obligation or commitment, to consent to such
a request at any time.) If all Lenders consent to an extension request, Agent
shall so notify Borrower and the Lenders and shall prepare an amendment to
reflect the requested extension. If no Lender or less than all Lenders shall
consent to an extension request, Agent shall so notify Borrower and the Lenders,
and the Maturity Date then in effect shall remain in effect.
31
<PAGE>
SECTION III. CONDITIONS PRECEDENT.
- ------------ --------------------
3.01. Initial Conditions Precedent. The obligations of the Lenders to
----------------------------
make the Loans comprising the initial Borrowing are subject to receipt by Agent,
on or prior to the Closing Date, of each item listed in Schedule 3.01, each in
-------------
form and substance satisfactory to Agent and each Lender, and with sufficient
copies for, Agent and each Lender. Agent shall notify Borrower and Lenders upon
Agent's receipt of such items.
3.02. Conditions Precedent to Each Credit Event. The occurrence of each
-----------------------------------------
Credit Event (including the initial Borrowing) is subject to the further
conditions that:
(a) Borrower shall have delivered to Agent the Notice of Borrowing
or Notice of Interest Period Selection, as the case may be, for such Credit
Event in accordance with this Agreement; and
(b) On the date such Credit Event is to occur and after giving
effect to such Credit Event, the following shall be true and correct:
(i) The representations and warranties of Borrower and its
Subsidiaries set forth in Paragraph 4.01 and in the other Credit
--------------
Documents are true and correct in all material respects as if made on
such date (except for representations and warranties expressly made as
of a specified date, which shall be true as of such date);
(ii) No Default has occurred and is continuing or will result
from such Credit Event; and
(iii) All of the Credit Documents are in full force and effect.
The submission by Borrower to Agent of each Notice of Borrowing and each
Notice of Interest Period Selection shall be deemed to be a representation
and warranty by Borrower that each of the statements set forth above in
this Subparagraph 3.02(b) is true and correct as of the date of such
--------------------
notice.
3.03. Covenant to Deliver. Borrower agrees (not as a condition but as a
-------------------
covenant) to deliver to Agent each item required to be delivered to Agent as a
condition to the occurrence of any Credit Event if such Credit Event occurs.
Borrower expressly agrees that the occurrence of any such Credit Event prior to
the receipt by Agent of any such item shall not constitute a waiver by Agent or
any Lender of Borrower's obligation to deliver such item.
SECTION IV. REPRESENTATIONS AND WARRANTIES.
- ----------- ------------------------------
4.01. Borrower's Representations and Warranties. In order to induce Agent
-----------------------------------------
and the Lenders to enter into this Agreement, Borrower hereby represents and
warranties to Agent and the Lenders as follows:
32
<PAGE>
(a) Due Incorporation, Qualification, etc. Each of Borrower and
-------------------------------------
Borrower's Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; (ii) has the power and authority to own, lease and operate
its properties and carry on its business as now conducted; and (iii) is
duly qualified, licensed to do business and in good standing as a foreign
corporation in each jurisdiction where the failure to be so qualified or
licensed is reasonably likely to have a Material Adverse Effect.
(b) Authority. The execution, delivery and performance by
---------
Borrower of each Credit Document executed, or to be executed, by Borrower
and the consummation of the transactions contemplated thereby (i) are
within the power of Borrower and (ii) have been duly authorized by all
necessary actions on the part of Borrower.
(c) Enforceability. Each Credit Document executed, or to be
--------------
executed, by Borrower has been, or will be, duly executed and delivered by
Borrower and constitutes, or will constitute, a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and general principles of equity.
(d) Non-Contravention. The execution and delivery by Borrower of
-----------------
the Credit Documents executed by Borrower and the performance and
consummation of the transactions contemplated thereby do not (i) violate
any Requirement of Law applicable to Borrower; (ii) violate any provision
of, or result in the breach or the acceleration of, or entitle any other
Person to accelerate (whether after the giving of notice or lapse of time
or both), any Contractual Obligation of Borrower; or (iii) result in the
creation or imposition of any Lien (or the obligation to create or impose
any Lien) upon any property, asset or revenue of Borrower (except such
Liens as may be created in favor of Agent pursuant to this Agreement or the
other Credit Documents).
(e) Approvals. No consent, approval, order or authorization of,
---------
or registration, declaration or filing with, any Governmental Authority or
other Person (including, without limitation, the shareholders of any
Person) is required in connection with the execution and delivery of the
Credit Documents executed by Borrower and the performance and consummation
of the transactions contemplated thereby.
(f) No Violation or Default. Neither Borrower nor any of its
-----------------------
Subsidiaries is in violation of or in default with respect to (i) any
Requirement of Law applicable to such Person; (ii) any Contractual
Obligation of such Person (nor is there any waiver in effect which, if not
in effect, would result in such a violation or default), where, in each
case, such violation or default is reasonably likely to have a Material
Adverse Effect. Without limiting the generality of the foregoing, except
as set forth in the Disclosure Letter, neither Borrower nor any of its
Subsidiaries (A) has violated any Environmental Laws, (B) has any liability
under any Environmental Laws or (C) has received notice or other
communication of an investigation or is under investigation by any
Governmental
33
<PAGE>
Authority having authority to enforce Environmental Laws, where such
violation, liability or investigation is reasonably likely to have a
Material Adverse Effect. No Default has occurred and is continuing.
(g) Litigation. Except as set forth in the Disclosure Letter, no
----------
actions (including, without limitation, derivative actions), suits,
proceedings or investigations are pending or, to the knowledge of Borrower,
threatened against Borrower or any of its Subsidiaries at law or in equity
in any court or before any other Governmental Authority which (i) is
reasonably likely (alone or in the aggregate) to have a Material Adverse
Effect or (ii) seeks to enjoin, either directly or indirectly, the
execution, delivery or performance by Borrower of the Credit Documents or
the transactions contemplated thereby.
(h) Title, Possession under Leases. Borrower and its
------------------------------
Subsidiaries own and have good and marketable title, or a valid leasehold
interest in, all their respective properties and assets as reflected in the
most recent Financial Statements delivered to Agent (except those assets
and properties disposed of in the ordinary course of business or otherwise
in compliance with this Agreement since the date of such Financial
Statements) and all respective assets and properties acquired by Borrower
and its Subsidiaries since such date (except those disposed of in the
ordinary course of business or otherwise in compliance with this
Agreement). Such assets and properties are subject to no Lien, except for
Permitted Liens. Each of Borrower and its Subsidiaries has complied with
all material obligations under all material leases to which it is a party
and all such leases are in full force and effect. Each of Borrower and its
Subsidiaries enjoys peaceful and undisturbed possession under such leases,
except where any failure to enjoy such possession (alone or in the
aggregate with other such failures) is not reasonably likely to have a
Material Adverse Effect.
(i) Financial Statements. The Financial Statements of Borrower
--------------------
and its Subsidiaries which have been delivered to Agent, (i) are in
accordance with the books and records of Borrower and its Subsidiaries,
which have been maintained in accordance with good business practice; (ii)
have been prepared in conformity with GAAP; and (iii) fairly present the
financial conditions and results of operations of Borrower and its
Subsidiaries as of the date thereof and for the period covered thereby. As
of the date of, and except as disclosed in the audited Financial Statements
dated December 31, 1998 furnished by Borrower to Agent prior to the date
hereof and in the Financial Statements delivered to Agent pursuant to
clause (i) or (ii) of Subparagraph 5.01(a), neither Borrower nor any of its
------------------------------------------
Subsidiaries has any Contingent Obligations, liability for taxes or other
outstanding obligations which are material in the aggregate.
(j) No Agreements to Sell Assets. Neither Borrower nor any of
----------------------------
its Subsidiaries has any legal obligation, absolute or contingent, to any
Person to sell the assets of Borrower or any of its Subsidiaries (other
than sales in the ordinary course of business), or to effect any merger,
consolidation or other reorganization of Borrower or any of its
Subsidiaries or to enter into any agreement with respect thereto.
34
<PAGE>
(k) Employee Benefit Plans.
----------------------
(i) Based on the latest valuation of each Employee Benefit
Plan that either Borrower or any ERISA Affiliate maintains or
contributes to, or has any obligation under (which valuation occurred
within twelve months of the date of this representation), the
aggregate benefit liabilities of such plan within the meaning of (S)
4001 of ERISA did not exceed the aggregate value of the assets of such
plan. Neither Borrower nor any ERISA Affiliate has any liability with
respect to any post-retirement benefit under any Employee Benefit Plan
which is a welfare plan (as defined in section 3(1) of ERISA), other
than liability for health plan continuation coverage described in Part
6 of Title I(B) of ERISA, which liability for health plan contribution
coverage is not reasonably likely to have a Material Adverse Effect.
(ii) Each Employee Benefit Plan complies, in both form and
operation, in all material respects, with its terms, ERISA and the
IRC, and no condition exists or event has occurred with respect to any
such plan which, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect. Each Employee Benefit Plan,
related trust agreement, arrangement and commitment of Borrower or any
ERISA Affiliate is legally valid and binding and in full force and
effect. No Employee Benefit Plan is being audited or investigated by
any government agency or is subject to any pending or threatened claim
or suit (other than routine benefits claims). Neither Borrower nor
any ERISA Affiliate nor any fiduciary of any Employee Benefit Plan has
engaged in a prohibited transaction under section 406 of ERISA or
section 4975 of the IRC which, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect.
(iii) Neither Borrower nor any ERISA Affiliate contributes
to or has any material contingent obligations to any Multiemployer
Plan. Neither Borrower nor any ERISA Affiliate has incurred any
material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan under Section 4201 of ERISA or as a
result of a sale of assets described in Section 4204 of ERISA. Neither
Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within
the meaning of Section 4241 or Section 4245 of ERISA or that any
Multiemployer Plan intends to terminate or has been terminated under
Section 4041A of ERISA.
(l) Other Regulations. Borrower is not subject to regulation
-----------------
under the Investment Company Act of 1940, the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code or to any other Governmental Rule limiting
its ability to incur indebtedness.
35
<PAGE>
(m) Patent and Other Rights. Except as set forth in the
-----------------------
Disclosure Letter, Borrower and its Subsidiaries own or license under
validly existing agreements, and have the full right to license without the
consent of any other Person, all patents, licenses, trademarks, trade
names, trade secrets, service marks, copyrights and all rights with respect
thereto, which are required to conduct their businesses as now conducted,
except where any failure so to own, license or have the right to license
without consent (alone or in the aggregate with other such failures) is not
reasonably likely to have a Material Adverse Effect.
(n) Governmental Charges. Borrower and its Subsidiaries have
--------------------
filed or caused to be filed all tax returns which are required to be filed
by them. Borrower and its Subsidiaries have paid, or made provision for
the payment of, all taxes and other Governmental Charges which have or may
have become due pursuant to said returns or otherwise and all other
indebtedness, except such Governmental Charges or indebtedness, if any,
which are being contested in good faith and as to which adequate reserves
(determined in accordance with GAAP) have been provided or which are not
reasonably likely to have a Material Adverse Effect if unpaid.
(o) Margin Stock. Borrower owns no Margin Stock which, in the
------------
aggregate, would constitute a substantial part of the assets of Borrower,
and no proceeds of any Loan will be used to purchase or carry, directly or
indirectly, any Margin Stock or to extend credit, directly or indirectly,
to any Person for the purpose of purchasing or carrying any Margin Stock.
(p) Subsidiaries, etc. Set forth in Schedule 4.01(p) (as
----------------- ----------------
supplemented by Borrower from time to time in a written notice to Agent) is
a complete list of all of Borrower's Subsidiaries, the jurisdiction of
incorporation of each, the classes of Equity Securities of each and the
percentages of shares of each such class owned directly or indirectly by
Borrower. Except for such Subsidiaries, Borrower has no other
Subsidiaries, is not a partner in any partnership or a joint venturer in
any joint venture.
(q) Solvency, Etc. Borrower is Solvent and, after the execution
-------------
and delivery of the Credit Documents and the consummation of the
transactions contemplated thereby, will be Solvent.
(r) Catastrophic Events. Neither Borrower nor any of its
-------------------
Subsidiaries and none of their respective properties is affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or other casualty that is
reasonably likely to have a Material Adverse Effect. There are no disputes
presently subject to grievance procedure, arbitration or litigation under
any of the collective bargaining agreements, employment contracts or
employee welfare or incentive plans to which Borrower or any of its
Subsidiaries is a party, and there are no strikes, lockouts, work stoppages
or slowdowns, or, to the best knowledge of Borrower, jurisdictional
disputes or organizing activities occurring or threatened which alone or in
the aggregate are reasonably likely to have a Material Adverse Effect.
36
<PAGE>
(s) No Material Adverse Effect. No event has occurred and no
--------------------------
condition exists which is reasonably likely to have a Material Adverse
Effect.
(t) Year 2000 Compatibility. Borrower and its Subsidiaries have
-----------------------
reviewed the areas within their respective business and operations which
could be adversely affected by, and have developed or are developing a
program to address on a timely basis, the "Year 2000 Problem" (that is, the
risk that computer applications used by Borrower and its Subsidiaries may
be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date on or after December 31,
1999), and have made related appropriate inquiry of material suppliers and
vendors. Based on such review and program, Borrower believes that the
"Year 2000 Problem" will not have a Material Adverse Effect.
(u) Accuracy of Information Furnished. None of the Credit
---------------------------------
Documents and none of the other certificates, statements or information
furnished to Agent or any Lender by or on behalf of Borrower or any of its
Subsidiaries in connection with the Credit Documents or the transactions
contemplated thereby contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
4.02. Reaffirmation. Borrower shall be deemed to have reaffirmed, for the
-------------
benefit of the Lenders and Agent, each representation and warranty contained in
Paragraph 4.01 on and as of the date of each Credit Event (except for
- --------------
representations and warranties expressly made as of a specified date, which
shall be true as of such date).
SECTION V. COVENANTS.
- ---------- ---------
5.01. Affirmative Covenants. Until the termination of this Agreement and
---------------------
the satisfaction in full by Borrower of all Obligations, Borrower will comply,
and will cause compliance, with the following affirmative covenants, unless
Required Lenders shall otherwise consent in writing:
(a) Financial Statements, Reports, etc. Borrower shall furnish
----------------------------------
to Agent, with sufficient copies for each Lender, the following, each in
such form and such detail as Agent or the Required Lenders shall reasonably
request:
(i) As soon as available and in no event later than fifty-five
(55) days after the last day of each fiscal quarter of Borrower, a
copy of the Financial Statements of Borrower and its Subsidiaries
(prepared on a consolidated basis) for such fiscal quarter and for the
fiscal year to date, certified by the chief financial officer or
treasurer of Borrower to present fairly the financial condition,
results of operations and other information reflected therein and to
have been prepared in accordance with GAAP (subject to normal year-end
audit adjustments);
37
<PAGE>
(ii) As soon as available and in no event later than one
hundred (100) days after the close of each fiscal year of Borrower,
(A) copies of the audited Financial Statements of Borrower and its
Subsidiaries (prepared on a consolidated basis) for such fiscal year,
prepared by independent certified public accountants of recognized
national standing acceptable to Agent and (B) copies of the
unqualified opinions (or qualified opinions reasonably acceptable to
Required Lenders) and management letters delivered by such accountants
in connection with all such Financial Statements;
(iii) Contemporaneously with the quarterly and year-end
Financial Statements required by the foregoing clauses (i) and (ii), a
--------------------
compliance certificate of the chief financial officer or treasurer of
Borrower (a "Compliance Certificate") which (A) states that no Default
----------------------
has occurred and is continuing, or, if any such Default has occurred
and is continuing, a statement as to the nature thereof and what
action Borrower proposes to take with respect thereto; (B) sets forth,
for the four-fiscal quarter period ending on the last day of the
fiscal quarter or fiscal year covered by such Financial Statements or
as of the last day of such fiscal quarter or fiscal year (as the case
may be), the calculation of the financial ratios and tests provided in
Paragraph 5.03; (C) states that the Year 2000 remediation efforts of
--------------
Borrower and its Subsidiaries are proceeding as scheduled; and (D)
indicates whether an auditor, regulator or third party consultant has
issued a management letter or other communication regarding the Year
2000 exposure, program or progress of Borrower and/or its
Subsidiaries;
(iv) As soon as possible and in no event later than ten (10)
Business Days after any officer of Borrower knows of the occurrence or
existence of (A) any Reportable Event under any Employee Benefit Plan
or Multiemployer Plan; (B) any actual or threatened litigation, suits,
claims or disputes against Borrower or any of its Subsidiaries
involving potential monetary damages payable by Borrower or its
Subsidiaries of $3,000,000 or more (alone or in the aggregate); (C)
any other event or condition which is reasonably likely to have a
Material Adverse Effect; or (D) any Default; the statement of the
chief financial officer or treasurer of Borrower setting forth details
of such event, condition or Default and the action which Borrower
proposes to take with respect thereto;
(v) As soon as available and in no event later than five (5)
Business Days after they are sent, made available or filed, copies of
(A) all registration statements and reports filed by Borrower or any
of its Subsidiaries with any securities exchange or the Securities and
Exchange Commission (including, without limitation, all 10-Q, 10-K and
8-Q reports); and (B) all reports, proxy statements and financial
statements sent or made available by Borrower or any of its
Subsidiaries to its security holders;
38
<PAGE>
(vi) As soon as available and in no event later than fifty-
five (55) days after the last day of each fiscal quarter, a
certificate which sets forth the calculation of the Funded
Indebtedness/EBITDA Ratio for the consecutive four-fiscal quarter
period ending on the last day of such quarter, certified by the chief
financial officer or treasurer of Borrower; and
(vii) Such other instruments, agreements, certificates,
opinions, statements, documents and information relating to the
operations or condition (financial or otherwise) of Borrower or its
Subsidiaries, and compliance by Borrower with the terms of this
Agreement and the other Credit Documents as Agent may from time to
time reasonably request.
(b) Books and Records. Borrower and its Subsidiaries shall at
-----------------
all times keep proper books of record and account in which full, true and
correct entries will be made of their transactions in accordance with GAAP.
(c) Inspections. Borrower and its Subsidiaries shall permit any
-----------
Person designated by any Lender, upon reasonable notice and during normal
business hours, to visit and inspect any of the properties and offices of
Borrower and its Subsidiaries, to examine the books and records of Borrower
and its Subsidiaries and make copies thereof and to discus the affairs,
finances and business of Borrower and its Subsidiaries with, and to be
advised as to the same by, their officers, auditors and accountants, all at
such times and intervals as any Lender may reasonably request.
(d) Insurance. Borrower and its Subsidiaries shall carry and
---------
maintain insurance of the types and in the amounts customarily carried from
time to time during the term of this Agreement by others engaged in
substantially the same business as such Person and operating in the same
geographic area as such Person, including, but not limited to, fire, public
liability, property damage and worker's compensation.
(e) Governmental Charges. Borrower and its Subsidiaries shall
--------------------
promptly pay and discharge when due all taxes and other Governmental
Charges prior to the date upon which penalties accrue thereon, except such
taxes and other Governmental Charges as may in good faith be contested or
disputed, or for which arrangements for deferred payment have been made,
provided that in each such case appropriate reserves are maintained in
accordance with GAAP.
(f) Use of Proceeds. Borrower shall use the proceeds of the
---------------
Loans only for the respective purposes set forth in Paragraph 2.06.
--------------
Borrower shall not use any part of the proceeds of any Loan, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock or
for the purpose of purchasing or carrying or trading in any securities
under such circumstances as to involve Borrower, any Lender or Agent in a
violation of Regulations T, U or X issued by the Federal Reserve Board.
39
<PAGE>
(g) General Business Operations. Each of Borrower and its
---------------------------
Subsidiaries shall (i) preserve and maintain its corporate existence and
all of its rights, privileges and franchises reasonably necessary to the
conduct of its business, (ii) conduct its business activities in compliance
with all Requirements of Law and Contractual Obligations applicable to such
Person, the violation of which is reasonably likely to have a Material
Adverse Effect and (iii) keep all property useful and necessary in its
business in good working order and condition, ordinary wear and tear
excepted. Borrower shall maintain its chief executive office and principal
place of business in the United States and shall not relocate its chief
executive office or principal place of business outside of California
except upon not less than thirty (30) days prior written notice to Agent.
(h) Year 2000 Compatibility. Borrower and its Subsidiaries shall take
-----------------------
all acts reasonably necessary to ensure that all software, hardware,
firmware, equipment, goods and systems utilized by or material to their
business operations or financial condition will properly perform date
sensitive functions before, during and after the year 2000. At the request
of Agent, Borrower shall provide to Agent such certifications or other
evidence of compliance with this Subparagraph 5.01(h) as Agent may
--------------------
reasonably require.
(i) Pari Passu Ranking. Borrower shall take, or cause to be
------------------
taken, all actions necessary to ensure that the Obligations of Borrower are
and continue to rank at least pari passu in right of payment with all other
----------
unsecured Indebtedness of Borrower (including, without limitation,
Indebtedness evidenced by the Private Placement Notes).
5.02. Negative Covenants. Until the termination of this Agreement and
------------------
the satisfaction in full by Borrower of all Obligations, Borrower will comply,
and will cause compliance, with the following negative covenants, unless
Required Lenders shall otherwise consent in writing:
(a) Indebtedness. Neither Borrower nor any of its Subsidiaries
------------
shall create, incur, assume or permit to exist any Indebtedness, except for
the following ("Permitted Indebtedness"):
----------------------
(i) The Obligations of Borrower under the Credit Documents;
(ii) Indebtedness of Borrower and its Subsidiaries existing on
the date of this Agreement; provided that (A) such Indebtedness is
reflected in the audited Financial Statements of Borrower for the year
ended December 31, 1998 delivered to Agent pursuant to Paragraph 3.01
--------------
and (B) each item of such Indebtedness of $1,000,000 or more is listed
in Schedule 5.02(a);
----------------
(iii) Indebtedness of Borrower and its Subsidiaries arising
from the endorsement of instruments for collection in the ordinary
course of Borrower's or a Subsidiary's business;
40
<PAGE>
(iv) Indebtedness of Borrower and its Subsidiaries for trade
accounts payable, provided that (A) such accounts arise in the
ordinary course of business and (B) no material part of any such
account is more than ninety (90) days past due (unless subject to a
bona fide dispute and for which adequate reserves have been
established);
(v) Indebtedness of Borrower and its Subsidiaries under Rate
Contracts, provided that all such Rate Contracts are entered into in
connection with bona fide hedging operations and not for speculation;
(vi) Indebtedness of Borrower and its Subsidiaries under
purchase money loans and Capital Leases incurred by Borrower or any of
its Subsidiaries to finance the acquisition by such Person of real
property, fixtures, equipment or Borrower's demonstration systems,
provided that (A) in each case involving real property, fixtures and
equipment, such Indebtedness is incurred by such Person at the time
of, or not later than thirty (30) days after, the acquisition by such
Person of the property so financed, (B) in each case, such
Indebtedness does not exceed the purchase price of the property so
financed and (C) the aggregate amount of such Indebtedness outstanding
at any time does not exceed $15,000,000;
(vii) Indebtedness of Borrower and its Subsidiaries under
initial or successive refinancings of any Indebtedness permitted by
clause (ii) above, provided that (A) the principal amount of any such
-----------
refinancing does not exceed the principal amount of the Indebtedness
being refinanced and (B) the material terms and provisions of any such
refinancing taken as a whole (including maturity, redemption,
prepayment, default and subordination provisions) are no less
favorable to the Lenders than the Indebtedness being refinanced;
(viii) Indebtedness of Borrower and its Subsidiaries with
respect to surety, appeal, indemnity, performance or other similar
bonds in the ordinary course of business;
(ix) Guaranty Obligations of Borrower in respect of Permitted
Indebtedness of its Subsidiaries;
(x) Indebtedness of Borrower to any of its Subsidiaries,
Indebtedness of any of Borrower's Subsidiaries to Borrower or
Indebtedness of any of Borrower's Subsidiaries to any of Borrower's
other Subsidiaries;
(xi) Indebtedness evidenced by the Private Placement Notes,
provided that (A) the Indebtedness arising under this Agreement shall
at all times rank at least pari passu in right of payment with the
---- -----
Indebtedness evidenced by such Private Placement Notes, (B) except as
required pursuant to Section 5.1 of the Note Purchase Agreement, no
principal payable in connection with the Indebtedness evidenced by
such Private Placement Notes is scheduled for
41
<PAGE>
payment on or prior to the Maturity Date, and (C) the aggregate
principal amount of all such Indebtedness evidenced by the Private
Placement Notes outstanding at any time (measured at the time of the
issuance of such Private Placement Notes) does not exceed One Hundred
Million Dollars ($100,000,000);
(xii) Indebtedness of Borrower under a "synthetic" lease
transaction involving the acquisition and construction of a new
headquarters facility; and
(xiii) Other Indebtedness of Borrower and its Subsidiaries
(whether or not of a type listed in clauses (i) through (xii) above),
-------------------------
provided that the aggregate principal amount of all such other
Indebtedness does not exceed $30,000,000 at any time.
(b) Liens. Neither Borrower nor any of its Subsidiaries shall
-----
create, incur, assume or permit to exist any Lien on or with respect to any
of its assets or property of any character, whether now owned or hereafter
acquired, except for the following ("Permitted Liens"):
---------------
(i) Liens in favor of Agent or any Lender securing the
Obligations;
(ii) Liens of Borrower and its Subsidiaries existing on the
date of this Agreement; provided that each Lien securing Indebtedness
of $100,000 or more is listed in Schedule 5.02(b);
----------------
(iii) Liens for taxes or other Governmental Charges not at
the time delinquent or thereafter payable without penalty or being
contested in good faith, provided that adequate reserves for the
payment thereof have been established in accordance with GAAP;
(iv) Liens of carriers, warehousemen, mechanics, materialmen,
vendors, and landlords and other similar Liens imposed by law incurred
in the ordinary course of business for sums not overdue or being
contested in good faith, provided that adequate reserves for the
payment thereof have been established in accordance with GAAP;
(v) Deposits under workers' compensation, employment insurance
and social security laws in the ordinary course of business;
(vi) Deposits to secure the performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or leases
or to secure indemnity, performance or other similar bonds in the
ordinary course of business;
(vii) Deposits to secure, or in lieu of, surety, appeal or
customs bonds in proceedings involving Borrower or any of its
Subsidiaries;
42
<PAGE>
(viii) Zoning restrictions, easements, rights-of-way, title
irregularities and other similar encumbrances, which alone or in the
aggregate are not substantial in amount and do not materially detract
from the value of the property subject thereto or interfere with the
ordinary conduct of the business of Borrower or any of its
Subsidiaries;
(ix) Banker's Liens and similar Liens (including set-off
rights) in respect of bank deposits;
(x) Liens on property or assets acquired by Borrower or any
of its Subsidiaries after the date of this Agreement or on property or
assets of any corporation which becomes a Subsidiary of Borrower after
the date of this Agreement, provided that (A) such Liens exist at the
time such property or assets or the stock of such corporation is
acquired by Borrower and (B) such Liens were not created in
contemplation of such acquisition by Borrower;
(xi) Judgement Liens, provided that such Liens do not
constitute an Event of Default under Subparagraph 6.01(h);
--------------------
(xii) Rights of vendors or lessors under conditional sale
agreements, Capital Leases or other title retention agreements,
provided that, in each case, (A) such rights secure or otherwise
relate to Permitted Indebtedness, (B) such rights do not extend to any
property other than property acquired with the proceeds of such
Permitted Indebtedness and (C) such rights do not secure any
Indebtedness other than such Permitted Indebtedness;
(xiii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties and in
connection with the importation of goods in the ordinary course of
Borrower's and its Subsidiaries' businesses;
(xiv) Liens securing Indebtedness which constitutes Permitted
Indebtedness under clause (vi) of Subparagraph 5.02(a) provided that,
-----------------------------------
in each case, such Lien (A) covers only those assets, the acquisition
of which was financed by such Permitted Indebtedness, and (B) secures
only such Permitted Indebtedness;
(xv) Liens on the property or assets of any Subsidiary of
Borrower in favor of Borrower or any other Subsidiary of Borrower;
(xvi) Liens incurred in connection with the extension,
renewal or refinancing of the Indebtedness secured by the Liens
described in clause (ii) or (xiv) above, provided that any extension,
--------------------
renewal or replacement Lien (A) is limited to the property covered by
the existing Lien and (B) secures Indebtedness
43
<PAGE>
which is no greater in amount and has material terms no less favorable
to the Lenders than the Indebtedness secured by the existing Lien;
(xvii) Liens in the property that is the subject of the
"synthetic" lease referred in clause (xii) of Subparagraph 5.02(a) and
------------------------------------
in any related property; and
(xviii) Liens on insurance proceeds in favor of insurance
companies with respect to the financing of insurance premiums.
(c) Asset Dispositions. Neither Borrower nor any of its Subsidiaries
------------------
shall sell, lease, transfer or otherwise dispose of any of its assets or
property, whether now owned or hereafter acquired, except for the
following:
(i) Sales of inventory by Borrower and its Subsidiaries in
the ordinary course of their businesses;
(ii) Sales of surplus, damaged, worn or obsolete equipment or
inventory for not less than fair market value;
(iii) Sales or other dispositions of Investments permitted by
clauses (i), (ii), (iii) and (iv) of Subparagraph 5.02(e) for not less
---------------------------------------------------------
than fair market value;
(iv) Sales or assignments of defaulted receivables to a
collection agency in the ordinary course of business;
(v) Sales of lease receivables, provided that (A) no Default
has occurred and is continuing at the time of, or will arise as a
result of, any such sale and (B) each such sale is for not less than
fair market value;
(vi) Sales or other dispositions of assets and property by
Borrower to any of Borrower's Subsidiaries or by any of Borrower's
Subsidiaries to Borrower or any of its other Subsidiaries;
(vii) Sales, leases, transfers or other disposition of the
property that is the subject of the "synthetic" lease transaction
referred in clause (xii) of Subparagraph 5.02(a) and in any related
------------------------------------
property solely in connection with such "synthetic" lease
transaction; and
(viii) Other sales, leases, transfers and disposals of assets
and property, provided that the aggregate value of all such assets and
property (based upon the greater of the fair market or book value of
such assets and property) so sold, leased, transferred or otherwise
disposed of in any fiscal year does not exceed $10,000,000.
44
<PAGE>
(d) Mergers, Acquisitions, Etc. Neither Borrower nor any of its
--------------------------
Subsidiaries shall consolidate with or merge into any other Person or
permit any other Person to merge into it, acquire any Person as a new
Subsidiary or acquire all or substantially all of the assets of any other
Person, except for the following:
(i) Any wholly-owned Subsidiary of Borrower may merge into
Borrower or any other wholly-owned Subsidiary of Borrower; and
(ii) Borrower or any of its Subsidiaries may acquire other
Persons and all or substantially all of the assets of other Persons,
provided that (A) no Default has occurred and is continuing at the
time of, or will arise as a result of any such acquisition and (B) the
aggregate cost to Borrower and its Subsidiaries of all such
acquisitions in any fiscal year does not exceed 7.5% of Borrower's
Tangible Net Worth on the last day of the immediately preceding fiscal
year.
(e) Investments. Neither Borrower nor any of its Subsidiaries
-----------
shall make any Investment except for Investments in the following:
(i) Investments of Borrower and its Subsidiaries in Cash
Equivalents;
(ii) Investments permitted by the investment policy attached
hereto as Exhibit D, provided that such policy has been approved by
---------
the Board of Directors of Borrower;
(iii) Investments of Borrower and its Subsidiaries existing
on the date of this Agreement; provided that (A) such Investments are
reflected in the audited Financial Statements of Borrower for the year
ended December 31, 1998 delivered to Agent pursuant to Paragraph 3.01
--------------
and (B) each Investment of $1,000,000 or more, is listed in Schedule
--------
5.02(e);
-------
(iv) Investments received by Borrower and its Subsidiaries in
connection with the bankruptcy or reorganization of customers and
suppliers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(v) Investments arising from rights received by Borrower and
its Subsidiaries upon the required payment of any permitted Contingent
Obligations of Borrower and its Subsidiaries;
(vi) Investments by Borrower and its Subsidiaries in
Subsidiaries of Borrower and Investments by Borrower's Subsidiaries in
Borrower;
(vii) Investments consisting of loans to employees, officers and
directors, the proceeds of which shall be used to purchase equity
securities of
45
<PAGE>
Borrower or its Subsidiaries and other loans or advances of funds to
employees, officers and directors;
(viii) Investments in receivables arising from the sale of
goods in international markets in the ordinary course of business;
(ix) Investments permitted by Subparagraph 5.02(a) or
--------------------
Subparagraph 5.02(d); and
--------------------
(x) Other Investments, provided that the aggregate amount of
such other Investments incurred in any fiscal year does not exceed
$25,000,000.
(f) Dividends, Redemptions, Etc. Neither Borrower nor any of its
---------------------------
Subsidiaries shall pay any dividends or make any distributions on its
Equity Securities; purchase, redeem, retire, defease or otherwise acquire
for value any of its Equity Securities; return any capital to any holder of
its Equity Securities as such; make any distribution of assets, Equity
Securities, obligations or securities to any holder of its Equity
Securities as such; or set apart any sum for any such purpose; except as
follows:
(i) Either Borrower or any of its Subsidiaries may pay
dividends on its capital stock payable solely in such Person's own
capital stock;
(ii) Any Subsidiary of Borrower may pay dividends to Borrower;
and
(iii) Borrower may repurchase shares of its outstanding
common stock, provided that (A) no Default has occurred and is
continuing at the time of, or will arise as a result of, any such
repurchase; (B) the Borrower's Funded Indebtedness/EBITDA Ratio for
the four-fiscal quarter period most recently ended prior to the date
of such purchase, as reflected in the most recent Compliance
Certificate delivered to Agent pursuant to clause (iii) of
---------------
Subparagraph 5.01(a), is less than 2.00 to 1.00; and (C) the aggregate
--------------------
cost of all such repurchases after the date of this Agreement does not
exceed $45,000,000.
(g) Change in Business. Neither Borrower nor any of its
------------------
Subsidiaries shall engage, either directly or indirectly through
Affiliates, in any business substantially different from its present
business.
(h) ERISA. Neither Borrower nor any ERISA Affiliate shall (i)
-----
adopt or institute any Employee Benefit Plan that is an employee pension
benefit plan within the meaning of Section 3(2) of ERISA, (ii) take any
action which will result in the partial or complete withdrawal, within the
meanings of sections 4203 and 4205 of ERISA, from a Multiemployer Plan,
(iii) engage or permit any Person to engage in any transaction prohibited
by section 406 of ERISA or section 4975 of the IRC involving any Employee
Benefit Plan or Multiemployer Plan which would subject either Borrower or
any ERISA Affiliate to any tax, penalty or other liability including a
liability to indemnify, (iv) incur
46
<PAGE>
or allow to exist any accumulated funding deficiency (within the meaning of
section 412 of the IRC or section 302 of ERISA), (v) fail to make full
payment when due of all amounts due as contributions to any Employee
Benefit Plan or Multiemployer Plan, (vi) fail to comply with the
requirements of section 4980B of the IRC or Part 6 of Title I(B) of ERISA,
or (vii) adopt any amendment to any Employee Benefit Plan which would
require the posting of security pursuant to section 401(a)(29) of the IRC,
where, singly or cumulatively, any such actions described above would have
a Material Adverse Effect.
(i) Transactions With Affiliates. Neither Borrower nor any
----------------------------
of its Subsidiaries shall enter into any Contractual Obligation with any
Affiliate or engage in any other transaction with any Affiliate except upon
terms at least as favorable to Borrower or such Subsidiary as such terms in
an arms-length transaction with unaffiliated Persons.
(j) Accounting Changes. Neither Borrower nor any of its
------------------
Subsidiaries shall change (i) its fiscal year (currently January 1 through
December 31) or (ii) its accounting practices except as required by GAAP.
(k) Indebtedness Payments, Etc. Neither Borrower nor any of
---------------------------
its Subsidiaries shall (i) except as required pursuant to Section 5.1 of
the Note Purchase Agreement, prepay, redeem, purchase, defease or otherwise
satisfy in any manner prior to the scheduled payment thereof any
Indebtedness evidenced by the Private Placement Notes; (ii) cause or permit
to occur any event or condition that would grant to the holders of the
Private Placement Notes the right to require Borrower or any of its
Subsidiaries to prepay, redeem, purchase, defease or otherwise satisfy in
any manner prior to the scheduled payment thereof any Indebtedness
evidenced by the Private Placement Notes, unless such prepayment,
redemption, purchase, defeasance or other satisfaction would be permitted
by clause (i) above; or (iii) amend, modify or otherwise change any of the
----------
provisions of the Private Placement Notes or any document, instrument or
agreement related to the Private Placement Notes in a manner which
adversely affects the material rights of Agent or the Lenders.
5.03. Financial Covenants. Until the termination of this
-------------------
Agreement and the satisfaction in full by Borrower of all Obligations, Borrower
will comply, and will cause compliance, with the following financial covenants,
unless Required Lenders shall otherwise consent in writing:
(a) Current Ratio. Borrower shall not permit its Current
-------------
Ratio to be less than 1.25 to 1.00 on the last day of any fiscal quarter.
(b) Funded Indebtedness/EBITDA Ratio. Borrower shall not
--------------------------------
permit its Funded Indebtedness/EBITDA Ratio to be greater than 2.00 to
1.00; provided, however, that if Borrower enters into a "synthetic" lease
-------- -------
transaction of the type described in clause (xii) of Subparagraph 5.02(a),
------------------------------------
then on and after the effective date of such "synthetic" lease transaction
Borrower shall not permit its Funded Indebtedness/EBITDA Ratio to be
greater than 3.00 to 1.00.
47
<PAGE>
(c) Fixed Charge Coverage Ratio. Borrower shall not permit its
---------------------------
Fixed Charge Coverage Ratio for any consecutive four-fiscal quarter period
ending on the date of each quarter to be less than 2.00 to 1.00.
(d) Tangible Net Worth. Borrower shall not permit its Tangible Net
------------------
Worth on the last day of any fiscal quarter (such date to be referred to
herein as a "determination date") which occurs after December 31, 1998
(such date to be referred to herein as the "base date") to be less than the
sum on such determination date of the following:
(i) One Hundred Eighty Three Million Dollars ($183,000,000);
plus
----
(ii) Eighty percent (80%) of the sum of Borrower's
consolidated quarterly net income (ignoring any quarterly losses) for
each fiscal quarter after the base date through and including the
fiscal quarter ending immediately prior to the determination date;
plus
----
(iii) One hundred percent (100%) of the Net Proceeds of all
Equity Securities issued by Borrower and its Subsidiaries (to Persons
other than Borrower or its Subsidiaries) during the period commencing
on the base date and ending on the determination date;
minus
-----
(iv) The aggregate cost to Borrower of repurchasing its common
stock to the extent permitted by clause (iii) of Subparagraph 5.02(f).
------------------------------------
SECTION VI. DEFAULT.
- ----------- -------
6.01. Events of Default. The occurrence or existence of any one or more
-----------------
of the following shall constitute an "Event of Default" hereunder:
----------------
(a) Non-Payment. Borrower shall (i) fail to pay when due any
-----------
principal of any Loan, (ii) fail to pay within two (2) Business Days after
the same becomes due, any interest or fees required under the terms of this
Agreement or any of the other Credit Documents, or (iii) fail to pay within
three (3) Business Days after the same becomes due, any other amount
required under the terms of this Agreement or any of the other Credit
Documents; or
48
<PAGE>
(b) Specific Defaults. Borrower or any of its Subsidiaries shall
-----------------
fail to observe or perform any covenant, obligation, condition or agreement
set forth in Subparagraph 5.01(d), Paragraph 5.02 or Paragraph 5.03; or
------------------------------------------------------
(c) Other Defaults. Borrower or any of its Subsidiaries shall
--------------
fail to observe or perform any other covenant, obligation, condition or
agreement contained in this Agreement or the other Credit Documents and
such failure shall continue for fifteen (15) days after Borrower first
knows (whether through a notice from Agent or otherwise) or should have
known of such failure; or
(d) Representations and Warranties. Any representation,
------------------------------
warranty, certificate, information or other statement (financial or
otherwise) made or furnished by or on behalf of Borrower or any of its
Subsidiaries to Agent or any Lender in or in connection with this Agreement
or any of the other Credit Documents, or as an inducement to Agent or any
Lender to enter into this Agreement, shall be false, incorrect, incomplete
or misleading in any material respect when made or furnished; or
(e) Cross-Default. (i) Borrower or any of its Subsidiaries shall
-------------
fail to make any payment when due on account of any Indebtedness of such
Person (other than the Obligations) and such failure shall continue beyond
any period of grace provided with respect thereto, if the amount of such
Indebtedness exceeds $3,000,000 or the effect of such failure is to cause,
or permit the holder or holders thereof to cause, Indebtedness of Borrower
and its Subsidiaries (other than the Obligations) in an aggregate amount
exceeding $3,000,000 to become due or (ii) Borrower or any of its
Subsidiaries shall otherwise fail to observe or perform any agreement, term
or condition contained in any agreement or instrument relating to any
Indebtedness of such Person (other than the Obligations), or any other
event shall occur or condition shall exist, if the effect of such failure,
event or condition is to cause, or permit the holder or holders thereof to
cause, Indebtedness of Borrower and its Subsidiaries (other than the
Obligations) in an aggregate amount exceeding $3,000,000 to become due
(and/or to be secured by cash collateral); or
(f) Insolvency, Voluntary Proceedings. Borrower or any of its
---------------------------------
Subsidiaries shall (i) apply for or consent to the appointment of a
receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its property, (ii) be unable, or admit in writing its
inability, to pay its debts generally as they mature, (iii) make a general
assignment for the benefit of its or any of its creditors, (iv) be
dissolved or liquidated in full or in part, (v) become insolvent (as such
term may be defined or interpreted under any applicable statue), (vi)
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
or consent to any such relief or to the appointment of or taking possession
of its property by any official in an involuntary case or other proceeding
commenced against it, or (vi) take any action for the purpose of effecting
any of the foregoing; or
49
<PAGE>
(g) Involuntary Proceedings. Proceedings for the appointment of
-----------------------
a receiver, trustee, liquidator or custodian of Borrower or any of its
Subsidiaries or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization
or other relief with respect to Borrower or any of its Subsidiaries or the
debts thereof under any bankruptcy, insolvency or other similar law now or
hereafter in effect shall be commenced and an order for relief entered or
such proceeding shall not be dismissed or discharged within sixty (60) days
of commencement; or
(h) Judgments. (i) One or more judgments, orders, decrees or
---------
arbitration awards requiring Borrower and/or its Subsidiaries to pay an
aggregate amount of $3,000,000 or more shall be rendered against Borrower
and/or any of its Subsidiaries in connection with any single or related
series of transactions, incidents or circumstances and the same shall not
be vacated or stayed for a period of thirty (30) consecutive days; (ii) any
judgment, writ, assessment, warrant of attachment, tax lien or execution or
similar process shall be issued or levied against a substantial part of the
property of Borrower or any of its Subsidiaries and the same shall not be
released, stayed, vacated or otherwise dismissed within thirty (30) days
after issue or levy; or (iii) any other judgments, orders, decrees,
arbitration awards, writs, assessments, warrants of attachment, tax liens
or executions or similar processes which, alone or in the aggregate, are
reasonably likely to have a Material Adverse Effect are rendered, issued or
levied; or
(i) Credit Documents. Any Credit Document or any material term
----------------
thereof shall cease to be, or be asserted by Borrower or any of its
Subsidiaries not to be, a legal, valid and binding obligation of Borrower
or any of its Subsidiaries enforceable in accordance with its terms; or
(j) ERISA. Any Reportable Event which constitutes grounds for the
-----
termination of any Employee Benefit Plan by the PBGC or for the appointment
of a trustee by the PBGC to administer any Employee Benefit Plan shall
occur, or any Employee Benefit Plan shall be terminated within the meaning
of Title IV of ERISA or a trustee shall be appointed by the PBGC to
administer any Employee Benefit Plan; or
(k) Change of Control. Any Change of Control shall occur.
-----------------
6.02. Remedies. At any time after the occurrence and during the
--------
continuance of any Event of Default (other than an Event of Default referred to
in Subparagraph 6.01(f) or 6.01(g)), Agent may, with the consent of the Required
-------------------------------
Lenders, or shall, upon instructions from the Required Lenders, by written
notice to Borrower, (a) terminate the Commitments and the obligations of the
Lenders to make Loans and/or (b) declare all outstanding Obligations payable by
Borrower to be immediately due and payable without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the Notes to the contrary notwithstanding. Upon
the occurrence or existence of any Event of Default described in Subparagraph
------------
6.01(f) or 6.01(g), immediately and without notice, (1) the Commitments and the
- ------------------
obligations of the Lenders to make Loans shall automatically terminate
50
<PAGE>
and (2) all outstanding Obligations payable by Borrower hereunder shall
automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the Notes to the contrary
notwithstanding. In addition to the foregoing remedies, upon the occurrence or
existence of any Event of Default, Agent may exercise any other right, power or
remedy available to it under any of the Credit Documents or otherwise by law,
either by suit in equity or by action at law, or both.
SECTION VII. THE AGENT AND RELATIONS AMONG LENDERS.
- ----------- -------------------------------------
7.01. Appointment, Powers and Immunities. Each Lender hereby appoints
----------------------------------
and authorizes Agent to act as its agent hereunder and under the other Credit
Documents with such powers as are expressly delegated to Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in any
other Credit Document, be a trustee for any Lender or have any fiduciary duty to
any Lender. Notwithstanding anything to the contrary contained herein Agent
shall not be required to take any action which is contrary to this Agreement or
any other Credit Document or any applicable Governmental Rule. Neither Agent
nor any Lender shall be responsible to any other Lender for any recitals,
statements, representations or warranties made by Borrower or any of its
Subsidiaries contained in this Agreement or in any other Credit Document, for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Credit Document or for any failure by Borrower or
any of its Subsidiaries to perform their respective obligations hereunder or
thereunder. Agent may employ agents and attorneys-in-fact and shall not be
responsible to any Lender for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither Agent nor any of
its directors, officers, employees, agents or advisors shall be responsible to
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Credit Document or in connection herewith or therewith,
except for its or their own gross negligence or willful misconduct. Except as
otherwise provided under this Agreement, Agent shall take such action with
respect to the Credit Documents as shall be directed by the Required Lenders.
7.02. Reliance by Agent. Agent shall be entitled to rely upon any
-----------------
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent with reasonable care. As to any other matters not
expressly provided for by this Agreement, Agent shall not be required to take
any action or exercise any discretion, but shall be required to act or to
refrain from acting upon instructions of the Required Lenders and shall in all
cases be fully protected by the Lenders in acting, or in refraining from acting,
hereunder or under any other Credit Document in accordance with the instructions
of the Required Lenders, and such instructions of the Required Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders.
51
<PAGE>
7.03. Defaults. Agent shall not be deemed to have knowledge or notice
--------
of the occurrence of any Default unless Agent has received a written notice from
a Lender or Borrower, referring to this Agreement, describing such Default and
stating that such notice is a "Notice of Default". If Agent receives such a
notice of the occurrence of a Default, Agent shall give prompt notice thereof to
the Lenders. Agent shall take such action with respect to such Default as shall
be reasonably directed by the Required Lenders; provided, however, that until
-------- -------
Agent shall have received such directions, Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of the Lenders.
7.04. Indemnification. Without limiting the Obligations of Borrower
---------------
hereunder, each Lender agrees to indemnify Agent, ratably in accordance with
their Proportionate Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against Agent in any way relating to or arising out of this
Agreement or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof; provided, however, that no Lender shall be liable for
-------- -------
any of the foregoing to the extent they arise from Agent's gross negligence or
willful misconduct. Agent shall be fully justified in refusing to take or in
continuing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The obligations of each Lender under this Paragraph 7.04 shall survive the
--------------
payment and performance of the Obligations, the termination of this Agreement
and any Lender ceasing to be a party to this Agreement (with respect to events
which occurred prior to the time such Lender ceased to be a Lender hereunder).
7.05. Non-Reliance. Each Lender represents that it has, independently and
------------
without reliance on Agent, or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of the
business, prospects, management, financial condition and affairs of Borrower and
the Subsidiaries and its own decision to enter into this Agreement and agrees
that it will, independently and without reliance upon Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own appraisals and decisions in taking or not taking
action under this Agreement. Neither Agent nor any of its affiliates nor any of
their respective directors, officers, employees, agents or advisors shall (a) be
required to keep any Lender informed as to the performance or observance by
Borrower or any of its Subsidiaries of the obligations under this Agreement or
any other document referred to or provided for herein or to make inquiry of, or
to inspect the properties or books of Borrower or any of its Subsidiaries; (b)
have any duty or responsibility to provide any Lender with any credit or other
information concerning Borrower or any of its Subsidiaries which may come into
the possession of Agent, except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by Agent
hereunder; or (c) be responsible to any Lender for (i) any recital, statement,
representation or warranty made by Borrower or any officer, employee or agent of
Borrower in this Agreement or in any of the other Credit Documents, (ii) the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any Credit Document, (iii) the value or sufficiency of any
collateral or the validity or perfection of any of the liens or security
interests
52
<PAGE>
intended to be created by the Credit Documents, or (iv) any failure by Borrower
to perform its obligations under this Agreement or any other Credit Document.
7.06. Resignation or Removal of Agent. Agent may resign at any time by
-------------------------------
giving thirty (30) days prior written notice thereof to Borrower and the
Lenders, and Agent may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Agent, which Agent, if not a Lender,
shall be reasonably acceptable to Borrower; provided, however, that Borrower
-------- -------
shall have no right to approve a successor Agent if a Default has occurred and
is continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from the duties and obligations
thereafter arising hereunder. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Section VII 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 Agent.
7.07. Authorization. Agent is hereby authorized by the Lenders to
-------------
execute, deliver and perform, each of the Credit Documents to which Agent is or
is intended to be a party and each Lender agrees to be bound by all of the
agreements of Agent contained in the Credit Documents.
7.08. Agent in its Individual Capacity. Agent and its affiliates may
--------------------------------
make loans to, accept deposits from and generally engage in any kind of banking
or other business with Borrower and its Subsidiaries and affiliates as though
Agent were not Agent hereunder. With respect to Loans, if any, made by Agent in
its capacity as a Lender, Agent in its capacity as a Lender shall have the same
rights and powers under this Agreement and the other Credit Documents as any
other Lender and may exercise the same as though it were not Agent, and the
terms "Lender" or "Lenders" shall include Agent in its capacity as a Lender.
SECTION VIII. MISCELLANEOUS.
- ------------ -------------
8.01. Notices. Except as otherwise provided herein, all notices,
-------
requests, demands, consents, instructions or other communications to or upon
Borrower, any Lender or Agent under this Agreement or the other Credit Documents
shall be in writing and faxed, mailed or delivered, if to Borrower or Agent, at
its respective facsimile number or address set forth below or, if to any Lender,
at the address or facsimile number specified beneath the heading "Address for
Notices" under the name of such Lender in Schedule I (or to such other facsimile
----------
number or address for any party as indicated in any notice given by that party
to the other parties). All such notices and communications shall be effective
(a) when sent by Federal Express or other overnight courier of recognized
standing, on the Business Day following the deposit with such service; (b) when
mailed, first class postage prepaid and addressed as aforesaid through the
United States Postal Service, upon receipt; (c) when delivered by hand, upon
delivery; and (d) when faxed, upon confirmation of receipt; provided, however,
-------- -------
that any notice delivered to Agent under Section II shall not be effective until
----------
received by Agent.
Agent: ABN AMRO Bank N.V.
53
<PAGE>
Capital Markets-Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman
Telephone: (212) 314-1724
Fax: (212) 314-1709
With a copy to:
ABN AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111-5812
Attn: Gina Brusatori
Telephone: (415) 984-3702
Fax: (415) 362-3524
54
<PAGE>
and
ABN AMRO Bank N.V.
208 South LaSalle Street, Suite 1500
Chicago, IL 60604-1003
Attn: Joseph Coriaci, Credit Administration
Telephone: (312) 992-5118
Fax: (312) 992-5111
Borrower: If by courier:
Acuson Corporation
1220 Charleston Road
Mountain View, CA 94043
Attn: Treasurer
If by mail:
Acuson Corporation
P.O. Box 7393
Mountain View, CA 94039-7393
Attn: Treasurer
Telephone: (650) 694-5598
Fax: (650) 967-4791
With a copy to:
Cooley Godward LLP
One Maritime Plaza, 20th Floor
San Francisco, CA 94111-3580
Attn: Joseph A. Scherer, Esq.
Telephone: (415) 693-2017
Fax: (415) 951-3699
Each Notice of Borrowing and Notice of Interest Period Selection shall be given
by Borrower to Agent's office located at the address referred to above during
Agent's normal business hours; provided, however, that any such notice received
-------- -------
by Agent after 1:00 p.m. on any Business Day shall be deemed received by Agent
on the next Business Day. In any case where this Agreement authorizes notices,
requests, demands or other communications by Borrower to Agent or any Lender to
be made by telephone or facsimile, Agent or any Lender may conclusively presume
that anyone purporting to be a person designated in any incumbency certificate
or other similar document received by Agent or a Lender is such a person.
8.02. Expenses. Borrower shall pay on demand, whether or not any Loan
--------
is made hereunder, (a) all reasonable out-of-
55
<PAGE>
pocket fees and expenses, including reasonable out-of-pocket attorneys' fees and
expenses, incurred by Agent in connection with the preparation, negotiation,
execution and delivery of, and the exercise of its duties under, this Agreement
and the other Credit Documents, and the preparation, negotiation, execution and
delivery of amendments and waivers hereunder and thereunder and (b) all
reasonable out-of-pocket fees and expenses, including reasonable out-of-pocket
attorneys' fees and expenses, incurred by Agent and the Lenders in the
enforcement or attempted enforcement of any of the Obligations or in preserving
any of Agent's or the Lenders' rights and remedies (including, without
limitation, all such fees and expenses incurred in connection with any "workout"
or restructuring affecting the Credit Documents or the Obligations or any
bankruptcy or similar proceeding involving Borrower or any of its Subsidiaries).
The obligations of Borrower under this Paragraph 8.02 shall survive the payment
--------------
and performance of the Obligations and the termination of this Agreement.
8.03. Indemnification. To the fullest extent permitted by law,
---------------
Borrower agrees to protect, indemnify, defend and hold harmless Agent, the
Lenders and their Affiliates and their respective directors, officers,
employees, agents and advisors ("Indemnitee") from and against any and all
----------
liabilities, losses, damages or expenses of any kind or nature and from any
suits, claims or demands (including in respect of or for reasonable attorney's
fees and other expenses) arising on account of or in connection with any matter
or thing or action or failure to act by Indemnitee, or any of them, arising out
of or relating to the Credit Documents or any transaction contemplated thereby,
including without limitation any use by Borrower of any proceeds of the Loans,
except to the extent such liability arises from the willful misconduct or gross
negligence of such Indemnitee. Upon receiving knowledge of any suit, claim or
demand asserted by a third party that Agent or any Lender believes is covered by
this indemnity, Agent or such Lender shall give Borrower notice of the matter
and an opportunity to defend it, at Borrower's sole cost and expense, with legal
counsel satisfactory to Agent or such Lender, as the case may be. Agent or such
Lender may also require Borrower to defend the matter. Any failure or delay of
Agent or any Lender to notify Borrower of any such suit, claim or demand shall
not relieve Borrower of its obligations under this Paragraph 8.03 but shall
--------------
reduce such obligations to the extent of any increase in those obligations
caused solely by any such failure or delay which is unreasonable. The
obligations of Borrower under this Paragraph 8.03 shall survive the payment and
--------------
performance of the Obligations and the termination of this Agreement.
8.04. Waivers; Amendments. Any term, covenant, agreement or condition
-------------------
of this Agreement or any other Credit Document may be amended or waived, and any
consent under this Agreement or any other Credit Document may be given, if such
amendment, waiver or consent is in writing and is signed by Borrower and the
Required Lenders (or Agent on behalf of the Required Lenders with the written
approval of the Required Lenders); provided, however that:
-------- -------
(a) Any amendment, waiver or consent which would (i) increase the
Total Commitment, (ii) extend the Maturity Date, (iii) reduce the principal
of or interest on any Loan or any fees or other amounts payable for the
account of the Lenders hereunder, (iv) extend any scheduled principal,
interest or fee payment date, (v) amend this Paragraph 8.04, or (vi) amend
--------------
the definition of Required Lenders, must be in writing and signed or
approved in writing by all Lenders;
56
<PAGE>
(b) Any amendment, waiver or consent which increases or decreases
the Proportionate Share of any Lender must be in writing and signed by such
Lender; and
(c) Any amendment, waiver or consent which affects the rights or
obligations of Agent must be in writing and signed by Agent.
No failure or delay by Agent or any Lender in exercising any right under this
Agreement or any other Credit Document shall operate as a waiver thereof or of
any other right hereunder or thereunder nor shall any single or partial exercise
of any such right preclude any other further exercise thereof or of any other
right hereunder or thereunder. Unless otherwise specified in such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
8.05. Successors and Assigns.
----------------------
(a) Binding Effect. This Agreement and the other Credit Documents
--------------
shall be binding upon and inure to the benefit of Borrower, the Lenders,
Agent, all future holders of the Notes and their respective successors and
permitted assigns, except that Borrower may not assign or transfer any of
its rights or obligations under any Credit Document without the prior
written consent of Agent and each Lender. All references in this Agreement
to any Person shall be deemed to include all successors and assigns of such
Person.
(b) Participations. Any Lender may at any time sell to one or
--------------
more banks or other financial institutions ("Participants") participating
------------
interests in any Loan owing to such Lender, any Note held by such Lender,
any Commitment of such Lender or any other interest of such Lender under
this Agreement and the other Credit Documents. In the event of any such
sale by a Lender of participating interests, such Lender's obligations
under this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain
the holder of its Notes for all purposes under this Agreement and Borrower
and Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement.
Any agreement pursuant to which any such sale is effected may require the
selling Lender to obtain the consent of the Participant in order for such
Lender to agree in writing to any amendment, waiver or consent of a type
specified in clause (i), (ii), (iii) or (iv) of Subparagraph 8.04(a) but
-------------------------------------------------------
may not otherwise require the selling Lender to obtain the consent of such
Participant to any other amendment, waiver or consent hereunder. Borrower
agrees that if amounts outstanding under this Agreement and the other
Credit Documents are not paid when due (whether upon acceleration or
otherwise), each Participant shall, to the fullest extent permitted by law,
be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any other Credit
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement or any other
Credit Documents; provided, however, that (i) no Participant
-------- -------
57
<PAGE>
shall exercise any rights under this sentence without the consent of Agent,
(ii) no Participant shall have any rights under this sentence which are
greater than those of the selling Lender and (iii) such rights of setoff
shall be subject to the obligation of such Participant to share the payment
so obtained with all of the Lenders as provided in Subparagraph 2.13(b).
--------------------
Borrower also agrees that any Lender which has transferred any
participating interest in its Commitment or Loans shall, notwithstanding
any such transfer, be entitled to the full benefits accorded such Lender
under Paragraph 2.14, Paragraph 2.15, and Paragraph 2.16, as if such Lender
--------------------------------------------------
had not made such transfer.
(c) Assignments. Any Lender may, at any time, sell and assign to
-----------
any Lender or any Eligible Assignee (individually, an "Assignee Lender")
---------------
all or a portion of its rights and obligations under this Agreement and the
other Credit Documents (such a sale and assignment to be referred to herein
as an "Assignment") pursuant to an assignment agreement in the form of
----------
Exhibit E (an "Assignment Agreement"), executed by each Assignee Lender and
--------- --------------------
such assignor Lender (an "Assignor Lender") and delivered to Agent for its
---------------
acceptance and recording in the Register; provided, however, that:
-----------------
(i) Without the written consent of Agent and, if no Default
has occurred and is continuing, Borrower (which consent of Agent and
Borrower shall not be unreasonably withheld), no Lender may make any
Assignment to any Assignee Lender which is not, immediately prior to
such Assignment, a Lender hereunder or an Affiliate thereof; or
(ii) Without the written consent of Agent and, if no Default
has occurred and is continuing, Borrower (which consent of Agent and
Borrower shall not be unreasonably withheld), no Lender may make any
Assignment to any Assignee Lender if, after giving effect to such
Assignment, the Commitment of such Lender or such Assignee Lender
would be less than Ten Million Dollars ($10,000,000) (except that a
Lender may make an Assignment which reduces its Commitment to zero
without the written consent of Borrower and Agent); or
(iii) Without the written consent of Agent and, if no Default
has occurred and is continuing, Borrower (which consent of Agent and
Borrower shall not be unreasonably withheld), no Lender may make any
Assignment which does not assign and delegate an equal pro rata
interest in such Lender's Loans, Commitment and all other rights,
duties and obligations of such Lender under this Agreement and the
other Credit Documents.
Upon such execution, delivery, acceptance and recording of each Assignment
Agreement, from and after the Assignment Effective Date determined pursuant
to such Assignment Agreement, (A) each Assignee Lender thereunder shall be
a Lender hereunder with a Proportionate Share as set forth on Attachment 1
------------
to such Assignment Agreement (under the caption "Proportionate Share After
----------------------------
Assignment") and shall have the rights, duties and obligations of such a
Lender under this Agreement and the other Credit Documents, and (B) the
Assignor Lender thereunder shall be a Lender with a Proportionate Share as
set
58
<PAGE>
forth on Attachment 1 to such Assignment Agreement (under the caption
-----------------------------------------
"Proportionate Share After Assignment"), or, if the Proportionate Share of
the Assignor Lender has been reduced to 0%, the Assignor Lender shall cease
to be a Lender and to have any obligation to make any Loan; provided,
--------
however, that any such Assignor Lender which ceases to be a Lender shall
-------
continue to be entitled to the benefits of any provision of this Agreement
which by its terms survives the termination of this Agreement. Each
Assignment Agreement shall be deemed to amend Schedule I to the extent, and
----------
only to the extent, necessary to reflect the addition of each Assignee
Lender, the deletion of each Assignor Lender which reduces its
Proportionate Share to 0% and the resulting adjustment of Proportionate
Shares arising from the purchase by each Assignee Lender of all or a
portion of the rights and obligations of an Assignor Lender under this
Agreement and the other Credit Documents. On or prior to the Assignment
Effective Date determined pursuant to each Assignment Agreement, Borrower,
at its own expense, shall execute and deliver to Agent, in exchange for the
surrendered Note of the Assignor Lender thereunder, a new Note to the order
of each Assignee Lender thereunder (with each new Note to be in an amount
equal to the Commitment assumed by such Assignee Lender) and, if the
Assignor Lender is continuing as a Lender hereunder, a new Note to the
order of the Assignor Lender (with the new Note to be in an amount equal to
the Commitment retained by it). Each such new Note shall be dated the
Closing Date and otherwise in the form of the Note replaced thereby. The
Notes surrendered by the Assignor Lender shall be returned by Agent to
Borrower marked "replaced". Each Assignee Lender which was not previously
a Lender hereunder and which is not incorporated under the laws of the
United States of America or a state thereof shall, within three (3)
Business Days of becoming a Lender, deliver to Borrower and Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or
4224 (or successor applicable form), as the case may be, certifying in each
case that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes.
(d) Register. Agent shall maintain at its address referred to in
--------
Paragraph 8.01 a copy of each Assignment Agreement delivered to it and a
--------------
register (the "Register") for the recordation of the names and addresses of
--------
the Lenders and the Proportionate Shares of each Lender from time to time.
The entries in the Register shall be conclusive in the absence of manifest
error, and Borrower, Agent and the Lenders may treat each Person whose name
is recorded in the Register as the owner of the Loans recorded therein for
all proposes of this Agreement. The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(e) Registration. Upon its receipt of an Assignment Agreement
------------
executed by an Assignor Lender and an Assignee Lender (and, to the extent
required by Subparagraph 8.05(c), by Borrower and Agent) together with
--------------------
payment to Agent by Assignor Lender of a registration and processing fee of
$4,000, Agent shall (i) promptly accept such Assignment Agreement and (ii)
on the "Assignment Effective Date" determined pursuant thereto record the
information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and Borrower. Agent may, from
time to time
59
<PAGE>
at its election, prepare and deliver to the Lenders and Borrower a revised
Schedule I reflecting the names, addresses and respective Proportionate
----------
Shares of all Lenders then parties hereto.
(f) Confidentiality. Agent and the Lenders may disclose the
---------------
Credit Documents and any financial or other information relating to
Borrower or any Subsidiary to each other or to any potential Participant or
Assignee Lender that has executed a confidentiality letter in the form of
Exhibit F.
---------
8.06. Setoff; Security Interest.
-------------------------
(a) Setoff. In addition to any rights and remedies of the Lenders
------
provided by law, each Lender shall have the right, with the prior consent
of Agent but without prior notice to or consent of Borrower, any such
notice and consent being expressly waived by Borrower to the extent
permitted by applicable law, upon the occurrence and during the continuance
of an Event of Default, to setoff and apply against the Obligations any
amount owing from such Lender to Borrower. The aforesaid right of set-off
may be exercised by such Lender against Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of Borrower or
against anyone else claiming through or against Borrower or such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding
the fact that such right of set-off may not have been exercised by such
Lender at any prior time. Each Lender agrees promptly to notify Borrower
after any such set-off and application made by such Lender, provided that
--------
the failure to give such notice shall not affect the validity of such set-
off and application.
(b) Security Interest. As security for the Obligations, Borrower
-----------------
hereby grants to Agent and each Lender, for the benefit of all Lenders, a
continuing security interest in any and all deposit accounts or moneys of
Borrower now or hereafter maintained with such Lender. Each Lender shall
have all of the rights of a secured party with respect to such security
interest.
8.07. No Third Party Rights. Nothing expressed in or to be implied
---------------------
from this Agreement is intended to give, or shall be construed to give, any
Person, other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
8.08. Partial Invalidity. If at any time any provision of this
------------------
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
60
<PAGE>
8.09. Jury Trial. EACH OF BORROWER, THE LENDERS AND AGENT, TO THE
----------
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT.
8.10. Counterparts. This Agreement may be executed in any number of
------------
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all proposes.
8.11. Confidentiality. Each Lender shall, at or prior to the time it
---------------
becomes a party to this Agreement, execute and deliver to Agent and Borrower a
confidentiality letter in the form of Exhibit F. Any disclosure made by any
---------
Lender in violation of any such confidentiality letter may entitle Borrower to
damages or injunctive relief but shall not affect the obligations of Borrower
and its Subsidiaries under this Agreement and the other Credit Documents.
[The first signature page follows.]
61
<PAGE>
IN WITNESS WHEREOF, Borrower, the Lenders and Agent have caused this
Agreement to be executed as of the day and year first above written.
BORROWER: ACUSON CORPORATION
- --------
By:__________________________________
Name:_____________________________
Title:____________________________
AGENT: ABN AMRO BANK N.V.
- -----
By:__________________________________
Name:_____________________________
Title:____________________________
By:__________________________________
Name:_____________________________
Title:____________________________
LENDERS: ABN AMRO BANK N.V.
- -------
By:__________________________________
Name:_____________________________
Title:____________________________
By:__________________________________
Name:_____________________________
Title:____________________________
BANQUE NATIONALE DE PARIS
By:__________________________________
Name:_____________________________
Title:____________________________
By:__________________________________
Name:_____________________________
Title:____________________________
62
<PAGE>
SCHEDULE I
----------
LENDERS
-------
PROPORTIONATE
LENDER SHARE*
- ------ -------------
ABN AMRO BANK N.V. 55.00000000%
- ------------------
Applicable Lending Office:
ABN AMRO Bank N.V.
San Francisco International Branch
101 California Street, Suite 4550
San Francisco, CA 94111
Address for Borrowing Notices and all other notices:
ABN AMRO Bank North America, Inc.
Capital Markets-Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attention: Linda Boardman
Telephone: (212) 314-1724
Fax: (212) 314-1709
Address for all other notices:
ABN AMRO Bank N.V.
San Francisco International Branch
101 California Street, Suite 4550
San Francisco, CA 94111
Attention: Gina M. Brusatori
Telephone: (415) 984-3702
Fax: (415) 362-3524
ABN AMRO Bank N.V.
208 South LaSalle Street, Suite 1500
Chicago, IL 60604-1003
Attn: Joseph Coriaci, Credit Administration
Telephone: (312) 992-5118
Fax: (312) 992-5111
I-1
<PAGE>
Wiring Instructions:
ABN AMRO Bank N.V.
New York, New York
RT/ABA No.: 026009580
Account Name: ABN AMRO San Francisco
Account No.: 6510010545-41
Reference: Acuson Corporation
* To be expressed as a percentage rounded to the seventh digit to the right of
the decimal point
I-2
<PAGE>
PROPORTIONATE
LENDER SHARE*
- ------ ---------------
BANQUE NATIONALE DE PARIS 45.00000000%
- -------------------------
Applicable Lending Office:
Banque Nationale de Paris
180 Montgomery Street
San Francisco, CA 94104
Address for Notices:
Banque Nationale de Paris
180 Montgomery Street
San Francisco, CA 94104
Attention: Katherine Wolfe
Telephone: (415) 772-1330
Fax: (415) 296-8954
Wiring Instructions:
Federal Reserve Bank of San Francisco
RT/ABA No.: 121027234
Account Name: Banque Nationale de Paris
San Francisco Branch
Reference: Acuson Corp
* To be expressed as a percentage rounded to the seventh digit to the right of
the decimal point
65
<PAGE>
SCHEDULE 1.01
-------------
PRICING GRID
------------
<TABLE>
<CAPTION>
LIBOR Loan Commitment
Funded Indebtedness/ Applicable Fee
Level EBITDA Ratio Margin Percentage
- ----------- ------------------------------ -------------------- --------------------
<S> <C> <C> <C>
1 greater than and equal to 2.0 to 1.0 1.125% 0.250%
2 less than 2.0 to 1.0 and 1.500% 0.300%
greater than and equal to 2.5 to 1.0
3 less than 2.5 to 1.0 and 1.750% 0.375%
greater than and equal to 3.0 to 1.0
4 less than 3.0 to 1.0 2.250% 0.450%
</TABLE>
EXPLANATION
-----------
1. The Applicable Margin for each LIBOR Loan and the Commitment Fee Percentage
will be set for each Margin Period and will vary depending upon whether
such period is a Level 1 Period, a Level 2 Period, a Level 3 Period or a
Level 4 Period.
2. The first Margin Period, which commences on the date of this Agreement and
ends on May 31, 1999 will be a Level 1 Period.
3. Each Margin Period thereafter will be a Level 1 Period, a Level 2 Period, a
Level 3 Period or a Level 4 Period depending upon Borrower's Funded
Indebtedness/EBITDA Ratio for the most recent consecutive four-fiscal
quarter period ending prior to the first day of such Margin Period.
4. Examples:
(a) Borrower's Funded Indebtedness/EBITDA Ratio is 2.50 for the
consecutive four-fiscal quarter period ending on or about March 31,
1999. The Margin Period of June 1, 1999 August 31, 1999 will be a
Level 2 Period.
(b) Borrower's Funded Indebtedness/EBITDA Ratio is 3.00 for the
consecutive four-fiscal quarter period ending on or about June 30,
1999. The Margin Period of September 1, 1999 November 30, 1999 will
be a Level 3 Period.
1.01-1
66
<PAGE>
SCHEDULE 3.01
-------------
INITIAL CONDITIONS PRECEDENT
----------------------------
A. Principal Credit Documents.
--------------------------
(1) The Credit Agreement, duly executed by Borrower, each Lender and
each Agent; and
(2) A Note payable to each Lender, each duly executed by Borrower.
B. Borrower Corporate Documents.
----------------------------
(1) The Certificate or Articles of Incorporation of Borrower,
certified as of a recent date prior to the Closing Date by the Secretary of
State (or comparable official) of its jurisdiction of incorporation;
(2) A Certificate of Good Standing (or comparable certificate) for
Borrower, certified as of a recent date prior to the Closing Date by the
Secretary of State (or comparable official) of its jurisdiction of
incorporation;
(3) A certificate of the Secretary or an Assistant Secretary of
Borrower, dated the Closing Date, certifying (a) that attached thereto is a
true and correct copy of the Bylaws of Borrower as in effect on the Closing
Date; (b) that attached thereto are true and correct copies of resolutions
duly adopted by the Board of Directors of Borrower and continuing in
effect, which authorize the execution, delivery and performance by Borrower
of this Agreement and the other Credit Documents executed or to be executed
by Borrower and the consummation of the transactions contemplated hereby
and thereby; and (c) that there are no proceedings for the dissolution or
liquidation of Borrower;
(4) A certificate of the Secretary or an Assistant Secretary of
Borrower, dated the Closing Date, certifying the incumbency, signatures and
authority of the officers of Borrower authorized to execute, deliver and
perform this Agreement, the other Credit Documents and all other documents,
instruments or agreements related thereto executed or to be executed by
Borrower; and
(5) A Certificate of Good Standing for Borrower, certified as of a
recent date prior to the Closing Date by the Secretary of State of
California.
C. Financial Statements, Financial Condition, Etc.
----------------------------------------------
(1) A copy of the audited consolidated Financial Statements of
Borrower for the fiscal year ended December 31, 1998, prepared by Arthur
Anderson LLP and a copy of the unqualified opinion delivered by such
accountants in connection with such Financial Statements;
3.01-1
<PAGE>
(2) A copy of the 10-K report filed by Borrower with the Securities
and Exchange Commission for the fiscal year ended December 31, 1998;
(3) Such other financial, business and other information regarding
Borrower, or any of its Subsidiaries as Agent or any Lender may reasonably
request, including information as to possible contingent liabilities, tax
matters, environmental matters and obligations for employee benefits and
compensation.
D. Opinions. A favorable written opinion from Cooley Godward LLP, outside
--------
counsel to Borrower, dated the Closing Date, addressed to Agent for the benefit
of Agent and the Lenders, covering such legal matters as Agent or Lenders may
reasonably request and otherwise in form and substance satisfactory to Agent.
E. Other Items.
-----------
(1) A duly completed and timely delivered Notice of Borrowing;
(2) The Disclosure Letter;
(3) Evidence that (a) the proceeds of the initial Loan will be used
to repay on the Closing Date all Indebtedness outstanding under the Prior
Credit Agreement and (b) the Prior Credit Agreement has been terminated;
(4) A copy of the Note Purchase Agreement as in effect on the Closing
Date, certified by the chief financial officer of Borrower;
(5) A certificate of the chief financial officer of Borrower,
addressed to Agent and dated the Closing Date, certifying that:
(a) The representations and warranties set forth in Paragraph
---------
4.01 and in the other Credit Documents are true and correct in all
----
material respects as of such date (except for such representations and
warranties made as of a specified date, which shall be true as of such
date); and
(b) No Default has occurred and is continuing as of such
date;
(6) All fees and expenses payable to Agent and the Lenders on or
prior to the Closing Date (including all fees payable to Agent pursuant to
the Agent's Fee Letter and the Participation Fees);
(7) All fees and expenses of Agent's counsel billed through the
Closing Date; and
(8) Such other evidence as Agent or any Lender may reasonably request
to establish the accuracy and completeness of the representations and
warranties and the
3.01-2
<PAGE>
compliance with the terms and conditions contained in this Agreement and the
other Credit Documents.
3.01.3
<PAGE>
SCHEDULE 4.01(p)
----------------
BORROWER'S SUBSIDIARIES
-----------------------
<TABLE>
<CAPTION>
Subsidiary** Jurisdiction Percent Ownership
- ------------ ------------ -----------------
<S> <C> <C>
Acuson Pty. Ltd. Australia 100%*
Acuson Austria GesmbH Austria 100%*
Acuson Belgium SA/NV Belgium 100%*
Acuson Canada Ltd. Canada 100%*
Acuson A/S Denmark 100%*
Acuson OY Finland 100%*
Acuson SARL France 100%*
Acuson GmbH Germany 100%*
Acuson Hong Kong Ltd. Hong Kong 100%*
Acuson SpA Italy 100%*
Acuson Nippon KK Japan 100%*
Acuson BV The Netherlands 100%*
Acuson New Zealand New Zealand 100%*
Acuson A/S Norway 100%*
Acuson Singapore Pte. Ltd. Singapore 100%*
Acuson Iberica SA Spain 100%*
Acuson AB Sweden 100%*
Acuson Ltd. United Kingdom 100%*
Acuson Foreign Sales Corporation Virgin Islands 100%
Acuson International Sales Corporation California 100%
Acuson Worldwide Sales Ltd. California 100%
Sound Technology, Inc. Pennsylvania 100%
</TABLE>
* A small number of shares may have been issued to local individuals for the
purpose of establishing and qualifying one or more of such subsidiaries in
the applicable foreign jurisdiction.
** Each of the above listed subsidiaries is directly owned by Borrower.
4.01(p)-1
<PAGE>
SCHEDULE 5.02(a)
----------------
EXISTING INDEBTEDNESS
---------------------
As of the Closing Date, Borrower has outstanding the aggregate principal amount
of seventy-five million dollars ($75,000,000). This represents the proceeds
from Borrower's issuance of its Series A Notes and Series B Notes pursuant to
the Note Purchase Agreement.
5.02(a)-1
<PAGE>
SCHEDULE 5.02(b)
----------------
EXISTING LIENS
--------------
None
5.02(b)-1
<PAGE>
SCHEDULE 5.02(e)
----------------
EXISTING INVESTMENTS
--------------------
None
5.02(e)-1
<PAGE>
EXHIBIT A
---------
NOTICE OF BORROWING
-------------------
[Date]
ABN AMRO Bank N.V.
as Agent
Capital Markets-Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman
1. Reference is made to that certain Credit Agreement, dated as of April 9,
1999 (the "Credit Agreement"), among Acuson Corporation ("Borrower"), the
---------------- --------
financial institutions listed in Schedule I to the Credit Agreement (the
----------
"Lenders") and ABN AMRO Bank N.V., as agent for the Lenders (in such capacity,
- --------
"Agent"). Unless otherwise indicated, all terms defined in the Credit Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 2.02 of the Credit Agreement, Borrower hereby
--------------
irrevocably requests a Borrowing upon the following terms:
(a) The principal amount of the requested Borrowing is to be $__________;
(b) The requested Borrowing is to consist of ["Base Rate" or "LIBOR"]
Loans;
(c) If the requested Borrowing is to consist of LIBOR Loans, the initial
Interest Period for such Loans will be __________ [days (not less than seven
(7))] [months]; and
(d) The date of the requested Borrowing is to be __________, ____.
3. Borrower hereby certifies to Agent and the Lenders that, on the date of
this Notice of Borrowing and after giving effect to the requested Borrowing:
(a) The representations and warranties of Borrower set forth in Paragraph
---------
4.01 of the Credit Agreement and in the other Credit Documents are true and
----
correct in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date, which
shall be true as of such date);
(b) No Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and effect.
A-1
<PAGE>
4. Please disburse the proceeds of the requested Borrowing to____________
______________________.
IN WITNESS WHEREOF, Borrower has executed this Notice of Borrowing on the
date set forth above.
ACUSON CORPORATION
By:_______________________________
Name:__________________________
Title:_________________________
A-2
<PAGE>
EXHIBIT B
---------
NOTICE OF INTEREST PERIOD SELECTION
-----------------------------------
[Date]
ABN AMRO Bank N.V.
as Agent
Capital Markets-Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman
1. Reference is made to that certain Credit Agreement, dated as of
April 9, 1999 (the "Credit Agreement"), among Acuson Corporation ("Borrower"),
---------------- --------
the financial institutions listed in Schedule I to the Credit Agreement (the
----------
"Lenders") and ABN AMRO Bank N.V., as agent for the Lenders (in such capacity,
- --------
"Agent"). Unless otherwise indicated, all terms defined in the Credit Agreement
- ------
have the same respective meanings when used herein.
2. Pursuant to Subparagraph 2.04(b) of the Credit Agreement, Borrower
--------------------
hereby irrevocably selects a new Interest Period for a Borrowing as follows:
(a) The Borrowing for which a new Interest Period is to be
selected consists of LIBOR Loans in the aggregate principal amount of
$__________ which were initially advanced to Borrower on __________, ____;
(b) The last day of the current Interest Period for such Loans is
___________, ____; and
(c) The next Interest Period for such Loans commencing upon the
last day of the current Interest Period is to be _________ [days (not less
than seven (7))] [months].
3. Borrower hereby certifies to the Agent and the Lenders that, on
the date of this Notice of Interest Period Selection, and after giving effect to
the requested selection:
(a) The representations and warranties of Borrower set forth in
Paragraph 4.01 of the Credit Agreement and in the other Credit Documents
--------------
are true and correct in all material respects as if made on such date
(except for representations and warranties expressly made as of a specified
date, which shall be true as of such date);
(b) No Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and effect.
B-1
<PAGE>
IN WITNESS WHEREOF, Borrower has executed this Notice of Interest Period
Selection on the date set forth above.
ACUSON CORPORATION
By:_______________________________
Name:__________________________
Title:_________________________
B-2
<PAGE>
EXHIBIT C
---------
NOTE
----
$______________ ____________________, __________
________________,____
FOR VALUE RECEIVED, ACUSON CORPORATION, a Delaware corporation
("Borrower"), hereby promises to pay to the order of _______________________, a
--------
_____________________ ("Lender"), the principal sum of_________________________
------
DOLLARS ($__________) or such lesser amount as shall equal the aggregate
outstanding principal balance of the Loans made by Lender to Borrower pursuant
to the Credit Agreement referred to below (as amended from time to time, the
"Credit Agreement"), on or before the Maturity Date specified in the Credit
----------------
Agreement; and to pay interest on said sum, or such lesser amount, at the rates
and on the dates provided in the Credit Agreement.
Borrower shall make all payments hereunder, for the account of
Lender's Applicable Lending Office, to Agent as indicated in the Credit
Agreement, in lawful money of the United States and in same day or immediately
available funds.
Borrower hereby authorizes Lender to record on the schedule(s) annexed
to this note the date and amount of each Loan and of each payment or prepayment
of principal made by Borrower and agrees that all such notations shall
constitute prima facie evidence of the matters noted; provided, however, that
-----------------
the failure of Lender to make any such notation shall not affect Borrower's
obligations hereunder.
This note is one of the Notes referred to in the Credit Agreement,
dated as of April 9, 1999, among Borrower, Lender and the other financial
institutions from time to time parties thereto (collectively, the "Lenders") and
-------
ABN AMRO Bank N.V., as agent for the Lenders. This note is subject to the terms
of the Credit Agreement, including the rights of prepayment and the rights of
acceleration of maturity set forth therein. Terms used herein have the meanings
assigned to those terms in the Credit Agreement, unless otherwise defined
herein.
The transfer, sale or assignment of any rights under or interest in
this note is subject to certain restrictions contained in the Credit Agreement,
including Paragraph 8.05 thereof.
--------------
Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees, incurred by Lender in the enforcement or attempt to
enforce any of Borrower's obligations hereunder not performed when due.
Borrower hereby waives notice of presentment, demand, protest or notice of any
other kind. This note shall be governed by and construed in accordance with the
laws of the State of California without reference to conflicts of law rules.
ACUSON CORPORATION
By:_______________________________
C-1
<PAGE>
Name:__________________________
Title:_________________________
C-2
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Date Type of Amount of Interest Amount of Unpaid Notation
Loan Loan Period Principal Principal Made By
Paid or Balance
Prepaid
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
C-3
<PAGE>
EXHIBIT D
---------
INVESTMENT POLICY
-----------------
PURPOSE
The purpose of this policy is to establish the responsibility, authority, and
guidelines for the investment of the surplus cash of Acuson Corporation (the
"Company"). Surplus cash is defined as those funds exceeding the operating
requirements of the Company and not immediately required for working capital or
financial obligations.
SCOPE
This policy shall apply to Acuson Corporation and all of its subsidiaries. When
applicable, and in a separate Addendum, additional guidelines and/or variations
on this policy will be included for funds managed by outside Investment
Managers. This investment policy will be reviewed annually by the Chief
Financial Officer to ensure that it remains consistent with the overall
objectives of Acuson Corporation and with current financial trends.
OBJECTIVES
The basic objectives of the Company's investment program, in order of priority,
are:
1. Safety and preservation of principal by investing in a high quality and
a well-diversified portfolio of marketable securities.
2. Liquidity of investments that is sufficient to meet the Company's cash
flow requirements.
3. Attainment of the highest after-tax market rate of return on invested
funds that is consistent with the above stated objectives and prudent
risk tolerance.
Proper fiduciary control of all Company investments will be maintained while
avoiding inappropriate concentration of investments.
RESPONSIBILITY
The Chiefs Financial Officer of the Company shall have oversight responsibility
for the cash investments of the Company, shall be responsible for directing and
interpreting this policy, and shall ensure conformance to this policy. The
Treasury Department will be responsible for the investment of cash for the
Company. The Chief Financial Officer of the Company together with one
additional person, if required and as designated by the Board of Directors, will
have authority to (1) open accounts with broker/dealers and banks, (2) establish
accounts or other arrangements for the custody of securities, (3) execute as
necessary documents required by broker/dealers, banks, and custodians, (4)
select and change external investments managers, (5) monitor investment results
of all outside investment managers, as well as results of any in-house
D-1
<PAGE>
investments activities, and (6) execute the investment policy as well as
designate those who can execute it.
The Chief Financial Officer, Treasurer, Assistant Treasurer, and Treasury
Manager shall each individually have the authority to purchase and sell
securities in the name of Acuson Corporation and on its behalf within the
guidelines set forth in this policy.
The Chief Financial Officer and Treasurer must approve any exceptions to this
policy in writing.
POLICY
Eligible Investments and Credit Quality
- ---------------------------------------
Investments of surplus cash of the Company will be limited to the following
categories
United States Government - Marketable securities which are direct
obligations of the United States or are issues by or guaranteed as to
principal end interest by the U.S. government and supported by the full
faith and credit of the United States.
United States Government Agency Securities - Debt securities issued by U.S.
government-sponsored enterprises, Federal agencies, and certain
international institutions which are not direct obligations of the United
States but which involve government sponsorship and are fully guaranteed by
U.S. government agencies or enterprises.
Municipal Obligations - Direct obligations of and obligations fully
guaranteed by a state, territory, or possession of the United States,
including the District of Columbia, or any political subdivision of any of
the foregoing, including any county or other local government body within
the U.S. which have a short-term rating of at least SP-1 by Standard and
Poor's or MIG-1 by Moody's or their equivalent and a medium and longer term
rating of at least AA by Standard and Poor's or Aa by Moody's or their
equivalent. Such investments are limited to tax-exempt commercial paper,
short-term notes, bond anticipation notes, tax anticipation notes, revenue
anticipation notes, general obligation notes or bonds, variable rate demand
notes, revenue bonds, put bonds, and weekly floaters. Auction rate
municipal notes and bonds, which are sold using the Dutch auction rate
reset mechanism, must have a rating of at least AAA by Standard and Poor's
or Aaa by Moody's or their equivalent.
In order to meet the credit requirements of this policy, municipal
securities may include credit enhancements such as (i) an irrevocable and
unconditional bank letter of credit that is rated A-l by Standard and
Poor's or P-1 by Moody's or their equivalent rating, (ii) insurance
provided by AMBAC Indemnity Corp. (AMBAC), Financial Guaranty Insurance
Corporation (FGIC), Financial Security Assurance, Inc. (FSA), or Municipal
Bond Investors Assurance (MBIA), or (iii) be backed by an escrow account of
U.S. treasury securities.
Pre-refunded municipal securities, which are not rated but which are fully
collateralized by U.S. Treasury securities to cover principal and interest
payments, are also eligible investments.
D-2
<PAGE>
Bank Money Market Instruments - Obligations of both domestic and foreign
commercial banks that have a minimum International Bank Credit Analysts
(IBCA) rating of A-1 or its equivalent. Such obligations may include, but
are not limited to, bank time deposits (domestic and Euro), negotiable
certificates of deposit (domestic, Yankee, and Euro), banker's acceptances,
and deposits placed with offshore branches of approved banks (Euro CD's and
TD's).
Corporate Debt Instruments All commercial paper and other short term,
unsecured promissory notes issued by corporations or financial institutions
including but not limited to: master notes, asset-backed notes, medium-
term notes, deposit notes, Eurodollar notes, and Yankee notes. All such
debt instruments must have a short-term rating of at least A-1 by Standard
& Poor's or P-l by Moody's or their equivalent and a long-term debt rating
of at least A by Standard & Poor's or by Moody's or their equivalent.
Repurchase Agreements Collateralized loans by Acuson Corporation with
financial institutions, which have been, elected primary government
security dealers by the Federal Reserve. These investments must be secured
by having the securities transferred to the Company's custodian. Such
investments must always be fully collateralized by U.S. Treasury or U.S.
government agency obligations and such collateral must be market priced
greater than the invested amount at the time of purchase.
Money Market Mutual Funds - Shares of open-ended investment companies
registered under the Investment Company Act of 1940, as amended. The
investments of such funds should comply with the SEC regulations under Rule
2a-7 and the fund should maintain a constant net asset value, offer daily
liquidity, and the weighted average maturity of the fund should not exceed
90 days.
Derivatives - For the purpose of either hedging interest rate exposure or
creating a synthetic security as outlined in the investment policy; the
following instruments can be used: futures, options, swaps, caps, floors,
collars and forward rate agreements. In no case, can derivatives be used
to create a leveraged position. Notional amounts associated with
derivative position must be one-to-one (dollar for dollar) or at a level
that is commensurate with the interest rate risk being managed.
Diversification
- ---------------
Investments within the portfolio will be diversified to avoid undue
concentration of risk. The following concentration limits shall apply:
1. There are no limits on securities of the U.S. government and its agencies.
2. Up to 50% of the portfolio may be invested in municipal securities, subject
to the other diversification limits of this section.
3. No more than $5 million or 10% of the portfolio, whichever is greater, will
be invested with any one issuer.
4. No more than 25% of the portfolio will be invested in a single industry,
except for
D-3
<PAGE>
financial institutions, which may be up to 50% of the portfolio.
5. No more than 25% of the portfolio will be invested in issuers of any one
sovereignty outside the United States.
6. No more than 50% of the portfolio will be invested in Dutch auction
municipal securities.
Maturity
- --------
All individual securities in the portfolio shall have a maturity of 36 months or
less, except repurchase agreements which shall have a maturity of 14 days or
less.
The duration of the portfolio shall be consistent with the cash needs of the
Company but in no case will it exceed 18 months. Duration: A measure of the
--------
average life of a bond defined as the weighted average of the times until each
payment is made, with weights proportional to the present value of the payment.
A maturity, by definition, shall include puts, announced calls, auctions, or
other structural features which will allow the Company to redeem the investment
at a quantifiable price prior to the stated final maturity consistent with
preservation of capital and liquidity requirements.
Marketability
- -------------
All holdings in the portfolio, except for those instruments which can be
classified as cash and cash equivalent, should be of sufficient size and in
issues that are actively trades to minimize transaction costs and to facilitate
accurate market valuation. When the total portfolio falls below $25 million the
above diversification limits may be exceeded upon approval by the Chief
Financial Officer in order to avoid having several small investments that are
not really marketable or that have yields below market rates.
Credit Downgrade
- ----------------
The Chief Financial Officer shall be notified immediately if any investment that
met the criteria of this policy at the time of purchase is subsequently
downgraded by Standard & Poor's, Moody's or an equivalent rating agency. After
reviewing all relevant factors, the Chief Financial Officer will confirm in
writing the action to be taken.
Subsidiaries
- ------------
Investment by subsidiaries of the Company shall be limited to interest bearing
deposits or similar investments in the local currency of the subsidiary at the
bank or branch of the bank where the subsidiary has an existing account that has
been previously approved by the Chief Financial Officer. These instruments must
be direct obligations of the bank, be executed only by the persons who have
signatory authority on the accounts at the bank, and have a maturity not greater
than 90 days.
Currencies
- ----------
D-4
<PAGE>
All eligible investments will be denominated in United States dollars or in the
functional currencies of the Company and its subsidiaries. No security
purchased can have currency exposure.
Trading
- -------
Investments will be made with the intention of holding them to maturity.
However, investments may be sold prior to maturity to preserve capital or to
provide required liquidity.
Trading securities is permitted to realize capital gains and losses within the
context of maximizing after-tax return, but this is not the primary goal or
function of the policy.
To attain the best prices in the secondary markets, a minimum of two bids will
be solicited for every security offered for sale.
All purchases and sales will be done in the name of the Company with the
approved brokers, dealers, and banks.
For accounting purposes, all investments shall be deemed to be in the "Available
for Sale" category, as defined under Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
Borrowing
- ---------
The Company shall not borrow funds from any institution for speculative
purposes. The Company shall not enter into reverse repurchase agreements or
purchase securities on margin for the purpose of leveraging the portfolio.
Financial Institutions
- ----------------------
The purchase and sale of securities investments and the subsequent custody or
safekeeping of purchased investments may only be handled through an Approved
Financial Institution as outlined below:
Type of institution Criteria
A. Commercial Banks Ranked within the top 100 worldwide by
assets and ranked A or better by Standard &
Poor's and Moody's
B. Investment Banks and Primary dealer in U.S. Government
Broker/Dealers securities and rated (on a stand-alone
basis or through its parent) A or better by
Standard & Poor's and Moody's; otherwise
all securities must be delivered to
Acuson's securities safekeeping account,
D-5
<PAGE>
C. Investment Management As specifically approved by the Chief
Companies Financial Officer and the Treasurer
CONTROLS
A third party custodian who will accept all investments made by the Company will
hold all remarketable securities in the portfolio in a custodial account.
Confirmation of all trades will be sent to a person who does not have investment
authority and all trades will be reconciled on a monthly basis to the custody
account statements and to the in-house transaction log or the monthly statements
from the outside investment managers.
ACCOUNTING & TAX
Corporate Treasury will be responsible for obtaining the opinion of both the Tax
and Accounting Departments in reference to any proposed derivative transaction.
The opinion(s) provided should encompass but not be limited to FAS 133 and FAS
115 as well as any tax consequence(s) that will result from a contemplated
transaction.
Although neither the Tax nor the Accounting Department will need to sign off on
the transaction itself, their guidance in terms of tax and/or accounting
treatment must be clearly articulated by the Treasurer to the CFO before any
transaction is consummated.
REPORTS
For portfolio investments handled in-house, a daily transaction log,
sequentially numbered, that records all pertinent information related to each
investment, will be prepared and maintained. On a monthly basis, reports that
provide detailed information about the composition of the portfolio will be
prepared and maintained. These reports will be sent to the Chief Financial
Officer and Treasurer. In addition, monthly reports which provide all the
pertinent investment and income information will be prepared and given to
General Accounting for inclusion is the accounts and records of the Company.
For portfolio investments handled by outside managers, monthly reports will be
provided to the Company on a timely basis which provide detailed information
about each individual investment in the portfolio including appropriate income
information. This information will be reviewed by the Treasury Department and
included in the monthly reporting package sent to the Chief Financial Officer
and Treasurer. An additional copy will be given to General Accounting for
inclusion in the accounts and records of the Company.
D-6
<PAGE>
EXHIBIT E
---------
ASSIGNMENT AGREEMENT
--------------------
THIS ASSIGNMENT AGREEMENT, dated as of the date set forth at the top of
Attachment 1 hereto, by and among:
(1) The bank designated under item A of Attachment 1 hereto as the
------------
Assignor Lender ("Assignor Lender"); and
---------------
(2) Each bank designated under item B of Attachment 1 hereto as an
------------
Assignee Lender (individually, an "Assignee Lender").
---------------
RECITALS
--------
A. Assignor Lender is one of the lenders which is a party to the Credit
Agreement dated as of April 9, 1999, by and among Acuson Corporation
("Borrower,") Assignor Lender and the other financial institutions parties
--------
thereto (collectively, the "Lenders") and ABN AMRO Bank N.V., as agent for the
-------
Lenders (in such capacity, "Agent"). (Such credit agreement, as amended,
-----
supplemented or otherwise modified in accordance with its terms from time to
time to be referred to herein as the "Credit Agreement").
----------------
B. Assignor Lender wishes to sell, and Assignee Lender wishes to purchase,
all or a portion of Assignor Lender's rights under the Credit Agreement pursuant
to Subparagraph 8.05(c) of the Credit Agreement.
AGREEMENT
---------
Now, therefore, the parties hereto hereby agree as follows:
1. Definitions. Except as otherwise defined in this Assignment Agreement,
-----------
all capitalized terms used herein and defined in the Credit Agreement have the
respective meanings given to those terms in the Credit Agreement.
2. Sale and Assignment. Subject to the terms and conditions of this
-------------------
Assignment Agreement, Assignor Lender hereby agrees to sell, assign and delegate
to each Assignee Lender and each Assignee Lender hereby agrees to purchase,
accept and assume the rights, obligations and duties of a Lender under the
Credit Agreement and the other Credit Documents equal to the Proportionate Share
set forth under the caption "Proportionate Share Transferred" opposite such
Assignee Lender's name on Attachment 1 hereto. Such sale, assignment and
------------
delegation shall become effective on the date designated in Attachment 1 hereto
------------
(the "Assignment Effective Date"), which date shall be, unless Agent shall
-------------------------
otherwise consent, at least five (5) Business Days after the date following the
date counterparts of this Assignment Agreement are delivered to Agent in
accordance with Paragraph 3 hereof.
E-1
<PAGE>
3. Assignment Effective Notice. Upon (a) receipt by Agent of five (5)
counterparts of this Assignment Agreement (to each of which is attached a fully
completed Attachment 1), each of which has been executed by Assignor Lender and
------------
each Assignee Lender (and, to the extent required by Subparagraph 8.05(c) of the
---------------------------
Credit Agreement, by Borrower and Agent) and (b) payment to Agent of the
- ----------------
registration and processing fee specified in Subparagraph 8.05(e) of the Credit
----------------------------------
Agreement by Assignor Lender, Agent will transmit to Borrower, Assignor Lender
- ---------
and each Assignee Lender an Assignment Effective Notice substantially in the
form of Attachment 2 hereto, fully completed (an "Assignment Effective Notice").
------------ ---------------------------
4. Assignment Effective Date. At or before 12:00 noon (local time of
-------------------------
Assignor Lender) on the Assignment Effective Date, each Assignee Lender shall
pay to Assignor Lender, in immediately available or same day funds, an amount
equal to the purchase price, as agreed between Assignor Lender and such Assignee
Lender (the "Purchase Price"), for the Proportionate Share purchased by such
--------------
Assignee Lender hereunder. Effective upon receipt by Assignor Lender of the
Purchase Price payable by each Assignee Lender, the sale, assignment and
delegation to such Assignee Lender of such Proportionate Share as described in
Paragraph 2 hereof shall become effective.
- -----------
5. Payments After the Assignment Effective Date. Assignor Lender and each
--------------------------------------------
Assignee Lender hereby agree that Agent shall, and hereby authorize and direct
Agent to, allocate amounts payable under the Credit Agreement and the other
Credit Documents as follows:
(a) All principal payments made after the Assignment Effective Date
with respect to each Proportionate Share assigned to an Assignee Lender
pursuant to this Assignment Agreement shall be payable to such Assignee
Lender.
(b) All interest, fees and other amounts accrued after the Assignment
Effective Date with respect to each Proportionate Share assigned to an
Assignee Lender pursuant to this Assignment Agreement shall be payable to
such Assignee Lender.
Assignor Lender and each Assignee Lender shall make any separate arrangements
between themselves which they deem appropriate with respect to payments between
them of amounts paid under the Credit Documents on account of the Proportionate
Share assigned to such Assignee Lender, and neither Agent nor Borrower shall
have any responsibility to effect or carry out such separate arrangements.
6. Delivery of Notes. On or prior to the Assignment Effective Date,
-----------------
Assignor Lender will deliver to Agent the Notes payable to Assignor Lender. On
or prior to the Assignment Effective Date, Borrower will deliver to Agent new
Notes for each Assignee Lender and Assignor Lender, in each case in principal
amounts reflecting, in accordance with the Credit Agreement, their respective
Commitments (as adjusted pursuant to this Assignment Agreement). As provided in
Subparagraph 8.05(c) of the Credit Agreement, each such new Note shall be dated
- --------------------------------------------
the Closing Date. Promptly after the Assignment Effective Date, Agent will send
to each of Assignor Lender and the Assignee Lenders its new Notes and will send
to Borrower the superseded Note payable to Assignor Lender, marked "Replaced."
E-2
<PAGE>
7. Delivery of Copies of Credit Documents. Concurrently with the
--------------------------------------
execution and delivery hereof, Assignor Lender will provide to each Assignee
Lender (if it is not already a Lender party to the Credit Agreement) conformed
copies of all documents delivered to Assignor Lender on or prior to the Closing
Date in satisfaction of the conditions precedent set forth in the Credit
Agreement.
8. Further Assurances. Each of the parties to this Assignment Agreement
------------------
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Assignment Agreement.
9. Further Representations, Warranties and Covenants. Assignor Lender and
-------------------------------------------------
each Assignee Lender further represent and warrant to and covenant with each
other, Agent and the Lenders as follows:
(a) Other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned hereby free and clear of
any adverse claim, Assignor Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement
or the other Credit Documents furnished.
(b) Assignor Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or any
of its obligations under the Credit Agreement or any other Credit
Documents.
(c) Each Assignee Lender confirms that it has received a copy of the
Credit Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment Agreement.
(d) Each Assignee Lender will, independently and without reliance upon
Agent, Assignor Lender or any other Lender and based upon 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 the Credit
Agreement and the other Credit Documents.
(e) Each Assignee Lender appoints and authorizes Agent to take such
action as Agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as Agent is authorized to exercise
by the terms thereof, together with such powers as are reasonably
incidental thereto, all in accordance with Section VII of the Credit
-------------------------
Agreement.
---------
(f) Each Assignee Lender agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit
Agreement and the other Credit Documents are required to be performed by it
as a Lender.
E-3
<PAGE>
(g) Attachment 1 hereto sets forth administrative information with
------------
respect to each Assignee Lender.
10. Effect of this Assignment Agreement. On and after the Assignment
-----------------------------------
Effective Date, (a) each Assignee Lender shall be a Lender with a Proportionate
Share equal to the Proportionate Share set forth under the caption
"Proportionate Share After Assignment" opposite such Assignee Lender's name on
Attachment 1 hereto and shall have the rights, duties and obligations of such a
- ------------
Lender under the Credit Agreement and the other Credit Documents and (b)
Assignor Lender shall be a Lender with a Proportionate Share equal to the
Proportionate Share set forth under the caption "Proportionate Share After
Assignment" opposite Assignor Lender's name on Attachment 1 hereto and shall
------------
have the rights, duties and obligations of such a Lender under the Credit
Agreement and the other Credit Documents, or, if the Proportionate Share of
Assignor Lender has been reduced to 0%, Assignor Lender shall cease to be a
Lender and shall have no further obligation to make any Loans.
11. Miscellaneous. This Assignment Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of California. Paragraph
headings in this Assignment Agreement are for convenience of reference only and
are not part of the substance hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers as of the
date set forth in Attachment 1 hereto.
------------
E-4
<PAGE>
______________________________, as
Assignor Lender
By:_______________________________
Name:__________________________
Title:_________________________
__________________________________, as an
Assignee Lender
By:_______________________________
Name:__________________________
Title:_________________________
__________________________________, as an
Assignee Lender
By:_______________________________
Name:__________________________
Title:_________________________
__________________________________, as an
Assignee Lender
By:_______________________________
Name:__________________________
Title:_________________________
E-5
<PAGE>
CONSENTED TO AND ACKNOWLEDGED BY:
ACUSON CORPORATION
By:_________________________________
Name:_____________________________
Title:____________________________
____________________________________,
As Agent
By:_________________________________
Name:_____________________________
Title:____________________________
ACCEPTED FOR RECORDATION
IN REGISTER:
____________________________________,
As Agent
By:_________________________________
Name:_____________________________
Title:____________________________
E-6
<PAGE>
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
-----------------------
NAMES, ADDRESSES AND PROPORTIONATE SHARES
OF ASSIGNOR LENDER AND ASSIGNEE LENDERS
AND ASSIGNMENT EFFECTIVE DATE
______________, ____
Proportionate Proportionate
Share Share After
A. ASSIGNOR LENDER Transferred/1/,/2/ Assignment/1/
----------------- -------------
________________ _________________% _____________%
Applicable Lending Office:
_____________________________
_____________________________
_____________________________
_____________________________
Address for notices:
_____________________________
_____________________________
_____________________________
_____________________________
Telephone No:________________
Telecopier No:_______________
Wiring Instructions:
_____________________________
_____________________________
_______________________
1 To be expressed by a percentage rounded to the seventh-digit to the right of
the decimal point.
2 Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchases by Assignee Lender.
E(1)-1
<PAGE>
Proportionate Proportionate
Share Share After
B. ASSIGNEE LENDERS Transferred/1/,/2/ Assignment/1/
---------------- ----------------- ------------
____________________ _________________% _____________%
Applicable Lending Office:
________________________________
________________________________
________________________________
________________________________
Address for notices:
________________________________
________________________________
________________________________
________________________________
Telephone No:___________________
Telecopier No:__________________
Wiring Instructions:
________________________________
________________________________
_______________________
1 To be expressed by a percentage rounded to the seventh-digit to the right of
the decimal point.
2 Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchases by Assignee Lender.
E(1)-2
<PAGE>
Proportionate Proportionate
Share Share After
B. ASSIGNEE LENDERS Transferred/1/,/2/ Assignment/1/
---------------- ------------------ -------------
(cont.d)
________________ __________________% ______________%
Applicable Lending Office:
____________________________
____________________________
____________________________
____________________________
Address for notices:
____________________________
____________________________
____________________________
____________________________
Telephone No:_______________
Telecopier No:______________
Wiring Instructions:
____________________________
____________________________
C. ASSIGNMENT EFFECTIVE DATE:
-------------------------
____________________ ,___
_______________________
1 To be expressed by a percentage rounded to the seventh-digit to the right of
the decimal point.
2 Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchases by Assignee Lender.
E(1)-3
<PAGE>
ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
-----------------------
FORM OF
ASSIGNMENT EFFECTIVE NOTICE
---------------------------
Reference is made to the Credit Agreement, dated as of April 9, 1999, among
Acuson Corporation ("Borrower"), the financial institutions parties thereto (the
--------
"Lenders") and ABN AMRO Bank N.V., as agent for the Lenders (in such capacity,
-------
"Agent"). Agent hereby acknowledges receipt of five executed counterparts of a
- ------
completed Assignment Agreement, a copy of which is attached hereto. [Note:
Attach copy of Assignment Agreement.] Terms defined in such Assignment
Agreement are used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the
Assignment Effective Date will be __________.
2. Pursuant to such Assignment Agreement, Assignor Lender is required to
deliver to Agent on or before the Assignment Effective Date the Notes payable to
Assignor Lender.
3. Pursuant to such Assignment Agreement, Borrower is required to deliver
to Agent on or before the Assignment Effective Date the following Notes, each
dated ________________ [Insert appropriate date]:
[Describe each new Note for Assignor Lender and each Assignee Lender as to
principal amount.]
4. Pursuant to such Assignment Agreement, each Assignee Lender is required
to pay its Purchase Price to Assignor Lender at or before 12:00 Noon on the
Assignment Effective Date in immediately available funds.
Very truly yours,
ABN AMRO BANK N.V.
as Agent
By:__________________________
Name:_____________________
Title:____________________
E(2)-1
<PAGE>
EXHIBIT F
---------
CONFIDENTIALITY LETTER
----------------------
[Lender letterhead]
[Date]
Acuson Corporation
1220 Charleston Road
Mountain View, CA 94043
Attn: Treasurer
Re: Credit Agreement dated as of April 9, 1999 (the "Credit Agreement")
among Acuson Corporation ("Borrower"), the financial institutions
parties thereto (the "Lenders") and ABN AMRO Bank N.V., as agent for
the Lenders ("Agent") - Confidentiality Agreement
Ladies and Gentlemen:
In order to permit ____________________ ("Lender") to evaluate the business
------
and financial prospects and condition of Borrower in connection with Lender's
[proposed] participation as a [Lender][participant] in the Credit Agreement,
Borrower, Agent or another Lender may have made or may hereafter make available
to Lender certain confidential financial information and other non-public
information relating to Borrower (the "Confidential Information"). This letter
------------------------
agreement sets out the understandings between Lender and Borrower with respect
Lender's treatment and control of the Confidential Information.
Lender will use the Confidential Information solely in connection with the
Credit Agreement, including Lender's determination of whether to become a [party
to][participant under] the Credit Agreement. Lender will endeavor in good faith
to maintain the confidentiality of the Confidential Information and, except as
provided below, will exercise reasonable efforts to prevent the disclosure of
the Confidential Information to third parties or to Lender's officers, employees
and agents except those officers, employees and agents who need to know in
connection with the purpose set forth in the first sentence of this paragraph.
If Lender elects not to participate in the Credit Agreement, Lender will
promptly return or destroy all Confidential Information (including any copies,
extracts, or summaries) if requested to do so by Borrower at any time after
discussions have been terminated and before Lender has become obligated to
participate in the Credit Agreement, provided that Lender may retain such
Confidential Information (subject to the obligations contained herein) as it
deems necessary in order to comply with ordinary and customary retention
requirements of financial institutions, sound banking practices and audit and
examination requirements.
Notwithstanding anything in this letter agreement to the contrary,
Confidential Information shall not include information that either (a) is in the
public domain or the knowledge or possession of Lender on a non-confidential
basis when disclosed to Lender or becomes part of
F-1
<PAGE>
the public domain after disclosure to Lender through no fault of Lender, or (b)
is disclosed to Lender by a third party, provided Lender does not have actual
knowledge that such third party is prohibited from disclosing such information.
The terms of this letter agreement shall not apply to disclosure of
Confidential Information that is, in the good faith opinion of Lender, compelled
by laws, regulations, rules, orders, or legal process or proceedings, provided
that Lender uses reasonable efforts to give Borrower sufficient notice to permit
Borrower to seek an order restraining such disclosure, or is disclosed to (a)
any party, including a prospective assignee or participant, that has signed a
confidentiality agreement containing terms substantially similar to those
contained herein, (b) legal counsel, examiners, auditors, and directors of
Lender and examiners, auditors, and investigators having regulatory authority
over Lender, or (c) any party in connection with the excise of remedies by
Lender (or Agent on behalf of Lenders) after the occurrence of any "Event of
Default" as defined in the Credit Agreement.
It is agreed that money damages would not be a sufficient remedy for breach
of this letter agreement by Lender and that Borrower shall be entitled to
specific performance or other equitable relief as a remedy for any such breach.
Such remedy shall not be deemed to be the exclusive remedy for Lender's breach
of this letter agreement but shall be in addition to all other remedies
available at law or equity to Borrower. Lender agrees that the provisions of
this letter agreement shall be deemed to apply, with equal force and effect, to
any of Lender's representatives, affiliates, or associates and that Lender shall
be responsible for any breach of the provisions of this letter agreement by any
of its directors, officers, employees, affiliates, or associates.
This letter agreement shall be governed by and be construed in accordance
with the laws of the State of California (excluding the choice of law rules
thereof) and is binding upon the successors and assigns of Lender and Borrower.
This letter agreement supersedes any prior agreements between Borrower and
Lender regarding confidential information furnished to Lender in connection with
the Credit Agreement.
Very truly yours,
[Lender name]
By____________________________
Name:______________________
Title:_____________________
F-2
<PAGE>
Acuson Corporation Exhibit 10.2
- --------------------------------------------------------------------------------
ACUSON CORPORATION
________________________
NOTE PURCHASE AGREEMENT
________________________
Dated as of April 9, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
AUTHORIZATION AND ISSUANCE OF NOTES........................................ 1
Section 1.1 Authorization of Notes....................................... 1
Section 1.2 Authorized Denominations..................................... 2
Section 1.3 Sale and Purchase of Notes................................... 2
ARTICLE II
CLOSING CONDITIONS......................................................... 3
Section 2.1 Representations and Warranties............................... 3
Section 2.2 Performance; No Default...................................... 4
Section 2.3 Compliance Certificates...................................... 4
Section 2.4 Opinion of Company's Counsel................................. 4
Section 2.5 Opinions of Purchasers' Special Counsel...................... 4
Section 2.6 Purchase Permitted By Applicable Law, etc.................... 4
Section 2.7 Payment of Special Counsel Fees.............................. 5
Section 2.8 Private Placement Number..................................... 5
Section 2.9 Changes in Corporate Structure............................... 5
Section 2.10 Proceedings and Documents.................................... 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................. 5
Section 3.1 Organization; Power and Authority.......................... 5
Section 3.2 Authorization, etc......................................... 5
Section 3.3 Disclosure................................................. 6
Section 3.4 Organization and Ownership of Shares of Subsidiaries....... 6
Section 3.5 Financial Statements....................................... 7
Section 3.6 Compliance with Laws, Other Instruments, etc............... 7
Section 3.7 Governmental Authorizations, etc........................... 7
Section 3.8 Litigation; Observance of Statutes and Orders.............. 7
Section 3.9 Taxes...................................................... 8
Section 3.10 Leases; Title to Property.................................. 8
Section 3.11 Licenses, Permits, etc..................................... 10
Section 3.12 Compliance with ERISA...................................... 10
Section 3.13 Private Offering by the Company............................ 11
Section 3.14 Use of Proceeds; Margin Regulations........................ 11
Section 3.15 Existing Indebtedness...................................... 12
Section 3.16 Foreign Assets Control Regulations, etc.................... 12
Section 3.17 Status under Certain Statutes.............................. 12
Section 3.18 Maintenance of Properties.................................. 12
Section 3.19 Insurance.................................................. 12
Section 3.20 Business of the Company and Restricted Subsidiaries........ 12
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
Section 3.21 Environmental Matters....................................... 13
Section 3.22 Domestic Restricted Subsidiaries............................ 13
ARTICLE IV
REPRESENTATIONS OF PURCHASER................................................ 13
Section 4.1 Purchase for Investment..................................... 13
Section 4.2 Source of Funds............................................. 14
ARTICLE V
PREPAYMENT OF THE NOTES..................................................... 15
Section 5.1 Required Prepayments........................................ 15
Section 5.2 Optional Prepayments with Make-Whole Amount................. 16
Section 5.3 Allocation of Partial Prepayments........................... 16
Section 5.4 Maturity; Surrender, etc.................................... 16
Section 5.5 Purchase of Notes........................................... 16
Section 5.6 Make-Whole Amount........................................... 17
ARTICLE VI
PAYMENTS ON NOTES........................................................... 18
Section 6.1 Payment of Interest......................................... 18
Section 6.2 Payment of Principal........................................ 18
Section 6.3 Place of Payment............................................ 19
Section 6.4 Home Office Payment......................................... 19
ARTICLE VII
AFFIRMATIVE COVENANTS OF COMPANY............................................ 19
Section 7.1 Compliance with Law......................................... 19
Section 7.2 Insurance................................................... 20
Section 7.3 Maintenance of Properties................................... 20
Section 7.4 Payment of Taxes............................................ 20
Section 7.5 Corporate Existence, etc.................................... 20
Section 7.6 Financial and Business Information.......................... 21
Section 7.7 Officer's Certificate....................................... 23
Section 7.8 Inspection.................................................. 23
Section 7.9 Nature of Business.......................................... 24
Section 7.10 Auditor's Compliance Certificate............................ 24
ARTICLE VIII
NEGATIVE COVENANTS OF COMPANY............................................... 24
Section 8.1 Transactions with Affiliates................................ 24
Section 8.2 Merger, Consolidation, etc.................................. 24
Section 8.3 Limitation on Sale of Assets................................ 25
Section 8.4 Maintenance of Consolidated Adjusted Net Worth.............. 25
Section 8.5 Limitation on the Incurrence of Debt........................ 25
Section 8.6 Limitation on Liens......................................... 26
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 8.7 Limitation of Restricted Subsidiary Debt.................... 27
Section 8.8 Fixed Charge Coverage....................................... 27
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES.............................................. 27
Section 9.1 Events of Default........................................... 27
Section 9.2 Acceleration................................................ 30
Section 9.3 Other Remedies.............................................. 30
Section 9.4 Rescission.................................................. 30
Section 9.5 No Waivers or Election of Remedies, Expenses, etc........... 31
ARTICLE X
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES............................... 31
Section 10.1 Registration of Notes....................................... 31
Section 10.2 Transfer and Exchange of Notes.............................. 31
Section 10.3 Replacement of Notes........................................ 32
ARTICLE XI
MISCELLANEOUS............................................................... 32
Section 11.1 Transaction Expenses........................................ 32
Section 11.2 Survival.................................................... 33
Section 11.3 Survival of Representations and Warranties; Entire Agreement 33
Section 11.4 Amendment and Waiver........................................ 33
Section 11.5 Notices..................................................... 34
Section 11.6 Reproduction of Documents................................... 35
Section 11.7 Confidential Information.................................... 35
Section 11.8 Substitution of Purchaser................................... 36
Section 11.9 Successors and Assigns...................................... 37
Section 11.10 Payments Due on Non-Business Days........................... 37
Section 11.11 Severability................................................ 37
Section 11.12 Construction................................................ 37
Section 11.13 Counterparts................................................ 37
Section 11.14 Governing Law............................................... 37
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
SCHEDULE A - INFORMATION RELATING TO INITIAL PURCHASERS
SCHEDULE B - DEFINED TERMS
EXHIBIT 1.1(a)(i) - FORM OF 6.59% SERIES A SENIOR UNSECURED NOTE DUE
APRIL 8, 2006
EXHIBIT 1.1(a)(ii) - FORM OF 6.39% SERIES B SENIOR UNSECURED NOTE DUE
APRIL 8, 2004
EXHIBIT 1.1(b) - FORM OF SUBSEQUENT NOTES
EXHIBIT 1.3(b) - FORM OF SUPPLEMENTAL NOTE PURCHASE AGREEMENT
EXHIBIT 2.4 - MATTERS COVERED BY OPINION OF SPECIAL COUNSEL FOR
THE COMPANY
EXHIBIT 2.5 - MATTERS COVERED BY OPINION OF SPECIAL COUNSEL FOR
THE PURCHASERS
</TABLE>
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<PAGE>
NOTE PURCHASE AGREEMENT
-----------------------
This NOTE PURCHASE AGREEMENT, dated as of April 9, 1999 (this
"Agreement"), is made between ACUSON CORPORATION, a Delaware corporation (the
"Company"), and each of the purchasers named in Schedule A to this Agreement and
----------
that are signatories to this Agreement (each an "Initial Purchaser" and
collectively, the "Initial Purchasers"), acting severally and not jointly.
The Company and the Initial Purchasers agree as follows:
ARTICLE I
AUTHORIZATION AND ISSUANCE OF NOTES
-----------------------------------
Section 1.1 Authorization of Notes.
(a) Series A Notes and Series B Notes. The Company will authorize the
---------------------------------
issue and sale of its senior unsecured promissory notes in one or more Series
(each, a "Series") in an aggregate principal amount of $80,000,000, consisting
of (i) the Series A Notes (as defined below), (ii) the Series B Notes (as
defined below) and (iii) the Subsequent Notes (as defined below). The first such
Series will consist of $71,000,000 aggregate principal amount of its 6.59%
Series A Senior Unsecured Notes due April 8, 2006 (such notes, including all
securities issued in exchange or replacement for any thereof being herein
collectively called the "Series A Notes"). The second such Series will consist
of $4,000,000 aggregate principal amount of its 6.39% Series B Senior Unsecured
Notes due April 8, 2004 (such notes, including all securities issued in exchange
or replacement for any thereof being herein collectively called "Series B
Notes"). Each Series A Note shall be substantially in the form of Exhibit
-------
1.1(a)(i) hereto, with such changes therefrom, if any, as may be approved by
- ---------
the Initial Purchasers and the Company and each Series B Note shall be
substantially in the form of Exhibit 1.1(a)(ii) hereto, with such changes
therefrom, if any, as may be approved by the Initial Purchasers and the Company.
(b) Subsequent Series. Subsequent Series of promissory notes
-----------------
(collectively, "Subsequent Notes") may be issued pursuant to Supplemental Note
Purchase Agreement, as provided in Section 1.3(b) in an aggregate principal
--------------
amount not to exceed $5,000,000 and shall (i) be identified as "Series C Notes";
(ii) shall be in the aggregate principal amount; (iii) shall be dated the date;
(iv) shall bear interest from such date at the rate per annum and at the
frequency; (v) shall bear interest on overdue principal (including any overdue
optional prepayment of principal) and premium, if any, and, to the extent
permitted by law, on any overdue installment of interest at the rate; and (vi)
shall be expressed to mature on the date, all as set forth in the Supplemental
Note Purchase Agreement relating thereto and shall otherwise be substantially in
the form attached hereto as Exhibit 1.1(b).
--------------
<PAGE>
(c) Definitions and References. The Series A Notes, the Series B
--------------------------
Notes and the Subsequent Notes are herein sometimes collectively referred to as
the "Notes". As used herein, the term "Notes" shall include each Note delivered
pursuant to this Agreement at any Closing Date and each Note delivered in
substitution or exchange for any such Note pursuant hereto. Certain capitalized
terms used in this Agreement are defined in Schedule B; references to a
----------
"Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or
an Exhibit attached to this Agreement.
Section 1.2 Authorized Denominations. The Notes are issuable only
------------------------
fully registered Notes in denominations of at least $1,000,000 (or the remaining
balance thereof, if less than $1,000,000).
Section 1.3 Sale and Purchase of Notes.
--------------------------
(a) Series A Notes and Series B Notes. Subject to the terms and
---------------------------------
conditions herein set forth, the Company hereby agrees to sell to each Initial
Purchaser and each Initial Purchaser agrees to purchase from the Company the
aggregate principal amount of the Series A Notes or Series B Notes set opposite
such Initial Purchaser's name in the Initial Purchaser Schedule attached hereto
as Schedule A (the "Initial Purchaser Schedule") at 100% of the aggregate
----------
principal amount. The sale and purchase of the Series A Notes and Series B Notes
shall take place at the offices of Winston & Strawn, 35 West Wacker, Chicago,
Illinois 60601 at 10:00 a.m., Chicago time, at a closing (the "Initial Closing")
on April 9, 1999, or such other date as shall be agreed upon by the Company and
each Initial Purchaser. At the Initial Closing, the Company will deliver to each
Initial Purchaser one or more Series A Notes or Series B Notes, as applicable,
registered in such Initial Purchaser's name (or in the name of its nominee),
evidencing the aggregate principal amount of Series A Notes or Series B Notes to
be purchased by said Initial Purchaser and in the denomination or denominations
specified with respect to such Initial Purchaser in the Initial Purchaser
Schedule against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account on the date of
the Initial Closing (the "Initial Closing Date") (as specified in a notice to
each Initial Purchaser at least three Business Days prior to the Initial Closing
Date).
(b) Subsequent Notes. At any time during the 365 day period
----------------
immediately following the Initial Closing Date, the Company and one or more
Eligible Purchasers may enter into an agreement substantially in the form of the
Supplemental Note Purchase Agreement attached hereto as Exhibit 1.3(b) (a
--------------
"Supplemental Note Purchase Agreement") in which, subject to the terms and
conditions herein and therein set forth, the Company shall agree to sell to each
such Eligible Purchaser named on the Supplemental Purchaser Schedule attached
thereto (collectively, the "Supplemental Purchasers") and each such Supplemental
Purchaser shall agree to purchase from the Company the aggregate principal
amount of the Series of Subsequent Notes (which Series shall aggregate not less
than $5,000,000) described in said Supplemental Note Purchase Agreement and set
opposite such Supplemental Purchaser's name in the Supplemental Purchaser
Schedule attached thereto (the "Supplemental Purchaser Schedule")
-2-
<PAGE>
at the price and otherwise under the terms set forth in said Supplemental Note
Purchase Agreement. The sale and purchase of the Subsequent Notes of the Series
described in said Supplemental Note Purchase Agreement will take place at the
location, date and time set forth therein at a closing as shall be agreed upon
by the Company and the respective Supplemental Note Purchasers (a "Supplemental
Closing"). At such Supplemental Closing the Company will deliver to each such
Supplemental Purchaser one or more Subsequent Notes of the Series to be
purchased by said Supplemental Purchaser registered in such Supplemental
Purchaser's name (or in the name of its nominee), evidencing the aggregate
principal amount of Subsequent Notes of such Series to be purchased by said
Supplemental Purchaser and in the denomination or denominations specified with
respect to such Supplemental Purchaser in such Supplemental Purchaser Schedule
against payment of the purchase price thereof by transfer of immediately
available funds for credit to the Company's account on the date of such
Supplemental Closing (a "Supplemental Closing Date") (as specified in a notice
to each such Supplemental Purchaser at least three Business Days prior to such
Supplemental Closing Date).
(c) Several Purchase Obligations. The obligations of each Purchaser
----------------------------
to purchase its respective Notes are several and separate from the obligations
of each other Purchaser and each Purchaser shall have no liability to any Person
for the performance or non-performance by any other Purchaser hereunder,
provided that it shall be a condition precedent to the obligation of any
Purchaser to purchase its respective Notes that all of the other Purchasers
shall have contemporaneously purchased their respective Notes as contemplated
hereby (unless such condition shall have been waived by any Purchaser as to
itself).
(d) Relief from Purchase Obligations. If at any Closing the Company
--------------------------------
shall fail to tender such Notes to any Purchaser as provided above in this
Section 1.3, or any of the conditions specified in Article II shall not have
- -----------
been fulfilled to any Purchaser's satisfaction, such Purchaser shall, at such
Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.
ARTICLE II
CLOSING CONDITIONS
------------------
The obligations of each Purchaser to purchase and pay for its
respective Notes at a Closing is subject to the fulfillment to such Purchaser's
satisfaction, prior to or at such Closing, of the conditions set forth in
Section 1.3(c) and this Article.
- --------------
Section 2.1 Representations and Warranties. The representations and
------------------------------
warranties of the Company in this Agreement shall be correct when made and at
the time of such Closing.
-3-
<PAGE>
Section 2.2 Performance; No Default. The Company shall have
-----------------------
performed and complied with all agreements and conditions contained in this
Agreement required to be performed or complied with by it prior to or at such
Closing and after giving effect to the issue and sale of the applicable Series
of Notes (and the application of the proceeds thereof as contemplated by Section
-------
3.14) no Default or Event of Default shall have occurred and be continuing.
- -----
Section 2.3 Compliance Certificates.
-----------------------
(a) Officer's Certificate. The Company shall have delivered to
---------------------
each of such Purchasers (and the Initial Purchasers, in the case of a
Supplemental Closing) an Officer's Certificate, dated the date of such
Closing, certifying that the conditions specified in Sections 2.1, 2.2 and
------------ ---
2.9 have been fulfilled.
- ---
(b) Secretary's Certificate. The Company shall have delivered to
-----------------------
each of such Purchasers a certificate certifying as to the resolutions attached
thereto and other corporate proceedings relating to the authorization, execution
and delivery of the Notes and this Agreement.
Section 2.4 Opinion of Company's Counsel. Each of such Purchasers
----------------------------
shall have received opinions in form and substance satisfactory to such
Purchaser, dated the date of such Closing from Cooley Godward LLP, counsel for
the Company, covering the matters set forth in Exhibit 2.4 and covering such
-----------
other matters incident to the transactions contemplated hereby as such
Purchasers, or any of them, may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to each such Purchaser).
Section 2.5 Opinions of Purchasers' Special Counsel. Each of such
---------------------------------------
Purchasers shall have received opinions in form and substance satisfactory to
such Purchaser, dated the date of such Closing from Winston & Strawn, the
Purchasers' special counsel in connection with such transactions, covering the
matters set forth in Exhibit 2.5 and such other matters incident to such
-----------
transactions as the Purchasers, or any of them, may reasonably request.
Section 2.6 Purchase Permitted By Applicable Law, etc. On such
-----------------------------------------
Closing Date, such Purchaser's purchase of Notes shall (i) be permitted by the
laws and regulations of each jurisdiction to which such Purchaser is subject,
without recourse to provisions (such as Section 1405(a)(8) of the New York
------------------
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (ii) not violate
any applicable law or regulation (including, without limitation, Regulation T, U
or X of the Board of Governors of the Federal Reserve System) and (iii) not
subject such Purchaser to any tax, penalty or liability under or pursuant to any
applicable law or regulation, which law or regulation was not in effect on the
date hereof. If requested by any such Purchaser, such Purchaser shall have
received an Officer's Certificate certifying as to such matters of fact as any
such Purchaser may reasonably specify to enable such Purchaser to determine
whether such purchase is so permitted.
-4-
<PAGE>
Section 2.7 Payment of Special Counsel Fees. Without limiting the
-------------------------------
provisions of Section 11.1, the Company shall have paid on or before such
------------
Closing the fees, charges and disbursements of such Purchaser's special counsel
referred to in Section 2.5 to the extent reflected in a statement of such
-----------
counsel rendered to the Company at least one Business Day prior to such Closing
Date.
Section 2.8 Private Placement Number. A Private Placement number is
------------------------
sued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the applicable Series of Notes.
Section 2.9 Changes in Corporate Structure. Except as set forth on
------------------------------
Schedule 2.9 of the Disclosure Letter, the Company shall not have been a party
- ------------
to any merger or consolidation and shall not have succeeded to all or any
substantial part of the liabilities of any other entity, at any time following
the date of the most recent financial statements referred to in Schedule 3.5 of
------------
the Disclosure Letter.
Section 2.10 Proceedings and Documents. All corporate and other
-------------------------
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to each Purchaser, and the Purchasers shall have received all such
counterpart originals or certified or other copies of such documents as the
Purchasers may reasonably request.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to the Purchasers as follows:
Section 3.1 Organization; Power and Authority. The Company is a
----------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and is duly qualified as a foreign corporation and is
in good standing in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be so qualified
or in good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has the corporate power
and authority to own or hold under lease the properties it purports to own or
hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement and the Notes and to perform the
provisions hereof and thereof.
Section 3.2 Authorization, etc. This Agreement, the Supplemental
-------------------
Note Purchase Agreements and the Notes have been duly authorized by all
necessary corporate action on the part of the Company. At or prior to the
Initial Closing, the Company will have duly executed and delivered each of this
Agreement and the Series A Notes and the Series B Notes.
-5-
<PAGE>
At or prior to each Subsequent Closing, the Company shall have duly executed and
delivered each of the applicable Supplemental Note Purchase Agreement and the
Series of Notes to be issued and sold pursuant thereto. This Agreement
constitutes, and upon execution and delivery thereof each Supplemental Note
Purchase Agreement and each Note shall constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 3.3 Disclosure. The Company, through its agent, ABN AMRO
----------
Incorporated, has delivered to each Purchaser a copy of a Confidential
Information Memorandum, dated February, 1999 (the "Memorandum"), relating to the
transactions contemplated hereby. Except as disclosed in Schedule 3.3 of the
------------
Disclosure Letter or the Memorandum, the documents, certificates or other
writings identified in Schedule 3.3 of the Disclosure Letter and the financial
------------
statements listed in Schedule 3.5 of the Disclosure Letter, taken as a whole,
------------
do not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as disclosed in the
Memorandum or as expressly described in Schedule 3.3 of the Disclosure Letter,
------------
or in one of the documents, certificates or other writings identified therein,
or in the financial statements listed in Schedule 3.5 of the Disclosure Letter,
------------
since December 31, 1998, there has been no change in the financial condition,
operations, business or properties of the Company or any of its Subsidiaries
except changes that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
Section 3.4 Organization and Ownership of Shares of Subsidiaries.
----------------------------------------------------
(a) Schedule 3.4 of the Disclosure Letter is (except as noted
------------
therein) a complete and correct list of the Subsidiaries and joint ventures,
showing, as to each such Subsidiary and joint venture, the correct name thereof,
the jurisdiction of its organization, and the percentage of shares of each class
of its capital stock or similar equity interests outstanding owned by the
Company and each such Subsidiary and joint venture.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 3.4 of the Disclosure Letter as
------------
being owned by the Company and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule 3.4 of
------------
the Disclosure Letter).
(c) Each Subsidiary identified in Schedule 3.4 of the Disclosure
------------
Letter is a corporation or other legal entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, and
is duly qualified as a foreign corporation or other
-6-
<PAGE>
legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 3.4 of the Disclosure Letter and customary limitations imposed by
------------
corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.
Section 3.5 Financial Statements. The Company has delivered to
--------------------
each Purchaser copies of the financial statements of the Company and its
Subsidiaries listed on Schedule 3.5 of the Disclosure Letter. All of said
------------
financial statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial position of
the Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
Section 3.6 Compliance with Laws, Other Instruments, etc. The
--------------------------------------------
execution, delivery and performance by the Company of this Agreement and the
Notes will not (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Restricted Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, partnership agreement,
partnership charter or by-laws, or any other Material agreement or instrument to
which the Company or any Subsidiary is bound or by which the Company or any
Restricted Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 3.7 Governmental Authorizations, etc. No consent, approval
---------------------------------
or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery or
performance by the Company of this Agreement or the Notes.
Section 3.8 Litigation; Observance of Statutes and Orders.
---------------------------------------------
-7-
<PAGE>
(a) Except as disclosed in Schedule 3.8 of the Disclosure Letter,
------------
there are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any arbitrator
of any kind or before or by any Governmental Authority that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
Section 3.9 Taxes. The Company has, at all times during its
-----
existence, been and is taxable as a corporation for federal and state income tax
purposes. The Company and each Subsidiary have filed all income tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and assessments
payable by them, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate
Material or (ii) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP. All taxes which the Company is required by law
to withhold and collect have been duly withheld and collected, and have been
paid over, in a timely manner, to the proper Authorities to the extent due and
payable, except for any taxes in an amount that is not individually or in the
aggregate Material. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate. The Federal income tax liabilities of the Company
and its Subsidiaries have been determined by the Internal Revenue Service and
paid for all fiscal years up to and including the fiscal year ended December 31,
1993.
Section 3.10 Leases; Title to Property. All Material leases are
-------------------------
valid and subsisting and are in full force and effect in all material respects.
The Company and each Restricted Subsidiary have good and sufficient title to
their respective Material properties, including all such properties reflected in
the most recent audited balance sheet referred to in Section 3.5 or purported
-----------
to have been acquired by the Company or any Restricted Subsidiary after said
date (except as sold or otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens, except for:
(a) Liens disclosed on Schedule 3.10 of the Disclosure Letter
-------------
securing Debt outstanding at the Initial Closing;
-8-
<PAGE>
(b) deposits under workers' compensation, employment insurance and
social security laws in the ordinary course of business;
(c) deposits to secure the performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases or to secure
indemnity, performance or other similar bonds in the ordinary course of
business;
(d) judgment liens, provided, that such Liens do not constitute an
--------
Event of Default under Section 9.1(i);
--------------
(e) rights of vendors or lessors under conditional sale agreements,
Capital Leases or other title retention agreements, provided, that in each case,
--------
(i) such rights do not extend to any property other than the acquired property
and (ii) such rights do not secure any Indebtedness other than such Indebtedness
incurred in connection with the acquisition of such property;
(f) Liens securing Debt permitted hereunder, provided, that in each
--------
case, such Lien (i) covers only those assets, the acquisition of which was
financed by such permitted Debt, and (ii) secures only such permitted Debt;
(g) other Liens (other than any Lien imposed by ERISA) which are
incidental to the normal conduct of the business of the Company or any
Restricted Subsidiary or the ownership of its property which are not incurred in
connection with the incurrence of Indebtedness and which do not in the aggregate
materially impair the use of such property in the operation of the business of
the Company or such Restricted Subsidiary or the value of such property for the
purposes of such business and which, with respect to payments required pursuant
to Sections 7.1 and 7.4, secure sums not yet due and payable;
------------ ---
(h) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries, provided that such Liens do not,
--------
in the aggregate, materially detract from the value of such property;
(i) with respect to Supplemental Closings, Liens given in connection
with property acquired or constructed after the Initial Closing Date, provided
that such Liens attach only to such after-acquired property and the Debt secured
by such Liens would not then exceed the lesser of the total purchase price or
fair market value of the property at the time of such acquisition;
(j) Liens upon the assets of any person existing at the time such
person is merged into or consolidated with the Company or a Restricted
Subsidiary or at the time of its acquisition by the Company or a Restricted
Subsidiary or its becoming a Restricted Subsidiary,
-9-
<PAGE>
provided that such Liens do not spread to any other asset owned by the Company
or any Restricted Subsidiary;
(k) Liens upon the assets or stock of the Company or any Restricted
Subsidiary in favor of the Company and/or any other Restricted Subsidiary;
(l) the extension, renewal or replacement of any Lien permitted by
the preceding clauses (a) through (k) in respect of the same property
theretofore subject thereto or the extension, renewal or replacement of such
property (without increase of the principal amount of the Debt so secured); and
(m) additional Liens, exclusive of the Liens permitted by the
preceding clauses (a) through (l) above, provided that the sum of (i) Debt
--------
secured by such additional Liens pursuant to this clause (m) plus (ii)
Restricted Subsidiary Debt pursuant to Section 8.7 shall not at any time
-----------
exceed an amount equal to twenty percent (20%) of Consolidated Adjusted Net
Worth.
Section 3.11 Licenses, Permits, etc. Except as disclosed in
----------------------
Schedule 3.11 of the Disclosure Letter, the Company and each Restricted
- -------------
Subsidiary own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or rights
thereto, that are Material, without known conflict with the rights of others,
except for those conflicts that, individually or in the aggregate, would not
have a Material Adverse Effect.
Section 3.12 Compliance with ERISA.
---------------------
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in section 3 of ERISA), and no event, transaction or
---------
condition has occurred or exists that would reasonably be expected to result in
the incurrence of any such liability by the Company or any ERISA Affiliate, or
in the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, if applicable, did not exceed the aggregate current
-10-
<PAGE>
value of the assets of such Plan allocable to such benefit liabilities. The term
"benefit liabilities" has the meaning specified in section 4001 of ERISA and the
terms "current value" and "present value" have the meaning specified in section
3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B
-------------
of the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 3.12(e) is made in
---------------
reliance upon and subject to (i) the accuracy of each Purchaser's
representation in Section 4.2 as to the sources of the funds to be used to pay
-----------
the purchase price of the Notes to be purchased by such Purchaser and (ii) the
assumption, made solely for the purpose of making such representation, that
Department of Labor Interpretive Bulletin 75-2 with respect to prohibited
transactions remains valid in the circumstances of the transactions contemplated
herein.
Section 3.13 Private Offering by the Company. Neither the Company
-------------------------------
nor anyone acting on its behalf has offered the Notes or any similar securities
for sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Purchasers and not more than 55 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
- ---------
Section 3.14 Use of Proceeds; Margin Regulations. The Company
----------------------------------
represents, warrants, covenants and agrees that the proceeds of the sale of the
Notes will be used by the Company for the purpose of refinancing outstanding
Debt of the Company and for other working capital and general corporate
purposes. No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve the Company in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12
-11-
<PAGE>
CFR 220). As used in this Section, the terms "margin stock" and "purpose of
buying or carrying" shall have the meanings assigned to them in said Regulation
U.
Section 3.15 Existing Indebtedness. The Notes will rank pari passu
--------------------- ---- -----
with the other senior unsecured Indebtedness of the Company. Except as described
therein, Schedule 3.15 of the Disclosure Letter sets forth a complete and
-------------
correct list of all outstanding Indebtedness of the Company and its Restricted
Subsidiaries as of December 31, 1998, since which date there has been no
Material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Indebtedness of the Company or its Restricted
Subsidiaries. Neither the Company nor any Restricted Subsidiary is in default
and no waiver of default is currently in effect, in the payment of any principal
or interest on any Indebtedness of the Company or such Restricted Subsidiary and
no event or condition exists with respect to any Indebtedness of the Company or
any Restricted Subsidiary the outstanding principal amount of which exceeds
$25,000 that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates of
payment.
Section 3.16 Foreign Assets Control Regulations, etc. Neither the
---------------------------------------
sale of the Notes by the Company hereunder nor its use of the proceeds thereof
will violate the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.
Section 3.17 Status under Certain Statutes. Neither the Company
-----------------------------
nor any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Interstate Commerce Act, as amended, or the Federal Power Act, as amended.
Section 3.18 Maintenance of Properties. The Company has and each
-------------------------
of its Restricted Subsidiaries has maintained and kept their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith has been
properly conducted at all times.
Section 3.19 Insurance. The Company has and each of its Restricted
---------
Subsidiaries has maintained, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities engaged in the same or a similar business and similarly situated.
Section 3.20 Business of the Company and Restricted Subsidiaries.
---------------------------------------------------
The Company and each Restricted Subsidiary are primarily engaged in the business
of the manufacture, sale and service of medical diagnostic and treatment
products.
-12-
<PAGE>
Section 3.21 Environmental Matters. Neither the Company nor any
---------------------
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed in Schedule 3.21 of the Disclosure
-------------
Letter:
(a) neither the Company nor any Subsidiary has knowledge of any facts
which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use, except, in each case, such as
could not reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or operated
by any of them and has not disposed of any Hazardous Materials in a manner
contrary to any Environmental Laws, in each case, in any manner that could
reasonably be expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
Section 3.22 Domestic Restricted Subsidiaries. As of the Closing
--------------------------------
Date, none Acuson International Sales Corporation, a California corporation,
Acuson Worldwide Sales Ltd., a California corporation, or Sound Technology,
Inc., a Pennsylvania corporation, being all of the domestic Restricted
Subsidiaries of the Company, individually, owns more than two percent (2.0%) of
the assets of the Company on a consolidated basis, and, collectively, such
Restricted Subsidiaries do not own more than three percent (3%) of the assets of
the Company on a consolidated basis.
ARTICLE IV
REPRESENTATIONS OF PURCHASER
----------------------------
Section 4.1 Purchase for Investment. Each Purchaser, severally and
-----------------------
not jointly, represents that such Purchaser is purchasing the Notes to be
purchased by it hereunder for such Purchaser's own account or for one or more
separate accounts maintained by such Purchaser or for the account of one or more
pension or trust funds and not with a view to the distribution thereof, provided
--------
that the disposition of such Purchaser's property shall at all times be within
such Purchaser's control. Each Purchaser understands that its respective Notes
have
-13-
<PAGE>
not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register such Notes.
Section 4.2 Source of Funds. Each Purchaser, severally and not
---------------
jointly, that at least one of the following statements is an accurate
representation as to each source of funds (a "Source") to be used by such
Purchaser to pay the purchase price of the Notes to be purchased by such
Purchaser hereunder:
(a) the source is an "insurance company general account", as such
term is defined in Prohibited Transaction Exemption ("PTE") 95-60 (issued July
12, 1995), and there is no plan with respect to which the aggregate amount of
such general account's reserves and liabilities for the contracts held by or on
behalf of such plan and all other plans maintained by the same employer (and
affiliates thereof as defined in section V(a) (1) of PTE 95-60) or by the same
employee organization (in each case determined in accordance with PTE 95-60)
exceeds or will exceed 10% of the total of all reserves and liabilities of such
general account (determined in accordance with PTE 95-60, exclusive of separate
account liabilities, plus any applicable surplus) as of the date of the Closing;
or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as such Purchaser has disclosed to the Company in
writing pursuant to this paragraph (b), no employee benefit plan or group of
plans maintained by the same employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled separate account or
collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
- ---------------
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
------------
Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
-14-
<PAGE>
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this paragraph
(e); or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 4.2, the terms "employee benefit plan", "governmental
-----------
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
---------
ARTICLE V
PREPAYMENT OF THE NOTES
-----------------------
The Notes shall be subject to prepayment only (i) pursuant to the
required prepayments specified in Section 5.1 (with respect to the Series A
-----------
Notes and Series B Notes) or the applicable Supplemental Note Purchase Agreement
(with respect to each Series of Subsequent Notes) and (ii) pursuant to the
optional prepayments permitted by Section 5.2 (with respect to all Notes
-----------
without regard to Series).
Section 5.1 Required Prepayments.
--------------------
(a) Series A Notes. On April 8, 2002 and on each April 8, thereafter
--------------
to and including April 8, 2006, the Company will prepay $14,200,000 principal
amount (or such lesser principal amount as shall then be outstanding) of the
Series A Notes at par and without payment of the Make-Whole Amount or any
premium, provided that upon any partial prepayment of the Notes pursuant to
--------
Section 5.2 or purchase of the Notes permitted by Section 5.5, the principal
- ----------- -----------
amount of each required prepayment of the Series A Notes becoming due under
this Section 5.1 on and after the date of such prepayment or purchase shall be
-----------
reduced in the same proportion as the aggregate unpaid principal amount of the
Series A Notes is reduced as a result of such prepayment or purchase.
(b) Series B Notes. On April 8, 2000 and on each April 8, thereafter
--------------
to and including April 8, 2004, the Company will prepay $800,000 principal
amount (or such lesser principal amount as shall then be outstanding) of the
Series B Notes at par and without payment of the Make-Whole Amount or any
premium, provided that upon any partial prepayment of the Notes pursuant to
--------
Section 5.2 or purchase of the Notes permitted by Section 5.5, the principal
- ----------- -----------
amount of each required prepayment of the Series B Notes becoming due under this
Section 5.1 on and after the date of such prepayment or purchase shall be
- -----------
reduced in the same proportion as the aggregate unpaid principal amount of the
Series B Notes is reduced as a result of such prepayment or purchase.
-15-
<PAGE>
Section 5.2 Optional Prepayments with Make-Whole Amount. The Company
-------------------------------------------
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, at 100% of the principal amount so
prepaid, and accrued interest thereon to the date of prepayment, plus the Make-
Whole Amount determined for the prepayment date with respect to such principal
amount. The Company shall give each holder of Notes written notice of each
optional prepayment under this Section 5.2 not less than 30 days and not more
-----------
than 60 days prior to the date fixed for such prepayment. Each such notice shall
specify such date, the aggregate principal amount of the Notes to be prepaid on
such date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 5.3), and the interest to be paid on the
-----------
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
Section 5.3 Allocation of Partial Prepayments. In the case of each
---------------------------------
partial prepayment of the Notes of any Series, the principal amount of the Notes
of such Series to be prepaid shall be allocated among all of the Notes of such
Series at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts of Notes of such Series not theretofore
called for prepayment; provided, that any optional prepayment by Company with
--------
respect to any Series under Section 5.2 shall not require pro rata prepayment
-----------
with respect to any other Series.
Section 5.4 Maturity; Surrender, etc. In the case of each
------------------------
prepayment of Notes pursuant to this Article V, the principal amount of each
---------
Note to be prepaid shall mature and become due and payable on the date fixed for
such prepayment, together with interest on such principal amount accrued to such
date and the applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount, if any, as aforesaid,
interest on such principal amount shall cease to accrue. Any Note paid or
prepaid in full shall be surrendered to the Company and canceled and shall not
be reissued, and no Note shall be issued in lieu of any prepaid principal amount
of any Note.
Section 5.5 Purchase of Notes. The Company shall not and shall not
-----------------
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes. The Company shall promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
-16-
<PAGE>
Section 5.6 Make-Whole Amount. The term "Make-Whole Amount" means,
-----------------
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
--------
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 5.2 or has become or is
-----------
declared to be immediately due and payable pursuant to Section 9.2, as the
-----------
context requires.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
lesser of (a) the interest rate on the applicable Series of Notes and (b) the
sum of (i) 50 basis points plus (ii) the Reinvestment Yield with respect to
----
such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, the yield to maturity implied by (i) the yields reported, as of 10:00
A.M. (New York City time) on the second Business Day preceding the Settlement
Date with respect to such Called Principal, on the display designated as "Page
500" on the Telerate Access Service (or such other display as may replace Page
500 on Telerate Access Service) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (ii) if such yields are not reported as of such
time or the yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the duration closest to and greater than the Remaining
Average Life and (2) the actively traded U.S. Treasury security with the
duration closest to and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal
-17-
<PAGE>
component of each Remaining Scheduled Payment with respect to such Called
Principal by (b) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is not a date
--------
on which interest payments are due to be made under the terms of the Notes, then
the amount of the next succeeding scheduled interest payment shall be reduced by
the amount of interest accrued to such Settlement Date and required to be paid
on such Settlement Date pursuant to Section 5.2 or 9.2.
----------- ---
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 5.2 or has become or is declared to be immediately due and payable
- -----------
pursuant to Section 9.2, as the context requires.
-----------
ARTICLE VI
PAYMENTS ON NOTES
-----------------
Section 6.1 Payment of Interest. The Series A Notes shall bear
-------------------
interest at the rate of 6.59% per annum and the Series B Notes shall bear
interest at the rate of 6.39% per annum. Each Series of Subsequent Notes shall
bear interest as provided in, and on the dates set forth on, the applicable
Supplemental Note Purchase Agreement pursuant to which such Series is issued.
Interest on all of the Notes shall accrue on the unpaid principal thereof from
the date of the Closing with respect thereto. Interest on the Series A Notes and
Series B Notes shall be payable in arrears quarterly on each April 8, July 8,
October 8 and January 8, commencing July 8, 1999, and at maturity, and shall be
computed on the basis of a 360-day year of twelve 30-day months. No provision of
this Agreement or of any Note shall require the payment or permit the collection
of interest in excess of the maximum which is permitted by law. If any such
excess interest is provided for herein or in any Note, or shall be adjudicated
to be so provided for, then the Company shall not be obligated to pay such
interest in excess of the maximum permitted by law, and the right to demand
payment of any such excess interest is hereby waived, any other provisions in
this Agreement or in any Note to the contrary notwithstanding.
Section 6.2 Payment of Principal. Principal of the Notes shall be
--------------------
payable at maturity and as otherwise provided in Article V, Article IX and the
applicable Supplemental Note Purchase Agreement.
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<PAGE>
Section 6.3 Place of Payment. Subject to Section 6.4, payments of
---------------- -----------
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Mountain View, California at the principal office of
the Company in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 6.4 Home Office Payment. So long as a Purchaser or a
-------------------
Purchaser's nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 6.3 or in such Note to the contrary, the Company
-----------
shall pay all sums becoming due on such Note for principal, Make-Whole Amount,
if any, and interest by the method and at the address specified for such purpose
below such Purchaser's name in the Initial Purchaser Schedule or the applicable
Supplemental Purchaser Schedule, as applicable, or by such other method or at
such other address as such Purchaser shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, such Purchaser shall surrender such
Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 6.3.
-----------
Prior to any sale or other disposition of any Note held by a Purchaser or a
Purchaser's nominee such Purchaser will, at such Purchaser's election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 10.2. The Company shall afford the
------------
benefits of this Section 6.4 to any Institutional Investor that is the direct
-----------
or indirect transferee of any Note purchased by any Purchaser under this
Agreement and that has made the same agreement relating to such Note as such
Purchaser has made in this Section 6.4.
-----------
ARTICLE VII
AFFIRMATIVE COVENANTS OF COMPANY
--------------------------------
The Company covenants that so long as any of the Notes are
outstanding:
Section 7.1 Compliance with Law. The Company shall and shall cause
-------------------
each of its Subsidiaries to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws and ERISA, and shall obtain and maintain in
effect all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations would
not reasonably be expected, individually or in the aggregate, to have a
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<PAGE>
materially adverse effect on the business, operations, affairs, financial
condition, properties or assets of the Company and its Subsidiaries taken as a
whole.
Section 7.2 Insurance. The Company shall and shall cause each of its
---------
Restricted Subsidiaries to maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the
case of entities engaged in the same or a similar business and similarly
situated.
Section 7.3 Maintenance of Properties. The Company shall and shall
-------------------------
cause each of its Restricted Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that
--------
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance would not, individually or in the aggregate,
have a materially adverse effect on the business, operations, affairs, financial
condition, properties or assets of the Company and its Restricted Subsidiaries
taken as a whole.
Section 7.4 Payment of Taxes. The Company shall and shall cause
----------------
each of its Subsidiaries to file all income tax or similar tax returns required
to be filed in any jurisdiction and to pay and discharge all taxes shown to be
due and payable on such returns and all other taxes, assessments, governmental
charges, or levies payable by any of them, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
provided that neither the Company nor any Subsidiary need pay any such tax or
- --------
assessment if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate would not reasonably be expected to have a materially adverse
effect on the business, operations, affairs, financial condition, properties or
assets of the Company and its Subsidiaries taken as a whole.
Section 7.5 Corporate Existence, etc. The Company shall at all
------------------------
times preserve and keep in full force and effect its corporate existence.
Subject to Sections 8.2 and 8.3, the Company shall at all times preserve and
-------- --- ---
keep in full force and effect the corporate existence of each of its Restricted
Subsidiaries (unless merged into the Company or a Restricted Subsidiary) and all
rights and franchises of the Company and its Restricted Subsidiaries unless, in
the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or
franchise would not, individually or in the aggregate, have a Material Adverse
Effect.
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Section 7.6 Financial and Business Information. The Company shall
----------------------------------
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
--------------------
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income and changes in
shareholders' equity of the Company and its Subsidiaries, for such quarter and
(in the case of the second and third quarters) for the portion of the fiscal
year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and certified by a Senior
Financial Officer as fairly presenting, in all material respects, the
financial position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from normal year-
end adjustments; provided, that the delivery within the time period
--------
specified above of copies of the Company's Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.6(a);
--------------
(b) Annual Statements -- within 120 days after the end of each
-----------------
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year;
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries, for such year,
prepared in accordance with GAAP;
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP and
accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state that
such financial statements present fairly, in all material respects, the
financial position of the companies being reported upon and their results
of operations and cash flows and have been prepared in conformity with GAAP
and that the examination of such accountants in connection with such
financial statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable basis for
such opinion in the circumstances; provided, that the
--------
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<PAGE>
delivery within the time period specified above of the Company's Annual
Report on Form 10-K for such fiscal year (together with the Company's
Annual Report to Act) prepared in accordance with the requirements
therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section 7.6(b);
--------------
(c) SEC and Other Reports -- promptly upon their becoming available,
---------------------
one copy of (i) each financial statement, report, notice or proxy statement
sent by the Company or any Subsidiary to public securities holders generally,
and (ii) each regular or periodic report, each registration statement that shall
have become effective (without exhibits except as expressly requested by such
holder), and each final prospectus and all amendments thereto filed by the
Company or any Subsidiary with the Securities and Exchange Commission and of all
press releases and other statements made available generally by the Company or
any Subsidiary to the public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
-------------------------------------
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default, a written notice specifying
the nature and period of existence thereof and what action the Company is
taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days
-------------
after a Responsible Officer becoming aware of any of the following, a written
notice setting forth the nature thereof and the action, if any, that the Company
or an ERISA Affiliate proposes to take with respect thereto:
(iii) with respect to any Plan, any reportable event, as defined
in section 4043(b) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect on the
date hereof; or
(iv) the taking by the PBGC of steps to institute, or the threatening
by the PBGC of the institution of, proceedings under section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Plan, or
the receipt by the Company or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or
(v) any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien on any of
the rights, properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities or Liens then
existing, would reasonably be expected to have a Material Adverse Effect; and
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<PAGE>
(f) Requested Information -- with reasonable promptness, such other
---------------------
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Restricted
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be reasonably
requested by any such holder of Notes.
Section 7.7 Officer's Certificate. Each set of financial statements
---------------------
delivered to a holder of Notes pursuant to Section 7.6(a) or Section 7.6(b)
-------------- ---------------
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including detailed
-------------------
calculations)required in order to establish whether the Company was in
compliance with the requirements of Sections 8.3, 8.4, 8.5, 8.6, 8.7 and
--------------------------------
8.8 during the quarterly or annual period covered by the statements then being
- ---
furnished (including with respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage, as the case
may be, permissible under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed
----------------
the relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and its
Restricted Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the certificate
and that such review shall not have disclosed the existence during such period
of any condition or event that constitutes a Default or an Event of Default or,
if any such condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company or any
Restricted Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
Section 7.8 Inspection. The Company shall permit the representatives
----------
of each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
----------
the expense of such holder and upon reasonable prior notice to the Company, to
visit the principal executive office of the Company, to discuss the affairs,
finances and accounts of the Company and its Restricted Subsidiaries with the
Company's officers, and, with the consent of the Company (which consent shall
not be unreasonably withheld) to visit the other offices and properties of the
Company and each Restricted Subsidiary, all at such reasonable times and as
often as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the
-------
expense of the Company to visit and inspect any of the offices or properties of
the Company or any Restricted Subsidiary, to examine all their respective books
of account, records, reports and other
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<PAGE>
papers, to make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the Company and its
Restricted Subsidiaries), all at such times and as often as may be requested.
Section 7.9 Nature of Business. Neither the Company nor any
------------------
Restricted Subsidiary will engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would then be
engaged in by the Company and its Restricted Subsidiaries would be substantially
changed from the general nature of the business engaged in by the Company and
its Restricted Subsidiaries on the date of this Agreement.
Section 7.10 Auditor's Compliance Certificate. Each set of financial
--------------------------------
statements delivered to a holder of Notes pursuant to Section 7.6(b) hereof
--------------
shall be accompanied by a certificate of independent certified public
accountants of recognized national standing, which certificate shall state
that the Company was in compliance with the requirements of Sections 8.3, 8.4,
------------ ---
8.5, 8.6, 8.7 and 8.8 during the annual period covered by the certificate then
- --- --- --- ---
being furnished (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence).
ARTICLE VIII
NEGATIVE COVENANTS OF COMPANY
-----------------------------
The Company covenants that so long as any of the Notes are
outstanding:
Section 8.1 Transactions with Affiliates. The Company shall not and
----------------------------
shall not permit any Restricted Subsidiary to enter into directly or indirectly
any Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the Company
or another Restricted Subsidiary), except pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate.
Section 8.2 Merger, Consolidation, etc. The Company shall not and
---------------------------
shall not permit any Restricted Subsidiary to consolidate with or merge with any
other Person or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
(a) the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the
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<PAGE>
Company as an entirety, as the case may be, shall be a solvent corporation
organized and existing under the laws of the United States or any State thereof
(including the District of Columbia), and, if the Company is not such
corporation, such corporation shall have executed and delivered to each holder
of any Notes its assumption of the due and punctual performance and observance
of each covenant and condition of this Agreement, each Supplemental Note
Purchase Agreement and the Notes; and
(b) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing and such entity would
be permitted to incur at least $1.00 of additional Debt under the limitations of
Section 8.5; provided, however, that (i) any Person may consolidate or merge
- ----------- --------
with the Company or any Wholly-Owned Restricted Subsidiary if the Company or
such Wholly-Owned Restricted Subsidiary, respectively, shall be the surviving
corporation; (ii) any Restricted Subsidiary may consolidate with or merge with
the Company or with any other of the Company's indirectly or directly Wholly-
Owned Restricted Subsidiaries; and (iii) any Non-Wholly-Owned Restricted
Subsidiary may consolidate or merge with any other Non-Wholly-Owned Restricted
Subsidiary. No such conveyance, transfer or lease of substantially all of the
assets of the Company shall have the effect of releasing the Company or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 8.2 from its liability under this Agreement or the
-----------
Notes.
Section 8.3 Limitation on Sale of Assets. The Company shall not,
----------------------------
and shall not permit any of its Restricted Subsidiaries to, sell, lease,
transfer, or otherwise dispose of assets (including, but not limited to, the
sale of receivables and sale/leaseback transactions) or the stock of Restricted
Subsidiaries, other than in the ordinary course of business, unless no Default
or Event of Default shall have occurred and be continuing and the aggregate net
book value of such disposed assets does not exceed 10% of consolidated total
assets in any one year and 30% of consolidated total assets on a cumulative
basis over the life of the Notes; provided, however, that notwithstanding the
above, the Company and its Restricted Subsidiaries may sell, lease, transfer or
otherwise dispose of assets in excess of such annual and aggregate limitations
provided that the excess proceeds are used (i) to purchase, or commit to
purchase, other assets useful in the Company's business of at least equivalent
value within one year; or (ii) to repay senior Debt.
Section 8.4 Maintenance of Consolidated Adjusted Net Worth. The
----------------------------------------------
Company shall not permit its Consolidated Adjusted Net Worth at any time to be
less than 75% of its Consolidated Adjusted Net Worth as of April 3, 1999 plus
25% of cumulative Net Income (but only if a positive number) of the Company from
April 3, 1999 to the end of the most recently completed fiscal quarter.
Section 8.5 Limitation on the Incurrence of Debt. The Company shall
------------------------------------
not incur additional Debt unless as of the date of incurrence of any additional
Debt and after giving effect thereto, the ratio of Debt to Total Capitalization
shall be less than fifty-five percent (55%).
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<PAGE>
Section 8.6 Limitation on Liens. The Company shall not, and shall not
-------------------
permit any of its Restricted Subsidiaries to, create, assume, or suffer to exist
any Lien on any asset now owned or hereafter acquired, except:
(i) Liens securing Debt outstanding at the date of the Initial Closing
and disclosed to the Purchasers;
(ii) deposits under workers' compensation, employment insurance and
social security laws in the ordinary course of business;
(iii) deposits to secure the performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases or to secure
indemnity, performance or other similar bonds in the ordinary course of
business;
(iv) judgment liens, provided, that such Liens do not constitute an
--------
Event of Default under Section 9.1(i);
--------------
(v) rights of vendors or lessors under conditional sale agreements,
Capital Leases or other title retention agreements, provided, that in each case,
--------
(i) such rights do not extend to any property other than the acquired property
and (ii) such rights do not secure any Indebtedness other than such Indebtedness
incurred in connection with the acquisition of such property;
(vi) Liens securing Debt permitted hereunder, provided, that in each
--------
case, such Lien (a) covers only those assets, the acquisition of which was
financed by such permitted Debt, and (b) secures only such permitted Debt;
(vii) other Liens (other than any Lien imposed by ERISA) which are
incidental to the normal conduct of the business of the Company or any
Restricted Subsidiary or the ownership of its property which are not incurred in
connection with the incurrence of Indebtedness and which do not in the aggregate
materially impair the use of such property in the operation of the business of
the Company or such Restricted Subsidiary or the value of such property for the
purposes of such business and which, with respect to payments required pursuant
to Sections 7.1 and 7.4, secure sums not yet due and payable;
-------- --- ---
(viii) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries, provided that such Liens do not,
--------
in the aggregate, materially detract from the value of such property;
(ix) Liens given in connection with property acquired or constructed
after the Initial Closing Date, provided that such Liens attach only to such
after-acquired property and the Debt secured by such Liens would not then exceed
the lesser of the total
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<PAGE>
purchase price or fair market value of the property at the time of such
acquisition and the aggregate principal amount of all Debt secured by such Liens
shall be permitted by the limitations set forth in Section 8.5;
-----------
(x) Liens upon the assets of any Person existing at the time such
person is merged into or consolidated with the Company or any Restricted
Subsidiary or at the time of its acquisition by the Company or any Restricted
Subsidiary or its becoming a Restricted Subsidiary, provided that (a) no such
Lien shall have been created or assumed in contemplation of such consolidation
or merger or such Person becoming a Subsidiary or such acquisition of property
and (b) such Liens do not spread to any other asset owned by the Company or any
Restricted Subsidiary;
(xi) Liens upon the assets or stock of the Company or any Restricted
Subsidiary in favor of the Company and/or any other Restricted Subsidiary;
(xii) the extension, renewal or replacement of any Lien permitted by
the preceding clauses (i) through (xi) in respect of the same property
theretofore subject thereto or the extension, renewal or replacement of such
property (without increase of the principal amount of the Debt so secured); and
(xiii) additional Liens, exclusive of the Liens permitted by the
preceding clauses (i) through (xii) above, provided that the sum of (a) Debt
--------
secured by such additional Liens pursuant to this clause (xiii) plus (b)
Restricted Subsidiary Debt pursuant to Section 8.7 shall not at any time exceed
-----------
an amount equal to twenty percent (20%) of Consolidated Adjusted Net Worth.
Section 8.7 Limitation of Restricted Subsidiary Debt. The Company shall not
----------------------------------------
permit any Restricted Subsidiary to become liable for any Debt, except Debt
owing to the Company or another Restricted Subsidiary, if, immediately after
giving effect thereto, the sum of (i) such Restricted Subsidiary Debt plus (ii)
the Company's consolidated Debt (without duplication) subject to Liens pursuant
to Section 8.6(xiii), would exceed twenty percent (20%) of Consolidated Adjusted
-----------------
Net Worth.
Section 8.8 Fixed Charge Coverage. The Company shall not permit the ratio of
---------------------
Income Available for Fixed Charges to Fixed Charges, in each case computed on a
rolling four quarters basis, to be less than 2.0 to 1.0.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
------------------------------
Section 9.1 Events of Default. An "Event of Default" shall exist if any of
-----------------
yhe following conditions or events shall occur and be continuing:
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<PAGE>
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note for
more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any term
contained in Sections 8.3, 8.4, 8.5, 8.6, 8.7 or 8.8; or
---------------------------------------
(d) the Company defaults in the performance of or compliance with any term
contained herein (other than those referred to in paragraphs (a), (b) and
(c) of this Section 9.1) or in any Supplemental Note Purchase Agreement and
-----------
such default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to refer
specifically to this paragraph (d) of Section 9.1); or
-----------
(e) any representation or warranty made in writing by or on behalf of the
Company or any Restricted Subsidiary or by any officer of the Company or
Restricted Subsidiary in this Agreement, any Supplemental Note Purchase
Agreement or in any writing furnished in connection with the transactions
contemplated hereby (including in the Disclosure Letter) proves to have been
false or incorrect in any respect material to the Company and its Restricted
Subsidiaries taken as a whole on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default (as
principal or guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Indebtedness that is outstanding
in an aggregate principal amount of at least $10,000,000 beyond any period of
grace provided with respect thereto, or (ii) the Company or any Restricted
Subsidiary is in default in the performance of or compliance with any term of
any evidence of any Indebtedness in an aggregate outstanding principal amount of
at least $10,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default or
condition such Indebtedness has become, or has been declared due and payable
before its stated maturity or before its regularly scheduled dates of payment;
or
(g) the Company or any Material Restricted Subsidiary (i) is generally
not paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against it of,
a petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other
-28-
<PAGE>
similar law of any jurisdiction, (iii) makes an assignment for the benefit of
its creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with respect
to any substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its Material
Restricted Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Material Restricted Subsidiaries, or any such petition shall be filed against
the Company or any of its Material Restricted Subsidiaries and such petition
shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money aggregating
in excess of $10,000,000 are rendered against one or more of the Company and its
Restricted Subsidiaries and which judgments are not, within 60 days after entry
thereof, bonded, discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding standards
of ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
------------
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
-------------------
Title IV of ERISA, shall exceed $250,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Company or any Restricted Subsidiary thereunder; and any such event or
events described in clauses (i) through (vi) above, either individually or
together with any other such event or events, would reasonably be expected to
have a Material Adverse Effect.
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<PAGE>
As used in Section 9.1(j), the terms "employee benefit plan" and "employee
--------------
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
---------
Section 9.2 Acceleration.
------------
(a) If an Event of Default with respect to the Company described in
paragraph (g) or (h) of Section 9.1 (other than an Event of Default described in
-----------
clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of at least 51% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of Section
-------
9.1 has occurred and is continuing, any holder or holders of Notes at the time
- ---
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 9.2, whether
-----------
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 9.3 Other Remedies. If any Default or Event of Default has
--------------
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 9.2, the holder of
-----------
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 9.4 Rescission. At any time after any Notes have been declared
----------
due and payable pursuant to clause (b) or (c) of Section 9.2, the holders of not
-----------
less than 51% in
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<PAGE>
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 11.4, and (c) no judgment or decree has
------------
been entered for the payment of any monies due pursuant hereto or to the Notes.
No rescission and annulment under this Section 9.4 shall extend to or affect any
-----------
subsequent Event of Default or Default or impair any right consequent thereon.
Section 9.5 No Waivers or Election of Remedies, Expenses, etc. No course
--------------------------------------------------
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred
by this Agreement or by any Note upon any holder thereof shall be exclusive of
any other right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Company under Section 11.1, the Company shall
------------
pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Article IX, including, without limitation,
----------
reasonable attorneys' fees, expenses and disbursements.
ARTICLE X
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
---------------------------------------------
Section 10.1 Registration of Notes. The Company shall keep at its
---------------------
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 10.2 Transfer and Exchange of Notes. Upon surrender of any Note
------------------------------
at the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or his attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as
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<PAGE>
provided below), one or more new Notes of the same Series (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of either Exhibit 1(a)(i), Exhibit 1.1(a)(ii) or Exhibit 1(b), as
--------------- ------------------ ------------
appropriate. Each such new Note shall be dated and bear interest from the date
to which interest shall have been paid on the surrendered Note or dated the date
of the surrendered Note if no interest shall have been paid thereon. The Company
may require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $1,000,000, provided that if
--------
necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $1,000,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representations set forth in
Section 4.2.
- -----------
Section 10.3 Replacement of Notes. Upon receipt by the Company of
--------------------
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
--------
nominee for, an original Purchaser or another holder of a Note with a minimum
net worth of at least $50,000,000, such Person's own unsecured agreement of
indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same Series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
ARTICLE XI
MISCELLANEOUS
-------------
Section 11.1 Transaction Expenses. Whether or not the transactions
--------------------
contemplated hereby are consummated, the Company shall pay all costs and
expenses (including reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by the Purchasers and each
other holder of a Note in connection with any amendments, waivers or consents
under or in respect of this Agreement or the Notes (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement or the
Notes or in responding to any subpoena or other
-32-
<PAGE>
legal process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Restricted Subsidiary or
in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Notes. The Company shall pay, and shall save the
Purchasers and each other holder of a Note harmless from, all claims in respect
of any fees, costs or expenses if any, of brokers and finders (other than those
retained by the Purchasers).
Section 11.2 Survival. The obligations of the Company under Sections
-------- --------
11.1 shall survive the payment or transfer of any Note, the enforcement,
- ----
amendment or waiver of any provision of this Agreement or any Supplemental Note
Purchase Agreement or the Notes, and the termination of this Agreement or any
Supplemental Note Purchase Agreement.
Section 11.3 Survival of Representations and Warranties; Entire Agreement.
------------------------------------------------------------
All representations and warranties contained herein or in any Supplemental Note
Purchase Agreement shall survive the execution and delivery of this Agreement or
any Supplemental Note Purchase Agreement and the Notes, the purchase or transfer
by the Purchasers of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of the
Purchasers or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement (including in any Supplemental Note Purchase
Agreement) shall be deemed representations and warranties of the Company under
this Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between the Purchasers and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.
Section 11.4 Amendment and Waiver.
--------------------
(a) Requirements. This Agreement and the Notes may be amended, and the
------------
observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Article I, II, III, or IV or Section 11.8 hereof, or any
------------------- -- ------- ----
defined term (as it is used therein), shall be effective as to any Purchaser
unless consented to by such Purchaser in writing, and (b) no such amendment or
waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Article IX
----------
relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or reduce the rate or change the time of
payment or method of computation of interest or of the Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Article V or Sections 9.1(a), 9.1(b), 9.2, 9.3, 9.4, 9.5,
--------- --------------------------------------------
11.4 or 11.7.
- ---- ----
(b) Solicitation of Holders of Notes.
-33-
<PAGE>
(i) Solicitation. The Company shall provide each holder of the Notes
------------
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company shall deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 11.4 to each holder of outstanding Notes promptly following the
------------
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(ii) Payment. The Company shall not directly or indirectly pay or
-------
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
(c) Binding Effect, etc. Any amendment or waiver consented to as provided
-------------------
in this Section 11.4 applies equally to all holders of Notes and is binding
------------
upon them and upon each future holder of any Note and upon the Company without
regard to whether such Note has been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
(d) Notes held by Company, etc. Solely for the purpose of determining
---------------------------
whether the holders of the requisite percentage of the aggregate principal
amount of Notes then outstanding approved or consented to any amendment, waiver
or consent to be given under this Agreement or the Notes, or have directed the
taking of any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.
Section 11.5 Notices. All notices and communications provided for
-------
hereunder shall be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
-34-
<PAGE>
(i) if to any of the Purchasers or any of the Purchasers' nominee, to
such Purchaser or such nominee at the address specified for such communications
in the Initial Purchaser Schedule or Subsequent Purchaser Schedule, as
applicable, or at such other address as such Purchaser or such nominee shall
have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of the Treasurer, or at such other address
as the Company shall have specified to the holder of each Note in writing.
Notices under this Section 11.5 shall be deemed given only when actually
------------
received.
Section 11.6 Reproduction of Documents. This Agreement and all documents
-------------------------
relating thereto, including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents received by the
Purchasers at the Closing (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter furnished
to the Purchasers, may be reproduced by the Purchasers by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar
process and the Purchasers may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Purchasers in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
This Section 11.6 shall not prohibit the Company or any other holder of Notes
------------
from contesting any such reproduction to the same extent that it could contest
the original, or from introducing evidence to demonstrate the inaccuracy of any
such reproduction.
Section 11.7 Confidential Information. For the purposes of this Section
------------------------ -------
11.7,"Confidential Information" means information delivered to any Purchaser by
- ----
or on behalf of the Company or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise
adequately identified when received by any Purchaser as being confidential
information of the Company or such Subsidiary, provided that such term does not
--------
include information that (a) was publicly known or otherwise known to such
Purchaser prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by such Purchaser or any person acting
on such Purchaser's behalf, (c) otherwise becomes known to such Purchaser other
than through disclosure by the Company or any Subsidiary or (d) constitutes
financial statements delivered to such Purchaser under Section 7.7 that are
-----------
otherwise publicly available. Each of the Purchasers shall maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect
-35-
<PAGE>
confidential information of third parties delivered to such Purchaser, provided
--------
that each of the Purchasers may deliver or disclose Confidential Information to
(i) such Purchaser's directors, officers, employees, agents, attorneys and
affiliates, (to the extent such disclosure reasonably relates to the
administration of the investment represented by such Purchaser's Notes), (ii)
such Purchaser's financial advisors and other professional advisors who agree to
hold confidential the Confidential Information substantially in accordance with
the terms of this Section 11.7, (iii) any other holder of any Note, (iv) any
------------
Institutional Investor to which such Purchaser sells or offers to sell such Note
or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 11.7), (v) any Person from which such Purchaser
------------
offers to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 11.7), (vi) any federal or state regulatory authority
------------
having jurisdiction over the Purchasers, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser's investment portfolio, or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to the Purchasers, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which the Purchasers are a party or (z) if an Event of Default has
occurred and is continuing, to the extent the Purchasers may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under the
Purchasers' Notes and this Agreement. Each holder of a Note, by its acceptance
of a Note, shall be deemed to have agreed to be bound by and to be entitled to
the benefits of this Section 11.7 as though it were a party to this Agreement.
------------
On reasonable request by the Company in connection with the delivery to any
holder of a Note of information required to be delivered to such holder under
this Agreement or requested by such holder (other than a holder that is a party
to this Agreement or its nominee), such holder shall enter into an agreement
with the Company embodying the provisions of this Section 11.7.
-------------
Section 11.8 Substitution of Purchaser. Each of the Purchasers
-------------------------
shall have the right to substitute any one of its Affiliates as the purchaser of
the Notes that such Purchaser has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both such Purchaser and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Article IV. Upon receipt
----------
of such notice, wherever the word "the Purchaser(s)" is used in this Agreement
(other than in this Section 11.8), such word shall be deemed to refer to such
------------
Affiliate in lieu of such Purchaser. In the event that such Affiliate is so
substituted as a purchaser hereunder and such Affiliate thereafter transfers to
the Purchaser all of the Notes then held by such Affiliate, upon receipt by the
Company of notice of such transfer, wherever the word "the Purchasers" is used
in this Agreement (other than in this Section 11.8), such word shall no longer
------------
be deemed to refer to such Affiliate, but shall refer to such Purchaser, and
such Purchaser shall have all the rights of an original holder of the Notes
under this Agreement.
-36-
<PAGE>
Section 11.9 Successors and Assigns. All covenants and other agreements
----------------------
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 11.10 Payments Due on Non-Business Days. Anything in this
---------------------------------
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
Section 11.11 Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 11.12 Construction. Each covenant contained herein shall be
------------
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 11.13 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
Section 11.14 Governing Law. This Agreement shall be construed and
-------------
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
[Signature pages follow]
-37-
<PAGE>
IN WITNESS WHEREOF, the Company and the Initial Purchasers have caused
this Agreement to be executed and delivered by their respective officers
thereunto duly authorized.
ACUSON CORPORATION
By:___________________________________________
Name:
Title:
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
By:___________________________________________
Name:
Title:
MONY LIFE INSURANCE COMPANY OF AMERICA
By:___________________________________________
Name:
Title:
PACIFIC LIFE INSURANCE COMPANY
By:___________________________________________
Name:
Title:
-38-
<PAGE>
NORTHERN LIFE INSURANCE COMPANY
By:___________________________________________
Name:
Title:
RELIASTAR LIFE INSURANCE COMPANY
By:___________________________________________
Name:
Title:
SECURITY CONNECTICUT LIFE INSURANCE
COMPANY
By:___________________________________________
Name:
Title:
AMERICAN UNITED LIFE INSURANCE COMPANY
By:___________________________________________
Name:
Title:
NATIONWIDE LIFE INSURANCE COMPANY
By:___________________________________________
Name:
Title:
-39-
<PAGE>
NATIONWIDE LIFE AND ANNUITY
INSURANCE COMPANY
By:___________________________________________
Name:
Title:
ALLIED LIFE INSURANCE COMPANY B
By:___________________________________________
Name:
Title:
MODERN WOODMEN OF AMERICA
By:___________________________________________
Name:
Title:
PROVIDENT MUTUAL LIFE INSURANCE COMPANY
By:___________________________________________
Name:
Title:
PROVIDENTMUTUAL LIFE & ANNUITY COMPANY OF AMERICA
By:___________________________________________
Name:
Title:
-40-
<PAGE>
SCHEDULE A
----------
INFORMATION RELATING TO INITIAL PURCHASERS
Principal Amount of
Name and Address of Initial Purchaser Notes
- ------------------------------------- to be Purchased
-------------------
THE GUARDIAN LIFE INSURANCE Series A $20,000,000
COMPANY OF AMERICA (Cudd & Co.-Nominee)
(1) All payments by wire transfer
of immediately available funds to:
The Chase Manhattan Bank
ABA No.: 021-000-021
CHASE/NYC/CTR/BNF
Acct. No.: 900-9-000200
Reference Acct. No.: G05978 The Guardian
PPN: 00511# AA 6
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
The Guardian Life Insurance Company of America
201 Park Avenue South
New York, NY 10003
Attn: Investment Accounting M-IA
Facsimile No.: (212) 677-9023
<PAGE>
(3) All other communications:
The Guardian Life Insurance Company of America
201 Park Avenue South
New York, NY 10003
Attn: Raymond J. Henry
Investment Department 7B
Facsimile: (212) 777-6715
(4) Tax Identification Number: 13-6022143
MONY LIFE INSURANCE COMPANY Series A $15,000,000
OF AMERICA (J. Romeo & Co.- Nominee)
(1) All payments by wire transfer
of immediately available funds to:
The Chase Manhattan Bank
ABA No.: 021-000-021
Acct. No.: 544-755102
Attn: P & I Department
PPN: 00511# AA 6
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
If by Registered Mail, Certified Mail or Federal Express:
--------------------------------------------------------
The Chase Manhattan Bank
4 New York Plaza, 13th Floor
New York, NY 10004
Attn: Income Processing - J. Piperato, 13th Floor
-2-
<PAGE>
If by Regular Mail:
------------------
The Chase Manhattan Bank
Dept. 3492
P.O. Box 50000
Newark, NJ 07101-8006
With a Second Copy to:
---------------------
Telecopy Confirms and Notices:
(212) 708-2152
Attn: Securities Custody Division
M.D. 6-39A
Mailing Confirms and Notices:
MONY Life Insurance Company of America
c/o MONY Life Insurance Company
1740 Broadway
New York, NY 10019
Attn: Securities Custody Division
M.D. 6-39A
(3) All other communications:
MONY Life Insurance Company of America
c/o MONY Life Insurance Company
1740 Broadway
New York, NY 10019
Attn: Capital Management Unit
Telecopy No.: (212) 708-2491
(4) Tax Identification Number: 86-0222062
-3-
<PAGE>
PACIFIC LIFE INSURANCE COMPANY Series A $10,000,000
A. Atwell & Co. - Nominee for Series A $5,000,000
(1) All payments by wire transfer
of immediately available funds to:
The Chase Manhattan Bank/SSTO
ABA No.: 021-000-021
Acct. No.: 900-9-002206
Acct. Name: Pacific Life General Account/89930705
Sub Acct. No.: 47363300
PPN: 00511# AA 6
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
The Chase Manhattan Bank
P.O. Box 456
Wall Street Stations
New York, NY 10005
And
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660-6397
Attn: Securities Administration
(3) All other communications:
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660-6397
Attn: Securities Department
(4) Tax Identification Number: 95-1079000
-4-
<PAGE>
B. Hare & Co. - Nominee for Series A $5,000,000
(1) All payments by wire transfer
of immediately available funds to:
Hare & Co.
The Bank of New York
ABA No.: 021-000-018 BNF: IOC566
Acct. Name: Pacific Life #280163
Attention: P&I Department
PPN: 00511# AA 6
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Hare & Co.
c/o The Bank of New York
P.O. Box 19266
Newark, New Jersey 07195
Acct. Name: Pacific Life #280163
Attention: P&I Department
And
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660-6397
Attn: Securities Administration - Cash Team
(3) All other communications:
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660-6397
Attn: Securities Department
(4) Tax Identification Number: 33-0522764
-5-
<PAGE>
NORTHERN LIFE INSURANCE COMPANY Series A $5,000,000
(1) All payments by wire transfer
of immediately available funds to:
US Bank N.A./Mpls.
601 2nd Avenue South
ABA No.: 091-000-022
Acct. No.: 160232376105
ATTN: Securities Accounting
PPN: 00511# AA 6
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Private Placements
Telephone No.: 612-372-5773
Telecopy No.: 612-372-5368
(3) All other communications:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Ref: Private Placements
Telephone No.: 612-372-5773
Telecopy No.: 612-372-5368
(4) Tax Identification Number: 41-1295933
RELIASTAR LIFE INSURANCE COMPANY Series A $3,000,000
(1) All payments by wire transfer
of immediately available funds to:
US Bank N.A./Mpls.
-6-
<PAGE>
601 2nd Avenue South
ABA No.: 091-000-022
Acct. No.: 110240014461
ATTN: Securities Accounting
PPN: 00511# AA 6
(2) All notices of payments and
written confirmations of such
wire transfers:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Private Placements
Telephone No.: 612-372-5257
Telecopy No.: 612-372-5368
(3) All other communications:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Private Placements
Telephone No.: 612-372-5257
Telecopy No.: 612-372-5368
(4) Tax Identification Number: 41-0451140
-7-
<PAGE>
SECURITY CONNECTICUT LIFE INSURANCE
COMPANY Series A $2,000,000
(1) All payments by wire transfer
of immediately available funds to:
The Chase Manhattan Bank
New York, New York
ABA No.: 021-000-021
Beneficiary Account No.: 544755102
Reference: Sigler & Co. (Nominee Name)
Tax I.D. No.: 13-3641527
F/C #G54426
ATTN: Securities Accounting
PPN: 00511# AA 6
(2) All notices of payments and
written confirmations of such
wire transfers:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Private Placements
Telephone No.: 612-372-5257
Telecopy No.: 612-372-5368
(3) All other communications:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Attn: Private Placements
Telephone No.: 612-372-5257
Telecopy No.: 612-372-5368
(4) Tax Identification Number: 35-1468921
-8-
<PAGE>
AMERICAN UNITED LIFE INSURANCE Series A $6,000,000
COMPANY (Two notes of $3,000,000 each)
(1) All payments by wire transfer
of immediately available funds to:
The Bank of New York
ABA No.: 021-000-018
BNF: IOC566
Acct. No.: 186683/AUL
Attn: P & I Department
PPN: 00511# AA 6
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
American United Life Insurance Company
One American Square
Post Office Box 368
Indianapolis, IN 46206
Attn: Christopher D. Pahlke, Securities Department
(3) All other communications:
American United Life Insurance Company
One American Square
Post Office Box 368
Indianapolis, IN 46206
Attn: Christopher D. Pahlke, Securities Department
(4) Tax Identification Number: 35-0145825
-9-
<PAGE>
NATIONWIDE LIFE INSURANCE COMPANY Series A $2,500,000
(1) All payments by wire transfer
of immediately available funds to:
The Bank of New York
ABA No.: 021-000-018
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attn: P & I Department
PPN: 00511# AA 6
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Nationwide Life Insurance Company
c/o The Bank of New York
P.O. Box 19266
Attn: P & I Department
Newark, NJ 07195
with a copy to:
Nationwide Life Insurance Company
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
(3) All other communications:
Nationwide Life Insurance Company
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Facsimile: (614) 249-4553
(4) Tax Identification Number: 31-4156830
-10-
<PAGE>
NATIONWIDE LIFE AND ANNUITY Series A $1,500,000
INSURANCE COMPANY
(1) All payments by wire transfer
of immediately available funds to:
The Bank of New York
ABA No.: 021-000-018
BNF: IOC566
F/A/O Nationwide Life and Annuity Insurance Company
Attn: P & I Department
PPN: 00511# AA 6
(2) All notices of payments and
written confirmations of such
wire transfers:
Nationwide Life and Annuity Insurance Company
c/o The Bank of New York
P.O. Box 19266
Attn: P & I Department
Newark, NJ 07195
with a copy to:
Nationwide Life and Annuity Insurance Company
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
(3) All other communications:
Nationwide Life and Annuity Insurance Company
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Facsimile: (614) 249-4553
(4) Tax Identification Number: 31-1000740
-11-
<PAGE>
ALLIED LIFE INSURANCE COMPANY B Series A $1,000,000
(1) All payments by wire transfer
of immediately available funds to:
The Bank of New York
ABA No.: 021-000-018
BNF: IOC566
F/A/O Allied Life Insurance Company B
Attn: P & I Department
PPN: 00511# AA 6
(2) All notices of payments and
written confirmations of such
wire transfers:
Allied Life Insurance Company B
c/o The Bank of New York
P.O. Box 19266
Attn: P & I Department
Newark, NJ 07195
with a copy to:
Allied Life Insurance Company B
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
(3) All other communications:
Allied Life Insurance Company B
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Facsimile: (614) 249-4553
(4) Tax Identification Number: 42-0921353
-12-
<PAGE>
MODERN WOODMEN OF AMERICA Series A $5,000,000
(1) All payments by wire transfer
of immediately available funds to:
The Northern Trust Company
50 South LaSalle Street
Chicago, IL 60675
ABA No. 071-000-152
Account Name: Modern Woodmen of America
Account No. 84352
PPN: 00511# AA 6
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Modern Woodmen of America
Attn: Investment Accounting Department
1701 First Avenue
Rock Island, IL 61201
(3) All other communications:
Modern Woodmen of America
Attn: Investment Department
1701 First Avenue
Rock Island, IL 61201
(4) Tax Identification Number: 36-1493430
-13-
<PAGE>
PROVIDENT MUTUAL LIFE INSURANCE Series B $2,000,000
COMPANY
(1) All payments by wire transfer
of immediately available funds to:
PNC Bank Philadelphia, PA
ABA No.: 031-000-053
Acct. No.: 8540842176
Credit to: PMLIC
Attn: Treasurer
RE: cusip/security
PPN: 00511# AB 4
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Provident Mutual Life Insurance Company
1205 Westlakes Drive
Berwyn, PA 19312-2419
Attn: Treasurer
(3) All other communications:
Provident Mutual Life Insurance Company
1205 Westlakes Drive
Berwyn, PA 19312-2419
Attn: Kevin C. Schildt
(4) Tax Identification Number: 23-0990450
-14-
<PAGE>
PROVIDENTMUTUAL LIFE & ANNUITY
COMPANY OF AMERICA Series B $2,000,000
(1) All payments by wire transfer
of immediately available funds to:
PNC Bank Philadelphia, PA
ABA No.: 031-000-053
Acct. No.: 8550754911
Credit to: PLACA
Attn: Treasurer
RE: cusip/security
PPN: 00511# AB 4
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Providentmutual Life & Annuity
Company of America
1205 Westlakes Drive
Berwyn, PA 19312-2419
Attn: Treasurer
(3) All other communications:
Providentmutual Life & Annuity
Company of America
1205 Westlakes Drive
Berwyn, PA 19312-2419
Attn: Kevin C. Schildt
(4) Tax Identification Number: 23-1619082
-15-
<PAGE>
SCHEDULE B
----------
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person and (b) any other Person who, to the knowledge of the Company,
beneficially owns or holds, directly or indirectly, 10% or more of any class of
voting or equity interests of such first Person or any other Person of which
such first Person, to the knowledge of the Company, beneficially owns or holds,
in the aggregate, directly or indirectly, 10% or more of any class of voting or
equity interests. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of the
Company.
"Business Day" means (a) for the purposes of Section 5.5 only, any day
-----------
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York or San Francisco, California
are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Closing" means the Initial Closing or any Supplemental Closing.
"Closing Date" means the Initial Closing Date or any Supplemental
Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Acuson Corporation, a Delaware corporation.
"Confidential Information" is defined in Section 11.7.
------------
<PAGE>
"Consolidated Adjusted Net Worth" for any period means, for the
Company and its Restricted Subsidiaries on a consolidated basis, total
shareholders' equity minus investments other than Permitted Investments.
-----
"Debt" means (i) all obligations for borrowed money of the Company and
its Restricted Subsidiaries, (ii) all obligations of the Company or any
Restricted Subsidiary as lessee under capital leases, (iii) all third party
obligations for borrowed money to the extent guaranteed by the Company or a
Restricted Subsidiary (excluding, for the avoidance of doubt, guaranteed
obligations under synthetic lease transactions), (iv) all Swaps entered into by
the Company or any Restricted Subsidiary and (v) any drawings under letters of
credit maintained in favor of the Company or any Restricted Subsidiary.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means that rate of interest that is 2.0% per annum
above the rate of interest stated in clause (a) of the first paragraph of the
Notes.
"Disclosure Letter" means the Disclosure Letter delivered by the
Company to the Initial Purchasers on the Closing Date.
"Eligible Purchaser" shall mean any Initial Purchaser and such
additional Institutional Investors each of which are domiciled in the United
States of America and identified in writing to the Purchasers on or prior to the
Initial Closing Date and from time to time thereafter; provided that the
--------
aggregate number of Eligible Purchasers (including the Initial Purchasers) shall
not at any time exceed eight.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
-----------
"Event of Default" is defined in Section 9.1.
-----------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
-2-
<PAGE>
"Fixed Charges" for any period shall mean the sum of interest expense
and Rent Expense.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
-3-
<PAGE>
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 10.1.
- ------------
"Income Available for Fixed Charges" for any period shall mean, for
the Company and its Restricted Subsidiaries on a consolidated basis, Net Income
before taxes and extraordinary items plus, to the extent deducted in
calculating Net Income, (i) Fixed Charges and (ii) depreciation and
amortization.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (but only if representing
obligations for borrowed money);
(f) Swaps of such Person; and
(g) all liabilities under any synthetic lease transactions entered
into by such Person and any Guaranty of such Person (including, for the
avoidance of doubt any
-4-
<PAGE>
Guaranty of any synthetic lease transaction) with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
"Initial Closing" is defined in Section 1.3(a).
--------------
"Initial Closing Date" is defined in Section 1.3(a).
--------------
"Initial Purchasers" is defined in the opening paragraph hereof.
"Initial Purchaser Schedule" means the Initial Purchaser Schedule
attached hereto as Schedule A.
----------
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 10% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 5.6.
-----------
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, or properties of the Company and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement, any Supplemental Note Purchase
Agreement or the Notes.
"Material Restricted Subsidiary" means any Restricted Subsidiary
accounting either for at least 10% of the Company's Net Income during one of the
two immediately preceding fiscal years or accounting for at least 10% of the
Company's consolidated total assets as of the end of either of the two
immediately preceding fiscal years.
"Memorandum" is defined in Section 3.3.
-----------
"Moody's" means Moody's Investor Service, Inc.
-5-
<PAGE>
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
------------------
"Net Income" shall mean the net income of the Company and its
Restricted Subsidiaries, calculated on a consolidated basis.
"Notes" is defined in Section 1.1(c).
--------------
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Investments" means, for the Company and its Restricted
Subsidiaries on a consolidated basis, the following:
A investments existing at the Initial Closing Date (whether or not
such investments would otherwise be deemed to be Permitted
Investments herein) and disclosed in writing to the Initial
Purchasers;
B investments in one or more Restricted Subsidiaries or any entity
which, concurrent with such investment, becomes a Restricted
Subsidiary;
C investments made for assets or property used in the ordinary course
of Company's business;
D investments in joint ventures and other corporate entities engaged
in substantially the same line(s) of business as the Company and
its Restricted Subsidiaries;
E direct obligations of the U.S. Government or any agencies thereof
bearing the full guarantee of the U.S. Government and maturing not
more than three years from the date acquired;
F repurchase agreements collateralized by obligations of the U.S.
Government or any agencies thereof bearing the full guarantee of
the U.S. Government and maturing not more than three years from the
date acquired;
G certificates of deposit or time deposits maturing within three
years from the date acquired and which are issued by a bank or
trust company domiciled in the United States or any sovereign
nation, in the latter case
-6-
<PAGE>
having a foreign currency sovereign debt rating of at least A1 by
S&P or A+ by Moody's and, with regard to each of the above, (a)
having an unsecured senior debt rating of A1 by S&P or A+ by
Moody's or an equivalent rating from another internationally
recognized rating agency and (b) having capital, surplus, and
undivided profits aggregating at least $250 million;
H commercial paper given an "A1" rating by S&P or "P1" by Moody's,
respectively, and maturing not more than 270 days from the date
acquired, and corporate bonds issued by U.S. domiciled corporations
having a final maturity of not more than three years from the date
of purchase and rated at least A by S&P or A2 by Moody's;
I tax-exempt securities having a final maturity of three years or
less from the date of purchase and rated at least SP-1 by S&P or
MIG-1 by Moody's or an equivalent medium or long-term rating by S&P
or Moody's; and
J other investments not otherwise permitted by sections (A) through
(I), provided that such investments shall not exceed, in aggregate,
10% of the Company's consolidated shareholders' equity at such
measurement date.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
------------
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Purchasers" means the Initial Purchasers and the Supplemental
Purchasers.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
-7-
<PAGE>
"Rent Expense" means, with respect to any period, (i) the sum of the
minimum amount of rental and other obligations required to be paid during such
period by the Company or any Restricted Subsidiary as lessee under all leases of
real or personal property (other than capital leases), excluding any amounts
required to be paid by the lessee (whether or not therein designated as rental
or additional rental) (a) which are on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges, or (b) which are
based on profits, revenues or sales realized by the lessee from the leased
property or otherwise based on the performance of the lessee, less (ii) all
----
rental income received by the Company or any Restricted Subsidiary as lessor
under all leases of real or personal property (other than capital leases).
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes (without regard to Series) at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Subsidiary" means any corporation of which more than 50%
of the voting stock is owned by the Company or another Restricted Subsidiary,
unless such corporation has been specifically designated by the Company as an
Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"Series" is defined in Section 1.1(a).
--------------
"Series A Notes" is defined in Section 1.1(a).
--------------
"Series B Notes" is defined in Section 1.1(a).
--------------
"Source" is defined in Section 4.2.
-----------
"Subsequent Notes" is defined in Section 1.1(b).
--------------
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons
-8-
<PAGE>
performing similar functions) of such entity, and any partnership or joint
venture if more than a 50% interest in the profits or capital thereof is owned
by such Person or one or more of its Subsidiaries or such Person and one or more
of its Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Supplemental Closing" is defined in Section 1.3(b).
--------------
"Supplemental Closing Date" is defined in Section 1.3(b).
--------------
"Supplemental Note Purchase Agreement" is defined in Section 1.3(b).
--------------
"Supplemental Purchasers" is defined in Section 1.3(b).
--------------
"Supplemental Purchaser Schedule" means the schedule of Supplemental
Purchases of any Series of Subsequent Notes which is attached to the
Supplemental Note Purchase Agreement relating to such Series.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Total Capitalization" means the sum of Debt and Consolidated Adjusted
Net Worth.
"Unrestricted Subsidiary" means any Subsidiary other than a Restricted
Subsidiary.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries at such time.
-9-
<PAGE>
EXHIBIT 1(a)(i)
[FORM OF SERIES A NOTE]
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE April 8, 2006
No. [_____] April 9, 1999
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to [___________________________], or
registered assigns, the principal sum of [___________________________] DOLLARS
($______________), as hereinafter provided, with interest (computed on the basis
of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at
the rate of 6.59% per annum from the date hereof, payable quarterly on the 8th
day of April, July, October and January in each year, commencing July 8, 1999,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of _____________ DOLLARS ($______________) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note
<PAGE>
Purchase Agreement. The aggregate principal amount of all Notes issued under the
Note Purchase Agreement shall not exceed $80,000,000. Each holder of this Series
A Note shall be deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 11.7 of the Note Purchase
------------
Agreement and (ii) to have made the representation set forth in Section 4.2 of
-----------
the Note Purchase Agreement.
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:____________________________________
-2-
<PAGE>
EXHIBIT 1(a)(ii)
[FORM OF SERIES B NOTE]
ACUSON CORPORATION
6.39% SERIES B SENIOR UNSECURED NOTE DUE April 8, 2004
No. [_____] April 9, 1999
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to [___________________________], or
registered assigns, the principal sum of [___________________________] DOLLARS
($____________), as hereinafter provided, with interest (computed on the basis
of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at
the rate of 6.39% per annum from the date hereof, payable quarterly on the 8th
day of April, July, October and January in each year, commencing July 8, 1999,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum equal to 8.39%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2000 through 2003, inclusive, each
in the amount of ___________ DOLLARS ($____________) and one (1) final
installment on April 8, 2004 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.39% Series B Senior Unsecured Notes due
April 8, 2004 (herein called the "Series B Notes") in the aggregate principal
amount of $4,000,000 issued pursuant to a certain Note Purchase Agreement, dated
as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.59%
Series A Senior Unsecured Notes due April 8, 2006 in the aggregate principal
amount of $71,000,000. The Company may from time to time issue additional
series of promissory notes under the Note
<PAGE>
Purchase Agreement. The aggregate principal amount of all Notes issued under the
Note Purchase Agreement shall not exceed $80,000,000. Each holder of this Series
B Note shall be deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 11.7 of the Note Purchase
------------
Agreement and (ii) to have made the representation set forth in Section 4.2 of
-----------
the Note Purchase Agreement.
This Series B Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series B Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series B Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series B Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series B Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series B Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
EXHIBIT 1(b)
[FORM OF SUBSEQUENT NOTE]
ACUSON CORPORATION
___% SERIES C SENIOR UNSECURED NOTE DUE [__________, ____]
No. [_____] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to [___________________________], or
registered assigns, the principal sum of [___________________________] DOLLARS
($____________), as hereinafter provided, with interest (computed on the basis
of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at
the rate of ____% per annum from the date hereof, payable quarterly, on the
[___] day of _________, _________, _________ and _________ in each year,
commencing [_________], until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable quarterly as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum
equal to ____%.
The Company agrees to pay the principal of this Note in _________
installments on __________ in each of the years _____ through _____, inclusive,
each in the amount of _____________ DOLLARS ($__________) and one (1) final
installment on ________ in such amount, or in any case the then unpaid principal
amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company
shall have designated by written notice to the holder of this Note as provided
in the Note Purchase Agreement and Supplemental Note Purchase Agreement referred
to below.
This Note is one of the ______% Series C Senior Unsecured Notes due [
] (the "Series C Notes")issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Note Purchasers named therein,
and a Supplemental Note Purchase Agreement dated as of ________, ___ (as from
time to time amended, the "Supplemental Note Purchase
<PAGE>
Agreement") entered into by the Company with the Supplemental Purchasers (as
such term is defined in the Note Purchase Agreement) named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Under and pursuant to said Note Purchase Agreement the Company has heretofore
issued Series A Notes and Series B Notes (the "Issued Notes") in the aggregate
principal amount of $75,000,000 and may, from time to time issue additional
series of promissory notes (such additional notes together with the Issued Notes
are hereinafter collectively referred to as the "Notes"). The aggregate
principal amount of all Notes issued under the Note Purchase Agreement shall not
exceed $80,000,000. Except as set forth in the Agreement, this Series C Note and
the holder hereof are entitled equally and ratably with the holders of all other
Notes outstanding under the Note Purchase Agreement to all the benefits provided
for thereby or referred to therein. Reference is hereby made to the Note
Purchase Agreement and the Supplemental Note Purchase Agreement for a statement
of such rights and benefits.
Each holder of this Series C Note shall be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
-
Section 11.7 of the Note Purchase Agreement and (ii) to have made the
- ------------ --
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
This Series C Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series C Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series C Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series C Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Series C Note is subject to prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series C Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series C Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
-2-
<PAGE>
By:___________________________________
Name:_________________________________
Title:________________________________
-3-
<PAGE>
EXHIBIT 1.3(b)
FORM OF SUPPLEMENTAL NOTE PURCHASE AGREEMENT
As of ____________________
To Each of the Purchasers
Named in the Supplemental
Purchaser Schedule Attached Hereto
Ladies and Gentlemen:
Reference is made to that certain Note Purchase Agreement dated as of April
9, 1999 between the Company and each of the Initial Purchasers named in the
Initial Purchaser Schedule attached thereto (the "Agreement"). Terms used but
not defined herein shall have the respective meanings set forth in the
Agreement.
As contemplated in Section 1.3(b) of the Agreement the Company agrees with
--------------
you as follows:
A. Subsequent Series of Notes. The Company will create a Subsequent
--------------------------
Series of Notes to be called the "Series C Notes". Said Series C Notes will be
dated the date of issue; will bear interest from such date at the rate of ___%
per annum, payable quarterly on the ___ day of each __________, __________,
__________ and __________ in each year (commencing _________) until the
principal amount thereof shall become due and payable and shall bear interest on
overdue principal (including any overdue optional prepayment of principal) and
premium, if any, and, to the extent permitted by law, on any overdue installment
of interest at the rate specified therein after the date due for payment,
whether by acceleration or otherwise, until paid; will be expressed to mature on
________________; and will be substantially in the form attached to the
Agreement as Exhibit 1.1(b) with the appropriate insertions to reflect the terms
and provisions set forth above.
B. Purchase and Sale of Series Notes. Subject to the terms and
---------------------------------
conditions in the Agreement and herein set forth, the Company hereby agrees to
sell, to each Supplemental Purchaser set forth on the Supplemental Purchaser
Schedule attached hereto (collectively, the "Series C Purchasers") and each
Series C Purchaser agrees to purchase from the Company the aggregate principal
amount of the Series C Notes set opposite each Series C Purchaser's name in the
Supplemental Purchaser Schedule at 100% of the aggregate principal amount. The
sale of the Series C Notes shall take place at the offices of Winston & Strawn,
35 W. Wacker, Chicago, Illinois 60601 at 10:00 a.m. Chicago time, at a closing
(the "Series C Closing") on ________________________________________,__________,
or such other date as shall be agreed upon by the Company and each Series C
Purchaser. At the Series C Closing, the Company will deliver to each Series C
Purchaser one or more Series C Notes registered in such Series C Purchaser's
name (or in the
<PAGE>
name of its nominee), evidencing the aggregate principal amount of Series C
Notes to be purchased by said Series C Purchaser and in the denomination or
denominations specified with respect to such Series C Purchaser in the
Supplemental Purchaser Schedule attached hereto against payment of the purchase
price thereof by transfer of immediately available funds for credit to the
Company's account on the date of the Series C Closing (the "Series C Closing
Date") (as specified in a notice to each Series C Purchaser at least three
business Days prior to the Series C Closing Date).
C. Conditions of Series C Closing. The obligation of each Series C
------------------------------
Purchaser to purchase and pay for the Series C Notes to be purchased by such
purchaser hereunder on the Series C Closing Date is subject to the satisfaction,
on or before such Series C Closing Date, of the conditions set forth in Article
II of the Agreement.
D. Prepayments. The Series C Notes shall be subject to prepayment only
-----------
(a) pursuant to the required prepayments, if any, specified in clause (x) below;
and (b) pursuant to the optional prepayments permitted by Section 5.2 of the
Agreement.
(x) Required Prepayments; Maturity.
------------------------------
[to be determined]
(y) Optional Prepayments. As provided in Sections 5.2 of the
-------------------- ------------
Agreement.
E. Series Notes issued under and Pursuant to Agreement. Except as
-----------------------------------------------------
specifically provided above, the Series C Notes shall be deemed to be issued
under, to be subject to and to have the benefit of all of the terms and
provisions of the Agreement as the same may from time to time be amended and
supplemented in the manner provided therein.
The execution hereof by the Series C Purchasers shall constitute a contract
among the Company and the Series C Purchasers for the uses and purposes
hereinabove set forth. By their acceptance hereof, each of the Series C
Purchasers shall also be deemed to have accepted and agreed to the terms and
provisions of the Agreement as in effect on the date hereof.
ACUSON CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
-2-
<PAGE>
Accepted as of
________________________
[SUPPLEMENTAL PURCHASERS]
By:________________________________
Name:______________________________
Title:_____________________________
-3-
<PAGE>
EXHIBIT 2.4
MATTERS COVERED BY OPINION OF SPECIAL COUNSEL
TO THE COMPANY
--------------
1. The Company being duly organized, validly existing and in good
standing and having requisite corporate power and authority to issue and sell
the Notes and to execute and deliver the documents.
2. The Company being duly qualified and in good standing as a
foreign corporation in appropriate jurisdictions.
3. Due authorization and execution of the documents and such
documents being legal, valid, binding and enforceable.
4. No conflicts with charter documents, laws or other agreements.
5. All consents required to issue and sell the Notes and to execute
and deliver the documents having been obtained.
6. No litigation questioning validity of documents.
7. The Notes not requiring registration under the Securities Act of
1933, as amended; no need to qualify an indenture under the Trust Indenture Act
of 1939, as amended.
8. No violation of Regulations T, U or X of the Federal Reserve
Board.
9. Company not an "investment company", or a company "controlled" by
an "investment company", under the Investment Company Act of 1940, as amended.
<PAGE>
Acuson Corporation Exhibit 10.3
- -------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 1 April 9, 1999
$20,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to CUDD & CO., or registered assigns, the
principal sum of TWENTY MILLION DOLLARS ($20,000,000.00), as hereinafter
provided, with interest (computed on the basis of a 360-day year of twelve 30-
day months) (a) on the unpaid balance thereof at the rate of 6.59% per annum
from the date hereof, payable quarterly on the 8th day of April, July, October
and January in each year, commencing July 8, 1999, until the principal hereof
shall have become due and payable, and (b) to the extent permitted by law on any
overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Make-Whole Amount (as defined
in the Note Purchase Agreement referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of FOUR MILLION DOLLARS ($4,000,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.4
- ------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 2 April 9, 1999
$15,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to J. ROMEO & CO., or registered assigns,
the principal sum of FIFTEEN MILLION DOLLARS ($15,000,000.00), as hereinafter
provided, with interest (computed on the basis of a 360-day year of twelve 30-
day months) (a) on the unpaid balance thereof at the rate of 6.59% per annum
from the date hereof, payable quarterly on the 8th day of April, July, October
and January in each year, commencing July 8, 1999, until the principal hereof
shall have become due and payable, and (b) to the extent permitted by law on any
overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Make-Whole Amount (as defined
in the Note Purchase Agreement referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of THREE MILLION DOLLARS ($3,000,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.5
- --------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 3 April 9, 1999
$5,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to ATWELL & CO., or registered assigns, the
principal sum of FIVE MILLION DOLLARS ($5,000,000.00), as hereinafter provided,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance thereof at the rate of 6.59% per annum from the date
hereof, payable quarterly on the 8th day of April, July, October and January in
each year, commencing July 8, 1999, until the principal hereof shall have become
due and payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable quarterly as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum
equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of ONE MILLION DOLLARS ($1,000,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.6
- --------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 4 April 9, 1999
$5,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to HARE & CO., or registered assigns, the
principal sum of FIVE MILLION DOLLARS ($5,000,000.00), as hereinafter provided,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance thereof at the rate of 6.59% per annum from the date
hereof, payable quarterly on the 8th day of April, July, October and January in
each year, commencing July 8, 1999, until the principal hereof shall have become
due and payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable quarterly as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum
equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of ONE MILLION DOLLARS ($1,000,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.7
- --------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 5 April 9, 1999
$5,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to NORTHERN LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of FIVE MILLION DOLLARS ($5,000,000.00),
as hereinafter provided, with interest (computed on the basis of a 360-day year
of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6.59%
per annum from the date hereof, payable quarterly on the 8th day of April, July,
October and January in each year, commencing July 8, 1999, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law
on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of ONE MILLION DOLLARS ($1,000,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
-1-
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.8
- --------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 6 April 9, 1999
$3,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to RELIASTAR LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of THREE MILLION DOLLARS ($3,000,000.00),
as hereinafter provided, with interest (computed on the basis of a 360-day year
of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6.59%
per annum from the date hereof, payable quarterly on the 8th day of April, July,
October and January in each year, commencing July 8, 1999, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law
on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of SIX HUNDRED THOUSAND DOLLARS ($600,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
-1-
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.9
- ------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 7 April 9, 1999
$2,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to SIGLER & CO., or registered assigns, the
principal sum of TWO MILLION DOLLARS ($2,000,000.00), as hereinafter provided,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance thereof at the rate of 6.59% per annum from the date
hereof, payable quarterly on the 8th day of April, July, October and January in
each year, commencing July 8, 1999, until the principal hereof shall have become
due and payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable quarterly as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum
equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of FOUR HUNDRED THOUSAND ($400,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
-1-
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.10
- ------------------ -------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 8 April 9, 1999
$3,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to AMERICAN UNITED LIFE INSURANCE COMPANY,
or registered assigns, the principal sum of THREE MILLION DOLLARS
($3,000,000.00), as hereinafter provided, with interest (computed on the basis
of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at
the rate of 6.59% per annum from the date hereof, payable quarterly on the 8th
day of April, July, October and January in each year, commencing July 8, 1999,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of SIX HUNDRED THOUSAND DOLLARS ($600,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.11
- --------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 9 April 9, 1999
$3,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to AMERICAN UNITED LIFE INSURANCE COMPANY,
or registered assigns, the principal sum of THREE MILLION DOLLARS
($3,000,000.00), as hereinafter provided, with interest (computed on the basis
of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at
the rate of 6.59% per annum from the date hereof, payable quarterly on the 8th
day of April, July, October and January in each year, commencing July 8, 1999,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of SIX HUNDRED THOUSAND DOLLARS ($600,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.12
- -------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 10 April 9, 1999
$5,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to MODERN WOODMEN OF AMERICA, or registered
assigns, the principal sum of FIVE MILLION DOLLARS ($5,000,000.00), as
hereinafter provided, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6.59% per
annum from the date hereof, payable quarterly on the 8th day of April, July,
October and January in each year, commencing July 8, 1999, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law
on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of ONE MILLION DOLLARS ($1,000,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.13
- --------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 11 April 9, 1999
$2,500,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to NATIONWIDE LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of TWO MILLION FIVE HUNDRED THOUSAND
DOLLARS ($2,500,000.00), as hereinafter provided, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 6.59% per annum from the date hereof, payable quarterly
on the 8th day of April, July, October and January in each year, commencing July
8, 1999, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.14
- --------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 12 April 9, 1999
$1,500,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY, or registered assigns, the principal sum of ONE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($1,500,000.00), as hereinafter provided, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 6.59% per annum from the date hereof,
payable quarterly on the 8th day of April, July, October and January in each
year, commencing July 8, 1999, until the principal hereof shall have become due
and payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable quarterly as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum
equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of THREE HUNDRED THOUSAND DOLLARS ($300,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.15
- -------------------------------------------------------------------------------
ACUSON CORPORATION
6.59% SERIES A SENIOR UNSECURED NOTE DUE APRIL 8, 2006
No. 13 April 9, 1999
$1,000,000.00 PPN 00511# AA 6
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to ALLIED LIFE INSURANCE COMPANY B, or
registered assigns, the principal sum of ONE MILLION DOLLARS ($1,000,000.00), as
hereinafter provided, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6.59% per
annum from the date hereof, payable quarterly on the 8th day of April, July,
October and January in each year, commencing July 8, 1999, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law
on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum equal to 8.59%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2002 through 2005, inclusive, each
in the amount of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) and one (1) final
installment on April 8, 2006 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.59% Series A Senior Unsecured Notes due
April 8, 2006 (herein called the "Series A Notes") in the aggregate principal
amount of $71,000,000 issued pursuant to a certain Note Purchase Agreement,
dated as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.39%
Series B Senior Unsecured Notes due April 8, 2004 in the aggregate principal
amount of $4,000,000. The Company may from time to time issue additional series
of promissory notes under the Note Purchase Agreement. The aggregate principal
amount of all Notes issued under the Note Purchase Agreement shall not exceed
$80,000,000. Each holder of this Series A Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series A Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series A Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series A Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.16
- --------------------------------------------------------------------------------
ACUSON CORPORATION
6.39% SERIES B SENIOR UNSECURED NOTE DUE APRIL 8, 2004
No. 1 April 9, 1999
$2,000,000.00 PPN 00511# AB 4
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to PROVIDENT MUTUAL LIFE INSURANCE COMPANY,
or registered assigns, the principal sum of TWO MILLION DOLLARS ($2,000,000.00),
as hereinafter provided, with interest (computed on the basis of a 360-day year
of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6.39%
per annum from the date hereof, payable quarterly on the 8th day of April, July,
October and January in each year, commencing July 8, 1999, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law
on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum equal to 8.39%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2000 through 2003, inclusive, each
in the amount of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) and one (1) final
installment on April 8, 2004 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.39% Series B Senior Unsecured Notes due
April 8, 2004 (herein called the "Series B Notes") in the aggregate principal
amount of $4,000,000 issued pursuant to a certain Note Purchase Agreement, dated
as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.59%
Series A Senior Unsecured Notes due April 8, 2006 in the aggregate principal
amount of $71,000,000. The Company may from time to time issue additional
series of promissory notes under the Note Purchase Agreement. The aggregate
principal amount of all Notes issued under the Note Purchase Agreement shall not
exceed $80,000,000. Each holder of this Series B Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series B Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series B Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series B Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series B Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series B Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series B Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<PAGE>
Acuson Corporation Exhibit 10.17
- --------------------------------------------------------------------------------
ACUSON CORPORATION
6.39% SERIES B SENIOR UNSECURED NOTE DUE APRIL 8, 2004
No. 2 April 9, 1999
$2,000,000.00 PPN 00511# AB 4
FOR VALUE RECEIVED, the undersigned, ACUSON CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to PROVIDENTMUTUAL LIFE & ANNUITY COMPANY OF
AMERICA, or registered assigns, the principal sum of TWO MILLION DOLLARS
($2,000,000.00), as hereinafter provided, with interest (computed on the basis
of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at
the rate of 6.39% per annum from the date hereof, payable quarterly on the 8th
day of April, July, October and January in each year, commencing July 8, 1999,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum equal to 8.39%.
The Company agrees to pay the principal of this Note in five (5)
installments on April 8 in each of the years 2000 through 2003, inclusive, each
in the amount of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) and one (1) final
installment on April 8, 2004 in such amount, or in any case the then unpaid
principal amount of this Note.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Mountain View, California or at such other place as the Company shall
have designated by written notice to the holder of this Note as provided in the
Note Purchase Agreement referred to below.
This Note is one of the 6.39% Series B Senior Unsecured Notes due
April 8, 2004 (herein called the "Series B Notes") in the aggregate principal
amount of $4,000,000 issued pursuant to a certain Note Purchase Agreement, dated
as of April 9, 1999 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and the Initial Purchasers named therein and is
entitled to the benefits, and subject to the terms and conditions, thereof.
Pursuant to the Note Purchase Agreement, the Company is also issuing 6.59%
Series A Senior Unsecured Notes due April 8, 2006 in the aggregate principal
amount of $71,000,000. The Company may from time to time issue additional
series of promissory notes under the Note Purchase Agreement. The aggregate
principal amount of all Notes issued under the Note Purchase Agreement shall not
exceed $80,000,000. Each holder of this Series B Note shall be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 11.7 of the Note Purchase Agreement and (ii) to have made the
------------
representation set forth in Section 4.2 of the Note Purchase Agreement.
-----------
<PAGE>
This Series B Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Series B Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series B Note for a like principal amount shall be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series B Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Series B Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Series B Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ACUSON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
-2-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUL-03-1999
<CASH> 21,998
<SECURITIES> 0
<RECEIVABLES> 145,197
<ALLOWANCES> 3,534
<INVENTORY> 96,556
<CURRENT-ASSETS> 303,450
<PP&E> 235,180
<DEPRECIATION> 158,054
<TOTAL-ASSETS> 409,676
<CURRENT-LIABILITIES> 120,994
<BONDS> 74,200
0
0
<COMMON> 127,870
<OTHER-SE> 86,612
<TOTAL-LIABILITY-AND-EQUITY> 409,676
<SALES> 193,699
<TOTAL-REVENUES> 238,887
<CGS> 105,867
<TOTAL-COSTS> 128,367
<OTHER-EXPENSES> 94,223
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,860
<INCOME-PRETAX> 14,167
<INCOME-TAX> 3,896
<INCOME-CONTINUING> 10,271
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,271
<EPS-BASIC> 0.38
<EPS-DILUTED> 0.38
</TABLE>
