<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended June 27, 1999
Commission File No. 1-10348
_______________________________________
Precision Castparts Corp.
An Oregon Corporation
IRS Employer Identification No. 93-0460598
4650 S.W. Macadam Avenue
Suite 440
Portland, Oregon 97201-4254
Telephone: (503) 417-4800
_______________________________________
Indicate by checkmark 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
Number of shares of Common Stock, no par value, outstanding
as of August 4, 1999: 24,492,178
Page 1 of 19 Pages
Note: This 10-Q was filed electronically via EDGAR with the
Securities and Exchange Commission.
</Page>
<PAGE>
Page 2
PART 1: FINANCIAL INFORMATION
Item 1. Financial Statements
Precision Castparts Corp. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
___________________________
(In thousands, except per share
data) 6/27/99 6/28/98
___________________________
<S> <C> <C>
Net sales $ 359,000 $ 370,000
Cost of goods sold 279,100 284,400
Selling and administrative expenses 37,400 38,000
Interest expense, net 6,800 6,900
________ ________
Income before provision for
income taxes 35,700 40,700
Provision for income taxes 13,400 16,300
________ ________
Net income $ 22,300 $ 24,400
======== ========
Net income per common share (Basic) $ 0.91 $ 1.00
======== ========
Net income per common share (Diluted) $ 0.91 $ 1.00
======== ========
</TABLE>
See Notes to the Interim Financial Statements on page 7.
</Page>
<PAGE>
Page 3
Precision Castparts Corp. and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(In thousands) 6/27/99 3/28/99
(Unaudited)
____________________________
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 16,600 $ 14,800
Receivables 252,900 255,100
Inventories 255,300 253,600
Prepaid expenses 6,600 7,300
Deferred income taxes 26,100 26,100
__________ __________
Total current assets 557,500 556,900
__________ __________
Property, plant and equipment, at cost 569,800 562,600
Less - Accumulated depreciation (240,900) (231,200)
__________ __________
Net property, plant and equipment 328,900 331,400
Goodwill, net 520,800 525,900
Other assets 36,600 35,400
__________ __________
$ 1,443,800 $ 1,449,600
========== ==========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Notes payable $ 18,200 $ 17,200
Current portion of long-term debt 39,000 39,000
Accounts payable 91,300 102,100
Accrued liabilities 118,000 137,100
Income taxes payable 21,000 9,200
__________ __________
Total current liabilities 287,500 304,600
__________ __________
Long-term debt, excluding
current portion 356,000 369,700
Deferred income taxes 25,100 25,100
Accrued retirement benefits obligation 42,100 39,200
Other long-term liabilities 16,200 13,600
__________ __________
Total liabilities 726,900 752,200
__________ __________
See Notes to the Interim Financial Statements on page 7.
</Page>
<PAGE>
Page 4
Shareholders' investment:
Common stock 24,500 24,500
Paid-in capital 178,800 178,400
Retained earnings 517,900 497,100
Cumulative translation adjustment (4,300) (2,600)
__________ __________
Total shareholders' investment 716,900 697,400
__________ __________
$1,443,800 $1,449,600
========== ==========
</TABLE>
Precision Castparts Corp. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
___________________________
(In thousands) 6/27/99 6/28/98
___________________________
<S> <C> <C>
Cash flows from operating activities:
Net income $ 22,300 $ 24,400
Non-cash items included in income:
Depreciation and amortization 14,900 13,200
Deferred income taxes - (100)
Changes in operating working capital,
excluding effects of acquisitions:
Receivables 2,200 (23,700)
Inventories (1,700) (1,500)
Payables,accruals and current taxes (17,100) (1,900)
Other operating activities, net 4,200 4,900
_________ _________
Net cash provided by
operating activities 24,800 15,300
_________ _________
See Notes to the Interim Financial Statements on page 7.
</Page>
<PAGE>
Page 5
Cash flows from investing activities:
Capital expenditures (9,500) (16,700)
Business acquisitions, net of
cash acquired - (76,100)
Other investing activities, net 2,000 (500)
_________ _________
Net cash used by investing
activities (7,500) (93,300)
_________ _________
Cash flows from financing activities:
Net change in short-term borrowings 1,000 18,400
Proceeds from issuance of debt - 53,000
Payments on debt (13,700) (9,400)
Proceeds from exercise of
stock options 400 1,700
Cash dividends (1,500) (1,500)
Other financing activities, net (1,700) 200
_________ _________
Net cash (used by) provided
by financing activities (15,500) 62,400
_________ _________
Net increase (decrease) in
cash and cash equivalents 1,800 (15,600)
Cash and cash equivalents at
beginning of period 14,800 25,000
_________ _________
Cash and cash equivalents at
end of period $ 16,600 $ 9,400
========= =========
</TABLE>
See Notes to the Interim Financial Statements on page 7.
</Page>
<PAGE>
Page 6
Precision Castparts Corp. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
_______________________
(In thousands) 6/27/99 6/28/98
_______________________
<S> <C> <C>
Net income $ 22,300 $ 24,400
Other comprehensive income (expense):
Foreign currency translation
adjustments (1,700) (700)
__________ _________
Total comprehensive income $ 20,600 $ 23,700
========== =========
</TABLE>
See Notes to the Interim Financial Statements on page 7.
</Page>
<PAGE>
Page 7
Notes to the Interim Financial Statements
(In thousands, except share and per share data)
(1) Basis of Presentation
The consolidated interim financial statements have been
prepared by Precision Castparts Corp. ("PCC" or the
"Company"), without audit and subject to year-end
adjustment, in accordance with generally accepted
accounting principles, except that certain information
and footnote disclosures made in the latest annual
report have been condensed or omitted for the interim
statements. Certain costs are estimated for the full
year and allocated in interim periods based on
estimates of operating time expired, benefit received,
or activity associated with the interim period. The
consolidated financial statements reflect all
adjustments which are, in the opinion of management,
necessary for a fair representation of the results for
the interim periods. Certain reclassifications have
been made to prior year amounts to conform to the
current year presentation.
(2) Fiscal 1999 Acquisitions
During the first quarter, PCC acquired the stock of
Environment/One Corporation ("E/One"), a manufacturer of
highly engineered equipment for low-pressure sewer systems
and other applications. The purchase price of $72,000
resulted in $62,300 of goodwill. E/One operates as part of
the Fluid Management Products segment.
During the first quarter, PCC acquired the assets of TBV, a
manufacturer of ball valves and pipeline instrumentation.
The purchase price of $9,800 resulted in $4,400 of goodwill.
TBV operates as part of the Fluid Management Products
segment.
During the fourth quarter, PCC acquired 70 percent of the
stock of Sterom S.A. ("Sterom"), a Romanian manufacturer of
high-quality industrial valves and oilfield equipment for
$1,600. As part of the transaction, PCC guaranteed
investments for capital improvements, the payment of tax
liabilities, and environmental remediation efforts. The
transaction generated goodwill of $6,500. Sterom operates
as part of the Fluid Management Products segment.
</Page>
<PAGE>
Page 8
(3) Earnings Per Share
<TABLE>
<CAPTION>
Three Months Ended
_____________________________________________
6/27/99 6/28/98
______________________________________
Basic Diluted Basic Diluted
______________________________________
<S> <C> <C> <C> <C>
Net Income $ 22,300 $ 22,300 $ 24,400 $ 24,400
______________________________________
Average shares outstanding 24,500 24,500 24,300 24,300
Common shares issuable - 100 - 200
______________________________________
Average shares outstanding
assuming dilution 24,500 24,600 24,300 24,500
______________________________________
Net income per common share $ 0.91 $ 0.91 $ 1.00 $ 1.00
======================================
</TABLE>
(4) Segment Information
<TABLE>
<CAPTION>
Three Months Ended
___________________________
6/27/99 6/28/98
___________________________
<S> <C> <C>
Net sales
Precision Alloy Products $ 242,700 $ 238,600
Fluid Management Products 73,300 77,000
Industrial Products 43,000 54,400
________ __ ________
Consolidated net sales $ 359,000 $ 370,000
======== ==========
Operating income
Precision Alloy Products $ 37,300 $ 36,200
Fluid Management Products 4,900 10,200
Industrial Products 3,100 3,700
Corporate expense (2,800) (2,500)
________ ________
Operating income 42,500 47,600
Interest expense, net 6,800 6,900
________ _________
Consolidated income before
provision for income taxes $ 35,700 $ 40,700
======== =========
</TABLE>
</Page>
<PAGE> Page 9
(5) Agreement to Acquire Wyman-Gordon Company
During the first quarter of fiscal 2000, through a
wholly-owned subsidiary, PCC entered into a definitive
agreement to acquire 100 percent of the stock of Wyman-
Gordon Company ("Wyman-Gordon") in a cash tender offer
valued at approximately $825,000, including the
assumption of $104,000 of net debt. Upon completion of
the tender offer and subsequent merger, Wyman-Gordon
will become a wholly-owned subsidiary of the Company.
The completion of the tender offer is conditioned upon
the tender of at least two-thirds of the outstanding
shares of Wyman-Gordon and certain other conditions,
including compliance with the requirements of the Hart-
Scott-Rodino Antitrust Improvements Act of 1976.
Wyman-Gordon, headquartered in Grafton, Massachusetts,
is the market leader in high-quality, technologically
advanced forgings for aircraft engine components, and
is also a leading manufacturer of investment castings
for the aerospace industry and forgings for the IGT and
energy markets.
The Company has entered into credit agreements totaling
$1,250,000 to finance the acquisition of Wyman-Gordon
and to refinance the Company's current facilities in
conjunction with this acquisition. One credit
agreement includes a $550,000 term loan facility, and a
$400,000 revolving credit facility. The other credit
agreement consists solely of a $300,000 interim term
loan facility. Subsequent to closing of the
acquisition, the Company is planning to issue $300,000
of medium-term debt securities, which will replace the
interim term loan facility. In addition, a portion of
the revolving credit facility will be used to finance a
cash tender offer for Wyman-Gordon's 8% $150,000 Senior
Notes due December 15, 2007.
The Company entered into a swap agreement to fix the
borrowing rate on approximately 50 percent of the
borrowings under the $950,000 credit agreement. In
addition, the Company entered into a hedge to fix the
underlying 10 year Treasury rate for the $300,000 of
medium-term debt securities to be issued.
</Page>
<PAGE>
Page 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Consolidated Results of Operations - Comparison Between
Three Months Ended June 27, 1999 and June 28, 1998
Sales of $359.0 million for the first quarter of fiscal 2000
were down 3 percent from $370.0 million in the same quarter
last year. Operating income of $42.5 million was down 11
percent from $47.6 million in the first quarter last year.
Net income was $22.3 million, or $0.91 per share (diluted),
for the quarter, compared with net income of $24.4 million,
or $1.00 per share (diluted) in the same quarter last year.
Results of Operations by Segment - Comparison Between Three
Months Ended June 27, 1999 and June 28, 1998
Precision Alloy Products
Precision Alloy Products increased its sales quarter over
quarter by 2 percent, from $238.6 million in the first
quarter of fiscal 1999 to $242.7 million this year.
Operating income for the segment improved by 3 percent, from
$36.2 million in the first quarter a year ago to $37.3
million in fiscal 2000. Sales growth was led by increased
spares and industrial gas turbine (IGT) activity at PCC
Airfoils, and AFT's sales more than doubled. Margin
improvement was driven by the IGT business, which has
started to deliver better results as the business
transitions from the development to production phase. Sales
and profit growth was moderated, however, by lower sales of
aerospace products at PCC Structurals. While GE Aircraft
Engines and Pratt & Whitney adjusted much of their
inventories last year in light of the aerospace cycle
downturn, many of their European revenue-sharing partners
are just beginning that process.
Fluid Management Products
Fluid Management Products' sales declined from $77.0 million
in the first quarter of fiscal 1999 to $73.3 million this
year, a reduction of 5 percent. Operating income also
declined, moving from $10.2 million last year to $4.9
million in the first quarter of this year. The segment's
performance continues to be adversely affected by slow
market conditions in the oil and gas industry.
</Page>
<PAGE>
Page 11
Industrial Products
Industrial Products reported sales of $43.0 million for the
first quarter of fiscal 2000 as compared to last year's
sales of $54.4 million, a 21 percent decrease. Operating
income fell by 16 percent, from $3.7 million in the first
quarter of fiscal 1999 to $3.1 million in the first quarter
of this year. A significant part of the sales decline was
due to timing issues at PCC Olofsson, where unusually large
shipments of machines were recorded in the first quarter of
last year. In addition, Reed-Rico experienced lower sales,
particularly in Europe, as a result of the continued
influence of Asian competition. Operating margin was
adversely affected by the lower sales volume.
Changes in Financial Condition and Liquidity
Total assets of $1,443.8 million at June 27, 1999
represented a $5.8 million decrease from the $1,449.6
million balance at March 28, 1999. Total capitalization at
June 27, 1999, was $1,130.1 million, consisting of $413.2
million of debt and $716.9 million of equity. The debt-to-
capitalization ratio was 37 percent compared with 38 percent
at the end of the prior fiscal year.
Cash from earnings for the three months ended June 27, 1999
of $37.2 million, plus $1.0 million from short-term
borrowings and $0.4 million from the sale of common stock
through stock option exercises exceeded cash requirements
which consisted of $12.4 million for increased working
capital, $9.5 million for capital expenditures, $13.7
million of debt repayments and $1.5 million for dividends.
The net increase in the quarter's cash resulted in an ending
cash balance of $16.6 million, up $1.8 million from fiscal
1999 year end.
During the first quarter of fiscal 2000, the Company
entered into credit agreements totaling $1,250.0 million to
finance the acquisition of Wyman-Gordon and to refinance the
Company's current facilities in conjunction with this
acquisition. One credit agreement includes a $550.0 million
term loan facility, and a $400.0 million revolving credit
facility. The other credit agreement consists solely of a
$300.0 million interim term loan facility. Subsequent to
closing of the acquisition, the Company is planning to issue
$300.0 million of medium-term debt securities, which will
replace the interim term loan facility. In addition, a
portion of the revolving credit facility will be used to
finance a cash tender offer for Wyman-Gordon's 8%
$150,000,000 Senior Notes due December 15, 2007.
</Page>
<PAGE>
Page 12
The Company entered into a swap agreement to fix the
borrowing rate on approximately 50 percent of the
borrowings under the $950.0 million credit agreement. In
addition, the Company entered into a hedge to fix the
underlying 10 year Treasury rate for the $300.0 million of
medium-term debt securities to be issued.
Management believes that the Company can fund the
requirements for capital spending, cash dividends and
potential acquisitions from cash balances, borrowing from
existing or new bank credit facilities, issuance of public
or privately placed debt securities, or the issuance of
stock.
Year 2000 Update
As many computer systems and other equipment with embedded
chips or processors use only two digits to represent the
calendar year, they may be unable to accurately process
certain data before, during or after the year 2000. As a
result, business entities are at risk for possible
miscalculations or systems failures causing disruptions in
their business operations. This is commonly known as the
Year 2000 (Y2K) issue. The Y2K issue can arise at any point
in the Company's supply, manufacturing, processing,
distribution, and financial chains.
The Company began addressing the Y2K issue in November 1997,
with the development of a standardized Year 2000 Plan
format. Prior to that time, many of the Company's
operations had already begun Y2K planning initiatives.
By March 1998 each of PCC's operating units had completed a
Year 2000 Plan that included the following components:
1) Inventory of all computing assets (both hardware and
software);
2) Assessment of Y2K compliance for all systems;
3) Determination of solutions for non-compliant systems
and development of a project schedule for non-compliant
systems, and
4) Contact with significant suppliers to determine the
sufficiency of their Year 2000 Plans.
The Company has prioritized projects on systems, that if not
corrected, have the potential of causing a material
disruption to the production process or financial and
accounting processes. The Company refers to these projects
as Critical Projects.
</Page>
<PAGE>
Page 13
There are currently thirteen Critical Projects. Ten
Critical Projects involve replacement of accounting and
business systems, and the three remaining Critical Projects
involve compliance of manufacturing and production control
equipment. All Critical Projects were completed by PCC
management's target date of June 30, 1999.
In addition, the Company is developing contingency plans
intended to mitigate the possible disruption in business
operations that may result from the Y2K issue. Contingency
plans may include stockpiling necessary materials and
inventories, securing alternate sources of supply, adjusting
facility shutdown and startup schedules, development of
manual procedures to execute transactions and complete
processes and other appropriate measures. Once developed,
contingency plans will be continually refined as additional
information becomes available. The deadline for completion
of the contingency plans is September 30, 1999.
PCC is a highly diversified company comprised of three
business segments. Each of these segments have multiple
operating units, resulting in twenty-five separate Year 2000
Plans. PCC has not required standardized systems throughout
the Company. This diversification has allowed the Company
to spread the risk of Y2K failures, since no one system is
responsible for the entire financial or operational needs of
the Company. Also, with few exceptions, business systems
that are not compliant are being replaced with packaged
systems as opposed to in-house developed and maintained
systems.
New business systems being installed include Platinum, JD
Edwards, Frontier and MAPICS. These systems have all had
significant testing for Y2K compliance performed by the
manufacturer and user community.
In addition, all the systems have been, or will be tested
in-house by a two-step process:
Primary Testing - each operating unit of the Company is
required to apply tests to determine Y2K compliance of its
systems.
Secondary Testing - Internal Audit has begun, and will
continue to perform, Y2K testing on selected systems. The
scheduled completion date is August 1999.
</Page>
<PAGE>
Page 14
While the Company's diversification reduces the risk that a
material Y2K issue will affect the Company's performance,
this same diversification increases the possibility that Y2K
issues will occur since many more systems exist than in a
centralized environment. Management is addressing this
issue by:
1) Development of formal Year 2000 Plans for each
operating unit;
2) Development of a Year 2000 team which includes key
Information Systems managers within the operating
units;
3) Requiring primary and secondary testing of systems, and
4) Development of contingency plans for all critical
manufacturing and financial systems.
Costs
The total cost associated with the modifications and
replacement of systems to become Year 2000 compliant is not
expected to be material to the Company's financial position.
The estimated total cost of all Y2K projects is $5.5
million. The $5.5 million includes 113 systems identified
as requiring some cost for Y2K upgrades, and includes $2.0
million for systems that, although not Year 2000 compliant,
would have been replaced for other reasons by Year 2000 or
shortly thereafter.
The Company has spent $4.4 million on Year 2000 systems,
including $3.4 million to replace systems and $1.0 million
to upgrade or modify existing systems. Estimated future
costs of $1.1 million include $0.9 million to replace
systems and $0.2 million to upgrade or modify systems.
The Company has spent $3.0 million on the thirteen Critical
Projects, which are estimated to represent $3.3 million of
the $5.5 million estimated total cost of all Y2K projects.
All costs associated with these projects have been provided
for from existing operating budgets and have been or will be
funded through operating cash flow.
</Page>
<PAGE>
Page 15
Risks
The Company relies on third party suppliers for raw
materials, outside processing, utilities, transportation and
other key services. Interruption of supplier operations due
to Y2K issues could affect Company operations. PCC has
initiated efforts to evaluate the status of suppliers'
efforts and to determine alternatives and contingency plan
requirements. While approaches to reducing risks of
interruption due to supplier failures will vary by division
and operating unit, options include identification of
alternate suppliers and accumulation of inventory to assure
production capability where feasible or warranted. These
activities are intended to provide a means of managing risk,
but cannot eliminate the potential for disruptions due to
third party failure.
The Company is also dependent upon its customers for sales
and cash flow. Y2K interruptions in the Company's customers'
operations could result in reduced sales, increased
inventory or receivable levels and cash flow reductions.
While these events are possible, PCC's customer base is
broad enough to minimize the affects of a single occurrence.
The Company, however, has communicated with its major
customers with respect to Y2K issues, and has received
information indicating that they are developing and
monitoring their own plans, as well as monitoring their
customers' and suppliers' plans.
The Year 2000 project is expected to significantly reduce
the Company's level of uncertainty about the Y2K problem.
The Company believes that, with the implementation of new
and modified business systems and completion of the Critical
Projects, the possibility of significant interruptions of
normal operations should be reduced. However, despite the
Company's activities in regards to the Year 2000 issue,
there can be no assurance that partial or total systems
interruptions or the costs necessary to update hardware and
software would not have a material adverse effect upon the
Company's business, financial condition, results of
operations and business processes.
The Company's Year 2000 project is an ongoing process and
the estimates of costs and completion dates for various
components of Y2K readiness described above are subject to
change. Readers are cautioned that forward looking
statements contained in the Year 2000 discussion above
should be read in conjunction with the Company's disclosures
under the heading: "FORWARD-LOOKING STATEMENTS".
</Page>
<PAGE>
Page 16
FORWARD-LOOKING STATEMENTS
Information included within this filing describing the
projected growth and future results and events constitutes
forward-looking statements, within the meaning of the
Private Securities Litigation Reform Act of 1995. Actual
results in future periods may differ materially from the
forward-looking statements because of a number of risks and
uncertainties, including but not limited to fluctuations in
the aerospace and general industrial cycles; the relative
success of the Company's entry into new markets, including
the rapid ramp-up of production for industrial gas turbine
and airframe components; competitive pricing; the
availability and cost of materials and supplies; relations
with the Company's employees; the Company's ability to
manage its operating costs and to integrate acquired
businesses in an effective manner; governmental regulations
and environmental matters; risks associated with
international operations and world economies; the relative
stability of certain foreign currencies; timely, effective
and cost-efficient introduction of hardware and software to
address the Year 2000 issue; and implementation of new
technologies. Any forward-looking statements should be
considered in light of these factors. The Company
undertakes no obligation to publicly release any forward-
looking information to reflect anticipated or unanticipated
events or circumstances after the date of this document.
</Page>
<PAGE>
Page 17
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its Annual Meeting of
Shareholders on August 4, 1999.
(b) The Shareholders voted as follows on the following
matters:
<TABLE>
<CAPTION>
1. Election of directors. The voting result for
each nominee is as follows:
Votes
Name Votes for withheld
_______________ ___________ _____________
<S> <C> <C>
Dean T. DuCray 22,043,775 257,288
Don R. Graber 22,044,647 256,416
Byron O. Pond, Jr. 21,948,004 353,059
J. Frank Travis 21,957,147 343,916
</TABLE>
Mr. DuCray, Mr. Graber and Mr. Pond were
elected to serve terms of three years. Mr.
Travis was elected to serve a term of two
years.
2. The amendment of the 1994 Stock Incentive Plan
to increase the number of shares reserved for
issuance under the plan by 1,000,000 was
approved by a count of 13,099,337 votes for,
9,093,122 votes withheld or against, and
108,604 votes abstaining.
3. The appointment of PricewaterhouseCoopers LLP
as auditors of the Company for the fiscal 2000
year was ratified by a count of 22,221,007
votes for, 40,697 votes withheld or against and
39,359 votes abstaining.
</Page>
<PAGE>
Page 18
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
(3) Agreement and Plan of Merger, dated
May 17, 1999, among Precision
Castparts Corp., WGC Acquisition Corp.
and Wyman-Gordon Company (Incorporated
herein by reference to Exhibit (c)(1)
in the Schedule 14D-1 dated May 21,
1999)(File number 5-10796)
(10)A Bank of America Credit Agreement Dated
July 30, 1999 between Precision
Castparts Corp. and Bank of America,
N.A. Schedules that have been omitted
will be furnished supplementally to
the Commission upon request.
(10)B Bank of America Credit Agreement Dated
July 30, 1999 among Precision
Castparts Corp., Bank of America, N.A.
as Administrative Agent and Letter of
Credit Issuing Bank and The Other
Financial Institutions Party Hereto
Arranged by Banc of America Securities
LLC. Schedules that have been omitted
will be furnished supplementally to
the Commission upon request.
(10)C Precision Castparts Corp. 1994 Stock
Incentive Plan as amended
(11) Computation of Per Share Earnings*
(27) Financial Data Schedule
* Data required by Statement of Financial
Accounting Standards No. 128, Earnings per
Share, is provided in Note 3 to the
Consolidated Financial Statements in this
Report.
b. Reports on Form 8-K
None.
</Page>
<PAGE>
Page 19
SIGNATURES
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.
PRECISION CASTPARTS CORP.
Registrant
DATE: August 11, 1999 /s/ W.D. Larsson
______________________________
W.D. Larsson
Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
</Page>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
June 27, 1999, financial statements and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000079958
<NAME> PRECISION CASTPARTS CORP.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-02-2000
<PERIOD-START> MAR-29-1999
<PERIOD-END> JUN-27-1999
<CASH> 16600
<SECURITIES> 0
<RECEIVABLES> 256000
<ALLOWANCES> 3100
<INVENTORY> 255300
<CURRENT-ASSETS> 557500
<PP&E> 569800
<DEPRECIATION> 240900
<TOTAL-ASSETS> 1443800
<CURRENT-LIABILITIES> 287500
<BONDS> 356000
0
0
<COMMON> 24500
<OTHER-SE> 692400
<TOTAL-LIABILITY-AND-EQUITY> 1443800
<SALES> 359000
<TOTAL-REVENUES> 359000
<CGS> 279100
<TOTAL-COSTS> 279100
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6800
<INCOME-PRETAX> 35700
<INCOME-TAX> 13400
<INCOME-CONTINUING> 22300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22300
<EPS-BASIC> 0.91
<EPS-DILUTED> 0.91
</TABLE>
<PAGE>
$300,000,000
CREDIT AGREEMENT
Dated as of July 30, 1999
between
PRECISION CASTPARTS CORP.
and
BANK OF AMERICA, N.A.
</Page>
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS 1
Section 1.01 Certain Defined Terms 1
Section 1.02 Other Interpretive Provisions 20
Section 1.03 Accounting Principles 21
ARTICLE II THE CREDITS
Section 2.01 Amounts and Terms of Commitment 21
Section 2.02 Loan Accounts 22
Section 2.03 Procedure for Borrowing 22
Section 2.04 Conversion and Continuation Elections 23
Section 2.05 Voluntary Termination or Reduction
of Commitments 24
Section 2.06 Optional Prepayments 25
Section 2.07 Mandatory Prepayments of Loans;
Mandatory Commitment Reductions 25
Section 2.08 Repayment 26
Section 2.09 Interest 26
Section 2.10 Fees 27
Section 2.11 Computation of Fees and Interest 28
Section 2.12 Payments by the Company 29
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01 Taxes 29
Section 3.02 Illegality 30
Section 3.03 Increased Costs and Reduction of Return 31
Section 3.04 Funding Losses 32
Section 3.05 Inability to Determine Rates 32
Section 3.06 Reserves on Offshore Rates Loans 33
Section 3.07 Certificates of Bank 33
Section 3.08 Survival 34
ARTICLE IV CONDITIONS PRECEDENT
Section 4.01 Conditions of Initial Loan 34
Section 4.02 Conditions to All Subsequent Loans 36
ARTICLE V REPRESENTATIONS AND WARRANTIES
Section 5.01 Corporate Existence and Power 37
Section 5.02 Corporate Authorization; No Contravention 38
Section 5.03 Governmental Authorization 38
Section 5.04 Binding Effect 38
Section 5.05 Litigation 39
Section 5.06 No Defaults 39
Section 5.07 ERISA Compliance 39
Section 5.08 Use of Proceeds; Margin Regulations 40
Section 5.09 Title to Properties; Liens 40
Section 5.10 Taxes 41
Section 5.11 Financial Condition 41
Section 5.12 Environmental Matters 42
Section 5.13 Regulated Entities 42
Section 5.14 No Burdensome Restrictions; No Restrictions
on Subsidiary Dividends 42
Section 5.15 Copyrights, Patents, Trademarks and
Licenses, Etc. 43
</Page>
<PAGE>
Section 5.16 Subsidiaries 43
Section 5.17 Insurance 43
Section 5.18 Solvency 43
Section 5.19 Swap Obligations 44
Section 5.20 Year 2000 44
Section 5.21 Merger Representations 44
Section 5.22 Full Disclosure 44
ARTICLE VI AFFIRMATIVE COVENANTS
Section 6.01 Financial Statements and Other Information 45
Section 6.02 Other Information 45
Section 6.03 Notices 45
Section 6.04 Inspection of Property and Books and
Records 46
Section 6.05 Use of Proceeds 46
Section 6.06 Convenants under Syndicate Credit
Agreement 47
Section 6.07 Further Assurances 47
ARTICLE VII NEGATIVE COVENANTS
Section 7.01 Use of Proceeds 47
Section 7.02 Covenants Under Syndicate Credit
Agreement 48
ARTICLE VIII EVENTS OF DEFAULT
Section 8.01 Event of Default 48
Section 8.02 Remedies 49
ARTICLE IX MISCELLANEOUS
Section 9.01 Amendments and Waivers 50
Section 9.02 Notices 50
Section 9.03 No Waiver; Cumulative Remedies 51
Section 9.04 Costs and Expenses 52
Section 9.05 Company Indemnification 52
Section 9.06 Marshalling; Payments Set Aside 53
Section 9.07 Successors and Assigns 53
Section 9.08 Assignments, Participations, Etc. 53
Section 9.09 Confidentiality 54
Section 9.10 Set-off 55
Section 9.11 Automatic Debits of Fees 56
Section 9.12 Counterparts 56
Section 9.13 Severability 56
Section 9.14 No Third Parties Benefited 56
Section 9.15 Governing Law and Jurisdiction 57
Section 9.16 Waiver of Jury Trial 57
Section 9.17 Entire Agreement 57
</Page>
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of July 30, 1999,
between PRECISION CASTPARTS CORP., an Oregon corporation (the
"Company"), and BANK OF AMERICA, N.A. (the "Bank").
WHEREAS, the Bank has agreed to make available to the
Company a term loan facility, upon the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms
. The following terms have the following meanings when used
herein (including in the recitals hereof):
"Acquired Company" means Wyman-Gordon Company, a
Massachusetts corporation.
"Acquisition" means any transaction or series of
related transactions for the purpose of or resulting,
directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in
excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise
causing any Person to become a Subsidiary, or (c) a merger
or consolidation or any other combination with another
Person (other than a Person that is a Subsidiary), provided
that the Company or the Subsidiary is the surviving Person.
"Affiliate" means, as to any Person, any other Person
which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person.
A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership
of voting securities, membership interests, by contract, or
otherwise.
Page 1
</Page>
<PAGE>
"Agent" means the Bank in its capacity as
administrative agent for the Syndicate Banks under the
Syndicate Credit Agreement, and any successor agent
appointed or arising thereunder.
"Agreement" means this Credit Agreement.
"Applicable Fee Amount" means with respect to the
commitment fee payable hereunder, the amount set forth
opposite the indicated Level in the pricing grid set forth
on Annex I in accordance with the parameters for
calculations of such amount also set forth on Annex I.
"Applicable Margin" means, with respect to Base Rate
Loans and Offshore Rate Loans, the amount set forth opposite
the indicated Level below the heading "Base Rate Spread" or
"Offshore Rate Spread," as applicable, in the pricing grid
set forth on Annex I in accordance with the parameters for
calculations of such amounts also set forth on Annex I.
"Assignee" has the meaning specified in subsection
9.08(a).
"Attorney Costs" means and includes all fees and
disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all
disbursements of internal counsel.
"Availability Expiry Date" means the earliest to occur
of: (a) March 1, 2000; (b) the effective date of the
Merger; and (c) the date on which the Commitment terminates
in accordance with the provisions of this Agreement.
"Bank" has the meaning specified in the introductory
clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform
Act of 1978 (11 U.S.C. 101, et seq.).
"Bank's Payment Office" means the address for payments
set forth on Schedule 1 or such other address as the Bank
may from time to time specify.
"Base Rate" means, for any day, the higher of:
(a) 0.50% per annum above the latest Federal Funds Rate; and
(b) the rate of interest in effect for such day as publicly
announced from time to time by the Bank as its "reference
rate." (The "reference rate" is a rate set by the Bank
based upon various factors including the Bank's costs and
Page 2
</Page>
<PAGE>
desired return, general economic conditions and other
factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such
announced rate.) Any change in the reference rate announced
by the Bank shall take effect at the opening of business on
the day specified in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based
on the Base Rate.
"Borrowing" means a borrowing of any Loan hereunder.
"Borrowing Date" means any date on which a Borrowing
occurs under Section 2.03.
"Bridge Maturity Date" means the date 364 days after
the Closing Date.
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in San
Francisco are authorized or required by law to close and, if
the applicable Business Day relates to any Offshore Rate
Loan, means such a day on which dealings are carried on in
the London or other applicable offshore Dollar interbank
market.
"Capital Adequacy Regulation" means any guideline,
request or directive of any central bank or other
Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Closing Date" means the date occurring on or before
March 1, 2000 on which all conditions precedent set forth in
Section 4.01 are satisfied or waived by the Bank.
"Code" means the Internal Revenue Code of 1986.
"Commitment" has the meaning specified in Section 2.01.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit C to the Syndicate
Credit Agreement.
"Contingent Obligation" means, as to any Person, any
direct or indirect liability of that Person, whether or not
contingent, with or without recourse, (a) with respect to
any Indebtedness, lease, dividend, letter of credit or other
Page 3
</Page>
<PAGE>
obligation (the "primary obligations") of another Person
(the "primary obligor"), including any obligation of that
Person (i) to purchase, repurchase or otherwise acquire such
primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to
make payment of such primary obligation, (iv) in connection
with any synthetic lease or other similar off balance sheet
lease transaction, or (v) otherwise to assure or hold
harmless the holder of any such primary obligation against
loss in respect thereof (each, a "Guaranty Obligation");
(b) with respect to any Surety Instrument issued for the
account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments;
(c) to purchase any materials, supplies or other property
from, or to obtain the services of, another Person if the
relevant contract or other related document or obligation
requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other
property is ever made or tendered, or such services are ever
performed or tendered; or (d) in respect of any Swap
Contract. The amount of any Contingent Obligation shall, in
the case of Guaranty Obligations, be deemed equal to the
stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not
stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof, and in the case of
other Contingent Obligations other than in respect of Swap
Contracts, shall be equal to the maximum reasonably
anticipated liability in respect thereof and, in the case of
Contingent Obligations in respect of Swap Contracts, shall
be equal to the Swap Termination Value.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed
of trust or other instrument, document or agreement to which
such Person is a party or by which it or any of its property
is bound.
Page 4
</Page>
<PAGE>
"Conversion/Continuation Date" means any date on which,
under Section 2.04, the Company (a) converts Loans of one
Type to another Type, or (b) continues as Loans of the same
Type, but with a new Interest Period, Loans having Interest
Periods expiring on such date.
"Default" means any event or circumstance which, with
the giving of notice, the lapse of time, or both, would (if
not cured or otherwise remedied during such time) constitute
an Event of Default.
"Disposition" means (i) the sale, lease, conveyance or
other disposition of property, other than (A) sales of
inventory in the ordinary course of business, (B) sales and
other dispositions of obsolete or unusable equipment,
(C) dispositions of defaulted receivables for collection in
the ordinary course of business, or (D) sales of receivables
pursuant to securitization programs; and (ii) the sale or
transfer by the Company or any Subsidiary of the Company of
any equity securities issued by any Subsidiary of the
Company and held by such transferor Person, in either case
to a Person other than the Company or a Subsidiary.
"Documents" means the Loan Documents, the Transaction
Documents and the Syndicate Loan Documents.
"Dollars," "dollars" and "$" each mean lawful money of
the United States.
"Eligible Assignee" means (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 $250,000,000; (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
$250,000,000, provided that such bank is acting through a
branch or agency located in the United States; and (c) a
Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of the Bank,
(ii) a Subsidiary of a Person of which the Bank is a
Subsidiary, or (iii) a Person of which the Bank is a
Subsidiary. No proposed assignee shall be an Eligible
Assignee if the effect of the assignment to the proposed
assignee would be to impose increased costs on the Company
pursuant to Section 3.01 or if the representation contained
in Section 4.01(f) of the Syndicate Credit Agreement would
not be true as to such Person if made as to such Person on
the date of assignment.
Page 5
</Page>
<PAGE>
"Environmental Claims" means all claims, however
asserted, by any Governmental Authority or other Person
alleging potential liability or responsibility for violation
of any Environmental Law.
"Environmental Laws" means all federal, state or local
laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative
orders, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health,
safety and land use matters.
"ERISA" means the Employee Retirement Income Security
Act of 1974.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) under common control with the Company
within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect
to a Pension Plan; (b) a withdrawal by the Company or any
ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate
from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event
or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA,
other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Company or any ERISA
Affiliate in excess of $5,000,000.
"Event of Default" means any of the events or
circumstances specified in Section 8.01.
Page 6
</Page>
<PAGE>
"Event of Loss" means, with respect to any property,
any of the following: (a) any loss, destruction or damage
of or to such property, (b) any pending or threatened
institution of any proceedings for the condemnation or
seizure of such property or for the exercise of any right of
eminent domain, or (c) any actual condemnation, seizure or
taking, by exercise of the power of eminent domain or
otherwise, of such property, or confiscation of such
property or the requisition of use of such property.
"Exchange Act" means the Securities Exchange Act of
1934.
"Existing Credit Facility" means the Credit Agreement
dated as of July 31, 1996, as amended, among the Company,
the Bank as agent, the other financial institutions party
thereto, and others.
"Existing Securities" means the Company's outstanding
debt securities under that certain Indenture dated as of
December 17, 1997.
"Federal Funds Rate" means, for any day, the rate set
forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the
Federal Reserve Bank of New York with respect to the
preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not
so published with respect to any such preceding Business
Day, the rate for such day will be the arithmetic mean as
determined by the Bank of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers
of Federal funds transactions in New York City selected by
the Bank.
"Fee Letter" means the Fee Letter referred to in the
Syndicate Credit Agreement.
"FRB" means the Board of Governors of the Federal
Reserve System, and any Governmental Authority succeeding to
any of its principal functions.
"Further Taxes" means any and all present or future
taxes, levies, assessments, imposts, duties, deductions,
fees, withholdings or similar charges (including net income
taxes and franchise taxes), and all liabilities with respect
thereto, imposed by any jurisdiction on account of amounts
payable or paid pursuant to Section 3.01.
Page 7
</Page>
<PAGE>
"GAAP" means generally accepted accounting principles
set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of
the date of application.
"Governmental Authority" means any nation or
government, any state or other political subdivision
thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any
corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the
foregoing.
"Guaranty Obligation" has the meaning specified in the
definition of "Contingent Obligation."
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness for borrowed money;
(b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than
trade payables and accrued liabilities incurred in the
ordinary course of business on ordinary terms); (c) all non-
contingent reimbursement or payment obligations with respect
to Surety Instruments; (d) all obligations evidenced by
notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as
financing, in either case with respect to property acquired
by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default
are limited to repossession or sale of such property);
(f) all obligations with respect to capital leases; (g) all
indebtedness referred to in clauses (a) through (f) above
secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured
by) any Lien upon or in property (including accounts and
contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of
such Indebtedness; and (h) all Guaranty Obligations in
respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (g) above; provided
Page 8
</Page>
<PAGE>
that Indebtedness shall not include sales of Permitted
Receivables sold pursuant to Permitted Receivables Purchase
Facilities and indemnification, recourse or repurchase
obligations thereunder. For all purposes of this Agreement,
the Indebtedness of any Person shall include any
Indebtedness of any partnership or joint venture in which
such Person is a general partner or a joint venturer to the
extent of any amount thereof as to which recourse to such
Person exists.
"Indemnified Liabilities" has the meaning specified in
Section 9.05.
"Indemnified Person" has the meaning specified in
Section 9.05.
"Independent Auditor" has the meaning specified in the
Syndicate Credit Agreement.
"Insolvency Proceeding" means, with respect to any
Person, (a) any case, action or proceeding with respect to
such Person before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief
of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; in
either case undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.
"Interest Payment Date" means (i) as to any Loan other
than a Base Rate Loan, the last day of each Interest Period
applicable to such Loan and, as to any Base Rate Loan, the
last Business Day of each calendar quarter and the Bridge
Maturity Date; provided, however, that if any Interest
Period for any Offshore Rate Loan exceeds three months, the
date that falls three months after the beginning of such
Interest Period and after each Interest Payment Date
thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan,
the period commencing on the Borrowing Date of such Loan or
on the Conversion/Continuation Date on which the Loan is
converted into or continued as an Offshore Rate Loan, and
ending on the date one, two, three or six months thereafter;
Page 9
</Page>
<PAGE>
provided that:
(i) if any Interest Period would otherwise end on
a day that is not a Business Day, that Interest Period
shall be extended to the following Business Day unless
the result of such extension would be to carry such
Interest Period into another calendar month, in which
event such Interest Period shall end on the preceding
Business Day;
(ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the
calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall
extend beyond the Bridge Maturity Date.
"Investment Grade" has the meaning specified in
subsection 2.07(c).
"IRS" means the Internal Revenue Service, and any
Governmental Authority succeeding to any of its principal
functions under the Code.
"Lending Office" means the office or offices of the
Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office," as the case may be, on
Schedule 1, or such other office or offices as the Bank may
from time to time notify to the Company.
"Lien" means any security interest, mortgage, deed of
trust, pledge, hypothecation, assignment, charge or deposit
arrangement, encumbrance, lien (statutory or other) or
preferential arrangement of any kind or nature whatsoever in
respect of any property having the same practical effect as
a security interest (including those created by, arising
under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the
same economic effect as any of the foregoing, or the filing
of any financing statement naming the owner of the asset to
which such lien relates as debtor, under the Uniform
Commercial Code or any comparable law), but not including
the interest of a lessor under an operating lease or the
interest of a purchaser of Permitted Receivables under any
Permitted Receivables Purchase Facility.
Page 10
</Page>
<PAGE>
"Loan" means an extension of credit, in the form of a
loan by the Bank to the Company under Article II, which may
be a Base Rate Loan or an Offshore Rate Loan (each a "Type"
of Loan).
"Loan Documents" means this Agreement, any Notes, the
Fee Letter, and all other documents delivered to the Bank in
connection with the transactions contemplated by this
Agreement.
"Margin Stock" means "margin stock" as such term is
defined in Regulation T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse
change in, or a material adverse effect upon, the
operations, business, or condition (financial or otherwise)
of the Company, the Acquired Company and its Subsidiaries
taken as a whole; (b) a material impairment of the ability
of the Company or any Subsidiary to perform under any
Document and to avoid any Event of Default; or (c) a
material adverse effect upon (i) the legality, validity,
binding effect or enforceability against the Company or any
Subsidiary of any Document. For purposes of this
definition, a liability shall be considered to be material
if it involves a cost to or expenditure by the Person of
$35,000,000 or more, net of amounts recoverable from
insurers where coverage is not contested or pursuant to
uncontested rights of subrogation, contribution or
indemnity.
"Merger" means the merger of the Acquired Company and
the Purchaser, as contemplated by the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of
Merger, dated as of May 17, 1999, by and among the Company,
the Purchaser and the Acquired Company.
"Minimum Amount" means (i) in respect of any Borrowing,
conversion or continuation of Loans, an aggregate minimum
amount of $5,000,000 or any integral multiple of $1,000,000
in excess thereof, and (ii) in the case of any reduction of
the Commitment under Section 2.05, or optional prepayment of
Loans under Section 2.06, $10,000,000 or any multiple of
$1,000,000 in excess thereof.
"Minimum Condition" means the minimum number of shares
required to be tendered and not withdrawn prior to the
expiration of the Offer, as specified in the Merger
Agreement.
Page 11
</Page>
<PAGE>
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA, to which
the Company or any ERISA Affiliate makes, is making, or is
obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make,
contributions.
"Net Proceeds" means (i) as to the issuance of any debt
or equity securities by the Company, cash proceeds received
by the Company in connection therewith, net of ordinary and
necessary out-of-pocket costs and expenses paid or incurred
in connection therewith in favor of any Person not an
Affiliate of the Company; (ii) as to any Disposition by a
the Company or any Subsidiary, proceeds in cash, checks or
other cash equivalent financial instruments as and when
received by such Person, net of: (A) the direct costs
relating to such Disposition, excluding amounts payable to
such Person or any Affiliate of such Person, (B) sale, use
or other transaction taxes and capital gains taxes paid or
payable by such Person as a direct result thereof, and
(C) amounts required to be applied to repay principal,
interest and prepayment premiums and penalties on
Indebtedness secured by a purchase money security interest
on any asset which is the subject of such Disposition; and
(iii) as to any Event of Loss suffered by the Company or any
Subsidiary, proceeds in cash, checks or other cash
equivalent financial instruments as and when received by
such Person, net of (A) all money actually applied to repair
or reconstruct the damaged property or property affected by
the condemnation or taking, (B) all of the costs and
expenses reasonably incurred in connection with the
collection of such proceeds, award or other payments, and
(C) any amounts retained by or paid to parties having
superior rights to such proceeds, awards or other payments.
For purposes of determining the amount of Net Proceeds in
respect of any Disposition or Event of Loss, however, the
amount of proceeds calculated as provided above shall be
reduced by (i) $10,000,000 of the amount of such proceeds,
and (ii) the amount of the balance of such proceeds after
such reduction that such Person has used (or intends to use
within six months of the date of receipt of such proceeds)
to pay the purchase price in connection with any Acquisition
or Investment permitted by the Syndicate Credit Agreement,
it being understood that any portion of such balance of such
proceeds that has not been so used within such six month
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<PAGE>
period shall be deemed to be Net Proceeds received on the
last day of such six month period and that all such proceeds
shall be deemed to be Net Proceeds at any time that an Event
of Default exists hereunder.
"Note" has the meaning specified in Section 2.02(b).
"Notice of Borrowing" means a notice in substantially
the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means the Loans and other Indebtedness
arising under any Loan Document owing by the Company to the
Bank or any Indemnified Person, whether direct or indirect
(including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter
arising.
"Offer" means, collectively, the Tender Offer Statement
filed by the Purchaser on May 21, 1999 with the SEC on
Schedule 14D-1, the Offer to Purchase dated May 21, 1999,
the related letter of transmittal, and any public
announcement relating to the foregoing.
"Offshore Rate" means: (i) the rate of interest per
annum determined by the Bank to be the rate of interest per
annum (rounded upward to the nearest 1/100th of 1%)
appearing on Dow Jones Page 3750 (as defined below) for
Dollar deposits in the approximate amount of the Offshore
Rate Loan to be made, continued or converted by Bank and
having a maturity comparable to such Interest Period, at
approximately 11:00 a.m. (London time) two Business Days
prior to the commencement of such Interest Period, subject
to clause (ii) below; or (ii) if for any reason the rate is
not available as provided in the preceding clause (i) of
this definition, the "Offshore Rate" instead means the rate
of interest per annum determined by the Bank to be the
arithmetic mean (rounded upward to the nearest 1/16th of 1%)
of the rates of interest per annum at which Dollar deposits
in the approximate amount of the Offshore Rate Loan to be
made, continued or converted by the Bank, and having a
maturity comparable to such Interest Period, would be
offered by the Bank to major banks in the London interbank
market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such
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<PAGE>
Interest Period. As used in this definition, "Dow
Jones Page 3750" means the display designated as "3750" on
the Dow Jones Market Service (formerly known as the Telerate
Service) or any replacement page thereof or successor
thereto.
"Offshore Rate Loan" means a Loan that bears interest
based on the Offshore Rate.
"Organization Documents" means, for any Person, the
certificate or articles of incorporation , the bylaws, any
certificate of determination or instrument relating to the
rights of preferred shareholders of such corporation, any
shareholder rights agreement, any other applicable
organizational or constitutional documents and all
applicable resolutions of the board of directors (or any
committee thereof) of such Person.
"Other Taxes" means any present or future stamp, court
or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made
hereunder or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect
to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection
9.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation,
or any Governmental Authority succeeding to any of its
principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in
Section 3(2) of ERISA) subject to Title IV of ERISA which
the Company sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the
case of a multiple employer plan (as described in Section
4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in the
Syndicate Credit Agreement.
"Permitted Receivables" shall mean all obligations of
any obligor (whether now existing or hereafter arising)
under a contract for sale of goods or services by the
Company or any of its Subsidiaries, which shall include any
obligation of such obligor (whether now existing or
hereafter arising) to pay interest, finance charges or
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<PAGE>
amounts with respect thereto, and, with respect to any of
the foregoing receivables or obligations, (a) all of the
interest of the Company or any of its Subsidiaries in the
goods (including returned goods) the sale of which gave rise
to such receivable or obligation after the passage of title
thereto to any obligor, (b) all other Liens and property
subject thereto from time to time purporting to secure
payment of such receivables or obligations, and (c) all
guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time
to time supporting or securing payment of any such
receivables or obligations.
"Permitted Receivables Purchase Facility" shall mean
any agreement of the Company or any of its Subsidiaries
providing for sales, transfers or conveyances of Permitted
Receivables purporting to be sales (and considered sales
under GAAP) that do not provide, directly or indirectly, for
recourse against the seller of such Permitted Receivables
(or against any of such seller's Affiliates) by way of a
guaranty or any other support arrangement, with respect to
the amount of such Permitted Receivables (based on the
financial condition or circumstances of the obligor
thereunder), other than such limited recourse as is
reasonable given market standards for transactions of a
similar type, taking into account such factors as historical
bad debt loss experience and obligor concentration levels.
"Permitted Swap Obligations" means all obligations
(contingent or otherwise) of the Company or any Subsidiary
existing or arising under Swap Contracts, provided that each
of the following criteria is satisfied: (a) such
obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or
assets held or reasonably anticipated by such Person, or
changes in the value of securities issued by such Person in
conjunction with a securities repurchase program not
otherwise prohibited hereunder, and not for purposes of
speculation or taking a "market view;" (b) such Swap
Contracts do not contain (i) any provision ("walk-away"
provision) exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to
the defaulting party, or (ii) any provision creating or
permitting the declaration of an event of default,
termination event or similar event upon the occurrence of an
Event of Default hereunder (other than an Event of Default
under subsection 9.01(a).
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<PAGE>
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture,
Governmental Authority or any other entity of whatever
nature.
"Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which the Company sponsors or
maintains or to which the Company makes, is making, or is
obligated to make contributions and includes any Pension
Plan.
"Purchaser" means WGC Acquisition Corp., a
Massachusetts corporation and a Wholly-Owned Subsidiary of
the Company.
"Reportable Event" means, any of the events set forth
in Section 4043(c) of ERISA or the regulations thereunder,
other than any such event for which the 30-day notice
requirement under ERISA has been waived in regulations
issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental
Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any
of its property is subject.
"Responsible Officer" means the chief executive officer
or the president of the Company (or any other officer having
substantially the same authority and responsibility) or the
vice president and chief financial officer of the Company
(or any other officer having substantially the same
authority and responsibility); and, with respect
certification of financial statements or compliance with
financial covenants, the treasurer of the Company (or any
other officer having substantially the same authority and
responsibility).
"S&P" means Standard & Poor's Ratings Group.
"SEC" means the Securities and Exchange Commission, or
any Governmental Authority succeeding to any of its
principal functions.
"Senior Notes" means the notes to be issued by the
Company in a registered offering or pursuant to Rule 144A or
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<PAGE>
in a private placement in an aggregate principal amount not
to exceed $300,000,000.
"Significant Subsidiary" means at any time (i) each
U.S. Subsidiary, and (ii) each Foreign Subsidiary, provided
that such Foreign Subsidiary has at such time either (A) net
sales for the preceding four fiscal quarter period in excess
of 1% of Consolidated Total Revenues or (B) total assets, as
of the last day of the preceding fiscal quarter,
constituting 1% or more of Consolidated Total Assets, in
each case based upon the Company's most recent annual or
quarterly financial statements delivered to the Bank under
Section 6.01.
"Solvent" means, as to any Person at any time, that
(a) the fair value of the property of such Person is greater
than the amount of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such
value is established and liabilities evaluated for purposes
of Section 101(31) of the Bankruptcy Code and, in the
alternative, for purposes of the Uniform Fraudulent Transfer
Act (as enacted in the State of Oregon); (b) the present
fair saleable value of the property of such Person is not
less than the amount that will be required to pay the
probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other
liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a
transaction, for which such Person's property would
constitute unreasonably small capital.
"Subsidiary" of a Person means any corporation ,
association, partnership, limited liability company, joint
venture or other business entity of which more than 50% of
the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations),
is owned or controlled directly or indirectly by the Person,
or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly
requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Company.
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<PAGE>
"Surety Instruments" means all letters of credit
(including standby and commercial), banker's acceptances,
bank guaranties, shipside bonds, surety bonds and similar
instruments.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap or option,
bond, note or bill option, interest rate option, forward
foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap,
swaption, currency option or any other, similar transaction
(including any option to enter into any of the foregoing) or
any combination of the foregoing, and, unless the context
otherwise clearly requires, any master agreement relating to
or governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one
or more Swap Contracts, after taking into account the effect
of any legally enforceable netting agreement relating to
such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date
referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as
determined based upon one or more mid-market or other
readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Bank).
"Syndicate Banks" means the financial institutions from
time to time party as "Banks" to the Syndicate Credit
Agreement.
"Syndicate Credit Agreement" means that Credit
Agreement dated as of July ____, 1999 among the Company,
Bank, as Administrative Agent and Letter of Credit Issuing
Bank, and the other financial institutions party thereto.
"Syndicate Credit Agreement Event of Default" means an
"Event of Default" as defined in the Syndicate Credit
Agreement.
"Syndicate Loan Documents" means the "Loan Documents"
as defined in the Syndicate Credit Agreement.
"Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees,
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withholdings or similar charges, and all liabilities with
respect thereto, excluding, in the case of the Bank, taxes
imposed on or measured by its net income (or taxes imposed
in lieu of such net income taxes) by the jurisdiction (or
any political subdivision thereof) under the laws of which
the Bank is organized or maintains a Lending Office.
"Tender Offer" means the offer to purchase all
outstanding shares of common stock of the Acquired Company
for cash in accordance with the terms of the Offer.
"Tender Offer Expiry Date" means the date on which all
conditions to the Purchaser's obligation to purchase shares
of the Acquired Company pursuant to the Tender Offer as set
forth in Section 1.1(a) of the Merger Agreement have been
satisfied or waived.
"Transaction" means, collectively, the Acquisition of
the Acquired Company, through the Tender Offer undertaken by
the Purchaser, and the Merger.
"Transaction Documents" means the Merger Agreement,
together with the Offer, and all other documents and
agreements entered into between the Acquired Company and the
Company, the Purchaser and any of the Company's other
Subsidiaries in furtherance of the transactions contemplated
by the foregoing.
"Type" has the meaning specified in the definition of
"Loan."
"UCC" means the Uniform Commercial Code as in effect in
New York.
"Unfunded Pension Liability" means the excess of a
Plan's benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Plan's assets,
determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code
for the applicable plan year.
"United States" and "U.S." each means the United States
of America.
"U.S. Subsidiary" means a Subsidiary that is
incorporated under the laws of any jurisdiction (including
territories) of the United States or located in and a
resident of the United States.
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"Wholly-Owned Subsidiary" means any corporation in
which (other than directors' qualifying shares required by
law) 100% of the capital stock of each class having ordinary
voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of
record, by the Company, or by one or more of the other
Wholly-Owned Subsidiaries, or both.
1.02 Other Interpretive Provisions.
(a) The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and
similar words refer to this Agreement as a whole and not to any
particular provision of this Agreement; and subsection, Section,
Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures,
notices and other writings, however evidenced.
(d) The term "including" is not limiting and means
"including without limitation."
(e) The term "to the best knowledge of the Company",
or any other term of similar import, means to the actual
knowledge of any executive officer of the Company or any employee
of the Company with management responsibility for the subject
matter as to which the Company's knowledge is relevant.
(f) In the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to
but excluding," and the word "through" means "to and including."
(g) Unless otherwise expressly provided herein,
(i) references to agreements (including this Agreement) and other
contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the
extent such amendments and other modifications are not prohibited
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by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or
regulation.
(h) The captions and headings of this Agreement are
for convenience of reference only and shall not affect the
interpretation of this Agreement.
(i) This Agreement and other Loan Documents may use
several different limitations, tests or measurements to regulate
the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in
accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Bank by way of
consent, approval or waiver shall be deemed modified by the
phrase "in its sole discretion."
(j) This Agreement and the other Loan Documents are
the result of negotiations between the Bank and the Company, have
been reviewed by counsel to the Bank and the Company, and are the
products of all parties. Accordingly, they shall not be
construed against the Bank merely because of the Bank's
involvement in their preparation.
1.03 Accounting Principles.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement
shall be made, in accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitment.
The Bank agrees, on the terms and conditions set forth
herein, to make term loans on not more than three separate dates
to the Company (each such loan, a "Loan") from time to time on
any Business Day during the period from the Closing Date to the
Availability Expiry Date, in an aggregate amount not to exceed
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the amount of Three Hundred Million Dollars ($300,000,000) (such
amount, as the same may be reduced under Section 2.05 or 2.07,
the Bank's "Commitment"). Amounts borrowed which are repaid or
prepaid by the Company may not be reborrowed.
2.02 Loan Accounts.
(a) The Loans shall be evidenced by one or more
accounts or records maintained by Bank in the ordinary course of
business. The accounts or records maintained by Bank shall be
conclusive absent manifest error of the amount of the Loans made
by the Bank to the Company, and the interest and payments
thereon. Any failure so to record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the
Company hereunder to pay any amount owing with respect to the
Loans.
(b) Upon the request of the Bank the Loans may be
evidenced by one or more promissory notes (the "Notes"), instead
of or in addition to loan accounts. The Bank shall endorse on
the schedules annexed to the Notes the date, amount and maturity
of each Loan made by it and the amount of each payment of
principal made by the Company with respect thereto. The Bank is
irrevocably authorized by the Company to endorse its Notes and
the Bank's record shall be conclusive absent manifest error;
provided, however, that the failure of the Bank to make, or an
error in making, a notation thereon with respect to any Loan
shall not limit or otherwise affect the obligations of the
Company hereunder or under any such Note to the Bank.
2.03 Procedure for Borrowing.
(a) Each Borrowing shall be made upon the Company's
irrevocable written notice delivered to the Bank in the form of a
Notice of Borrowing (which notice must be received by the Bank
(i) not later than 9:00 a.m. (San Francisco time) at least three
Business Days prior to the requested Borrowing Date, in the case
of Offshore Rate Loans and (ii) not later than 9:00 a.m. (San
Francisco time) at least one Business Day before the requested
Borrowing Date, in the case of Base Rate Loans), specifying:
(i) the amount of the Borrowing, which shall be in
a Minimum Amount;
(ii) the requested Borrowing Date, which shall be a
Business Day;
(iii) the Type of Loans comprising the Borrowing; and
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(iv) if applicable, the duration of the Interest
Period applicable to such Loans included in such notice,
subject to the provisions of the definition of "Interest
Period" herein. If the Notice of Borrowing fails to specify
the duration of the Interest Period for any Borrowing
comprised of Offshore Rate Loans, such Interest Period shall
be 90 days or three months, respectively;
provided, however, that with respect to the Borrowing to be made
on the Closing Date, the Notice of Borrowing shall be delivered
to the Bank not later than 8:00 a.m. (San Francisco time) one
Business Day before the Closing Date and such Borrowing will
consist of Base Rate Loans only.
(b) The proceeds of each such Borrowing will then be
made available to the Company by the Bank at the Bank's Payment
Office by crediting the account of the Company on the books of
the Bank with such proceeds, or if requested by the Company, by
wire transfer in accordance with written instructions provided to
the Bank by the Company.
(c) After giving effect to any Borrowing, unless the
Bank shall otherwise consent, there may not be more than five
different Interest Periods in effect.
2.04 Conversion and Continuation Elections.
(a) The Company may, upon irrevocable written notice
to the Bank in accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable
Interest Period, in the case of any other Type of Loans, to
convert any such Loans (or any part thereof in a Minimum
Amount) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Loans having Interest
Periods expiring on such day (or any part thereof in a
Minimum Amount);
provided that if at any time the aggregate amount of Offshore
Rate Loans in respect of any Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than
$5,000,000, such Offshore Rate Loans shall automatically convert
into Base Rate Loans, and on and after such date the right of the
Company to continue such Loans as, and convert such Loans into,
Offshore Rate Loans shall terminate.
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(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Bank (i) not later
than 9:00 a.m. (San Francisco time) at least three Business Days
in advance of the Conversion/ Continuation Date, if the Loans are
to be converted into or continued as Offshore Rate Loans; and
(ii) not later than 9:00 a.m. (San Francisco time) at least one
Business Day in advance of time on the Conversion/Continuation
Date, if the Loans are to be converted into Base Rate Loans,
specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted
or continued;
(iii) the Type of Loans resulting from the proposed
conversion or continuation; and
(iv) other than in the case of conversions into Base
Rate Loans, the duration of the requested Interest Period,
subject to the provisions of the definition of "Interest
Period" herein.
(c) If upon the expiration of any Interest Period
applicable to Offshore Rate Loans, the Company has failed to
select timely a new Interest Period to be applicable to such
Offshore Rate Loans or if any Default or Event of Default then
exists, the Company shall be deemed to have elected to convert
such Offshore Rate Loans into Base Rate Loans effective as of the
expiration date of such Interest Period.
(d) Unless the Bank otherwise consents, during the
existence of a Default or an Event of Default, the Company may
not elect to have a Loan converted into or continued as an
Offshore Rate Loan.
(e) After giving effect to any conversion or
continuation of Loans, unless the Bank shall otherwise consent,
there may not be more than five different Interest Periods in
effect.
2.05 Voluntary Termination or Reduction of Commitments
. The Company may, upon not less than three Business Days'
prior notice to the Bank, terminate the Commitment, or
permanently reduce the Commitment, provided that the aggregate
amount of any partial reduction is in a Minimum Amount. Once
reduced in accordance with this Section 2.05, the Commitment may
not be increased. All accrued commitment fees to, but not
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including, the effective date of any termination of Commitment,
shall be paid on the effective date of such termination.
2.06 Optional Prepayments
. Subject to Section 3.04, the Company may, at any time or
from time to time, upon not less than (i) three Business Days'
irrevocable notice to the Bank (in the case of any Offshore Rate
Loans), and (ii) one Business Day's irrevocable notice to the
Bank (in the case of any Base Rate Loans), ratably prepay Loans
in whole or in part, in Minimum Amounts. Such notice of
prepayment shall specify the date and amount of such prepayment,
and the Type(s) of Loans to be prepaid. If such notice is given
by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable
on the date specified therein, together with (other than in the
case of Base Rate Loans) accrued interest to each such date on
the amount prepaid and any amounts required pursuant to Section
3.04. Optional prepayments of Loans shall be applied in inverse
order of maturity.
2.07 Mandatory Prepayments of Loans; Mandatory Commitment
Reductions.
(a) If on the Availability Expiry Date the Commitment
shall exceed the outstanding principal amount of the Loans made,
such unused portion of the Commitment shall automatically
terminate on the Availability Expiry Date.
(b) If the Company or any of its Subsidiaries shall at
any time after the Closing Date make or agree to make a
Disposition, or shall suffer an Event of Loss, then (i) the
Company shall promptly notify the Bank of such proposed
Disposition or Event of Loss (including the amount of the
estimated Net Proceeds to be received in respect thereof) and
(ii) promptly upon receipt by the Company or the Subsidiary of
the Net Proceeds of such Disposition or Event of Loss, the
Company shall prepay Loans in an aggregate amount equal to the
amount of such Net Proceeds.
(c) If after the Closing Date the Company issues new
common or preferred equity, the Company shall promptly notify the
Bank of the estimated Net Proceeds of such issuance to be
received by the Company. Promptly upon its receipt of Net
Proceeds of such issuance, the Company shall prepay Loans in an
aggregate amount equal to the amount of such Net Proceeds;
provided that at any time the Company has attained Investment
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Grade debt ratings, such prepayments shall not be required
hereunder. As used herein, "Investment Grade" means actual or
implied senior unsecured long-term non-credit enhanced debt
ratings equal to or better than BBB- from S&P and Baa3 from
Moody's.
(d) If after the Closing Date the Company or any of
its Subsidiaries issues any debt securities (other than
commercial paper issued by the Company or its Subsidiaries up to
an aggregate amount of $200,000,000 at any time outstanding), the
Company shall promptly notify the Bank of the estimated Net
Proceeds of such issuance to be received by the Company or such
Subsidiary. Promptly upon the Company's or such Subsidiary's
receipt of the Net Proceeds of such issuance, the Company shall
prepay Loans in an aggregate amount equal to the amount of such
Net Proceeds.
(e) Any prepayments pursuant to this Section 2.07
shall be applied first to any Base Rate Loans then outstanding
and then to Offshore Rate Loans with the shortest Interest
Periods remaining; provided, however, that if the amount of Base
Rate Loans then outstanding is not sufficient to satisfy the
entire prepayment requirement, the Company may, at its option,
place any amounts which it would otherwise be required to use to
prepay Offshore Rate Loans on a day other than the last day of
the Interest Period therefor in an interest-bearing account
pledged to the Bank until the end of such Interest Period at
which time such pledged amounts will be applied to prepay such
Offshore Rate Loans. The Company shall pay, together with each
prepayment under this Section 2.07, accrued interest on the
amount of any Offshore Rate Loans prepaid and any amounts
required pursuant to Section 3.04.
2.08 Repayment
. The Company shall repay to the Bank the aggregate
outstanding principal amount of the Loans on the Bridge Maturity
Date.
2.09 Interest.
(a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Offshore Rate or the Base Rate, as
the case may be (and subject to the Company's right to convert to
other Types of Loans under Section 2.04), plus the Applicable
Margin.
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(b) Interest on each Loan shall be paid in arrears on
each Interest Payment Date applicable to such Loan. Interest
shall also be paid on the date of any prepayment of Loans (other
than Base Rate Loans) under Section 2.06 or 2.07 for the portion
of such Loans so prepaid and upon payment (including prepayment)
in full thereof and, during the existence of any Event of
Default, interest shall be paid on demand of the Bank.
(c) Notwithstanding subsection (a) of this Section,
while any Event of Default exists or after acceleration, the
Company shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal
amount of all outstanding Obligations, at a rate per annum which
is determined by adding 2% per annum to the Applicable Margin
then in effect for such Loans and, in the case of Obligations not
subject to an Applicable Margin, at a rate per annum equal to the
Base Rate plus the Applicable Margin then in effect for Base Rate
Loans, plus 2% per annum; provided, however, that on and after
the expiration of any Interest Period applicable to any Offshore
Rate Loan outstanding on the date of occurrence of such Event of
Default or acceleration, the principal amount of such Loan shall,
during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Base
Rate, plus the Applicable Margin then in effect for Base Rate
Loans, plus 2% per annum.
(d) Anything herein to the contrary notwithstanding,
the obligations of the Company hereunder shall be subject to the
limitation that payments of interest shall not be required for
any period for which interest is computed hereunder, to the
extent (but only to the extent) that contracting for or receiving
such payment by Bank would be contrary to the provisions of any
law applicable to Bank limiting the highest rate of interest that
may be lawfully contracted for, charged or received by Bank, and
in such event the Company shall pay Bank interest at the highest
rate permitted by applicable law.
2.10 Fees.
(a) Commitment Fees. The Company shall pay a
commitment fee on the actual daily unused portion of the Bank's
Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily
utilization for that quarter as calculated by the Bank at a rate
per annum equal to the Applicable Fee Amount. Such commitment
fee shall accrue from the date hereof to the Availability Expiry
Date and shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter to the Availability
Expiry Date, with the final payment to be made on the
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Availability Expiry Date, as the case may be; provided that in
connection with any reduction or termination of Commitment under
Section 2.05 or Section 2.07, the accrued commitment fee
calculated for the period ending on such date shall also be paid
on the date of reduction or termination. The commitment fees
provided in this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time during
which one or more conditions in Article IV are not met.
(b) Utilization Fee. If at any time the Applicable
Margin is determined by reference to Level 1 as set forth in the
Pricing Grid in Annex I, the Company shall pay to the Bank a
utilization fee on the outstanding Loans, equal to .125% per
annum (any period during which such utilization fee is payable
being hereinafter referred to as a "Utilization Fee Accrual
Period"). Such utilization fee shall be computed on a quarterly
basis in arrears on the last Business Day of each calendar
quarter, shall accrue from the first day of any Utilization Fee
Accrual Period to the last day thereof and shall be due and
payable quarterly in arrears on the last Business Day of each
calendar quarter to the Bridge Maturity Date, with the final
payment to be made on the Bridge Maturity Date. The utilization
fee, if applicable, will be added to the Applicable Margin.
(c) Other Fees. The Company shall also pay such other
fees to the Bank as are required by the Fee Letter.
2.11 Computation of Fees and Interest.
(a) All computations of interest for Base Rate Loans
when the Base Rate is determined by the Bank's "reference rate"
shall be made on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed. All other computations of
fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more interest being
paid than if computed on the basis of a 365-day year). Interest
and fees shall accrue during each period during which interest or
such fees are computed from the first day thereof to the last day
thereof.
(b) Each determination of an interest rate by the Bank
shall be conclusive and binding on the Company in the absence of
manifest error. The Bank will, at the request of the Company,
deliver to the Company a statement showing the quotations used by
the Bank in determining any interest rate and the resulting
interest rate.
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2.12 Payments by the Company.
(a) All payments to be made by the Company shall be
made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Company
shall be made to the Bank at the Bank's Payment Office, and shall
be made in Dollars and in immediately available funds, no later
than 11:00 a.m. (San Francisco time) on the date specified
herein.
(b) Subject to the provisions set forth in the
definition of "Interest Period" herein, whenever any payment is
due on a day other than a Business Day, such payment shall be
made on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or
fees, as the case may be.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Any and all payments by the Company to the Bank
under this Agreement and any other Loan Document shall be made
free and clear of, and without deduction or withholding for, any
Taxes. In addition, the Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct
or withhold any Taxes, Other Taxes or Further Taxes from or in
respect of any sum payable hereunder to the Bank, then:
(i) the sum payable shall be increased as necessary
so that, after making all required deductions and
withholdings (including deductions and withholdings
applicable to additional sums payable under this Section),
the Bank receives and retains an amount equal to the sum it
would have received and retained had no such deductions or
withholdings been made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount deducted
or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
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(iv) the Company shall also pay to the Bank at the
time interest is paid, Further Taxes in the amount that the
Bank specifies as necessary to preserve the after-tax yield
the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold harmless
the Bank for the full amount of (i) Taxes, (ii) Other Taxes, and
(iii) Further Taxes in the amount that the Bank specifies as
necessary to preserve the after-tax yield such Bank would have
received if such Taxes, Other Taxes or Further Taxes had not been
imposed, and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes
were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the
Bank makes written demand therefor.
(d) Within 30 days after the date of any payment by
the Company of Taxes, Other Taxes or Further Taxes, the Company
shall furnish to the Bank the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment
reasonably satisfactory to the Bank.
(e) If the Company is required to pay any amount to
the Bank pursuant to subsection (b) or (c) of this Section, then
the Bank shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its
Lending Office so as to eliminate any such additional payment by
the Company which may thereafter accrue, if such change in the
sole judgment of the Bank is not otherwise disadvantageous to
such Bank.
3.02 Illegality.
(a) If the Bank determines that the introduction of
any Requirement of Law, or any change in any Requirement of Law,
or in the interpretation or administration of any Requirement of
Law, has made it unlawful, or that any central bank or other
Governmental Authority has asserted that it is unlawful, for the
Bank or its applicable Lending Office to make Offshore Rate
Loans, then, on notice thereof by the Bank to the Company, any
obligation of the Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies the Company that the
circumstances giving rise to such determination no longer exist.
(b) If the Bank determines that it is unlawful to
maintain any Offshore Rate Loan, the Company shall, upon its
receipt of notice of such fact and demand from the Bank, prepay
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in full such Offshore Rate Loans of the Bank then outstanding,
together with interest accrued thereon and amounts required under
Section 3.04, either on the last day of the Interest Period
thereof, if the Bank may lawfully continue to maintain such
Offshore Rate Loans to such day, or immediately, if the Bank may
not lawfully continue to maintain such Offshore Rate Loan. If
the Company is required to so prepay any Offshore Rate Loan, then
concurrently with such prepayment, the Company shall borrow from
the affected Bank, in the amount of such repayment, a Base Rate
Loan.
(c) If the obligation of the Bank to make or maintain
Offshore Rate Loans has been so terminated or suspended, the
Company may elect, by giving notice to the Bank that all Loans
which would otherwise be made by the Bank as Offshore Rate Loans
shall be instead Base Rate Loans.
3.03 Increased Costs and Reduction of Return.
(a) If the Bank determines that, due to either (i) the
introduction of or any change in or in the interpretation of any
law or regulation or (ii) the compliance by the Bank with any
guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall
be any increase in the cost to the Bank of agreeing to make or
making, funding or maintaining any Offshore Rate Loans, then the
Company shall be liable for, and shall from time to time, upon
demand, pay to the Bank, additional amounts as are sufficient to
compensate the Bank for such increased costs.
(b) If the Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change
in any Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or
(iv) compliance by the Bank (or its Lending Office) or any
corporation controlling the Bank with any Capital Adequacy
Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Bank or any
corporation controlling the Bank and (taking into consideration
the Bank's or such corporation's policies with respect to capital
adequacy and the Bank's desired return on capital) determines
that the amount of such capital is increased as a consequence of
its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of the Bank to the Company, the
Company shall pay to the Bank, from time to time as specified by
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the Bank, additional amounts sufficient to compensate the Bank
for such increase.
3.04 Funding Losses
. The Company shall reimburse the Bank and hold the Bank
harmless from any loss or expense which the Bank may sustain or
incur as a consequence of:
(a) the failure of the Company to make on a timely
basis any payment of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or
convert a Loan after the Company has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Conversion/
Continuation;
(c) the failure of the Company to make any prepayment
in accordance with any notice delivered under Section 2.06 or
2.07;
(d) the prepayment (including pursuant to Section 2.06
or 2.07) or other payment (including after acceleration thereof)
of an Offshore Rate Loan on a day that is not the last day of the
relevant Interest Period; or
(e) the conversion under Section 2.04 of any Offshore
Rate Loan to a Base Rate Loan on a day that is not the last day
of the relevant Interest Period;
including any such loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain its Offshore
Rate Loans or from fees payable to terminate the deposits from
which such funds were obtained. For purposes of calculating
amounts payable by the Company to the Bank under this Section and
under subsection 3.03(a), each Offshore Rate Loan made by the
Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at
the LIBOR used in determining the Offshore Rate for such Offshore
Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Loan is in
fact so funded.
3.05 Inability to Determine Rates
. If the Bank determines that for any reason adequate and
reasonable means do not exist for determining the Offshore Rate
for any requested Interest Period with respect to a proposed
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Borrowing of Offshore Rate Loans or conversion or
continuation of Offshore Rate Loans, or that the Offshore Rate
applicable pursuant to subsection 2.09(a) for any requested
Interest Period with respect to a proposed Borrowing of Offshore
Rate Loans or a conversion into or continuation of Offshore Rate
Loans does not adequately and fairly reflect the cost to the Bank
of funding such Loans, the Bank will promptly so notify the
Company. Thereafter, the obligation of the Bank to make or
maintain Offshore Rate Loans, as the case may be, hereunder shall
be suspended until the Bank revokes such notice in writing. Upon
receipt of such notice, the Company may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by
it. If the Company does not revoke such Notice, the Bank shall
make, convert or continue the Loans, as proposed by the Company,
in the amount specified in the applicable notice submitted by the
Company, but such Loans shall be made, converted or continued as
Base Rate Loans instead of Offshore Rate Loans.
3.06 Reserves on Offshore Rate Loans
. The Company shall pay to the Bank, as long as the Bank
shall be required under regulations of the FRB to maintain
reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional interest on the unpaid
principal amount of each Offshore Rate Loan equal to the actual
costs of such reserves allocated to such Loan by the Bank (as
determined by the Bank in good faith, which determination shall
be conclusive absent manifest error), payable on each date on
which interest is payable on such Loan, provided the Company
shall have received at least 15 days' prior written notice of
such additional interest from the Bank. If the Bank fails to
give notice 15 days prior to the relevant Interest Payment Date,
such additional interest shall be payable 15 days from receipt of
such notice.
3.07 Certificates of Bank
(a) If the Bank claims reimbursement or compensation
under this Article III, it shall deliver to the Company a
certificate setting forth in reasonable detail the amount payable
to it hereunder and such certificate shall be conclusive and
binding on the Company in the absence of manifest error.
(b) Failure or delay on the part of the Bank to demand
compensation, reimbursement or indemnity under this Article III
for Taxes, Further Taxes, Other Taxes, increased costs, reduction
in amounts received or receivable, or reduction in return on
capital shall not constitute a waiver of the Bank's right to
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demand such compensation; provided that the Bank shall be
entitled to compensation under this Article III for any amounts
with respect to any date unless the Bank shall have notified the
Company not more than 90 days after the later of (i) such date
and (ii) the date on which the Bank shall have become aware of
such Taxes, Further Taxes, Other Taxes, costs or reductions.
3.08 Survival
. The agreements and obligations of the Company in this
Article III shall survive the termination of the Commitment and
the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loan
. The obligation of the Bank to make its initial Loan
hereunder shall be subject to the condition that the Bank shall
have received on or before the Closing Date all of the following,
in form and substance reasonably satisfactory to it:
(a) Credit Agreement. This Agreement executed on or
before July 30, 1999 by the Company;
(b) Resolutions; Incumbency. Each of the following:
(i) Copies of the resolutions of the board of
directors of the Company authorizing the transactions
contemplated hereby, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Company; and
(ii) certificates of the Secretary or Assistant
Secretary of the Company, dated as of the Closing Date,
certifying the names, titles and true signatures of the
officers of the Company authorized to execute, deliver and
perform this Agreement and all other Documents to be
delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of
the documents required to be delivered under subsection 5.01(c)
of the Syndicate Credit Agreement;
(d) Legal Opinions. Each of the following:
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(i) An opinion of Stoel Rives LLP, counsel to the
Company and addressed to the Bank, dated the Closing Date,
substantially in the form of Exhibit D to the Syndicate
Credit Agreement; and
(ii) a favorable opinion of Brobeck, Phleger &
Harrison LLP, special counsel to the Bank, dated the Closing
Date;
(e) Payment of Fees. Evidence of payment by the
Company of all accrued and unpaid fees, costs and expenses to the
extent then due and payable on the Closing Date, together with
Attorney Costs of the Bank to the extent invoiced prior to or on
the Closing Date, plus such additional amounts of Attorney Costs
as shall constitute the Bank's reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter
preclude final settling of accounts between the Company and
Bank); including any such costs, fees and expenses arising under
or referenced in Sections 2.10 and 9.04;
(f) Documents and Actions Relating to the Transaction.
A certificate of a Responsible Officer of the Company required
under subsection 5.01(f) of the Syndicate Credit Agreement;
(g) Documents and Actions Relating to the Syndicate
Credit Agreement. A certificate of a Responsible Officer of the
Company certifying that all conditions precedent to the closing
of the loans under the Syndicate Credit Agreement shall have been
satisfied in accordance with the terms and conditions thereof
(other than any conditions relating to the closing of the
transactions contemplated by this Agreement);
(h) Certificate. A certificate signed by a
Responsible Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in
Article V are true and correct on and as of such date, as
though made on and as of such date (except to the extent
such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct
as of such earlier date); and
(ii) no Default or Event of Default exists or would
result from the Loans.
(i) Existing Credit Facility. Evidence satisfactory
to the Bank that the commitments to extend credit under the
Existing Credit Facility have been terminated and that all
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principal, interest, charges and fees due thereunder have been
paid or that arrangements reasonably satisfactory to the Bank for
the payment thereof have been made by the Bank (the Company
acknowledging that such commitments shall be terminated
simultaneously with the closing hereunder); and
(j) Other Documents.
(i) The financial statements and other documents
required to be delivered under subsection 5.01(j) of the
Syndicate Credit Agreement; and
(ii) such other approvals, opinions, documents or
materials as the Bank may reasonably request.
(k) Notice of Borrowing. The Bank shall have received
a Notice of Borrowing.
(l) Representations and Warranties. The
representations and warranties in Article V shall be true and
correct on and as of the Closing Date with the same effect as if
made on and as of the Closing Date (except to the extent such
representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such
earlier date); and
(m) No Existing Default. No Default or Event of
Default shall exist or shall result from the Loan.
4.02 Conditions to All Subsequent Loans
. The obligation of the Bank to make any subsequent Loan
after the Closing Date shall be subject to the satisfaction of
the following conditions precedent on the relevant Borrowing
Date:
(a) Notice. The Bank shall have received a Notice of
Borrowing;
(b) Representations and Warranties. The
representations and warranties in Article V shall be true and
correct on and as of such Borrowing Date with the same effect as
if made on and as of such Borrowing Date (except to the extent
such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such
earlier date) and except that this subsection (b) shall be deemed
instead to refer to the last day of the most recent quarter and
year for which financial statements have then been delivered in
respect of the representation and warranty made in
subsection 5.11(a));
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(c) No Existing Default. No Default or Event of
Default shall exist or shall result from such Borrowing; and
(d) No Material Adverse Effect. There has occurred
since December 31, 1998 (as to the Company and its Subsidiaries)
and February 28, 1999 (as to the Acquired Company and its
Subsidiaries), no event or circumstances that has resulted or
could reasonably be expected to result in a Material Adverse
Effect.
Each Notice of Borrowing submitted by the Company hereunder shall
constitute a representation and warranty by the Company
hereunder, as of the date of each such notice and as of each
Borrowing Date, that the conditions in this Section 4.02 are
satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Bank that:
5.01 Corporate Existence and Power
. The Company and each of its Subsidiaries:
(a) (i) (in the case of the Company) is a corporation
duly organized and validly existing under the laws of the State
of Oregon, and (ii) (in the case of any Subsidiary) is a
corporation, limited liability company or partnership duly
organized or formed, as the case may be, validly existing and in
good standing (if applicable) under the laws of the jurisdiction
of its incorporation or formation;
(b) (i) has the organizational power and authority and
all material governmental licenses, authorizations, consents and
approvals to own its assets and carry on its business and
(ii) has the organizational power and authority and all
governmental licenses, authorizations, consents and approvals to
execute, deliver, and perform its obligations under the Documents
to which it is a party;
(c) is duly qualified, licensed and in good standing
under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires
such qualification, license or good standing; and
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(d) is in compliance with all material Requirements of
Law; except, in each case referred to in clause (a)(ii), (b)(i),
(c) or (d) where failure to do so could not reasonably be
expected to have a Material Adverse Effect.
5.02 Corporate Authorization; No Contravention
. The execution, delivery and performance by the Company
and its Subsidiaries of this Agreement and each other Document to
which such Person is party, have been duly authorized by all
necessary corporate action, and do not and will not:
(a) contravene the terms of any of that Person's
Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien (other than
Permitted Liens) under, any document evidencing any Contractual
Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which
such Person or its property is subject; or
(c) violate any Requirement of Law.
5.03 Governmental Authorization
. No approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental
Authority is necessary or required in connection with (i) the
execution, delivery or performance by, or enforcement against,
the Company or any of its Subsidiaries of this Agreement or any
other Document or (ii) the consummation of the Tender Offer or
the Transaction, except, in the case of this clause (ii),
(A) such as will be obtained before the Tender Offer Expiry Date
or (B) where failure to obtain or effect any of the foregoing
could not reasonably be expected to have a Material Adverse
Effect.
5.04 Binding Effect
.This Agreement and each other Document to which the Company
or any of its Subsidiaries is a party constitute the legal, valid
and binding obligations of the Company or the Subsidiary party
thereto, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
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(a) The Merger Agreement is in full force and effect,
enforceable against the parties thereto in accordance with its
terms, and has not been amended or modified in any material
respect since its date of execution. The Offer has not been
amended or modified in any material respect.
5.05 Litigation
. Except as specifically disclosed in Schedule 6.05 to the
Syndicate Credit Agreement, there are no actions, suits,
proceedings, claims or disputes pending, or to the best knowledge
of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the
Company, the Acquired Company, or its Subsidiaries or any of
their respective properties which:
(a) purport to affect or pertain to this Agreement or
any other Document, or any of the transactions contemplated
hereby or thereby; or
(b) if determined adversely to the Company or its
Subsidiaries, would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order
or any order of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other
Document, or directing that the transactions provided for herein
or therein not be consummated as herein or therein provided.
5.06 No Defaults
. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company. Neither
the Company nor any Subsidiary is in default under or with
respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, could reasonably
be expected to have a Material Adverse Effect, or that would
create an Event of Default under subsection 9.01(e) of the
Syndicate Credit Agreement.
5.07 ERISA Compliance
. Except as specifically disclosed in Schedule 6.07 to the
Syndicate Credit Agreement:
(a) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and
other federal or state law. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable
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determination letter from the IRS and to the best knowledge of
the Company, nothing has occurred which would cause the loss of
such qualification where the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect. The
Company and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been
made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Company, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has
resulted or could reasonably be expected to result in a Material
Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension
Liability; (iii) neither the Company nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA);
(iv) neither the Company nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 or 4243
of ERISA with respect to a Multiemployer Plan; and (v) neither
the Company nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
5.08 Use of Proceeds; Margin Regulations
. The proceeds of the Loans are to be used solely for the
purposes set forth in and permitted by Section 6.05 and Section
7.01. Neither the Company nor any Subsidiary is generally
engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin
Stock.
5.09 Title to Properties; Liens
. The Company and each Subsidiary have good record and
marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct
of their respective businesses, except for such properties and
defects in title as could not, individually or in the aggregate,
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reasonably be expected to have a Material Adverse Effect. The
property of the Company and its Subsidiaries is subject to no
Liens, other than Permitted Liens.
5.10 Taxes
. The Company and its Significant Subsidiaries have filed
all Federal and other material tax returns and reports required
to be filed, and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise
due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves
have been provided in accordance with GAAP. There is no proposed
tax assessment against the Company or any Subsidiary that would,
if made, have a Material Adverse Effect.
5.11 Financial Condition
(a) . (a) The audited consolidated balance sheet of
the Company and its Subsidiaries dated March 29, 1998, the
unaudited balance sheet of the Company and its Subsidiaries dated
March 28, 1999 and, in each case, the related consolidated
statements of income or operations, shareholders' equity and cash
flows for the fiscal period ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby,
except as otherwise expressly noted therein, subject to the
absence of footnotes and ordinary, good faith year end audit
adjustments in the case of quarterly financial statements;
(ii) fairly present in all material respects the
financial condition of the Company and its Subsidiaries as
of the date thereof and the results of operations and cash
flows for the periods covered thereby; and
(iii) except as specifically disclosed in Schedule
6.11 to the Syndicate Credit Agreement, reflect, by footnote
disclosure or otherwise, all material Indebtedness and other
liabilities, direct or contingent, of the Company and its
consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent
Obligations.
(b) The pro forma financial statements of the Company
and its Subsidiaries referred to in subsection 4.01(j)(i) were
prepared on a basis consistent with GAAP as applied to the
Company's financial statements, have been prepared in good faith
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by the Company based on reasonable assumptions, are based on the
best information available to the Company as of the date of
delivery thereof, accurately reflect all material adjustments
required to be made to give effect to the Transaction, and
present fairly on a pro forma basis the estimated consolidated
financial position of the Company as of the date thereof,
assuming consummation of the Transaction.
(c) Since December 31, 1998 (as to the Company and its
Subsidiaries) and February 28, 1999 (as to the Acquired Company
and its Subsidiaries) there has not been any Material Adverse
Effect.
5.12 Environmental Matters
. The Company conducts in the ordinary course of business a
review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties,
and as a result thereof the Company has reasonably concluded
that, except as specifically disclosed in Schedule 6.12 to the
Syndicate Credit Agreement, such Environmental Laws and
Environmental Claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
5.13 Regulated Entities
. None of the Company, any Person controlling the Company,
or any Subsidiary, is an "Investment Company" within the meaning
of the Investment Company Act of 1940. The Company is not
subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness.
5.14 No Burdensome Restrictions; No Restrictions on
Subsidiary Dividends
. Neither the Company nor any Subsidiary is a party to or
bound by any Contractual Obligation, or subject to any
restriction in any Organization Document, or any Requirement of
Law, which could reasonably be expected to have a Material
Adverse Effect. Except as permitted by Section 8.16 of the
Syndicate Credit Agreement, neither the Company nor any
Subsidiary is a party to or bound by any Contractual Obligation
which expressly restricts, limits or prohibits the payment of
dividends by any Subsidiary or the making of any other
distribution in respect of such Subsidiary's capital stock.
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5.15 Copyrights, Patents, Trademarks and Licenses, Etc
. The Company or its Subsidiaries own or are licensed or
otherwise have the right to use all of the material patents,
trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the
best knowledge of the Company, no slogan or other advertising
device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by the
Company or any Subsidiary infringes upon any rights held by any
other Person. Except as specifically disclosed in Schedule 6.05
to the Syndicate Credit Agreement, no claim or litigation
regarding any of the foregoing is pending or, to the best
knowledge of the Company, threatened, and no patent, invention,
device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the best knowledge
of the Company, proposed, which, in either case, could reasonably
be expected to have a Material Adverse Effect.
5.16 Subsidiaries
. As of the Closing Date (after giving effect to the
Transaction), the Company has no Subsidiaries other than those
specifically disclosed in Schedule 6.16 to the Syndicate Credit
Agreement.
5.17 Insurance
. Except as specifically disclosed in Schedule 6.17 to the
Syndicate Credit Agreement, the properties of the Company and its
Subsidiaries are insured with financially sound and reputable
insurance companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Company or
such Subsidiary operates except to the extent the Company and its
Subsidiaries maintain a plan or plans of self-insurance to such
extent and covering such risks as is usual for companies of
similar size engaged in similar businesses and owning similar
properties.
5.18 Solvency
. The Company and its Significant Subsidiaries (taken as a
whole) are Solvent.
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5.19 Swap Obligations
. Neither the Company nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts,
other than Permitted Swap Obligations. The Company has
undertaken its own independent assessment of its consolidated
assets, liabilities and commitments and has considered
appropriate means of mitigating and managing risks associated
with such matters and has not relied on any swap counterparty or
any Affiliate of any swap counterparty in determining whether to
enter into any Swap Contract.
5.20 Year 2000
. On the basis of a comprehensive review and assessment of
the Company's and its Subsidiaries' systems and equipment and
inquiry made of the Company's and its Subsidiaries' material
suppliers, vendors and customers, the Company's management is of
the view that the "Year 2000 problem" (that is, the inability of
computers, as well as embedded microchips in non-computing
devices, to perform properly date-sensitive functions with
respect to certain dates prior to and after December 31, 1999),
including costs of remediation, will not result in a Material
Adverse Effect. The Company and its Subsidiaries have developed
feasible contingency plans adequately to ensure uninterrupted and
unimpaired business operation in the event of failure of their
own or a third party's systems or equipment due to the Year 2000
problem, including those of vendors, customers, and suppliers, as
well as a general failure of or interruption in its
communications and delivery infrastructure.
5.21 Merger Representations
. All representations and warranties of the Purchaser or
the Company in the Merger Agreement are true and correct in all
material respects as of each date made or deemed made. To the
Company's knowledge, all representations and warranties of the
Acquired Company in the Merger Agreement are true and correct in
all material respects as of each date made or deemed made.
5.22 Full Disclosure
. None of the representations or warranties made by the
Company or any Subsidiary in the Documents as of the date such
representations and warranties are made or deemed made, and none
of the statements contained in the Offer or in any other exhibit,
report, statement or certificate furnished by or on behalf of the
Company or any Subsidiary in connection with the Documents
(including the offering and disclosure materials delivered by or
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on behalf of the Company to the Bank prior to the Closing
Date), contains any untrue statement of a material fact or omits
any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances
under which they are made, not misleading as of the time when
made or delivered; provided that to the extent any such
information, report, financial statement, exhibit or schedule was
based upon or constitutes a forecast or projection, the Company
represents only that it acted in good faith and utilized
reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule (it
being understood that forecasts and projections by their nature
involve approximations and uncertainties).
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as the Bank shall have any Commitment hereunder, or
any Loan or other Obligation shall remain unpaid or unsatisfied,
unless the Bank waives compliance in writing:
6.01 Financial Statements and Other Information
. The Company shall deliver to the Bank, in form and detail
reasonably satisfactory to the Bank, the financial statements and
other documents, notices and certificates described in Section
7.01, 7.02 and 7.03 of the Syndicate Credit Agreement within the
time limits stipulated within such sections.
6.02 Other Information
. The Company shall promptly furnish to the Bank such
additional information regarding the business, financial or
corporate affairs of the Company or any Subsidiary as the Bank
may from time to time reasonably request.
6.03 Notices
. The Company shall promptly notify the Bank:
(a) but in no event more than 10 days after a
Responsible Officer becomes aware of the occurrence or existence
thereof, of the occurrence of any Default or Event of Default;
and
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(b) of any proposed waiver, amendment or modification
of the Syndicate Credit Agreement.
Each notice under this Section shall be accompanied by
a written statement by a Responsible Officer setting forth
details of the occurrence referred to therein, and stating what
action the Company or any affected Subsidiary proposes to take
with respect thereto and at what time. Each notice under
subsection 6.03(a) shall describe with particularity any and all
clauses or provisions of the Syndicate Credit Agreement, this
Agreement or other Loan Document, that have been (or foreseeably
will be) breached or violated, but the failure to correctly list
all such sections shall not, of itself, constitute a failure to
comply with this Section.
6.04 Inspection of Property and Books and Records
. The Company shall, and shall cause each Subsidiary to,
maintain proper books of record and account, in which full, true
and correct entries in conformity with local statutory reporting
requirements or GAAP consistently applied, as applicable, shall
be made of all financial transactions and matters involving the
assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit,
representatives and independent contractors of the Bank to visit
and inspect any of their respective properties, to examine their
respective corporate, financial, operating and other records, and
make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at
such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to
the Company; provided, however, when an Event of Default exists
the Bank may do any of the foregoing at the expense of the
Company at any time during normal business hours and without
advance notice.
6.05 Use of Proceeds
. The Company shall use the proceeds of the Loans: (i) to
fund the purchase of shares tendered pursuant to the Tender
Offer, the consummation of the Merger and the payment of fees,
costs and expenses arising out of the Transaction; (ii) to
refinance Indebtedness of the Acquired Company; (iii) to
refinance the Indebtedness of the Company and certain of its
Subsidiaries under the Existing Credit Facility; and (iv) for
working capital and other general corporate purposes not in
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contravention of any Requirement of Law or of any Document
(including for purposes of undertaking Acquisitions; provided
that such Acquisitions do not contravene any provision of this
Agreement or of any other Document or any applicable Requirement
of Law).
6.06 Covenants under Syndicate Credit Agreement
. The Company shall at all times perform and comply or, as
appropriate, cause the performance and compliance with all
covenants set forth in Article VII of the Syndicate Credit
Agreement, as if such covenants were set forth in full herein.
6.07 Further Assurances
(a) The Company shall ensure that all written
information, exhibits and reports furnished to the Bank do not
and will not contain any untrue statement of a material fact and
do not and will not omit to state any material fact or any fact
necessary to make the statements contained therein not misleading
in light of the circumstances in which made, and will promptly
disclose to the Bank and correct any defect or error that may be
discovered therein or in any Document or in the execution,
acknowledgement or recordation thereof.
(b) Promptly upon request by the Bank, the Company
shall do, execute, acknowledge, and deliver any and all such
further acts, certificates, assurances and other instruments the
Bank may reasonably require from time to time in order to carry
out more effectively the purposes of this Agreement or any other
Loan Document.
ARTICLE VII
NEGATIVE COVENANTS
So long as the Bank shall have any Commitment hereunder, or
any Loan or other Obligation shall remain unpaid or unsatisfied:
7.01 Use of Proceeds
. The Company shall not, and shall not suffer or permit any
Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) (A) to purchase or carry Margin Stock, (B) to
repay or otherwise refinance indebtedness of the Company or
others incurred to purchase or carry Margin Stock, or (C) to
extend credit for the purpose of purchasing or carrying any
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Margin Stock, in each case in violation of, or for a purpose
which violates, or would be inconsistent with, Regulation T, U or
X of the FRB, or (ii) to finance an Acquisition which is
contested at any time by the board of directors or equivalent
governing body of the acquired Person or the Person from whom the
Acquisition is to be made (an "Unfriendly Acquisition") or for a
bid to make an Unfriendly Acquisition.
7.02 Covenants Under Syndicate Credit Agreement
. The Company shall at all times perform and comply or, as
appropriate, cause the performance and compliance with all
covenants set forth in Article VIII of the Syndicate Credit
Agreement, as if such covenants were set forth in full herein.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default
. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. The Company fails to make, (i) when
and as required to be made herein, payments of any amount of
principal of any Loan, or (ii) within five days after the same
becomes due, payment of any interest, fee or any other amount
payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or
warranty by the Company or any Subsidiary made or deemed made
herein, in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the
Company, any Subsidiary, or any Responsible Officer, furnished at
any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the
date made or deemed made; or
(c) Specific Defaults. The Company fails to perform
or observe any term, covenant or agreement contained in any of
Section 6.01, 6.02(a) or 6.03, or in Article VII; or
(d) Other Defaults. The Company or any Subsidiary
party thereto fails to perform or observe any other term or
covenant contained in this Agreement or any other Loan Document,
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and such default shall continue unremedied for a period of 30
days after the earlier of (i) the date upon which a Responsible
Officer knew or reasonably should have known of such failure or
(ii) the date upon which written notice thereof is given to the
Company by the Bank; or
(e) Insolvency; Voluntary Proceedings. The Company or
any Significant Subsidiary (i) ceases or fails to be solvent, or
generally fails to pay, or admits in writing its inability to
pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to
itself; or (iv) takes any action to effectuate or authorize any
of the foregoing; or
(f) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Company
or any Significant Subsidiary, or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied
against a substantial part of the Company's or any Significant
Subsidiary's properties, and any such proceeding or petition
shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released,
vacated or fully bonded within 60 days after commencement, filing
or levy; (ii) the Company or any Significant Subsidiary admits
the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order
under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Company or any Significant Subsidiary acquiesces in the
appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its
property or business; or
(g) Default under Syndicate Credit Agreement. Any
Syndicate Credit Agreement Event of Default shall have occurred
and be continuing.
8.02 Remedies
. If any Event of Default occurs, the Bank may do any or
all of the following:
(a) declare the obligation of the Bank to make any
Loans hereunder to be terminated, whereupon such obligation shall
be terminated;
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(b) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Company; and
(cn exercise all rights and
remedies available to it under the Loan Documents or applicable
law;
provided, however, that upon the occurrence of any event
specified in subsection (e) or (f) of Section 8.01 (in the case
of clause (i) of subsection (f) upon the expiration of the 60-day
period mentioned therein), the obligation of the Bank to make
Loans shall automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable
without further act of the Bank.
ARTICLE IX
MISCELLANEOUS
9.01 Amendments and Waivers
. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom,
shall be effective unless the same shall be in writing and signed
by the Bank and the Company, and then any such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given.
9.02 Notices
(a) All notices, requests, consents, approvals,
waivers and other communications shall be in writing (including,
unless the context expressly otherwise provides, by facsimile
transmission), and mailed, faxed or delivered, to the address or
facsimile number specified for notices on Schedule 1; or, as
directed to the Company or the Bank, to such other address as
shall be designated by such party in a written notice to the
other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice
to the Company and the Bank.
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(b) All such notices, requests and communications
shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively,
or if mailed, upon the fifth Business Day after the date
deposited into the mails, or if delivered, upon delivery
(provided that all notices of a Default or an Event of Default
shall be given by overnight delivery or facsimile transmission,
and provided further that any failure to do so shall not impair
or limit the rights and remedies of the Bank resulting from the
existence of such Default or Event of Default); except that
notices pursuant to Article II to the Bank shall not be effective
until actually received by the Bank at the address specified for
the Bank on Schedule 1.
(c) Any agreement of the Bank herein to receive
certain notices by telephone or facsimile is solely for the
convenience and at the request of the Company. The Bank shall be
entitled to rely on the authority of any Person purporting to be
a Person authorized by the Company to give such notice and the
Bank shall not have any liability to the Company or other Person
on account of any action taken or not taken by the Bank in
reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans shall not be
affected in any way or to any extent by any failure by the Bank
to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Bank of a confirmation which is at
variance with the terms understood by the Bank to be contained in
the telephonic or facsimile notice.
9.03 No Waiver; Cumulative Remedies
. No failure to exercise and no delay in exercising, on the
part of the Bank, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or
privilege. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any
other rights, powers, privileges or remedies provided by law or
in equity, or under any other instrument, document or agreement
now existing or hereafter arising.
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9.04 Costs and Expenses
. The Company shall:
(a) whether or not the transactions contemplated
hereby are consummated, pay or reimburse the Bank within five
Business Days after demand (subject to subsection 4.01(e)) for
all costs and expenses reasonably incurred by the Bank in
connection with (i) the development, preparation, delivery,
closing, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or
not consummated), this Agreement, any Loan Document and any other
documents prepared in connection herewith or therewith, and
(ii) the consummation of the transactions contemplated hereby and
thereby; and
(b) pay or reimburse the Bank within five Business
Days after demand (subject to subsection 4.01(e)) for all costs
and expenses (including Attorney Costs) incurred by it in
connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of
Default or after acceleration of the Loans (including in
connection with any "workout" or restructuring regarding the
Loans, and including in any Insolvency Proceeding or appellate
proceeding).
9.05 Company Indemnification
. Whether or not the transactions contemplated hereby are
consummated, the Company shall indemnify, defend and hold the
Bank, the Bank's Affiliates and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each
an "Indemnified Person") harmless from and against any and all
liabilities, claims, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and
disbursements (including reasonable Attorney Costs) of any kind
or nature whatsoever which may at any time (including at any time
following repayment of the Loans) be imposed on, incurred by or
asserted against any such Person arising out of any demand made
on or claim asserted against an Indemnified Person in any way
relating to or arising out of this Agreement, the Transaction,
the other Documents or any document contemplated by or referred
to therein, or the transactions contemplated hereby, or any
action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any
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investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of
this Agreement or the Transaction, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Company shall have
no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities to the extent they are found by a final
decision of a court of competent jurisdiction or in binding
arbitration to have resulted primarily from the gross negligence
or willful misconduct of or from materially misleading
information relating to and provided in writing by such
Indemnified Person. The agreements in this Section and in
Section 9.04 shall survive the termination of the Commitment and
the payment of all Obligations.
9.06 Marshalling; Payments Set Aside
. The Bank shall be under no obligation to marshal any
assets in favor of the Company or any other Person or against or
in payment of any or all of the Obligations. To the extent that
the Company makes a payment to the Bank, or the Bank exercises
its right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Bank in
its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any Insolvency Proceeding or otherwise,
then to the extent of such recovery the obligation or part
thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not
been made or such set-off had not occurred.
9.07 Successors and Assigns
. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that the
Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written
consent of the Bank.
9.08 Assignments, Participations, Etc.
(a) (a) The Bank may, with the written consent of
the Company (which shall not be unreasonably withheld), at any
time assign and delegate to one or more Eligible Assignees (each
an "Assignee") all, or any ratable part of all, of the Loans, the
Commitment, and the other rights and obligations of the Bank
hereunder; provided, however, that (i) no written consent of the
Company shall be required during the existence of a Default or an
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Event of Default; and (ii) no written consent of the Company
shall be required in connection with any assignment and
delegation by the Bank to an Eligible Assignee that is an
Affiliate of the Bank; and provided further, however, that the
Company may continue to deal solely and directly with the Bank in
connection with the interest so assigned to an Assignee until the
Bank and its Assignee shall have delivered to the Company a
written notice of such assignment, together with payment
instructions, addresses and related information with respect to
the Assignee.
(b) The Bank may at any time sell to one or more
commercial banks or other Persons (a "Participant") participating
interests in any Loans, the Commitment and the other interests of
the Bank hereunder and under the other Loan Documents; provided,
however, that (i) the Bank's obligations under this Agreement
shall remain unchanged, (ii) the Bank shall remain solely
responsible for the performance of such obligations, (iii) the
Company shall continue to deal solely and directly with the Bank
in connection with the Bank's rights and obligations under this
Agreement and the other Loan Documents, and (iv) the Bank shall
not transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any
consent or waiver with respect to, this Agreement or any other
Loan Document, except to the extent such amendment, consent or
waiver would affect or involve any of the following: (A) any
increase or extension of the Commitment (or reinstatement of the
Commitment if terminated pursuant to Section 8.02); (B) any
postponement or delay of any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees
or other amounts due to the Bank hereunder or under any other
Loan Document (including the date of any mandatory prepayment
hereunder); or (C) any reduction of the principal of, or the rate
of interest specified herein on any Loan, or any fees or other
amounts payable hereunder or under any other Loan Document.
9.09 Confidentiality
. The Bank agrees to take and to cause its Affiliates to
take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as
"confidential" or "secret" by the Company and provided to it by
the Company or any Subsidiary, or by the Agent on the Company's
or such Subsidiary's behalf, under this Agreement or any other
Loan Document, and neither it nor any of its Affiliates shall use
any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents or
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in connection with other business now or hereafter existing or
contemplated with the Company or any Subsidiary; except to the
extent such information (i) was or becomes generally available to
the public other than as a result of disclosure by the Bank, or
(ii) was or becomes available on a non-confidential basis from a
source other than the Company, provided that such source is not
bound by a confidentiality agreement with the Company known to
such Bank; provided, however, that the Bank may disclose such
information (A) at the request or pursuant to any requirement of
any Governmental Authority to which the Bank is subject or in
connection with an examination of such Bank by any such
authority; (B) pursuant to subpoena or other court process;
(C) when required to do so in accordance with the provisions of
any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which
the Bank or its Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to the Bank's
independent auditors, legal counsel and other professional
advisors; (G) to any Participant or Assignee, actual or
potential, provided that such Person agrees in writing to keep
such information confidential to the same extent required of the
Bank hereunder; (H) as expressly permitted under the terms of any
other document or agreement regarding confidentiality to which
the Company or any Subsidiary is party or is deemed party with
such Bank or such Affiliate; and (I) to its Affiliates; provided,
that with respect to disclosures under clauses (B) and (D), the
Bank shall use commercially reasonable efforts to notify the
Company (unless such notification is prohibited by any applicable
Requirement of Law) of the proposed disclosure before such
disclosure is made to reasonably afford the Company the
opportunity to seek to prevent such disclosure.
9.10 Set-off
. In addition to any rights and remedies of the Bank
provided by law, if an Event of Default exists or the Loans have
been accelerated, the Bank is authorized at any time and from
time to time, without prior notice to the Company, any such
notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, the
Bank to or for the credit or the account of the Company against
any and all Obligations owing to the Bank, now or hereafter
existing, irrespective of whether or not the Bank shall have made
demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. The Bank agrees
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promptly to notify the Company after any such set-off and
application made by the Bank; provided, however, that the failure
to give such notice shall not affect the validity of such set-off
and application.
9.11 Automatic Debits of Fees
. With respect to any principal, interest, commitment fee,
arrangement fee, letter of credit fee or other fee, or any other
cost or expense (including Attorney Costs) due and payable to the
Bank under the Loan Documents, the Company hereby irrevocably
authorizes the Bank to debit any deposit account of the Company
with the Bank in an amount such that the aggregate amount debited
from all such deposit accounts does not exceed such principal,
interest, fee or other cost or expense. If there are
insufficient funds in such deposit accounts to cover the amount
of the payment then due, such debits will be reversed (in whole
or in part, in the Bank's sole discretion) and such amount not
debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.
9.12 Counterparts
. This Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be
deemed to constitute but one and the same instrument.
9.13 Severability
. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or
any instrument or agreement required hereunder.
9.14 No Third Parties Benefited
. This Agreement is made and entered into for the sole
protection and legal benefit of the Company, the Bank, the
Indemnified Persons and their successors and permitted assigns,
and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan
Documents.
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<PAGE>
9.15 Governing Law and Jurisdiction (a) THIS AGREEMENT AND
ANY NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE BANK SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b)ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE COMPANY AND THE BANK CONSENT, FOR THEMSELVES AND
IN RESPECT OF THEIR PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION
OF THOSE COURTS. THE COMPANY AND THE BANK EACH IRREVOCABLY WAIVE
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO.
9.16 Waiver of Jury Trial
. THE COMPANY AND THE BANK EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY
TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. THE COMPANY AND THE BANK EACH AGREE
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
9.17 Entire Agreement
. This Agreement, together with the other Loan Documents,
embodies the entire agreement and understanding among the Company
and the Bank and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written,
relating to the subject matter hereof and thereof.
(remainder of page intentionally left blank)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in San Francisco, California,
by their proper and duly authorized officers as of the day and
year first above written.
PRECISION CASTPARTS CORP.
By: /s/ W.D. Larsson
Title: Vice President and Chief
Financial Officer
BANK OF AMERICA, N.A.
By: /s/ Kenneth J. Beck
Title: Vice President
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SCHEDULE 1
PAYMENT OFFICES; ADDRESSES FOR NOTICES;
LENDING OFFICES
PRECISION CASTPARTS CORP.
Address for Notices:
Precision Castparts Corp.
Executive Office, Suite 240
4650 S.W. Macadam Avenue
Portland, OR 97201-4254
Attention: Treasurer
BANK OF AMERICA, N.A.
Notices for Borrowing, Conversions/Continuations, Payments and
Otherwise:
Bank of America, N.A.
Credit Services
1850 Gateway Blvd
Concord, CA 94520
Attention: Cheryl Stroble
Bank's Payment Office:
Bank of America, N.A.
1850 Gateway Blvd
Concord, CA 94520
Attention: Credit Services
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(continued.)
<PAGE>
PRECISION CASTPARTS CORP.
1994 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this 1994 Stock Incentive
Plan (the "Plan") of Precision Castparts Corp. (the "Company")
is to encourage selected employees of the Company and its
subsidiaries who are in a position to influence the financial
success of the Company or of its subsidiaries to acquire a
proprietary interest in the Company and to give them added
incentive to advance the interests of the Company, through an
opportunity to share in its profits and growth.
2. Shares Subject to the Plan. Subject to adjustment as
provided below and in paragraph 12, the shares to be offered
under the Plan shall consist of Common Stock of the Company,
and the total number of shares of Common Stock that may be
issued under the Plan shall not exceed 2,548,117 shares, plus
any shares that are subject to options granted under the
Company's 1984 Stock Incentive Plan (the "1984 Plan") which
are outstanding on May 16, 1994 and which options expire,
terminate or are cancelled under such plan after May 16, 1994.
The shares issued under the Plan may be authorized and
unissued shares or reacquired shares. If an option or stock
appreciation right granted under the Plan expires, terminates
or is cancelled, the unissued shares subject to such option or
stock appreciation right shall again be available under the
Plan. If shares sold or awarded as a bonus under the Plan are
forfeited to the Company or repurchased by the Company, the
number of shares forfeited or repurchased shall again be
available under the Plan.
3. Effective Date and Duration of Plan.
(a) Effective Date. The Plan shall become effective
as of May 18, 1994. No option or stock appreciation right
granted under the Plan to an officer who is subject to
Section 16(b) of the Securities Exchange Act of 1934, as
amended (an "Officer") or a director shall become exercisable,
however, until the Plan is approved by the affirmative vote of
the holders of a majority of the shares of Common Stock
represented at a shareholders meeting at which a quorum is
present and any such awards under the Plan prior to such
approval shall be conditioned on and subject to such approval.
Subject to this limitation, options and stock appreciation
rights may be granted and shares may be awarded as bonuses or
sold under the Plan at any time after the effective date and
before termination of the Plan.
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(b) Duration. The Plan shall continue in effect
until all shares available for issuance under the Plan have
been issued and all restrictions on such shares have lapsed.
The Board of Directors may suspend or terminate the Plan at any
time except with respect to options and shares subject to
restrictions then outstanding under the Plan. Termination
shall not affect any outstanding options, any right of the
Company to repurchase shares or the forfeitability of shares
issued under the Plan.
4. Administration.
(a) Board of Directors. The Plan shall be
administered by the Board of Directors of the Company, which
shall determine and designate from time to time the individuals
to whom awards shall be made, the amount of the awards and the
other terms and conditions of the awards. Subject to the
provisions of the Plan, the Board of Directors may from time to
time adopt and amend rules and regulations relating to
administration of the Plan, advance the lapse of any waiting
period, accelerate any exercise date, waive or modify any
restriction applicable to shares (except those restrictions
imposed by law) and make all other determinations in the
judgment of the Board of Directors necessary or desirable for
the administration of the Plan. The interpretation and
construction of the provisions of the Plan and related
agreements by the Board of Directors shall be final and
conclusive. The Board of Directors may correct any defect or
supply any omission or reconcile any inconsistency in the Plan
or in any related agreement in the manner and to the extent it
shall deem expedient to carry the Plan into effect, and it
shall be the sole and final judge of such expediency.
(b) Committee. The Board of Directors may delegate
to a committee of the Board of Directors or specified officers
of the Company, or both (the "Committee") any or all authority
for administration of the Plan. If authority is delegated to a
Committee, all references to the Board of Directors in the Plan
shall mean and relate to the Committee except (i) as otherwise
provided by the Board of Directors, (ii) that only the Board of
Directors may amend or terminate the Plan as provided in
paragraphs 3 and 15 and (iii) that a Committee including
officers of the Company shall not be permitted to grant options
to persons who are officers of the Company. If awards are to
be made under the Plan to Officers or directors, authority for
selection of Officers and directors for participation and
decisions concerning the timing, pricing and amount of a grant
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<PAGE>
or award, if not determined under a formula meeting the
requirements of Rule 16b-3 under the Securities Exchange Act of
1934, as amended, shall be delegated to a committee consisting
of two or more disinterested directors.
(c) Indemnification of Committee. In addition to
such other rights of indemnification as they may have as
officers or directors or as members of the Committee, the
members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees
actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or
in connection with the Plan or any option granted thereunder,
and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that such
Committee member is liable for negligence or misconduct in the
performance of his duties; provided that within sixty (60) days
after institution of any such action, suit or proceeding a
Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.
5. Types of Awards; Eligibility. The Board of Directors
may, from time to time, take the following action, separately
or in combination, under the Plan: (i) grant Incentive Stock
Options, as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), as provided in paragraphs
6(a) and 6(b); (ii) grant options other than Incentive Stock
Options ("Non-Statutory Stock Options") as provided in
paragraphs 6(a) and 6(c); (iii) award stock bonuses as provided
in paragraph 7; (iv) sell shares subject to restrictions as
provided in paragraph 8; (v) grant stock appreciation rights as
provided in paragraph 9; (vi) grant cash bonus rights as
provided in paragraph 10; and (vii) grant foreign qualified
awards as provided in paragraph 11. Any such awards may be
made to salaried key employees of the Company or any subsidiary
of the Company, including employees who are officers or
directors, who have substantial responsibility in the direction
and management of the Company or any of its subsidiaries or
divisions. The Board of Directors shall select the individuals
to whom awards shall be made and shall specify the action taken
with respect to each individual to whom an award is made. At
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<PAGE>
the discretion of the Board of Directors, an individual may be
given an election to surrender an award in exchange for the
grant of a new award. No individual may be granted options or
stock appreciation rights under the Plan for more than 100,000
shares of Common Stock in any calendar year.
6. Option Grants.
(a) General Rules Relating to Options.
(i) Terms of Grant. The Board of Directors may
grant options under the Plan. With respect to each option
grant, the Board of Directors shall determine the number
of shares subject to the option, the option price, the
period of the option, the time or times at which the
option may be exercised and whether the option is an
Incentive Stock Option or a Non-Statutory Stock Option.
At the time of the grant of an option or at any time
thereafter, the Board of Directors may provide that an
optionee who exercised an option with Common Stock of the
Company shall automatically receive a new option to
purchase additional shares equal to the number of shares
surrendered and may specify the terms and conditions of
such new options.
(ii) Exercise of Options. Except as provided
in paragraph 6(a)(iv) or as determined by the Board of
Directors, no option granted under the Plan may be
exercised unless at the time of such exercise the optionee
is employed by the Company or any subsidiary of the
Company and shall have been so employed continuously since
the date such option was granted. Absence on leave or on
account of illness or disability under rules established
by the Board of Directors shall not, however, be deemed an
interruption of employment for this purpose. Unless
otherwise determined by the Board of Directors, vesting of
options shall not continue during an absence on leave
(including an extended illness) or on account of
disability. Except as provided in paragraphs 6(a)(iv), 12
and 14, options granted under the Plan may be exercised
from time to time over the period stated in each option in
such amounts and at such times as shall be prescribed by
the Board of Directors, provided that options shall not be
exercised for fractional shares. Unless otherwise
determined by the Board of Directors, if the optionee does
not exercise an option in any one year with respect to the
full number of shares to which the optionee is entitled in
that year, the optionee's rights shall be cumulative and
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<PAGE>
the optionee may purchase those shares in any subsequent
year during the term of the option. Unless otherwise
determined by the Board of Directors, if an Officer
exercises an option within six months of the grant of the
option, the shares acquired upon exercise of the option
may not be sold until six months after the date of grant
of the option.
(iii) Nontransferability. Each Incentive Stock
Option and, unless otherwise determined by the Board of
Directors with respect to an option granted to a person
who is neither an Officer nor a director of the Company,
each other option granted under the Plan by its terms
shall be nonassignable and nontransferable by the
optionee, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution
of the state or country of the optionee's domicile at the
time of death, and each option by its terms shall be
exercisable during the optionee's lifetime only by the
optionee.
(iv) Termination of Employment.
(A) General Rule. Unless otherwise
determined by the Board of Directors, in the event
the employment of the optionee with the Company or a
subsidiary terminates for any reason other than
because of physical disability, death or, in the case
of Nonstatutory Stock Options, retirement, as
provided in subparagraphs 6(a)(iv)(B), (C) and (D),
the option may be exercised at any time prior to the
expiration date of the option or the expiration of
three months (six months in the case of Nonstatutory
Stock Options) after the date of such termination,
whichever is the shorter period, but only if and to
the extent the optionee was entitled to exercise the
option at the date of such termination.
(B) Termination Because of Total
Disability. Unless otherwise determined by the Board
of Directors, in the event of the termination of
employment because of total disability, the option
may be exercised at any time prior to the expiration
date of the option or the expiration of three months
after the date of such termination (six months in the
case of Nonstatutory Stock Options), whichever is the
shorter period, but only if and to the extent the
optionee was entitled to exercise the option at the
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<PAGE>
date of such termination. The term "total
disability" means a mental or physical impairment
which is expected to result in death or which has
lasted or is expected to last for a continuous period
of 12 months or more and which causes the optionee to
be unable, in the opinion of the Company and two
independent physicians, to perform his or her duties
as an employee of the Company and to be engaged in
any substantial gainful activity. Total disability
shall be deemed to have occurred on the first day
after the Company and the two independent physicians
have furnished their opinion of total disability to
the Company.
(C) Termination Because of Death. Unless
otherwise determined by the Board of Directors, in
the event of the death of an optionee while employed
by the Company or a subsidiary, the option may be
exercised at any time prior to the expiration date of
the option or the expiration of 12 months after the
date of death, whichever is the shorter period, but
only if and to the extent the optionee was entitled
to exercise the option at the date of death and only
by the person or persons to whom such optionee's
rights under the option shall pass by the optionee's
will or by the laws of descent and distribution of
the state or country of domicile at the time of
death.
(D) Termination Upon Retirement at Normal
Retirement Age or at Bona Fide early Retirement. In
the event the employment of an optionee by the
Company or by any subsidiary of the Company is
terminated by retirement at normal retirement age as
defined under the provisions of the Company's
Retirement Plan or under conditions of bona fide
early retirement, any Non-Statutory Stock Option may
be exercised at any time prior to its expiration date
or the expiration of twelve months after the date of
such termination of employment, whichever is the
shorter period, but only if and to the extent the
optionee was entitled to exercise the option on the
date of such termination.
(E) Amendment of Exercise Period
Applicable to Termination. The Board of Directors,
at the time of grant or at any time thereafter, may
extend the 3-month, 6-month and 12-month exercise
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<PAGE>
periods any length of time not longer than the
original expiration date of the option, and may
increase the portion of an option that is
exercisable, subject to such terms and conditions as
the Board of Directors may determine.
(F) Failure to Exercise Option. To the
extent that the option of any deceased optionee or of
any optionee whose employment terminates is not
exercised within the applicable period, all further
rights to purchase shares pursuant to such option
shall cease and terminate.
(v) Purchase of Shares. Unless the Board of
Directors determines otherwise, shares may be acquired
pursuant to an option granted under the Plan only upon receipt
by the Company of notice in writing from the optionee of the
optionee's intention to exercise, specifying the date the
option being exercised was granted, the number of shares as to
which the optionee desires to exercise the option, and the
date on which the optionee desires to complete the
transaction, and if required in order to comply with the
Securities Act of 1933, as amended, containing a
representation that it is the optionee's present intention to
acquire the shares for investment and not with a view to
distribution. Unless the Board of Directors determines
otherwise, on or before the date specified for completion of
the purchase of shares pursuant to an option, the optionee
must have paid the Company the full purchase price of such
shares in cash (including, with the consent of the Board of
Directors, cash that may be the proceeds of a loan from the
Company) or, with the consent of the Board of Directors, in
whole or in part, in Common Stock of the Company valued at
fair market value, restricted stock, promissory notes and
other forms of consideration. The fair market value of Common
Stock provided in payment of the purchase price shall be the
closing price of the Common Stock as reported in The Wall
Street Journal on the trading day preceding the date the
option is exercised, or such other reported value of the
Common Stock as shall be specified by the Board of Directors.
No shares shall be issued until full payment for the shares
has been made. With the consent of the Board of Directors, an
optionee may request the Company to apply automatically the
shares to be received upon the exercise of a portion of a
stock option (even though stock certificates have not yet been
issued) to satisfy the purchase price for additional portions
of the option. Each optionee who has exercised an option
shall immediately upon notification of the amount due, if any,
pay to the Company in cash amounts necessary to satisfy any
applicable federal, state and local tax withholding
requirements. If additional withholding is or becomes
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<PAGE>
required beyond any amount deposited before delivery of the
certificates, the optionee shall pay such amount to the Company
on demand. If the optionee fails to pay the amount demanded,
the Company may withhold that amount from other amounts payable
by the Company to the optionee, including salary, subject to
applicable law. With the consent of the Board of Directors an
optionee may satisfy this obligation, in whole or in part, by
having the Company withhold from the shares to be issued upon
the exercise that number of shares that would satisfy the
withholding amount due or by delivering to the Company Common
Stock to satisfy the withholding amount. Upon the exercise of
an option, the number of shares reserved for issuance under the
Plan shall be reduced by the number of shares issued upon
exercise of the option, less the number of shares surrendered
in payment of the option exercise or surrendered or withheld to
satisfy withholding obligations.
(b) Incentive Stock Options. Incentive Stock
Options shall be subject to the following additional terms and
conditions:
(i) Limitation on Amount of Grants. No
employee may be granted Incentive Stock Options under the
Plan if the aggregate fair market value, on the date of
grant, of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by that
employee during any calendar year under the Plan and under
any other incentive stock option plan (within the meaning
of Section 422 of the Code) of the Company or any parent
or subsidiary of the Company exceeds $100,000.
(ii) Limitations on Grants to 10 Percent
Shareholders. An Incentive Stock Option may be granted
under the Plan to an employee possessing more than
10 percent of the total combined voting power of all
classes of stock of the Company or of any parent or
subsidiary of the Company only if the option price is at
least 110 percent of the fair market value of the Common
Stock subject to the option on the date it is granted, as
described in paragraph 6(b)(iv), and the option by its
terms is not exercisable after the expiration of five
years from the date it is granted.
(iii) Duration of Options. Subject to
paragraphs 6(a)(ii) and 6(b)(ii), Incentive Stock Options
granted under the Plan shall continue in effect for the
period fixed by the Board of Directors, except that no
Incentive Stock Option shall be exercisable after the
expiration of 10 years from the date it is granted.
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<PAGE>
(iv) Option Price. The option price per share
shall be determined by the Board of Directors at the time
of grant. Except as provided in paragraph 6(b)(ii), the
option price shall not be less than 100 percent of the
fair market value of the Common Stock covered by the
Incentive Stock Option at the date the option is granted.
The fair market value shall be the closing price of the
Common Stock as reported in The Wall Street Journal on the
day preceding the date the option is granted, or if there
has been no sale on that date, on the last preceding date
on which a sale occurred, or such other value of the
Common Stock as shall be specified by the Board of
Directors.
(v) Limitation on Time of Grant. No Incentive
Stock Option shall be granted on or after the tenth
anniversary of the effective date of the Plan.
(vi) Conversion of Incentive Stock Options.
The Board of Directors may at any time without the consent
of the optionee convert an Incentive Stock Option to a
Non-Statutory Stock Option.
(c) Non-Statutory Stock Options. Non-Statutory
Stock Options shall be subject to the following terms and
conditions:
(i) Option Price. The option price for
Non-Statutory Stock Options shall be determined by the
Board of Directors at the time of grant and may be any
amount determined by the Board of Directors.
(ii) Duration of Options. Non-Statutory Stock
Options granted under the Plan shall continue in effect
for the period fixed by the Board of Directors.
7. Stock Bonuses. The Board of Directors may award
shares under the Plan as stock bonuses. Shares awarded as a
bonus shall be subject to the terms, conditions, and
restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning
transferability and forfeiture of the shares awarded, together
with such other restrictions as may be determined by the Board
of Directors. If shares are subject to forfeiture, all
dividends or other distributions paid by the Company with
respect to the shares shall be retained by the Company until
the shares are no longer subject to forfeiture, at which time
all accumulated amounts shall be paid to the
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<PAGE>
recipient. The Board of Directors may require the recipient to
sign an agreement as a condition of the award, but may not
require the recipient to pay any monetary consideration other
than amounts necessary to satisfy tax withholding requirements.
The agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of
Directors. The certificates representing the shares awarded
shall bear any legends required by the Board of Directors.
Unless otherwise determined by the Board of Directors, shares
awarded as a stock bonus to an Officer may not be sold until
six months after the date of the award. The Company may
require any recipient of a stock bonus to pay to the Company in
cash upon demand amounts necessary to satisfy any applicable
federal, state or local tax withholding requirements. If the
recipient fails to pay the amount demanded, the Company may
withhold that amount from other amounts payable by the Company
to the recipient, including salary, subject to applicable law.
With the consent of the Board of Directors, a recipient may
deliver Common Stock to the Company to satisfy this withholding
obligation. Upon the issuance of a stock bonus, the number of
shares reserved for issuance under the Plan shall be reduced by
the number of shares issued, less the number of shares
surrendered or withheld to satisfy withholding obligations.
8. Restricted Stock. The Board of Directors may issue
shares under the Plan for such consideration (including
promissory notes and services) as determined by the Board of
Directors. Shares issued under the Plan shall be subject to
the terms, conditions and restrictions determined by the Board
of Directors. The restrictions may include restrictions
concerning transferability, repurchase by the Company and
forfeiture of the shares issued, together with such other
restrictions as may be determined by the Board of Directors.
If shares are subject to forfeiture or repurchase by the
Company, all dividends or other distributions paid by the
Company with respect to the shares shall be retained by the
Company until the shares are no longer subject to forfeiture or
repurchase, at which time all accumulated amounts shall be paid
to the recipient. All Common Stock issued pursuant to this
paragraph 8 shall be subject to a purchase agreement, which
shall be executed by the Company and the prospective recipient
of the shares prior to the delivery of certificates
representing such shares to the recipient. The purchase
agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of
Directors. The certificates representing the shares shall bear
any legends required by the Board of Directors. Unless
otherwise determined by the Board of Directors, shares issued
under this paragraph 8 to an Officer may not be sold until six
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<PAGE>
months after the shares are issued. The Company may require
any purchaser of restricted stock to pay to the Company in cash
upon demand amounts necessary to satisfy any applicable
federal, state or local tax withholding requirements. If the
purchaser fails to pay the amount demanded, the Company may
withhold that amount from other amounts payable by the Company
to the purchaser, including salary, subject to applicable law.
With the consent of the Board of Directors, a purchaser may
deliver Common Stock to the Company to satisfy this withholding
obligation. Upon the issuance of restricted stock, the number
of shares reserved for issuance under the Plan shall be reduced
by the number of shares issued, less the number of shares
surrendered in payment of the restricted stock or surrendered
or withheld to satisfy withholding obligations.
9. Stock Appreciation Rights.
(a) Grant. Stock appreciation rights may be
granted under the Plan by the Board of Directors, subject
to such rules, terms, and conditions as the Board of
Directors prescribes.
(b) Exercise.
(i) Each stock appreciation right shall entitle
the holder, upon exercise, to receive from the Company in
exchange therefor an amount equal in value to the excess
of the fair market value on the date of exercise of one
share of Common Stock of the Company over its fair market
value on the date of grant (or, in the case of a stock
appreciation right granted in connection with an option,
the excess of the fair market value of one share of Common
Stock of the Company over the option price per share under
the option to which the stock appreciation right relates),
multiplied by the number of shares covered by the stock
appreciation right or the option, or portion thereof, that
is surrendered. No stock appreciation right shall be
exercisable at a time that the amount determined under
this subparagraph is negative. Payment by the Company
upon exercise of a stock appreciation right may be made in
Common Stock valued at fair market value, in cash, or
partly in Common Stock and partly in cash, all as
determined by the Board of Directors.
(ii) A stock appreciation right shall be
exercisable only at the time or times established by the
Board of Directors. If a stock appreciation right is
granted in connection with an option, the following rules
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<PAGE>
shall apply: (1) the stock appreciation right shall be
exercisable only to the extent and on the same conditions
that the related option could be exercised; (2) upon
exercise of the stock appreciation right, the option or
portion thereof to which the stock appreciation right
relates terminates; and (3) upon exercise of the option,
the related stock appreciation right or portion thereof
terminates. Unless otherwise determined by the Board of
Directors, no stock appreciation right granted to an
Officer or director may be exercised during the first
six months following the date it is granted.
(iii) The Board of Directors may withdraw any
stock appreciation right granted under the Plan at any
time and may impose any conditions upon the exercise of a
stock appreciation right or adopt rules and regulations
from time to time affecting the rights of holders of stock
appreciation rights. Such rules and regulations may
govern the right to exercise stock appreciation rights
granted prior to adoption or amendment of such rules and
regulations as well as stock appreciation rights granted
thereafter.
(iv) For purposes of this paragraph 9, the fair
market value of the Common Stock shall be the closing
price of the Common Stock as reported in The Wall Street
Journal, or such other reported value of the Common Stock
as shall be specified by the Board of Directors, on the
trading day preceding the date the stock appreciation
right is exercised.
(v) No fractional shares shall be issued upon
exercise of a stock appreciation right. In lieu thereof,
cash may be paid in an amount equal to the value of the
fraction or, if the Board of Directors shall determine,
the number of shares may be rounded downward to the next
whole share.
(vi) Each stock appreciation right granted in
connection with an Incentive Stock Option, and unless
otherwise determined by the Board of Directors with
respect to a stock appreciation right granted to a person
who is neither an Officer nor a director of the Company,
each other stock appreciation right granted under the Plan
by its terms shall be nonassignable and nontransferable by
the holder, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution
of the state or country of the holder's domicile at the
time of death, and each stock appreciation right by its
terms shall be exercisable during the holder's lifetime
only by the holder.
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<PAGE>
(vii) Each participant who has exercised a
stock appreciation right shall, upon notification of the
amount due, pay to the Company in cash amounts necessary
to satisfy any applicable federal, state and local tax
withholding requirements. If the participant fails to pay
the amount demanded, the Company may withhold that amount
from other amounts payable by the Company to the
participant including salary, subject to applicable law.
With the consent of the Board of Directors a participant
may satisfy this obligation, in whole or in part, by
having the Company withhold from any shares to be issued
upon the exercise that number of shares that would satisfy
the withholding amount due or by delivering Common Stock
to the Company to satisfy the withholding amount.
(viii) Upon the exercise of a stock
appreciation right for shares, the number of shares
reserved for issuance under the Plan shall be reduced by
the number of shares issued, less the number of shares
surrendered or withheld to satisfy withholding
obligations. Cash payments of stock appreciation rights
shall not reduce the number of shares of Common Stock
reserved for issuance under the Plan.
10. Cash Bonus Rights.
(a) Grant. The Board of Directors may grant cash
bonus rights under the Plan in connection with (i) options
granted or previously granted, (ii) stock appreciation rights
granted or previously granted, (iii) stock bonuses awarded or
previously awarded and (iv) shares sold or previously sold
under the Plan. Cash bonus rights will be subject to rules,
terms and conditions as the Board of Directors may prescribe.
Unless otherwise determined by the Board of Directors with
respect to a cash bonus right granted to a person who is
neither an Officer nor a director of the Company, each cash
bonus right granted under the Plan by its terms shall be
nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the
laws of descent and distribution of the state or country of the
holder's domicile at the time of death. The payment of a cash
bonus shall not reduce the number of shares of Common Stock
reserved for issuance under the Plan.
(b) Cash Bonus Rights in Connection With Options.
A cash bonus right granted in connection with an option will
entitle an optionee to a cash bonus when the related option is
exercised (or terminates in connection with the exercise of a
stock appreciation right related to the option) in whole or in
part. If an optionee purchases shares upon exercise of an
Page 13
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<PAGE>
option and does not exercise a related stock appreciation
right, the amount of the bonus shall be determined by
multiplying the excess of the total fair market value of the
shares to be acquired upon the exercise over the total option
price for the shares by the applicable bonus percentage. If
the optionee exercises a related stock appreciation right in
connection with the termination of an option, the amount of the
bonus shall be determined by multiplying the total fair market
value of the shares and cash received pursuant to the exercise
of the stock appreciation right by the applicable bonus
percentage. The bonus percentage applicable to a bonus right
shall be determined from time to time by the Board of
Directors.
(c) Cash Bonus Rights in Connection With Stock
Bonus. A cash bonus right granted in connection with a stock
bonus will entitle the recipient to a cash bonus payable when
the stock bonus is awarded or restrictions, if any, to which
the stock is subject lapse. If bonus stock awarded is subject
to restrictions and is repurchased by the Company or forfeited
by the holder, the cash bonus right granted in connection with
the stock bonus shall terminate and may not be exercised. The
amount and timing of payment of a cash bonus shall be
determined by the Board of Directors.
(d) Cash Bonus Rights in Connection With Stock
Purchases. A cash bonus right granted in connection with the
purchase of stock pursuant to paragraph 8 will entitle the
recipient to a cash bonus when the shares are purchased or
restrictions, if any, to which the stock is subject lapse. Any
cash bonus right granted in connection with shares purchased
pursuant to paragraph 8 shall terminate and may not be
exercised in the event the shares are repurchased by the
Company or forfeited by the holder pursuant to applicable
restrictions. The amount of any cash bonus to be awarded and
timing of payment of a cash bonus shall be determined by the
Board of Directors.
(e) Taxes. The Company shall withhold from any cash
bonus paid pursuant to paragraph 10 the amount necessary to
satisfy any applicable federal, state and local withholding
requirements.
11. Foreign Qualified Grants. Awards under the Plan may
be granted to such officers and employees of the Company and
its subsidiaries residing in foreign jurisdictions as the Board
of Directors may determine from time to time. The Board of
Directors may adopt such supplements to the Plan as may be
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<PAGE>
necessary to comply with the applicable laws of such foreign
jurisdictions and to afford participants favorable treatment
under such laws; provided, however, that no award shall be
granted under any such supplement with terms which are more
beneficial to the participants than the terms permitted by the
Plan.
12. Changes in Capital Structure.
(a) Stock Splits; Stock Dividends. If the
outstanding Common Stock of the Company is hereafter increased
or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company by
reason of any stock split, combination of shares or dividend
payable in shares, recapitalization or reclassification,
appropriate adjustment shall be made by the Board of Directors
in the number and kind of shares available for grants under the
Plan. In addition, the Board of Directors shall make
appropriate adjustment in the number and kind of shares as to
which outstanding options and stock appreciation rights, or
portions thereof then unexercised, shall be exercisable, so
that the optionee's proportionate interest before and after the
occurrence of the event is maintained. Notwithstanding the
foregoing, the Board of Directors shall have no obligation to
effect any adjustment that would or might result in the
issuance of fractional shares, and any fractional shares
resulting from any adjustment may be disregarded or provided
for in any manner determined by the Board of Directors. Any
such adjustments made by the Board of Directors shall be
conclusive.
(b) Mergers, Reorganizations, Etc. In the event of
a merger, consolidation or plan of exchange to which the
Company is a party or a sale of all or substantially all of the
Company's assets (each, a "Transaction"), the Board of
Directors shall, in its sole discretion and to the extent
possible under the structure of the Transaction, select one of
the following alternatives for treating outstanding options and
stock appreciation rights under the Plan:
(i) Outstanding options and stock appreciation
rights shall remain in effect in accordance with their
terms.
(ii) Outstanding options and stock appreciation
rights shall be converted into options to purchase stock
in the corporation and stock appreciation rights with
respect to stock in the corporation that is the surviving
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<PAGE>
or acquiring corporation in the Transaction. The amount,
type of securities subject thereto and exercise price of
the converted options and stock appreciation rights shall
be determined by the Board of Directors of the Company,
taking into account the relative values of the companies
involved in the Transaction and the exchange rate, if any,
used in determining shares of the surviving corporation to
be issued to holders of shares of the Company. Unless
otherwise determined by the Board of Directors, the
converted options and stock appreciation rights shall be
vested only to the extent that the vesting requirements
relating to options and stock appreciation rights granted
hereunder have been satisfied.
(iii) Holders of outstanding options and stock
appreciation rights shall be provided a 30-day period
prior to the consummation of the Transaction during which
outstanding options and stock appreciation rights shall be
exercisable to the extent vested without any limit on
exercisability and upon the expiration of such 30-day
period, all unexercised options and stock appreciation
rights shall immediately terminate. The Board of
Directors may, in its sole discretion, accelerate the
exercisability of options or stock appreciation rights so
that they are exercisable in full during such 30-day
period.
(c) Dissolution of the Company. In the event of the
dissolution or liquidation of the Company, the Board of
Directors may in its sole discretion (i) provide a 30-day
period prior to such event during which optionees shall have
the right to exercise options and stock appreciation rights in
whole or in part without any limitation on exercisability and
upon the expiration of which 30-day period all unexercised
options and stock appreciation rights shall immediately
terminate, or (ii) waive or modify any restriction on the
options or stock appreciation rights.
13. Corporate Mergers, Acquisitions, etc. The Board of
Directors may also grant options, stock appreciation rights,
stock bonuses and cash bonuses and issue restricted stock under
the Plan having terms, conditions and provisions that vary from
those specified in this Plan provided that any such awards are
granted in substitution for, or in connection with the
assumption of, existing options, stock appreciation rights,
stock bonuses, cash bonuses and restricted stock granted,
awarded or issued by another corporation and assumed or
otherwise agreed to be provided for by the Company pursuant to
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<PAGE>
or by reason of a transaction involving a corporate merger,
consolidation, acquisition of property or stock, separation,
reorganization or liquidation to which the Company or a
subsidiary is a party.
14. Acceleration in Certain Events.
Notwithstanding any other provisions of the Plan, a
special acceleration ("Special Acceleration") of all options
and stock appreciation rights outstanding under the Plan shall
occur and such options and stock appreciation rights shall
immediately become exercisable in full at any time when any one
of the following events has taken place:
(a) The shareholders of the Company approve one of the
following ("Approved Transactions"):
(i) Any consolidation, merger or plan of
exchange involving the Company ("Merger") pursuant to
which Common Stock would be converted into cash; or
(ii) Any sale, lease, exchange, or other
transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of
the Company; or
(iii) The adoption of any plan or proposal for
the liquidation or dissolution of the Company; or
(iv) Any merger, consolidation or plan of
exchange which results in the voting securities of the
Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity)
50% or less of the combined voting power of the voting
securities of the Company or such surviving entity
outstanding immediately after such merger, consolidation
or exchange; or
(v) Any merger, consolidation or plan of
exchange effected to implement a recapitalization of the
Company (or similar transaction) in which a person
acquires more than 20% of the combined voting power of the
Company's then outstanding securities; or
(b) A tender or exchange offer, other than one made by
the Company, is made for Common Stock (or securities
convertible into Common Stock) and such offer results in a
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<PAGE>
portion of those securities being purchased and the offeror
after the consummation of the offer is the beneficial owner (as
determined pursuant to Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), directly or
indirectly, of more than 20 percent of the outstanding Common
Stock (an "Offer"); or
(c) Any Person is or becomes the beneficial owner of
more than 20 percent of the Company's outstanding Common Stock;
or
(d) During any period of two consecutive years,
individuals who at the beginning of such period constituted a
majority of the Board of Directors cease for any reason to
constitute a majority thereof unless the nomination or election
of such new directors was approved by a vote of at least two-
thirds of the directors then still in office who were directors
at the beginning of such period.
All options and stock appreciation rights that are
accelerated pursuant to this paragraph 14 shall terminate upon
the dissolution of the Company or upon the consummation of any
Merger pursuant to which Common Stock would be converted to
cash. The terms used in this paragraph 14 and not defined
elsewhere in the Plan shall have the same meanings as such
terms have in the Exchange Act and the rules and regulations
adopted thereunder.
15. Amendment of Plan. The Board of Directors may at any
time, and from time to time, modify or amend the Plan in such
respects as it shall deem advisable because of changes in the
law while the Plan is in effect or for any other reason.
Except as provided in paragraphs 6(a)(iv), 9, 12 and 14,
however, no change in an award already granted shall be made
without the written consent of the holder of such award.
16. Approvals. The obligations of the Company under the
Plan are subject to the approval of state and federal
authorities or agencies with jurisdiction in the matter. The
Company will use its best efforts to take steps required by
state or federal law or applicable regulations, including rules
and regulations of the Securities and Exchange Commission and
any stock exchange on which the Company's shares may then be
listed, in connection with the grants under the Plan. The
foregoing notwithstanding, the Company shall not be obligated
to issue or deliver Common Stock under the Plan if such
issuance or delivery would violate applicable state or federal
securities laws.
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<PAGE>
17. Employment Rights. Nothing in the Plan or any award
pursuant to the Plan shall confer upon any employee any right
to be continued in the employment of the Company or any
subsidiary or interfere in any way with the right of the
Company or any subsidiary by whom such employee is employed to
terminate such employee's employment at any time, for any
reason, with or without cause, or to decrease such employee's
compensation or benefits.
18. Rights as a Shareholder. The recipient of any award
under the Plan shall have no rights as a shareholder with
respect to any Common Stock until the date of issue to the
recipient of a stock certificate for such shares. Except as
otherwise expressly provided in the Plan, no adjustment shall
be made for dividends or other rights for which the record date
occurs prior to the date such stock certificate is issued.
Page 19
</Page>
<PAGE>
$950,000,000
CREDIT AGREEMENT
Dated as of July 30, 1999
among
PRECISION CASTPARTS CORP.,
BANK OF AMERICA, N.A.
as Administrative Agent
and
Letter of Credit Issuing Bank
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
_______________________________________________________
Banc of America Securities LLC,
Sole Lead Arranger
and Sole Book Manager
</Page>
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS 1
Section 1.01 Certain Defined Terms 1
Section 1.02 Other Interpretive Provisions 30
Section 1.03 Accounting Principles 32
ARTICLE II THE CREDITS
Section 2.01 Amounts and Terms of Commitment 32
Section 2.02 Loan Accounts 33
Section 2.03 Procedure for Borrowing 34
Section 2.04 Conversion and Continuation Elections 36
Section 2.05 Voluntary Termination or Reduction
of Commitments 37
Section 2.06 Swingline Loans 38
Section 2.07 Optional Prepayments 42
Section 2.08 Mandatory Prepayments of Loans;
Mandatory Commitment Reductions 42
Section 2.09 Repayment 44
Section 2.10 Interest 44
Section 2.11 Fees 45
Section 2.12 Computation of Fees and Interest 47
Section 2.13 Payments by the Company 47
Section 2.14 Payments by the Banks to the Agent 48
Section 2.15 Sharing of Payments, Etc. 49
ARTICLE III THE LETTERS OF CREDIT
Section 3.01 The Letter of Credit Facility 50
Section 3.02 Issuance, Amendment and Renewal
of Letters of Credit 52
Section 3.03 Risk Participations, Drawings and
Reimbursements 55
Section 3.04 Repayment of Participants 58
Section 3.05 Role of the Issuing Bank 59
Section 3.06 Obligations Absolute 60
Section 3.07 Cash Collateral Pledge 61
Section 3.08 Letter of Credit Fees 62
Section 3.09 Applicability of Uniform Customs
and Practice and ISP98 63
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY
Section 4.01 Taxes 63
Section 4.02 Illegality 65
Section 4.03 Increased Costs and Reduction of Return 66
Section 4.04 Funding Losses 67
Section 4.05 Inability to Determine Rates 68
Section 4.06 Reserves on Offshore Rate Loans 68
Section 4.07 Certificate of Banks 69
Section 4.08 Substitution of Banks 69
Section 4.09 Survival 70
ARTICLE V CONDITIONS OF PRECEDENT
Section 5.01 Conditions of Initial Credit Extensions 70
Section 5.02 Conditions to Subsequent Credit Extensions 74
</Page>
<PAGE>
ARTICLE VI REPRESENTATIONS AND WARRANTIES
Section 6.01 Corporate Existence and Power 75
Section 6.02 Corporate Authorization; No Contravention 76
Section 6.03 Governmental Authorization 76
Section 6.04 Binding Effect 77
Section 6.05 Litigation 77
Section 6.06 No Defaults 78
Section 6.07 ERISA Compliance 78
Section 6.08 Use of Proceeds; Margin Regulations 79
Section 6.09 Title to Properties; Liens 79
Section 6.10 Taxes 79
Section 6.11 Financial Condition 80
Section 6.12 Environmental Matters 81
Section 6.13 Regulated Entities 81
Section 6.14 No Burdensome Restrictions; No Restrictions
on Subsidiary Dividends 81
Section 6.15 Copyrights, Patents, Trademarks and
Licenses, Etc. 82
Section 6.16 Subsidiaries 82
Section 6.17 Insurance 82
Section 6.18 Solvency 83
Section 6.19 Swap Obligations 83
Section 6.20 Year 2000 83
Section 6.21 Merger Representations 83
Section 6.22 Full Disclosure 84
ARTICLE VII AFFIRMATIVE COVENANTS
Section 7.01 Financial Statements 85
Section 7.02 Certificates; Other Information 86
Section 7.03 Notices 86
Section 7.04 Preservation of Corporate Existence, Etc. 88
Section 7.05 Maintenance of Property 89
Section 7.06 Insurance 89
Section 7.07 Payment of Obligations 89
Section 7.08 Compliance with Laws 90
Section 7.09 Compliance with ERISA 90
Section 7.10 Inspection of Property and Books
and Records 90
Section 7.11 Environmental Law 91
Section 7.12 Use of Proceeds 91
Section 7.13 Merger 91
Section 7.14 Further Assurances 91
ARTICLE VIII NEGATIVE COVENANTS
Section 8.01 Negative Pledges; Liens 92
Section 8.02 Disposition of Assets 95
Section 8.03 Consolidations and Mergers 97
Section 8.04 Loans and Investments 98
Section 8.05 Limitation on Indebtedness 99
Section 8.06 Transaction with Affiliates 100
Section 8.07 Use of Proceeds 101
Section 8.08 Contingent Obligations 101
Section 8.09 ERISA 102
</Page>
<PAGE>
Section 8.10 Change in Business 102
Section 8.11 Accounting Changes 102
Section 8.12 Transaction Documents 103
Section 8.13 Minimum Consolidated Net Worth 103
Section 8.14 Fixed Charge Coverage Ratio 103
Section 8.15 Leverage Ratio 103
Section 8.16 No Restrictions on Subsidiary Dividends 103
ARTICLE IX EVENTS OF DEFAULT
Section 9.01 Event of Default 104
Section 9.02 Remedies 108
ARTICLE X THE AGENT
Section 10.01 Appointment and Authorization; Agent 109
Section 10.02 Delegation of Duties 110
Section 10.03 Liability of Agent 110
Section 10.04 Reliance by Agent 111
Section 10.05 Notice of Default 112
Section 10.06 Credit Decision 112
Section 10.07 Indemnification of Agent 113
Section 10.08 Agent in Individual Capacity 114
Section 10.09 Successor Agent 114
Section 10.10 Withholding Tax 115
Section 10.11 Co-Agents; Lead Managers 117
ARTICLE XI MISCELLANEOUS
Section 11.01 Amendments and Waivers 117
Section 11.02 Notices 119
Section 11.03 No Waiver; Cumulative Remedies 120
Section 11.04 Costs and Expenses 120
Section 11.05 Company Indemnification 121
Section 11.06 Marshalling; Payments Set Aside 122
Section 11.07 Successors and Assigns 122
Section 11.08 Assignments, Participations, Etc. 123
Section 11.09 Confidentiality 126
Section 11.10 Set-off 127
Section 11.11 Automatic Debits of Fees 127
Section 11.12 Notification of Addresses, Lending
Offices, Etc. 128
Section 11.13 Counterparts 128
Section 11.14 Severability 128
Section 11.15 No Third Parties Benefited 128
Section 11.16 Governing Law and Jurisdiction 129
Section 11.17 Waiver of Jury Trial 129
Section 11.18 Entire Agreement 130
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of July
30, 1999, among PRECISION CASTPARTS CORP., an Oregon
corporation (the "Company"), the several financial
institutions from time to time party to this Agreement
(individually, a "Bank" and, collectively, the
"Banks"), The Bank of Nova Scotia and Wachovia Bank,
N.A., as co-syndication agents, and Bank of America,
N.A., as Issuing Bank, Swingline Bank and
administrative agent for itself and the other Banks (in
such capacity, the "Agent").
WHEREAS, the Banks have agreed to make available
to the Company a term loan and revolving credit
facility with letter of credit subfacility and a
swingline subfacility, upon the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein,
the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms.
The following terms have the following meanings
when used herein (including in the recitals hereof):
"Acquired Company" means Wyman-Gordon
Company, a Massachusetts corporation.
"Acquisition" means any transaction or series
of related transactions for the purpose of or
resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the
assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of
50% of the capital stock, partnership interests,
membership interests or equity of any Person, or
otherwise causing any Person to become a
Subsidiary, or (c) a merger
Page 1
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<PAGE>
or consolidation or any other combination with
another Person (other than a Person that is a
Subsidiary), provided that the Company or the
Subsidiary is the surviving Person.
"Affiliate" means, as to any Person, any
other Person which, directly or indirectly, is in
control of, is controlled by, or is under common
control with, such Person. A Person shall be
deemed to control another Person if the
controlling Person possesses, directly or
indirectly, the power to direct or cause the
direction of the management and policies of the
other Person, whether through the ownership of
voting securities, membership interests, by
contract, or otherwise.
"Agent" means BofA in its capacity as
administrative agent for the Banks hereunder, and
any successor agent appointed or arising under
Section 10.09.
"Agent-Related Persons" means BofA and any
successor agent appointed or arising under Section
10.09 and any successor letter of credit issuing
bank hereunder, together with their respective
Affiliates (including, in the case of BofA, the
Lead Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Agent's Payment Office" means the address
for payments set forth on Schedule 11.02 or such
other address in the United States as the Agent
may from time to time specify.
"Aggregate Commitment" means the combined
Commitments of the Banks.
"Agreement" means this Credit Agreement.
"Applicable Fee Amount" means with respect to
the commitment fees and Standby Letter of Credit
fees payable hereunder, the amount set forth
opposite the indicated Level below the heading
"Commitment Fee" or "Letter of Credit Fee," as
applicable, in the pricing grid set forth on
Annex I in accordance with the parameters for
calculations of such amount also set forth on
Annex I.
Page 2
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<PAGE>
"Applicable Margin" means, with respect to
Base Rate Loans and Offshore Rate Loans, the
amount set forth opposite the indicated Level
below the heading "Base Rate Spread" or "Offshore
Rate Spread," as applicable, in the pricing grid
set forth on Annex I in accordance with the
parameters for calculations of such amounts also
set forth on Annex I.
"Assignee" has the meaning specified in
subsection 11.08(a).
"Attorney Costs" means and includes all fees
and disbursements of any law firm or other
external counsel, the allocated cost of internal
legal services and all disbursements of internal
counsel.
"Bank" has the meaning specified in the
introductory clause hereto. References to the
"Banks" shall include each of the Issuing Bank and
the Swingline Bank in its capacity as such unless
the context otherwise clearly requires. For
purposes of clarification only, to the extent that
the Issuing Bank or the Swingline Bank may have
any rights or obligations in addition to those of
the Banks due to its status as Issuing Bank or
Swingline Bank, its status as such will be
specifically referenced.
"Bankruptcy Code" means the Federal
Bankruptcy Reform Act of 1978 (11 U.S.C. 101, et
seq.).
"Base Rate" means, for any day, the higher
of: (a) 0.50% per annum above the latest Federal
Funds Rate; and (b) the rate of interest in effect
for such day as publicly announced from time to
time by BofA as its "reference rate." (The
"reference rate" is a rate set by BofA based upon
various factors including BofA's costs and desired
return, general economic conditions and other
factors, and is used as a reference point for
pricing some loans, which may be priced at, above,
or below such announced rate.) Any change in the
reference rate announced by BofA shall take effect
at the opening of business on the day specified in
the public announcement of such change.
Page 3
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<PAGE>
"Base Rate Loan" means a Loan that bears
interest based on the Base Rate.
"BofA" means Bank of America, N.A., a
national banking association.
"Borrowing" means a borrowing hereunder
consisting of (i) Revolving Loans or Term Loans of
the same Type made to the Company on the same day
by the Banks under Article II, and, other than in
the case of Base Rate Loans, having the same
Interest Period, (ii) a Swingline Loan (or
Swingline Loans) made to the Company on the same
day by the Swingline Bank, or (ii) an L/C
Borrowing.
"Borrowing Date" means any date on which a
Borrowing occurs under Section 2.03 or
Section 2.06.
"Bridge Credit Agreement" means the Credit
Agreement, dated as of the date hereof, between
the Company and BofA.
"Bridge Loan Documents" means the Bridge
Credit Agreement, any promissory notes thereunder,
and all other documents delivered to BofA in
connection with the transactions contemplated by
the Bridge Credit Agreement.
"Business Day" means any day other than a
Saturday, Sunday or other day on which commercial
banks in New York City or San Francisco are
authorized or required by law to close and, if the
applicable Business Day relates to any Offshore
Rate Loan, means such a day on which dealings are
carried on in the London or other applicable
offshore Dollar interbank market.
"Capital Adequacy Regulation" means any
guideline, request or directive of any central
bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the
force of law, in each case, regarding capital
adequacy of any bank or of any corporation
controlling a bank.
"Cash Collateralize" means to pledge and
deposit with or deliver to the Agent, for the
benefit of the Agent, the
Page 4
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<PAGE>
Issuing Bank and the Banks, as collateral for the
L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance
reasonably satisfactory to the Agent and the
Issuing Bank (which documents are hereby consented
to by the Banks). Derivatives of such term shall
have corresponding meaning.
"Closing Date" means the date occurring on or
before March 1, 2000 on which all conditions
precedent set forth in Section 5.01 are satisfied
or waived by all Banks (or, in the case of
subsection 5.01(e), waived by the Person entitled
to receive such payment).
"Co-Agent" means each of The Bank of Nova
Scotia and Wachovia Bank, N.A., in its capacity as
co-syndication agent hereunder.
"Code" means the Internal Revenue Code of
1986.
"Commercial Letter of Credit" means a
commercial Letter of Credit Issued in respect of
the purchase of inventory or other goods and
services by the Company in the ordinary course of
business.
"Commitment," as to each Bank, means the sum
of its Revolving Commitment and Term Commitment.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit C.
"Consolidated Funded Indebtedness" means, as
of the date of determination and without
duplication, all Indebtedness of the Company and
its Subsidiaries representing all Indebtedness of
the type described in clauses (a), (c), (d) and
(f) (other than the attributable interest
component thereof) of the definition of
Indebtedness, and any Guaranty Obligation of the
Company and its Subsidiaries with respect to such
Indebtedness of another Person, plus the
outstanding amount under any Permitted Receivables
Sale Facility.
"Consolidated Interest Expense" means, for
any period, gross consolidated interest expense
for the period
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<PAGE>
(including all commissions, discounts, fees and
other charges in connection with standby letters
of credit and similar instruments) for the Company
and its Subsidiaries.
"Consolidated Net Income" means for any
period the net sales from operations of the
Company and its Subsidiaries less all their
operating and non-operating expenses (including
taxes on income), but excluding all amounts with
respect to the operations of any Subsidiary for
any period prior to the time it shall have become
an Subsidiary.
"Consolidated Net Worth" means, as of the
date of determination, the consolidated
shareholders' equity of the Company and its
Subsidiaries; provided, however, that any
reduction in shareholders' equity directly
resulting from a change in GAAP shall be
disregarded in determining Consolidated Net Worth
for the purposes of this Agreement, but only if
and to the extent such change is (a) (i) a
mandatory change required as a result of a
definitive pronouncement by the Financial
Accounting Standards Board and (ii) concurred with
by the Independent Auditor; and (b) has no cash or
other working capital effect on the consolidated
balance sheet of the Company and its Subsidiaries.
"Consolidated Total Assets" means, as of the
date of determination, the consolidated total
assets of the Company and its Subsidiaries.
"Consolidated Total Revenues" means, as of
the date of determination, the consolidated net
sales of the Company and its Subsidiaries.
"Contingent Obligation" means, as to any
Person, any direct or indirect liability of that
Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness,
lease, dividend, letter of credit or other
obligation (the "primary obligations") of another
Person (the "primary obligor"), including any
obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary
obligations or any security therefor, (ii) to
advance or provide funds for the payment or
discharge of any such primary obligation, or to
maintain
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<PAGE>
working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of
income or financial condition of the primary
obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the
owner of any such primary obligation of the
ability of the primary obligor to make payment of
such primary obligation, (iv) in connection with
any synthetic lease or other similar off balance
sheet lease transaction, or (v) otherwise to
assure or hold harmless the holder of any such
primary obligation against loss in respect thereof
(each, a "Guaranty Obligation"); (b) with respect
to any Surety Instrument issued for the account of
that Person or as to which that Person is
otherwise liable for reimbursement of drawings or
payments; (c) to purchase any materials, supplies
or other property from, or to obtain the services
of, another Person if the relevant contract or
other related document or obligation requires that
payment for such materials, supplies or other
property, or for such services, shall be made
regardless of whether delivery of such materials,
supplies or other property is ever made or
tendered, or such services are ever performed or
tendered; or (d) in respect of any Swap Contract.
The amount of any Contingent Obligation shall, in
the case of Guaranty Obligations, be deemed equal
to the stated or determinable amount of the
primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or
if indeterminable, the maximum reasonably
anticipated liability in respect thereof, and in
the case of other Contingent Obligations other
than in respect of Swap Contracts, shall be equal
to the maximum reasonably anticipated liability in
respect thereof and, in the case of Contingent
Obligations in respect of Swap Contracts, shall be
equal to the Swap Termination Value.
"Contractual Obligation" means, as to any
Person, any provision of any security issued by
such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or
other instrument, document or agreement to which
such Person is a party or by which it or any of
its property is bound.
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<PAGE>
"Conversion/Continuation Date" means any date
on which, under Section 2.04, the Company
(a) converts Loans of one Type to another Type, or
(b) continues as Loans of the same Type, but with
a new Interest Period, Loans having Interest
Periods expiring on such date.
"Credit Extension" means and includes (a) the
making of any Revolving Loans, Term Loans and
Swingline Loans hereunder, and (b) the Issuance of
any Letters of Credit hereunder.
"Default" means any event or circumstance
which, with the giving of notice, the lapse of
time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of
Default.
"Documents" means the Loan Documents, the
Transaction Documents and the Bridge Loan
Documents.
"Dollars," "dollars" and "$" each mean lawful
money of the United States.
"EBITDA" means, for any period, for the
Company and its Subsidiaries on a consolidated
basis the sum of (a) the net income (or net loss)
for such period (computed without giving effect to
extraordinary losses and extraordinary gains) plus
(b) all amounts treated as expenses for
depreciation, interest and the amortization of
intangibles of any kind to the extent included in
the determination of such net income (or loss),
plus (c) all accrued taxes on or measured by
income to the extent included in the determination
of such net income (or loss). In computing EBITDA
for any period before the Acquired Company became
a Subsidiary of the Company, EBITDA shall include
the EBITDA of the Acquired Company, except that
there shall be included in EBITDA of the Acquired
Company for the fiscal quarter ended August 31,
1998, up to $3,000,000, for the fiscal quarter
ended November 30, 1998, up to $2,000,000, and for
the fiscal quarter ended February 28, 1999, up to
$30,000,000, in respect of extraordinary and
nonrecurring charges. Additionally, when so
including EBITDA of the Acquired Company, to the
extent necessary the fiscal
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<PAGE>
quarter(s) of the Acquired Company ending
immediately prior to the applicable fiscal
quarter(s) of the Company will be used.
"Effective Amount" means (i) with respect to
any Revolving Loans, Swingline Loans and Term
Loans on any date, the aggregate outstanding
principal amount thereof after giving effect to
any Borrowings and prepayments or repayments of
Term Loans, Revolving Loans and Swingline Loans
occurring on such date; and (ii) with respect to
any outstanding L/C Obligations on any date, the
amount of such L/C Obligations on such date after
giving effect to any Issuances of Letters of
Credit occurring on such date and any other
changes in the aggregate amount of the L/C
Obligations as of such date, including as a result
of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any
reductions in the maximum amount available for
drawing under Letters of Credit taking effect on
such date; provided that for purposes of Section
2.08, the Effective Amount shall be determined
without giving effect to any mandatory prepayments
to be made under Section 2.08.
"Eligible Assignee" means (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
$250,000,000; (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
$250,000,000, provided that such bank is acting
through a branch or agency located in the United
States; and (c) a Person that is primarily engaged
in the business of commercial banking and that is
(i) a Subsidiary of a Bank, (ii) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (iii) a
Person of which a Bank is a Subsidiary. No
proposed assignee shall be an Eligible Assignee if
the effect of the assignment to the proposed
assignee would be to impose increased costs on the
Company pursuant to Section 4.01 or if the
representation contained in Section 4.01(f) would
not be true as to such Person if made as to such
Person on the date of assignment.
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<PAGE>
"Environmental Claims" means all claims,
however asserted, by any Governmental Authority or
other Person alleging potential liability or
responsibility for violation of any Environmental
Law.
"Environmental Laws" means all federal, state
or local laws, statutes, common law duties, rules,
regulations, ordinances and codes, together with
all administrative orders, directed duties,
requests, licenses, authorizations and permits of,
and agreements with, any Governmental Authorities,
in each case relating to environmental, health,
safety and land use matters.
"ERISA" means the Employee Retirement Income
Security Act of 1974.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) under common control
with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections
414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event
with respect to a Pension Plan; (b) a withdrawal
by the Company or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations which is
treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by
the Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which might reasonably
be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not
delinquent
Page 10
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<PAGE>
under Section 4007 of ERISA, upon the Company or
any ERISA Affiliate in excess of $5,000,000.
"Event of Default" means any of the events or
circumstances specified in Section 9.01.
"Exchange Act" means the Securities Exchange
Act of 1934.
"Existing Credit Facility" means the Credit
Agreement dated as of July 31, 1996, as amended,
among the Company, BofA as agent, the other
financial institutions party thereto, and others.
"Existing Lines of Business" means those
lines of business carried on by the Company, the
Acquired Company and their Subsidiaries on the
date hereof.
"Existing Securities" means the Company's
outstanding debt securities under that certain
Indenture dated as of December 17, 1997.
"Federal Funds Rate" means, for any day, the
rate set forth in the weekly statistical release
designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank
of New York with respect to the preceding Business
Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such
rate is not so published with respect to any such
preceding Business Day, the rate for such day will
be the arithmetic mean as determined by the Agent
of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three
leading brokers of Federal funds transactions in
New York City selected by the Agent.
"Fee Letter" has the meaning specified in
subsection 2.11(a).
"Fixed Charge Coverage Ratio" means for any
period the ratio of (i) (A) EBITDA minus (B) all
accrued taxes on or measured by income to the
extent included in the determination of net income
(or loss) included in the
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<PAGE>
calculation of EBITDA for such period, in the case
of (A) and (B) calculated on a four quarter
rolling basis for the applicable fiscal quarter
and the three immediately preceding fiscal
quarters, to (ii) (A) Consolidated Interest
Expense, calculated on a four quarter rolling
basis for the applicable fiscal quarter and the
three immediately preceding fiscal quarters plus
(B) the current portion of long-term debt
(excluding therefrom up to $9,000,000 of
Indebtedness in respect of the Michigan Strategic
Fund Industrial Development Revenue Bonds (Norcor
Manufacturing Project) maturing December 1, 2000),
determined on a consolidated basis for the Company
and its Subsidiaries.
"Foreign Subsidiary" means each Subsidiary of
the Company organized under the laws of any
jurisdiction outside of the United States which is
also located outside of the United States.
"FRB" means the Board of Governors of the
Federal Reserve System, and any Governmental
Authority succeeding to any of its principal
functions.
"Further Taxes" means any and all present or
future taxes, levies, assessments, imposts,
duties, deductions, fees, withholdings or similar
charges (including net income taxes and franchise
taxes), and all liabilities with respect thereto,
imposed by any jurisdiction on account of amounts
payable or paid pursuant to Section 4.01.
"GAAP" means generally accepted accounting
principles set forth from time to time in the
opinions and pronouncements of the Accounting
Principles Board and the American Institute of
Certified Public Accountants and statements and
pronouncements of the Financial Accounting
Standards Board (or agencies with similar
functions of comparable stature and authority
within the U.S. accounting profession), which are
applicable to the circumstances as of the date of
application.
"Governmental Authority" means any nation or
government, any state or other political
subdivision thereof, any central bank (or similar
monetary or
Page 12
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<PAGE>
regulatory authority) thereof, any entity
exercising executive, legislative, judicial,
regulatory or administrative functions of or
pertaining to government, and any corporation or
other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the
foregoing.
"Guaranty Obligation" has the meaning
specified in the definition of "Contingent
Obligation."
"Honor Date" has the meaning specified in
subsection 3.03(b).
"HSR Act" means the Hart-Scott-Rodino
Antitrust Improvements Act of 1976.
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness for borrowed
money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property
or services (other than trade payables and accrued
liabilities incurred in the ordinary course of
business on ordinary terms); (c) all non-
contingent reimbursement or payment obligations
with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so
evidenced incurred in connection with the
acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any
conditional sale or other title retention
agreement, or incurred as financing, in either
case with respect to property acquired by the
Person (even though the rights and remedies of the
seller or bank under such agreement in the event
of default are limited to repossession or sale of
such property); (f) all obligations with respect
to capital leases; (g) all indebtedness referred
to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be
secured by) any Lien upon or in property
(including accounts and contracts rights) owned by
such Person, even though such Person has not
assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in
respect of indebtedness or obligations of others
of the kinds referred to in clauses
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<PAGE>
(a) through (g) above; provided that Indebtedness
shall not include sales of Permitted Receivables
sold pursuant to Permitted Receivables Purchase
Facilities and indemnification, recourse or
repurchase obligations thereunder. For all
purposes of this Agreement, the Indebtedness of
any Person shall include any Indebtedness of any
partnership or joint venture in which such Person
is a general partner or a joint venturer to the
extent of any amount thereof as to which recourse
to such Person exists.
"Indemnified Liabilities" has the meaning
specified in Section 11.05.
"Indemnified Person" has the meaning
specified in Section 11.05.
"Independent Auditor" has the meaning
specified in subsection 7.01(a).
"Insolvency Proceeding" means, with respect
to any Person, (a) any case, action or proceeding
with respect to such Person before any court or
other Governmental Authority relating to
bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general
assignment for the benefit of creditors,
composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its
creditors generally or any substantial portion of
its creditors; in either case undertaken under
U.S. Federal, state or foreign law, including the
Bankruptcy Code.
"Interest Payment Date" means (i) as to any
Loan other than a Base Rate Loan, the last day of
each Interest Period applicable to such Loan and,
as to any Base Rate Loan which is not a Swingline
Loan, the last Business Day of each calendar
quarter and the Revolving Termination Date (in the
case of Revolving Loans) and the Term Maturity
Date (in the case of Term Loans), and (ii) with
respect to any Base Rate Loan that is a Swingline
Loan, the Business Day on which principal of such
Swingline Loan is repaid or as otherwise provided
in Section 2.06(e); provided, however, that if any
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<PAGE>
Interest Period for Offshore Rate Loan exceeds
three months, the date that falls three months
after the beginning of such Interest Period and
after each Interest Payment Date thereafter is
also an Interest Payment Date.
"Interest Period" means, as to any Offshore
Rate Loan, the period commencing on the Borrowing
Date of such Loan or on the
Conversion/Continuation Date on which the Loan is
converted into or continued as an Offshore Rate
Loan, and ending on the date one, two, three or
six months thereafter;
provided that:
(i) if any Interest Period would
otherwise end on a day that is not a Business
Day, that Interest Period shall be extended
to the following Business Day unless the
result of such extension would be to carry
such Interest Period into another calendar
month, in which event such Interest Period
shall end on the preceding Business Day;
(ii) any Interest Period that begins on
the last Business Day of a calendar month (or
on a day for which there is no numerically
corresponding day in the calendar month at
the end of such Interest Period) shall end on
the last Business Day of the calendar month
at the end of such Interest Period;
(iii) no Interest Period for any
Term Loan shall extend beyond the Term
Maturity Date, and no Interest Period for any
Revolving Loan shall extend beyond the
Revolving Termination Date; and
(iv) no Interest Period applicable to
a Term Loan or portion thereof
shall extend beyond any date
upon which is due any scheduled
principal payment in respect of
the Term Loans unless the
aggregate principal amount of
Term Loans represented by Base
Rate Loans, or by Offshore Rate
Loans having Interest Periods
that will
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<PAGE>
expire on or before such date,
equals or exceeds the amount of
such principal payment.
"Investment" has the meaning specified in
Section 8.04.
"IRS" means the Internal Revenue Service, and
any Governmental Authority succeeding to any of
its principal functions under the Code.
"Issuance Date" has the meaning specified in
subsection 3.01(a).
"Issue" means, with respect to any Letter of
Credit, to issue or to extend the expiry of, or to
renew, amend or increase the amount of such Letter
of Credit; and the terms "Issued," "Issuing" and
"Issuance" have corresponding meanings.
"Issuing Bank" means BofA in its capacity as
issuer of one or more Letters of Credit hereunder,
together with any replacement letter of credit
issuer arising under subsection 10.01(b) or
Section 10.09. Specific reference to the Issuing
Bank shall exclude the Issuing Bank in its
capacity as a Bank hereunder.
"Joint Venture" means a single-purpose
corporation, partnership, limited liability
company, joint venture or other similar legal
arrangement (whether created by contract or
conducted through a separate legal entity) now or
hereafter formed by the Company or any of its
Subsidiaries with another Person in order to
conduct a common venture or enterprise with such
Person.
"L/C Advance" means each Bank's participation
in any L/C Borrowing in accordance with its Pro
Rata Share.
"L/C Amendment Application" means an
application form for amendment of outstanding
Standby or Commercial Letters of Credit as shall
at any time be in use at the Issuing Bank, as the
Issuing Bank shall request.
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<PAGE>
"L/C Application" means an application form
for issuances of Standby or Commercial Letters of
Credit as shall at any time be in use at the
Issuing Bank, as the Issuing Bank shall request.
"L/C Borrowing" means an extension of credit
resulting from a drawing under any Letter of
Credit which shall not have been reimbursed on the
date when made nor converted into a Borrowing of
Revolving Loans under subsection 3.03(b).
"L/C Commitment" means the commitment of the
Issuing Bank to Issue, and the commitment of the
Banks severally to participate in, Letters of
Credit from time to time Issued or outstanding
under Article III, in an aggregate amount not to
exceed on any date the amount of $50,000,000, as
the same shall be reduced as a result of a
reduction in the L/C Commitment pursuant to
Section 2.05; provided that the L/C Commitment is
a part of the combined Revolving Commitments,
rather than a separate, independent commitment;
and provided further that if as a result of any
Commitment reductions hereunder the L/C Commitment
shall exceed the combined Revolving Commitments ,
the L/C Commitment shall automatically reduce by
the amount of such excess.
"L/C Obligations" means at any time the sum
of (a) the aggregate undrawn amount of all Letters
of Credit then outstanding, plus (b) the amount of
all unreimbursed drawings under all Letters of
Credit, including all outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of
Credit, the L/C Applications, the L/C Amendment
Applications and any other document relating to
any Letter of Credit, including any of the Issuing
Bank's standard form documents for letter of
credit issuances.
"Lead Arranger" means Banc of America
Securities LLC, a Delaware limited liability
company, in its capacity as Sole Lead Arranger and
Sole Book Manager.
"Lending Office" means, as to any Bank, the
office or offices of such Bank specified as its
"Lending Office" or
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<PAGE>
"Domestic Lending Office" or "Offshore Lending
Office," as the case may be, on Schedule 11.02, or
such other office or offices as such Bank may from
time to time notify to the Company and the Agent.
"Letters of Credit" means any letters of
credit (whether Standby Letters of Credit or
Commercial Letters of Credit) Issued by the
Issuing Bank pursuant to Article III.
"Leverage Ratio" means for any period the
ratio of (i) Consolidated Funded Indebtedness to
(ii) EBITDA, calculated on a four quarter rolling
basis for the applicable fiscal quarter and the
three immediately preceding fiscal quarters.
"Lien" means any security interest, mortgage,
deed of trust, pledge, hypothecation, assignment,
charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement
of any kind or nature whatsoever in respect of any
property having the same practical effect as a
security interest (including those created by,
arising under or evidenced by any conditional sale
or other title retention agreement, the interest
of a lessor under a capital lease, any financing
lease having substantially the same economic
effect as any of the foregoing, or the filing of
any financing statement naming the owner of the
asset to which such lien relates as debtor, under
the Uniform Commercial Code or any comparable
law), but not including the interest of a lessor
under an operating lease or the interest of a
purchaser of Permitted Receivables under any
Permitted Receivables Purchase Facility.
"Loan" means an extension of credit, in the
form of a Revolving Loan, Term Loan or a Swingline
Loan by a Bank to the Company under Article II,
which may be a Base Rate Loan or an Offshore Rate
Loan (each a "Type" of Loan), or Article III in
the form of an L/C Advance.
"Loan Documents" means this Agreement, any
Notes, the Fee Letter, and all other documents
delivered to the Agent or any Bank in connection
with the transactions contemplated by this
Agreement.
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<PAGE>
"Majority Banks" means at any time Banks then
holding in excess of 50% of the then aggregate
Credit Exposure of all the Banks, or, if no Credit
Exposure exists, Banks then having in excess of
50% of the sum of the combined Revolving
Commitments and the combined Term Commitments (if
any). As used in this definition, the "Credit
Exposure" of any Bank means (i) with respect to
any outstanding Revolving Loans, the aggregate
outstanding principal amount of the Revolving
Loans made by such Bank, (ii) with respect to any
outstanding Term Loans, the aggregate outstanding
principal amount of the Term Loans made by such
Bank, and (iii) with respect to any outstanding
Swingline Loans and L/C Obligations, the
participating interest therein equal to such
Bank's Pro Rata Share thereof.
"Margin Stock" means "margin stock" as such
term is defined in Regulation T, U or X of the
FRB.
"Material Adverse Effect" means (a) a
material adverse change in, or a material adverse
effect upon, the operations, business, or
condition (financial or otherwise) of the Company,
the Acquired Company and its Subsidiaries taken as
a whole, (b) a material impairment of the ability
of the Company or any Subsidiary to perform under
any Document and to avoid any Event of Default; or
(c) a material adverse effect upon the legality,
validity, binding effect or enforceability against
the Company or any Subsidiary of any Document.
For purposes of this definition, a liability shall
be considered to be material if it involves a cost
to or expenditure by the Person of $35,000,000 or
more, net of amounts recoverable from insurers
where coverage is not contested or pursuant to
uncontested rights of subrogation, contribution or
indemnity.
"Merger" means the merger of the Acquired
Company and the Purchaser, as contemplated by the
Merger Agreement.
"Merger Agreement" means the Agreement and
Plan of Merger, dated as of May 17, 1999, by and
among the Company, the Purchaser and the Acquired
Company.
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<PAGE>
"Minimum Amount" means (i) in respect of any
Borrowing, conversion or continuation of Loans,
(a) in the case of Base Rate Loans or Offshore
Rate Loans, an aggregate minimum amount of
$5,000,000 or any integral multiple of $1,000,000
in excess thereof, (b) in the case of Swingline
Loans, an aggregate minimum amount of $1,000,000
or any integral multiple of $500,000 in excess
thereof (or such other amount as shall be
acceptable to the Swingline Bank); and (ii) in the
case of any reduction of the Commitments under
Section 2.05, or optional prepayment of Loans
under Section 2.07, $10,000,000 or any multiple of
$1,000,000 in excess thereof.
"Minimum Condition" means the minimum number
of shares required to be tendered and not
withdrawn prior to the expiration of the Offer, as
specified in the Merger Agreement.
"Moody's" means Moody's Investors Service,
Inc.
"Multiemployer Plan" means a "multiemployer
plan," within the meaning of Section 4001(a)(3) of
ERISA, to which the Company or any ERISA Affiliate
makes, is making, or is obligated to make
contributions or, during the preceding three
calendar years, has made, or been obligated to
make, contributions.
"Net Equity Proceeds" means, as to the
issuance of any equity securities, cash proceeds
received in connection therewith, net of ordinary
and necessary out-of-pocket costs and expenses
paid or incurred in connection therewith in favor
of any Person not an Affiliate of the Company.
"Net Proceeds" means, as to any Permitted
Receivable Purchase Facility, or the issuance of
any debt or equity securities, cash proceeds
received in connection therewith, net of ordinary
and necessary out-of-pocket costs and expenses
paid or incurred in connection therewith in favor
of any Person not an Affiliate of the Company.
"Note" means a Revolving Note or a Term Note.
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<PAGE>
"Notice of Borrowing" means a notice in
substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a
notice in substantially the form of Exhibit B.
"Obligations" means the Revolving Loans,
Swingline Loans, Term Loans, L/C Obligations and
other Indebtedness arising under any Loan Document
owing by the Company to any Bank, the Agent, the
Issuing Bank, the Swingline Bank, or any
Indemnified Person, whether direct or indirect
(including those acquired by assignment), absolute
or contingent, due or to become due, now existing
or hereafter arising.
"Offer" means, collectively, the Tender Offer
Statement filed by the Purchaser on May 21, 1999
with the SEC on Schedule 14D-1, the Offer to
Purchase dated May 21, 1999, the related letter of
transmittal, and any public announcement relating
to the foregoing.
"Offshore Rate" means: (i) the rate of
interest per annum determined by the Agent to be
the rate of interest per annum (rounded upward to
the nearest 1/100th of 1%) appearing on Dow Jones
Page 3750 (as defined below) for Dollar deposits
in the approximate amount of the Offshore Rate
Loan to be made, continued or converted by BofA
and having a maturity comparable to such Interest
Period, at approximately 11:00 a.m. (London time)
two Business Days prior to the commencement of
such Interest Period, subject to clause
(ii) below; or (ii) if for any reason the rate is
not available as provided in the preceding clause
(i) of this definition, the "Offshore Rate"
instead means the rate of interest per annum
determined by the Agent to be the arithmetic mean
(rounded upward to the nearest 1/16th of 1%) of
the rates of interest per annum notified to the
Agent by BofA as the rate of interest at which
Dollar deposits in the approximate amount of the
Offshore Rate Loan to be made, continued or
converted by BofA, and having a maturity
comparable to such Interest Period, would be
offered to major banks in the London interbank
market at
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<PAGE>
their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement
of such Interest Period. As used in this
definition, "Dow Jones Page 3750" means the
display designated as "3750" on the Dow Jones
Market Service (formerly known as the Telerate
Service) or any replacement page thereof or
successor thereto.
"Offshore Rate Loan" means a Loan that bears
interest based on the Offshore Rate.
"Organization Documents" means, for any
Person, the certificate or articles of
incorporation , the bylaws, any certificate of
determination or instrument relating to the rights
of preferred shareholders of such corporation, any
shareholder rights agreement, any other applicable
organizational or constitutional documents and all
applicable resolutions of the board of directors
(or any committee thereof) of such Person.
"Other Taxes" means any present or future
stamp, court or documentary taxes or any other
excise or property taxes, charges or similar
levies which arise from any payment made hereunder
or from the execution, delivery, performance,
enforcement or registration of, or otherwise with
respect to, this Agreement or any other Loan
Documents.
"Participant" has the meaning specified in
subsection 11.08(d).
"PBGC" means the Pension Benefit Guaranty
Corporation, or any Governmental Authority
succeeding to any of its principal functions under
ERISA.
"Pension Plan" means a pension plan (as
defined in Section 3(2) of ERISA) subject to Title
IV of ERISA which the Company sponsors, maintains,
or to which it makes, is making, or is obligated
to make contributions, or in the case of a
multiple employer plan (as described in Section
4064(a) of ERISA) has made contributions at any
time during the immediately preceding five (5)
plan years.
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<PAGE>
"Permitted Liens" has the meaning specified
in Section 8.01.
"Permitted Receivables" shall mean all
obligations of any obligor (whether now existing
or hereafter arising) under a contract for sale of
goods or services by the Company or any of its
Subsidiaries, which shall include any obligation
of such obligor (whether now existing or hereafter
arising) to pay interest, finance charges or
amounts with respect thereto, and, with respect to
any of the foregoing receivables or obligations,
(a) all of the interest of the Company or any of
its Subsidiaries in the goods (including returned
goods) the sale of which gave rise to such
receivable or obligation after the passage of
title thereto to any obligor, (b) all other Liens
and property subject thereto from time to time
purporting to secure payment of such receivables
or obligations, and (c) all guarantees, insurance,
letters of credit and other agreements or
arrangements of whatever character from time to
time supporting or securing payment of any such
receivables or obligations.
"Permitted Receivables Purchase Facility"
shall mean any agreement of the Company or any of
its Subsidiaries providing for sales, transfers or
conveyances of Permitted Receivables purporting to
be sales (and considered sales under GAAP) that do
not provide, directly or indirectly, for recourse
against the seller of such Permitted Receivables
(or against any of such seller's Affiliates) by
way of a guaranty or any other support arrangement
with respect to the amount of such Permitted
Receivables (based on the financial condition or
circumstances of the obligor thereunder), other
than such limited recourse as is reasonable given
market standards for transactions of a similar
type, taking into account such factors as
historical bad debt loss experience and obligor
concentration levels.
"Permitted Swap Obligations" means all
obligations (contingent or otherwise) of the
Company or any Subsidiary existing or arising
under Swap Contracts, provided that each of the
following criteria is satisfied: (a) such
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<PAGE>
the ordinary course of business for the purpose of
directly mitigating risks associated with
liabilities, commitments or assets held or
reasonably anticipated by such Person, or changes
in the value of securities issued by such Person
in conjunction with a securities repurchase
program not otherwise prohibited hereunder, and
not for purposes of speculation or taking a
"market view;" (b) such Swap Contracts do not
contain (i) any provision ("walk-away" provision)
exonerating the non-defaulting party from its
obligation to make payments on outstanding
transactions to the defaulting party, or (ii) any
provision creating or permitting the declaration
of an event of default, termination event or
similar event upon the occurrence of an Event of
Default hereunder (other than an Event of Default
under subsection 9.01(a).
"Person" means an individual, partnership,
corporation, limited liability company, business
trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority
or any other entity of whatever nature.
"Plan" means an employee benefit plan (as
defined in Section 3(3) of ERISA) which the
Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make
contributions and includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any
time, the percentage equivalent (expressed as a
decimal, rounded to the ninth decimal place) at
such time of (a) in the case of the Revolving
Commitments or the Revolving Loans, such Bank's
Revolving Commitment divided by the combined
Revolving Commitments of all Banks (or, if all
Revolving Commitments have been terminated, the
aggregate principal amount of such Bank's
Revolving Loans divided by the aggregate principal
amount of the Revolving Loans then held by all
Banks), and (b) in the case of the Term
Commitments or the Term Loans, such Bank's Term
Commitment divided by the combined Term
Commitments of all Banks (or, if all Term
Commitments have been terminated, the aggregate
principal amount of such Bank's Term Loans divided
by the aggregate
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<PAGE>
principal amount of Term Loans then held by all
Banks). The initial Pro Rata Share of each Bank
is set forth opposite such Bank's name in Schedule
2.01 under the heading "Pro Rata Share."
"Purchaser" means WGC Acquisition Corp., a
Massachusetts corporation and a Wholly-Owned
Subsidiary of the Company.
"Reimbursement Date" has the meaning set
forth in Section 3.03.
"Replacement Bank" has the meaning specified
in Section 4.08.
"Reportable Event" means, any of the events
set forth in Section 4043(c) of ERISA or the
regulations thereunder, other than any such event
for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the
PBGC.
"Requirement of Law" means, as to any Person,
any law (statutory or common), treaty, rule or
regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable
to or binding upon the Person or any of its
property or to which the Person or any of its
property is subject.
"Responsible Officer" means the chief
executive officer or the president of the Company
(or any other officer having substantially the
same authority and responsibility) or the vice
president and chief financial officer of the
Company (or any other officer having substantially
the same authority and responsibility); and, with
respect certification of financial statements or
compliance with financial covenants, the treasurer
of the Company (or any other officer having
substantially the same authority and
responsibility).
"Revolving Commitment," as to each Bank, has
the meaning specified in subsection 2.01(b).
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<PAGE>
"Revolving Loan" has the meaning specified in
Section 2.01.
"Revolving Note" means a promissory note
executed by the Company in favor of a Bank
pursuant to subsection 2.02(b), in substantially
the form of Exhibit F.
"Revolving Termination Date" means the
earlier to occur of: (a) the sixth anniversary of
the Closing Date (provided that if such sixth
anniversary shall not be a Business Day, then the
Business Day immediately preceding such sixth
anniversary); and (b) the date on which the
Revolving Commitments terminate in accordance with
the provisions of this Agreement.
"S&P" means Standard & Poor's Ratings Group.
"SEC" means the Securities and Exchange
Commission, or any Governmental Authority
succeeding to any of its principal functions.
"Senior Notes" means the notes to be issued
by the Company in a registered offering or
pursuant to Rule 144A or in a private placement in
an aggregate principal amount not to exceed
$300,000,000.
"Significant Subsidiary" means at any time
(i) each U.S. Subsidiary, and (ii) each Foreign
Subsidiary, provided that such Foreign Subsidiary
has at such time either (A) net sales for the
preceding four fiscal quarter period in excess of
1% of Consolidated Total Revenues or (B) total
assets, as of the last day of the preceding fiscal
quarter, constituting 1% or more of Consolidated
Total Assets, in each case based upon the
Company's most recent annual or quarterly
financial statements delivered to the Agent under
Section 7.01.
"Solvent" means, as to any Person at any
time, that (a) the fair value of the property of
such Person is greater than the amount of such
Person's liabilities (including disputed,
contingent and unliquidated liabilities) as such
value is established and liabilities evaluated for
purposes of Section 101(31) of the Bankruptcy
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<PAGE>
Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act (as enacted in the
State of Oregon); (b) the present fair saleable
value of the property of such Person is not less
than the amount that will be required to pay the
probable liability of such Person on its debts as
they become absolute and matured; (c) such Person
is able to realize upon its property and pay its
debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they
mature in the normal course of business; (d) such
Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not
engaged in business or a transaction, and is not
about to engage in business or a transaction, for
which such Person's property would constitute
unreasonably small capital.
"Standby Letter of Credit" means a standby
Letter of Credit Issued to support obligations of
the Company, contingent or otherwise.
"Subsidiary" of a Person means any
corporation, association, partnership, limited
liability company, joint venture or other business
entity of which more than 50% of the voting stock,
membership interests or other equity interests (in
the case of Persons other than corporations), is
owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the
Person, or a combination thereof. Unless the
context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of
the Company.
"Surety Instruments" means all letters of
credit (including standby and commercial),
banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"Swap Contract" means any agreement, whether
or not in writing, relating to any transaction
that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option,
equity or equity index swap or option, bond, note
or bill option, interest rate option, forward
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<PAGE>
foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate
swap, swaption, currency option or any other,
similar transaction (including any option to enter
into any of the foregoing) or any combination of
the foregoing, and, unless the context otherwise
clearly requires, any master agreement relating to
or governing any or all of the foregoing.
"Swap Termination Value" means, in respect of
any one or more Swap Contracts, after taking into
account the effect of any legally enforceable
netting agreement relating to such Swap Contracts,
(a) for any date on or after the date such Swap
Contracts have been closed out and termination
value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior
to the date referenced in clause (a) the amount(s)
determined as the mark-to-market value(s) for such
Swap Contracts, as determined based upon one or
more mid-market or other readily available
quotations provided by any recognized dealer in
such Swap Contracts (which may include any Bank).
"Swingline Bank" means BofA, in its capacity
as maker of Swingline Loans hereunder. Specific
reference to the Swingline Bank shall exclude the
Swingline Bank in its capacity as a Bank
hereunder.
"Swingline Commitment" has the meaning
specified in subsection 2.06(a).
"Swingline Loan" has the meaning specified in
subsection 2.06(a).
"Taxes" means any and all present or future
taxes, levies, assessments, imposts, duties,
deductions, fees, withholdings or similar charges,
and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent,
respectively, taxes imposed on or measured by its
net income (or taxes imposed in lieu of such net
income taxes) by the jurisdiction (or any
political subdivision thereof) under the laws of
which such Bank or the Agent, as the case may be,
is organized or maintains a Lending Office.
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<PAGE>
"Tender Offer" means the offer to purchase
all outstanding shares of common stock of the
Acquired Company for cash in accordance with the
terms of the Offer.
"Tender Offer Expiry Date" means the date on
which all conditions to the Purchaser's obligation
to purchase shares of the Acquired Company
pursuant to the Tender Offer as set forth in
Section 1.1(a) of the Merger Agreement have been
satisfied or waived.
"Term Availability Expiry Date" means the
earliest to occur of: (a) March 1, 2000; (b) the
effective date of the Merger; and (c) the date on
which the Term Commitments terminate in accordance
with the provisions of this Agreement.
"Term Commitment," as to each Bank, has the
meaning specified in subsection 2.01(a).
"Term Loan" has the meaning specified in
Section 2.01.
"Term Maturity Date" means the sixth
anniversary of the Closing Date (provided that if
such sixth anniversary shall not be a Business
Day, then the Business Day immediately preceding
such sixth anniversary).
"Term Note" means a promissory note executed
by the Company in favor of a Bank pursuant to
subsection 2.02(b), in substantially the form of
Exhibit G.
"Transaction" means, collectively, the
Acquisition of the Acquired Company, through the
Tender Offer undertaken by the Purchaser and the
Merger.
"Transaction Documents" means the Merger
Agreement, together with the Offer, and all other
documents and agreements entered into between the
Acquired Company and the Company, the Purchaser
and any of the Company's other Subsidiaries in
furtherance of the transactions contemplated by
the foregoing.
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<PAGE>
"Type" has the meaning specified in the
definition of "Loan."
"UCC" means the Uniform Commercial Code as in
effect in New York.
"Unfunded Pension Liability" means the excess
of a Plan's benefit liabilities under Section
4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with
the assumptions used for funding the Pension Plan
pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." each means the
United States of America.
"U.S. Subsidiary" means a Subsidiary that is
incorporated under the laws of any jurisdiction
(including territories) of the United States or
located in and a resident of the United States.
"Wholly-Owned Subsidiary" means any
corporation in which (other than directors'
qualifying shares required by law) 100% of the
capital stock of each class having ordinary voting
power, and 100% of the capital stock of every
other class, in each case, at the time as of which
any determination is being made, is owned,
beneficially and of record, by the Company, or by
one or more of the other Wholly-Owned
Subsidiaries, or both.
1.02 Other Interpretive Provisions.
(a) (a) The meanings of defined terms are
equally applicable to the singular and plural forms of
the defined terms.
(b) The words "hereof," "herein,"
"hereunder" and similar words refer to this Agreement
as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and
Exhibit references are to this Agreement unless
otherwise specified.
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<PAGE>
(c) The term "documents" includes any and
all instruments, documents, agreements, certificates,
indentures, notices and other writings, however
evidenced.
(d) The term "including" is not limiting and
means "including without limitation."
(e) The term "to the best knowledge of the
Company", or any other term of similar import, means to
the actual knowledge of any executive officer of the
Company or any employee of the Company with management
responsibility for the subject matter as to which the
Company's knowledge is relevant.
(f) In the computation of periods of time
from a specified date to a later specified date, the
word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding," and the word
"through" means "to and including."
(g) Unless otherwise expressly provided
herein, (i) references to agreements (including this
Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such
amendments and other modifications are not prohibited
by the terms of any Loan Document, and (ii) references
to any statute or regulation are to be construed as
including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
(h) The captions and headings of this
Agreement are for convenience of reference only and
shall not affect the interpretation of this Agreement.
(i) This Agreement and other Loan Documents
may use several different limitations, tests or
measurements to regulate the same or similar matters.
All such limitations, tests and measurements are
cumulative and shall each be performed in accordance
with their terms. Unless otherwise expressly provided,
any reference to any action of the Agent or the Banks
by way of consent, approval or waiver shall be deemed
modified by the phrase "in its/their sole discretion."
(j) This Agreement and the other Loan
Documents are
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<PAGE>
the result of negotiations among the Agent, the Company
and the other parties, have been reviewed by counsel to
the Agent, the Company and such other parties, and are
the products of all parties. Accordingly, they shall
not be construed against the Banks or the Agent merely
because of the Agent's or Banks' involvement in their
preparation.
1.03 Accounting Principles.
(a) (a) Unless the context otherwise
clearly requires, all accounting terms not expressly
defined herein shall be construed, and all financial
computations required under this Agreement shall be
made, in accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the
Company.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments.
(a) (a) The Term Credit.
Each Bank severally agrees, on the terms and
conditions set forth herein, to make loans to the
Company (each such loan, a "Term Loan") from time to
time on any Business Day during the period from the
Closing Date to the Term Availability Expiry Date, in
an aggregate amount not to exceed the amount set forth
opposite such Bank's name on Schedule 2.01 under the
heading "Term Commitment" (such amount, as the same may
be reduced under Section 2.08 or reduced or increased
as a result of one or more assignments under Section
11.08, such Bank's "Term Commitment"); provided,
however, that after giving effect to any Borrowing of
Term Loans, (i) the Effective Amount of Term Loans of
such Bank shall not exceed its Term Commitment; and
(ii) the Effective Amount of all outstanding Revolving
Loans plus the Effective Amount of all Swingline Loans
plus the Effective Amount of all L/C Obligations plus
the Effective Amount of all outstanding Term Loans
shall not exceed the Aggregate Commitment. Amounts
borrowed as Term Loans which are repaid or prepaid by
the Company may not be reborrowed.
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<PAGE>
(b) The Revolving Credit. Each Bank
severally agrees, on the terms and conditions set forth
herein, to make loans to the Company (each such loan, a
"Revolving Loan") from time to time on any Business Day
during the period from the Closing Date to the
Revolving Termination Date, in an aggregate amount not
to exceed at any time the amount set forth opposite
such Bank's name on Schedule 2.01 under the heading
"Revolving Commitment" (such amount, as the same may be
reduced under Section 2.05 or reduced or increased as a
result of one or more assignments under Section 11.08,
such Bank's "Revolving Commitment"); provided, however,
that after giving effect to any Borrowing of Revolving
Loans, (i) the Effective Amount of all outstanding
Revolving Loans and Swingline Loans, and the Effective
Amount of all L/C Obligations, shall not at any time
exceed the combined Revolving Commitments; (ii) the
Effective Amount of the Revolving Loans of any Bank,
plus the participation of such Bank in the Effective
Amount of all L/C Obligations and Swingline Loans,
shall not at any time exceed such Bank's Revolving
Commitment; and (iii) the Effective Amount of all
outstanding Revolving Loans plus the Effective Amount
of all Swingline Loans plus the Effective Amount of all
L/C Obligations plus the Effective Amount of all
outstanding Term Loans shall not exceed the Aggregate
Commitment. Within the limits of each Bank's
Commitment, and subject to the other terms and
conditions hereof, the Company may borrow under this
subsection 2.01(b), prepay under Section 2.07 and
reborrow under this subsection 2.01(b).
2.02 Loan Accounts.
(a) (a) The Loans made by each Bank and
the Letters of Credit Issued by the Issuing Bank shall
be evidenced by one or more accounts or records
maintained by such Bank or Issuing Bank, as the case
may be, in the ordinary course of business. The
accounts or records maintained by the Agent, the
Issuing Bank and each Bank shall be conclusive absent
manifest error of the amount of the Loans made by the
Banks to the Company and the Letters of Credit Issued
for the account of the Company, and the interest and
payments thereon. Any failure so to record or any
error in doing so shall not, however, limit or
otherwise affect the obligation of the Company
hereunder to pay any amount owing with respect to the
Loans or any Letter of Credit.
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<PAGE>
(b) Upon the request of any Bank made
through the Agent, the Loans made by such Bank may be
evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall
endorse on the schedules annexed to its Notes the date,
amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company
with respect thereto. Each such Bank is irrevocably
authorized by the Company to endorse its Notes and each
Bank's record shall be conclusive absent manifest
error; provided, however, that the failure of a Bank to
make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect
the obligations of the Company hereunder or under any
such Note to such Bank.
2.03 Procedure for Borrowing.
(a) (a) Each Borrowing of Revolving
Loans or Term Loans shall be made upon the Company's
irrevocable written notice delivered to the Agent in
the form of a Notice of Borrowing (which notice must be
received by the Agent (i) not later than 9:00 a.m. San
Francisco time at least three Business Days prior to
the requested Borrowing Date, in the case of Offshore
Rate Loans and (ii) not later than 9:00 a.m. San
Francisco time at least one Business Day before the
requested Borrowing Date, in the case of Base Rate
Loans), specifying:
(A) the amount of the Borrowing, which
shall be in a Minimum Amount;
(B) whether Revolving or Term Loans, or
Revolving Loans and Term Loans, are
requested, and in the latter case the
respective amounts thereof;
(C) the requested Borrowing Date, which
shall be a Business Day;
(D) the Type of Loans comprising the
Borrowing; and
(E) if applicable, the duration of the
Interest Period applicable to such Loans
included in such notice, subject to the
provisions of the definition of "Interest
Period" herein. If the Notice of Borrowing
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<PAGE>
fails to specify the duration of the Interest
Period for any Borrowing comprised of
Offshore Rate Loans, such Interest Period
shall be 90 days or three months,
respectively;
provided, however, that with respect to the
Borrowing to be made on the Closing Date, the
Notice of Borrowing shall be delivered to the
Agent not later than 8:00 a.m. (San Francisco
time) one Business Day before the Closing
Date and such Borrowing will consist of Base
Rate Loans only; and further provided that if
so requested by the Agent (which shall be
solely for the purpose of facilitating
syndication of the Commitments and the
Loans), all Borrowings during the first 60
days following the Closing Date shall have
the same Interest Period and shall be Base
Rate Loans or Offshore Rate Loans for
Interest Periods no longer than one month.
(b) The Agent will promptly notify each Bank
of its receipt of any Notice of Borrowing and of the
amount of such Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its
Pro Rata Share of each Borrowing available to the Agent
for the account of the Company at the Agent's Payment
Office by 11:00 a.m. (San Francisco time) on the
Borrowing Date requested by the Company in funds
immediately available to the Agent. The proceeds of
each such Borrowing will then be made available to the
Company by the Agent at such office by crediting the
account of the Company on the books of BofA with the
aggregate of the amounts made available to the Agent by
the Banks and in like funds as received by the Agent,
or if requested by the Company, by wire transfer in
accordance with written instructions provided to the
Agent by the Company of such funds as received by the
Agent, unless on the date of the Borrowing all or any
portion of the proceeds thereof shall then be required
to be applied to the repayment of any outstanding
Loans, in which case such proceeds or portion thereof
shall be applied to the payment of such Loans.
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<PAGE>
(d) After giving effect to any Borrowing,
unless the Agent shall otherwise consent, there may not
be more than ten different Interest Periods in effect.
2.04 Conversion and Continuation Elections.
(a) (a) The Company may, upon
irrevocable written notice to the Agent in accordance
with subsection 2.04(b):
(i) elect, as of any Business Day, in
the case of Base Rate Loans (other than Swingline
Loans), or as of the last day of the applicable
Interest Period, in the case of any other Type of
Revolving Loans or Term Loans, to convert any such
Loans (or any part thereof in a Minimum Amount)
into Loans of any other Type; or
(ii) elect, as of the last day of the
applicable Interest Period, to continue any
Revolving Loans or Term Loans having Interest
Periods expiring on such day (or any part thereof
in a Minimum Amount);
provided that if at any time the aggregate amount of
Offshore Rate Loans in respect of any Borrowing is
reduced, by payment, prepayment, or conversion of part
thereof to be less than $5,000,000, such Offshore Rate
Loans shall automatically convert into Base Rate Loans,
and on and after such date the right of the Company to
continue such Loans as, and convert such Loans into,
Offshore Rate Loans shall terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent
(i) not later than 9:00 a.m. (San Francisco time) at
least three Business Days in advance of the Conversion/
Continuation Date, if the Loans are to be converted
into or continued as Offshore Rate Loans; and (ii) not
later than 9:00 a.m. (San Francisco time) at least one
Business Day in advance of time on the
Conversion/Continuation Date, if the Loans are to be
converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation
Date;
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(B) the aggregate amount of Loans to be
converted or continued;
(C) the Type of Loans resulting from the
proposed conversion or continuation; and
(D) other than in the case of conversions
into Base Rate Loans, the duration of the
requested Interest Period, subject to the
provisions of the definition of "Interest
Period" herein.
(c) If upon the expiration of any Interest
Period applicable to Offshore Rate Loans, the Company
has failed to select timely a new Interest Period to be
applicable to such Offshore Rate Loans, or if any
Default or Event of Default then exists, the Company
shall be deemed to have elected to convert such
Offshore Rate Loans into Base Rate Loans effective as
of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank
of its receipt of a Notice of Conversion/Continuation,
or, if no timely notice is provided by the Company, the
Agent will promptly notify each Bank of the details of
any automatic conversion. All conversions and
continuations shall be made ratably according to the
respective outstanding principal amounts of the Loans
with respect to which the notice was given held by each
Bank.
(e) Unless the Majority Banks otherwise
consent, during the existence of a Default or an Event
of Default, the Company may not elect to have a Loan
converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or
continuation of Loans, unless the Agent shall otherwise
consent, there may not be more than ten different
Interest Periods in effect.
2.05 Voluntary Termination or Reduction of
Commitments.
(a) (a) The Company may, upon not less
than three Business Days' prior notice to the Agent,
terminate the Revolving Commitments, or permanently
reduce the Revolving
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Commitments, provided that the aggregate amount of any
partial reduction is in a Minimum Amount; unless, after
giving effect thereto and to any prepayments of any
Loans made on the effective date thereof, (a) the
Effective Amount of all Swingline Loans, Revolving
Loans and L/C Obligations together would exceed the
amount of the combined Revolving Commitments then in
effect, or (b) the Effective Amount of all L/C
Obligations then outstanding would exceed the L/C
Commitment. Once reduced in accordance with this
Section 2.05, the Revolving Commitments may not be
increased. Any reduction of the Revolving Commitments
shall be applied to each Bank according to its Pro Rata
Share. If and to the extent specified by the Company
in the notice to the Agent, some or all of the
reduction in the Revolving Commitments shall be applied
to reduce the L/C Commitment and the Swingline
Commitment. All accrued commitment and letter of
credit fees to, but not including, the effective date
of any termination of Revolving Commitments, shall be
paid on the effective date of such termination.
(b) At no time shall the Swingline
Commitment exceed the combined Revolving Commitments,
and any reduction of the Revolving Commitments which
reduces the combined Revolving Commitments below the
then-current amount of the Swingline Commitment shall
result in an automatic corresponding reduction of the
Swingline Commitment to the amount of the combined
Revolving Commitments , as so reduced, without any
action on the part of the Swingline Bank.
2.06 Swingline Loans.
(a) (a) Subject to the terms and
conditions hereof, the Swingline Bank agrees to make a
portion of the Revolving Commitments available to the
Company by making swingline loans denominated in
Dollars (individually, a "Swingline Loan", and,
collectively, the "Swingline Loans") to the Company on
any Business Day during the period from the Closing
Date to the Revolving Termination Date in accordance
with the procedures set forth in this Section 2.06 in
an aggregate principal amount at any one time
outstanding not to exceed Twenty-Five Million Dollars
($25,000,000), notwithstanding the fact that such
Swingline Loans, when aggregated with any other Credit
Extensions made by or participated in by the Swingline
Bank, may exceed the Swingline Bank's Revolving
Commitment (the amount of such commitment of the
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Swingline Bank to make Swingline Loans to the Company
pursuant to this subsection 2.06(a), as the same shall
be reduced pursuant to subsection 2.05 or as a result
of any assignment pursuant to Section 11.08, the
Swingline Bank's "Swingline Commitment"); provided that
at no time shall (i) the sum of the Effective Amount of
all Swingline Loans plus the Effective Amount of all
Revolving Loans plus the Effective Amount of all L/C
Obligations exceed the combined Revolving Commitments,
or (ii) the Effective Amount of all Swingline Loans
exceed the Swingline Commitment. Additionally, no more
than three Swingline Loans may be outstanding at any
one time, and all Swingline Loans shall at all times be
Base Rate Loans or accrue interest at such other rate
as may be agreed to by the Swingline Bank and the
Company. Within the foregoing limits, and subject to
the other terms and conditions hereof, the Company may
borrow under this subsection 2.06(a), prepay pursuant
to Section 2.07 and reborrow pursuant to this
subsection 2.06(a).
(b) The Company shall provide the Agent
irrevocable written notice (including notice via
facsimile confirmed immediately by a telephone call) in
the form of a Notice of Borrowing of any Swingline Loan
requested hereunder (which notice must be received by
the Agent prior to 11:00 a.m. (San Francisco time) on
the requested Borrowing Date) specifying (i) the amount
to be borrowed, which shall be in a Minimum Amount
(unless otherwise agreed by the Swingline Bank), and
(ii) the requested Borrowing Date, which shall be a
Business Day. Unless the Swingline Bank has received
notice prior to 12:00 Noon (San Francisco time) on such
Borrowing Date from the Agent (including at the request
of any Bank) (A) directing the Swingline Bank not to
make the requested Swingline Loan as a result of the
limitations set forth in the proviso set forth in the
first sentence of subsection 2.06(a); or (B) that one
or more conditions specified in Article V are not then
satisfied; then, subject to the terms and conditions
hereof, the Swingline Bank will, not later than
2:00 p.m. (San Francisco time) on the Borrowing Date
specified in such Notice of Borrowing, make the amount
of its Swingline Loan available to the Company by
crediting the account of the Company on the books of
BofA or if requested by the Company, by wire transfer
in accordance with written instructions provided to
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the Agent by the Company. The Agent will notify the
Banks on a quarterly basis if any Swingline Loan
Borrowings occurred during such quarter.
(c) The Company shall repay to the Swingline
Bank in full on the Revolving Termination Date the
aggregate principal amount of the Swingline Loans
outstanding on the Revolving Termination Date.
(d) With respect to any Swingline Loan, for
one Business Day during each successive ten -Business
Day period the principal amount of such Swingline Loan
shall be $0 (a "Clean-Up Day"). The Company shall
prepay the outstanding principal amount of such
Swingline Loan to the extent required so that a Clean-
Up Day may occur in each such ten (10) - Business Day
period as provided in this subsection 2.06(d) (which
Swingline Loan may not be reborrowed until such Clean-
Up Day has ended).
(e) If:
(i) any Swingline Loan required to be
prepaid under subsection 2.06(d) shall remain
outstanding at 5:00 p.m. (San Francisco time) on
the Business Day immediately prior to a Clean-Up
Day and by such time on such Business Day the
Agent shall have received neither: (A) a Notice
of Borrowing delivered pursuant to Section 2.03
requesting that Revolving Loans be made pursuant
to subsection 2.01 on the Clean-Up Day in an
amount at least equal to the principal amount of
such Swingline Loan; nor (B) any other notice
indicating the Company's intent to repay such
Swingline Loan with funds obtained from other
sources; or
(ii) any such Swingline Loan shall
remain outstanding during the existence of a
Default or Event of Default and the Swingline Bank
shall in its sole discretion notify the Agent that
the Swingline Bank desires that such Swingline
Loan be converted into Revolving Loans;
then the Agent shall be deemed to have received a
Notice of Borrowing from the Company pursuant to
Section 2.03 requesting that Base Rate Loans be made
pursuant to subsection 2.01(b) on such Clean-Up Day
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(in the case of the circumstances described in clause
(i) above) or on the first Business Day subsequent to
the date of such notice from the Swingline Bank (in the
case of the circumstances described in clause
(ii) above) in an amount equal to the amount of such
Swingline Loan, and the procedures set forth in
subsections 2.03(b) and 2.03(c) shall be followed in
making such Base Rate Loans; provided that such Base
Rate Loans shall be made notwithstanding the Company's
failure to comply with Section 5.02, or any other
requirement contained in the definition of "Minimum
Amount" and provided, further, that if a Borrowing of
Revolving Loans becomes legally impracticable and if so
required by the Swingline Bank at the time such
Revolving Loans are required to be made by the Banks in
accordance with this subsection 2.06(e), each Bank
agrees that in lieu of making Revolving Loans as
described in this subsection 2.06(e), such Bank shall
purchase a participation from the Swingline Bank in the
applicable Swingline Loan in an amount equal to such
Bank's Pro Rata Share of such Swingline Loan, and the
procedures set forth in subsections 2.03(b) and 2.03(c)
shall be followed in connection with the purchases of
such participations. Upon such purchases of
participations the prepayment requirements of
subsection 2.06(d) shall be deemed waived with respect
to such Swingline Loan. If any such Swingline Loan
shall remain outstanding in lieu of a Borrowing of
Revolving Loans as provided above, interest on such
Swingline Loan shall be due and payable on demand. The
proceeds of such Base Rate Loans, or participations
purchased, shall be applied to repay such Swingline
Loan. A copy of each notice given by the Agent to the
Banks pursuant to this subsection 2.06(e) with respect
to the making of Revolving Loans, or the purchases of
participations, shall be promptly delivered by the
Agent to the Company. Each Bank's obligation in
accordance with this Agreement to make the Revolving
Loans, or purchase the participations, as contemplated
by this subsection 2.06(e), shall be absolute and
unconditional and shall not be affected by any
circumstance, including (1) any set-off, counterclaim,
recoupment, defense or other right which such Bank may
have against the Swingline Bank, the Company or any
other Person for any reason whatsoever; (2) the
occurrence or continuance of a Default, an Event of
Default or a Material Adverse Effect; or (3) any other
circumstance, happening or event whatsoever, whether or
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not similar to any of the foregoing.
2.07 Optional Prepayments
. Subject to Section 4.04, the Company may, at
any time or from time to time, upon not less than
(i) three Business Days' irrevocable notice to the
Agent (in the case of any Offshore Rate Loans), and
(ii) one Business Day's irrevocable notice to the Agent
(in the case of any Base Rate Loans), ratably prepay
Term Loans, Revolving Loans or Swingline Loans in whole
or in part, in Minimum Amounts. Such notice of
prepayment shall specify the date and amount of such
prepayment, whether such prepayment of Loans is of Term
Loans, Revolving Loans or Swingline Loans (or a
combination thereof), and the Type(s) of Loans to be
prepaid. The Agent will promptly notify the Swingline
Bank (in the case of any prepayment of Swingline Loans)
and each Bank of its receipt of any such notice, and of
such Bank's Pro Rata Share of such prepayment. If such
notice is given by the Company, the Company shall make
such prepayment and the payment amount specified in
such notice shall be due and payable on the date
specified therein, together with (other than in the
case of Base Rate Loans) accrued interest to each such
date on the amount prepaid and any amounts required
pursuant to Section 4.04. Optional prepayments of Term
Loans shall be applied in inverse order of maturity.
2.08 Mandatory Prepayments of Loans; Mandatory
Commitment Reductions.
(a) (a) If on the Term Availability
Expiry Date the aggregate Term Commitments shall exceed
the outstanding principal amount of the Term Loans
made, such unused portion of the Term Commitments shall
automatically terminate on the Term Availability Expiry
Date.
(b) If on any date the Effective Amount of
L/C Obligations exceeds the L/C Commitment, the Company
shall Cash Collateralize on such date the outstanding
Letters of Credit in an amount equal to the excess of
the maximum amount then available to be drawn under the
Letters of Credit over the Aggregate L/C Commitment.
Subject to Section 4.04, if on any date after giving
effect to any Cash Collateralization made on such date
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pursuant to the preceding sentence, the Effective
Amount of all Loans then outstanding plus the Effective
Amount of all L/C Obligations shall exceed the combined
Revolving Commitments, the Company shall immediately,
and without notice or demand, prepay the outstanding
principal amount of the Loans and L/C Advances by an
amount equal to the applicable excess.
(c) If the Company or any Subsidiary shall
at any time or from time to time receive payment of the
proceeds of any sales of Permitted Receivables under a
Permitted Receivables Purchase Facility, then (i) the
Company shall promptly notify the Agent thereof
(including the amount of the estimated Net Proceeds to
be received by the Company or such Subsidiary in
respect thereof) and (ii) promptly upon, and in no
event later than one Business Day after, receipt by the
Company or the Subsidiary of the Net Proceeds of such
sale, the Company shall prepay Term Loans in an
aggregate amount equal to the amount of such Net
Proceeds, to be applied pro rata (on a weighted basis)
to remaining maturities.
(d) Any prepayments pursuant to this Section
2.08 shall be applied first to any Base Rate Loans then
outstanding and then to Offshore Rate Loans with the
shortest Interest Periods remaining; provided, however,
that if the amount of Base Rate Loans then outstanding
is not sufficient to satisfy the entire prepayment
requirement, the Company may, at its option, place any
amounts which it would otherwise be required to use to
prepay Offshore Rate Loans on a day other than the last
day of the Interest Period therefor in an interest-
bearing account pledged to the Agent for the benefit of
the Banks until the end of such Interest Period at
which time such pledged amounts will be applied to
prepay such Offshore Rate Loans. The Company shall
pay, together with each prepayment under this Section
2.08, accrued interest on the amount of any Offshore
Rate Loans prepaid and any amounts required pursuant to
Section 4.04.
(e) Upon the making of any mandatory prepayment under
this Section 2.08 at any time prior to the Term Availability
Expiry Date, the Term Commitments of each Bank shall
automatically be reduced by an amount equal to such Bank's
ratable share of the aggregate of principal repaid, effective as
of the earlier of the date that such prepayment is made or the
date by which such prepayment is due and payable hereunder. All
accrued
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commitment fees to, but not including the effective
date of any reduction or termination of Term
Commitments, shall be paid on the effective date of
such reduction or termination.
2.09 Repayment.
(a) (a) The Term Credit. The Company
shall repay to the Agent for the account of the Banks
on the last Business Day of each calendar quarter the
aggregate principal amount of Term Loans as set forth
in Schedule 2.09 (each a "Principal Payment Date");
provided that on the Term Maturity Date the Company
shall repay the aggregate principal amount of Term
Loans outstanding on such date.
(b) The Revolving Credit. The Company
shall repay to Agent for the account of the Banks on
the Revolving Termination Date the aggregate principal
amount of Revolving Loans outstanding on such date.
2.10 Interest.
(a) (a) (i) Each Revolving Loan and
Term Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing
Date at a rate per annum equal to the Offshore Rate or
the Base Rate, as the case may be (and subject to the
Company's right to convert to other Types of Loans
under Section 2.04), plus the Applicable Margin.
(ii) Each Swingline Loan shall bear interest on the
outstanding principal amount thereof from the
applicable Borrowing Date at a rate per annum equal to
the Base Rate plus the Applicable Margin, or at such
other rate as may be agreed to by the Swingline Bank.
(b) Interest on each Revolving Loan, Term
Loan and Swingline Loan shall be paid in arrears on
each Interest Payment Date applicable to such Loan.
Interest shall also be paid on the date of any
prepayment of Loans (other than Base Rate Loans) under
Section 2.06 or 2.07 for the portion of such Loans so
prepaid and upon payment (including prepayment) in full
thereof and, during the existence of any Event of
Default, interest shall be paid on demand of the Agent
at the request or with the consent of the Majority
Banks.
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(c) Notwithstanding subsection (a) of this
Section, while any Event of Default exists or after
acceleration, the Company shall pay interest (after as
well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all
outstanding Obligations, at a rate per annum which is
determined by adding 2% per annum to the Applicable
Margin then in effect for such Loans and, in the case
of Obligations not subject to an Applicable Margin, at
a rate per annum equal to the Base Rate plus the
Applicable Margin then in effect for Base Rate Loans,
plus 2% per annum; provided, however, that on and after
the expiration of any Interest Period applicable to any
Offshore Rate Loan outstanding on the date of
occurrence of such Event of Default or acceleration,
the principal amount of such Loan shall, during the
continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal
to the Base Rate, plus the Applicable Margin then in
effect for Base Rate Loans, plus 2% per annum.
(d) Anything herein to the contrary
notwithstanding, the obligations of the Company to any
Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any
period for which interest is computed hereunder, to the
extent (but only to the extent) that contracting for or
receiving such payment by such Bank would be contrary
to the provisions of any law applicable to such Bank
limiting the highest rate of interest that may be
lawfully contracted for, charged or received by such
Bank, and in such event the Company shall pay such Bank
interest at the highest rate permitted by applicable
law.
2.11 Fees.
In addition to certain fees described in Section
3.08:
(a) Arrangement, Agency and Other Fees. The
Company shall pay an arrangement fee to the Lead
Arranger for the Lead Arranger's own account, an agency
fee to the Agent for the Agent's own account, and other
fees to the Issuing Bank, as required by the letter
agreement (the "Fee Letter") among the Company, the
Lead Arranger, Agent and Issuing Bank dated May 14,
1999.
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(b) Commitment Fees. The Company shall pay
to the Agent for the account of each Bank a commitment
fee on the actual daily unused portion of such Bank's
Revolving Commitment and Term Commitment, computed on a
quarterly basis in arrears on the last Business Day of
each calendar quarter based upon the daily utilization
for that quarter as calculated by the Agent at a rate
per annum equal to the Applicable Fee Amount. For
purposes of calculating utilization under this
subsection, the Commitments shall be deemed used to the
extent of the Effective Amount of Revolving Loans and
Term Loans then outstanding, plus the Effective Amount
of L/C Obligations then outstanding. Swingline Loans
shall not constitute utilization. Such commitment fee
shall accrue from the date hereof to the Revolving
Termination Date (in the case of the Revolving
Commitments) and the Term Availability Expiry Date (in
the case of the Term Commitments) and shall be due and
payable quarterly in arrears on the last Business Day
of each calendar quarter to the Revolving Termination
Date (in the case of the Revolving Commitments) and the
Term Availability Expiry Date (in the case of the Term
Commitments), with the final payment to be made on the
Revolving Termination Date or Term Availability Expiry
Date, as the case may be; provided that in connection
with any reduction or termination of Commitments under
Section 2.05 or Section 2.08, the accrued commitment
fee calculated for the period ending on such date shall
also be paid on the date of reduction or termination.
The commitment fees provided in this subsection shall
accrue at all times after the above-mentioned
commencement date, including at any time during which
one or more conditions in Article V are not met.
(c) Utilization Fee. If at any time the
Applicable Margin is determined by reference to Level 1
as set forth in the Pricing Grid in Annex I, the
Company shall pay to the Agent for the account of each
Bank a utilization fee on the outstanding Loans at any
time that the aggregate outstanding Loans (including
Swingline Loans) exceed 33% of the Aggregate
Commitment, equal to .125% per annum (any period during
which such utilization fee is payable being hereinafter
referred to as a "Utilization Fee Accrual Period").
Such utilization fee shall be computed on a quarterly
basis in arrears on the last Business Day of each
calendar quarter, shall accrue from the first day of
any Utilization Fee Accrual Period to the last day
thereof and
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shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter to the
Revolving Termination Date (in the case of the
Revolving Loans) and the Term Maturity Date (in the
case of the Term Loans), with the final payment to be
made on the Revolving Termination Date or Term Maturity
Date, as the case may be. The utilization fee, if
applicable, will be added to the Applicable Margin.
2.12 Computation of Fees and Interest.
(a) (a) All computations of interest
for Base Rate Loans when the Base Rate is determined by
BofA's "reference rate" shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual
days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more interest
being paid than if computed on the basis of a 365-day
year). Interest and fees shall accrue during each
period during which interest or such fees are computed
from the first day thereof to the last day thereof.
(b) Each determination of an interest rate
by the Agent shall be conclusive and binding on the
Company and the Banks in the absence of manifest error.
The Agent will, at the request of the Company or any
Bank, deliver to the Company or the Bank, as the case
may be, a statement showing the quotations used by the
Agent in determining any interest rate and the
resulting interest rate.
2.13 Payments by the Company.
(a) (a) All payments to be made by the
Company shall be made without set-off, recoupment or
counterclaim. Except as otherwise expressly provided
herein, all payments by the Company shall be made to
the Agent for the account of the Banks at the Agent's
Payment Office, and shall be made in Dollars and in
immediately available funds, no later than 11:00 a.m.
(San Francisco time) on the date specified herein. The
Agent will promptly distribute to each Bank its Pro
Rata Share (or other applicable share as expressly
provided herein) of such payment in like funds as
received. Any payment received by the Agent later than
11:00 a.m. (San Francisco time) shall be deemed to have
been received on the following Business Day and
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any applicable interest or fee shall continue to
accrue. The Agent will promptly distribute to each
Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such payment in like
funds as received.
(b) Subject to the provisions set forth in
the definition of "Interest Period" herein, whenever
any payment is due on a day other than a Business Day,
such payment shall be made on the following Business
Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the
case may be.
(c) Unless the Agent receives notice from
the Company prior to the date on which any payment is
due to the Banks that the Company will not make such
payment in full as and when required, the Agent may
assume that the Company has made such payment in full
to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required),
in reliance upon such assumption, distribute to each
Bank on such due date an amount equal to the amount
then due such Bank. If and to the extent the Company
has not made such payment in full to the Agent, each
Bank shall repay to the Agent on demand such amount
distributed to such Bank, together with interest
thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Bank until the
date repaid.
2.14 Payments by the Banks to the Agent.
(a) (a) Unless the Agent receives notice
from a Bank on or prior to the Closing Date or, with
respect to any Borrowing after the Closing Date, at
least one Business Day prior to the date of such
Borrowing, that such Bank will not make available as
and when required hereunder to the Agent for the
account of the Company the amount of that Bank's Pro
Rata Share of the Borrowing, the Agent may assume that
each Bank has made such amount available to the Agent
in immediately available funds on the Borrowing Date
and the Agent may (but shall not be so required), in
reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to
the extent any Bank shall not have made its full amount
available to the Agent in immediately available funds
and the
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Agent in such circumstances has made available to the
Company such amount, that Bank shall on the Business
Day following such Borrowing Date make such amount
available to the Agent, together with interest at the
Federal Funds Rate for each day during such period. A
notice of the Agent submitted to any Bank with respect
to amounts owing under this subsection (a) shall be
conclusive, absent manifest error. If such amount is
so made available, such payment to the Agent shall
constitute such Bank's Loan on the date of Borrowing
for all purposes of this Agreement. If such amount is
not made available to the Agent on the Business Day
following the Borrowing Date, the Agent will notify the
Company of such failure to fund and, upon demand by the
Agent, the Company shall pay such amount to the Agent
for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing,
at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such
Borrowing.
(b) The failure of any Bank to make any Loan
on any Borrowing Date shall not relieve any other Bank
of any obligation hereunder to make a Loan on such
Borrowing Date, but no Bank shall be responsible for
the failure of any other Bank to make the Loan to be
made by such other Bank on any Borrowing Date.
2.15 Sharing of Payments, Etc.
If, other than as expressly provided elsewhere
herein, any Bank shall obtain on account of the Loans
made by it any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other
share contemplated hereunder), such Bank shall
immediately (a) notify the Agent of such fact, and
(b) purchase from the other Banks such participations
in the Loans made by them as shall be necessary to
cause such purchasing Bank to share the excess payment
pro rata with each of them; provided, however, that if
all or any portion of such excess payment is thereafter
recovered from the purchasing Bank, such purchase shall
to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid
therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment
to (ii) the total amount so
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recovered from the purchasing Bank) of any interest or
other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Company
agrees that any Bank so purchasing a participation from
another Bank may, to the fullest extent permitted by
law, exercise all its rights of payment (including the
right of set-off, but subject to Section 11.10) with
respect to such participation as fully as if such Bank
were the direct creditor of the Company in the amount
of such participation. The Agent will keep records
(which shall be conclusive and binding in the absence
of manifest error) of participations purchased under
this Section and will in each case notify the Banks
following any such purchases or repayments.
ARTICLE III
THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility.
(a) (a) On the terms and conditions set
forth herein (i) the Issuing Bank agrees, (A) from time
to time on any Business Day during the period from the
Closing Date to the Revolving Termination Date to issue
Letters of Credit for the account of the Company, and
to amend or renew Letters of Credit previously issued
by it, in accordance with subsections 3.02(c) and
3.02(d), and (B) to honor drafts under the Letters of
Credit; and (ii) the Banks severally agree to
participate in Letters of Credit Issued for the account
of the Company; provided that the Issuing Bank shall
not be obligated to Issue, and no Bank shall be
obligated to participate in, any Letter of Credit if as
of the date of Issuance of such Letter of Credit and
after giving effect thereto (the "Issuance Date")
(1) the Effective Amount of all L/C Obligations plus
the Effective Amount of all Revolving Loans plus the
Effective Amount of all Swingline Loans shall exceed
the combined Revolving Commitments, (2) the
participation of any Bank in the Effective Amount of
all L/C Obligations and Swingline Loans plus the
Effective Amount of the Revolving Loans of such Bank
shall exceed such Bank's Revolving Commitment, (3) the
Effective Amount of L/C Obligations shall exceed the
L/C Commitment, or (4) the Effective Amount of all L/C
Obligations plus the Effective Amount of all Revolving
Loans plus the Effective Amount of all Term Loans plus
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the Effective Amount of all Swingline Loans shall
exceed the Aggregate Commitment. Within the foregoing
limits, and subject to the other terms and conditions
hereof, the Company's ability to obtain Letters of
Credit shall be fully revolving, and, accordingly, the
Company may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit which
have expired or which have been drawn upon and
reimbursed.
(b) The Issuing Bank is under no obligation
to Issue any Letter of Credit if:
(i) any order, judgment or decree of
any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the
Issuing Bank from Issuing such Letter of Credit,
or any Requirement of Law applicable to the
Issuing Bank or any request or directive (whether
or not having the force of law) from any
Governmental Authority with jurisdiction over the
Issuing Bank shall prohibit, or request that the
Issuing Bank refrain from, the Issuance of letters
of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank
with respect to such Letter of Credit any
restriction, reserve or capital requirement (for
which the Issuing Bank is not otherwise
compensated hereunder) not in effect on the
Closing Date, or shall impose upon the Issuing
Bank any unreimbursed loss, cost or expense which
was not applicable on the Closing Date and which
the Issuing Bank in good faith deems material to
it;
(ii) the Issuing Bank has received
written notice from any Bank, the Agent or the
Company, on or prior to the Business Day prior to
the requested date of Issuance of such Letter of
Credit, that one or more of the applicable
conditions contained in Article V is not then
satisfied;
(iii) the expiry date of any requested
Letter of Credit is (A) more than 365 days after
the date of Issuance, unless the Majority Banks
have approved such expiry date in writing, or
(B) less than 30 days prior to the Revolving
Termination Date, unless all of the Banks
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have approved such expiry date in writing;
(iv) the expiry date of any requested
Letter of Credit is prior to the maturity date of
any financial obligation to be supported by the
requested Letter of Credit;
(v) any requested Letter of Credit
does not provide for drafts, or is not otherwise
in form and substance acceptable to the Issuing
Bank, or the Issuance of a Letter of Credit shall
violate any applicable policies of the Issuing
Bank;
(vi) any Standby Letter of Credit is
for the purpose of supporting the issuance of any
letter of credit by any other Person;
(vii) any Letter of Credit is in a face
amount less than $500,000 (for Commercial Letters
of Credit, unless otherwise agreed by the Issuing
Bank) or $5,000,000 (for Standby Letters of
Credit); or
(viii) any Letter of Credit is to be
denominated in a currency other than Dollars.
(c) Letters of Credit issued under this
Article III shall be either Standby Letters of Credit
or Commercial Letters or Credit.
3.02 Issuance, Amendment and Renewal of Letters of
Credit.
(a) (a) Each Letter of Credit shall be
issued upon the irrevocable written request of the
Company received by the Issuing Bank (with a copy sent
by the Company to the Agent) at least four Business
Days (or such shorter time as the Issuing Bank may
agree in a particular instance in its sole discretion)
prior to the proposed date of issuance. Each such
request for issuance of a Letter of Credit shall be by
facsimile, confirmed immediately in an original
writing, in the form of an L/C Application, and shall
specify in form and detail satisfactory to the Issuing
Bank: (i) the proposed date of issuance of the Letter
of Credit (which shall be a Business Day); (ii) the
face amount of the Letter of Credit; (iii) the expiry
date of the
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Letter of Credit; (iv) the name and address of the
beneficiary thereof; (v) the documents to be presented
by the beneficiary of the Letter of Credit in case of
any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case
of any drawing thereunder; and (vii) such other matters
as the Issuing Bank may require.
(b) At least two Business Days prior to the
Issuance of any Letter of Credit, the Issuing Bank will
confirm with the Agent (by telephone or in writing)
that the Agent has received a copy of the L/C
Application or L/C Amendment Application from the
Company and, if not, the Issuing Bank will provide the
Agent with a copy thereof. Unless the Issuing Bank has
received notice on or before the Business Day
immediately preceding the date the Issuing Bank is to
issue a requested Letter of Credit from the Agent
(A) directing the Issuing Bank not to issue such Letter
of Credit because such issuance is not then permitted
under subsection 3.01(a) as a result of the limitations
set forth in clauses (1) through (3) thereof or
subsection 3.01(b)(ii); or (B) that one or more
conditions specified in Article V are not then
satisfied; then, subject to the terms and conditions
hereof, the Issuing Bank shall, on the requested date,
issue a Letter of Credit for the account of the Company
in accordance with the Issuing Bank's usual and
customary business practices.
(c) From time to time while a Letter of
Credit is outstanding and prior to the Revolving
Termination Date, the Issuing Bank will, upon the
written request of the Company received by the Issuing
Bank (with a copy sent by the Company to the Agent) at
least four Business Days (or such shorter time as the
Issuing Bank may agree in a particular instance in its
sole discretion) prior to the proposed date of
amendment (including a renewal or extension thereof),
amend any Letter of Credit issued by it. Each such
request for amendment of a Letter of Credit shall be
made by facsimile, confirmed immediately in an original
writing, made in the form of an L/C Amendment
Application and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of
Credit to be amended; (ii) the proposed date of
amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed
amendment; and
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(iv) Issuing Bank shall be under no obligation to amend
any Letter of Credit if: (A) the Issuing Bank would
have no obligation at such time to issue such Letter of
Credit in its amended form under the terms of this
Agreement; or (B) the beneficiary of any such Letter of
Credit does not accept the proposed amendment to the
Letter of Credit. The Agent will promptly notify the
Banks of the Issuance of any Standby Letter of Credit
notified to it by the Issuing Bank. The Banks
acknowledge and agree that the Agent will not notify
them of the receipt by the Agent of any L/C Application
or L/C Amendment Application or of the Issuance of any
Commercial Letter of Credit. From time to time the
Agent will notify the Banks of the amount of all
outstanding Letters of Credit hereunder.
(d) The Issuing Bank and the Banks agree
that, while a Letter of Credit is outstanding and prior
to the Revolving Termination Date, the Issuing Bank
shall be entitled to authorize the renewal of any
Letter of Credit issued by it. The Issuing Bank shall
be under no obligation so to renew any Letter of Credit
if: (A) the Issuing Bank would have no obligation at
such time to issue or amend such Letter of Credit in
its renewed form under the terms of this Agreement; or
(B) the beneficiary of any such Letter of Credit does
not accept the proposed renewal of the Letter of
Credit. If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless
the beneficiary thereof receives notice from the
Issuing Bank that such Letter of Credit shall not be
renewed, and if at the time of renewal the Issuing Bank
would be entitled to authorize the automatic renewal of
such Letter of Credit in accordance with this
subsection 3.02(e) upon the request of the Company but
the Issuing Bank shall not have received any written
direction by the Company with respect thereto, the
Issuing Bank shall nonetheless be permitted to allow
such Letter of Credit to renew, and the Company and the
Banks hereby authorize such renewal, and, accordingly,
the Issuing Bank shall be deemed to have received an
L/C Amendment Application from the Company requesting
such renewal.
(e) The Issuing Bank may, at its election
(or as required by the Agent at the direction of the
Majority Banks), deliver any notices of termination or
other communications to any Letter of Credit
beneficiary or transferee, and take any other action as
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necessary or appropriate, at any time and from time to
time, in order to cause the expiry date of such Letter
of Credit to be a date not later than the Revolving
Termination Date.
(f) This Agreement shall control in the
event of any conflict with any L/C-Related Document
(other than any Letter of Credit).
(g) The Issuing Bank will also deliver to
the Agent, concurrently or promptly following its
delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such
Letter of Credit or amendment to or renewal of a Letter
of Credit.
3.03 Risk Participations, Drawings and
Reimbursements.
(a) (a) Immediately upon the Issuance of
each Letter of Credit, each Bank shall be deemed to,
and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a participation in such
Letter of Credit and each drawing thereunder in an
amount equal to the product of (i) the Pro Rata Share
of such Bank, times (ii) the maximum amount available
to be drawn under such Letter of Credit and the amount
of such drawing, respectively. Each Issuance of a
Letter of Credit shall be deemed to utilize the
Revolving Commitment of each Bank by an amount equal to
the amount of such participation.
(b) In the event of any request for a
drawing under a Letter of Credit by the beneficiary or
transferee thereof, the Issuing Bank will promptly
notify the Company and specify in such notice the date
such drawing will be honored by the Issuing Bank (the
"Honor Date"). If the Issuing Bank so notifies the
Company prior to 9:00 a.m. (San Francisco time) on the
Honor Date, the Company, as account party under such
Letter of Credit, shall reimburse the Issuing Bank no
later than 11:00 a.m. (San Francisco time) on the Honor
Date for the amount paid by the Issuing Bank under such
Letter of Credit or, if the Issuing Bank shall so
notify the Company after 9:00 a.m. (San Francisco time)
on the Honor Date, the Company, as account party under
such Letter of Credit, shall reimburse the Issuing Bank
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no later than 11:00 a.m. (San Francisco time) on the
next succeeding Business Day for the amount paid by the
Issuing Bank under such Letter of Credit on the Honor
Date (each such date, a "Reimbursement Date"), in each
case, in an amount equal to the amount so paid by the
Issuing Bank. In the event the Company fails to
reimburse the Issuing Bank for the full amount of any
drawing under any Letter of Credit by the required time
as provided above on the Reimbursement Date, the
Issuing Bank will promptly notify the Agent, and the
Agent will promptly notify each Bank thereof (including
the amount thereof and such Bank's Pro Rata Share
thereof), and the Company shall be deemed to have
requested that Base Rate Loans be made by the Banks to
the Company to be disbursed on the Reimbursement Date
for such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Commitments and
subject to the conditions set forth in Section 5.02.
The Company hereby directs that the proceeds of any
such Loans deemed to be made by it shall be used to pay
its reimbursement obligations in respect of any such
drawing. Solely for the purposes of making such Loans,
the Minimum Amount limitations set forth in
Section 2.03 shall not be applicable. Any notice given
by the Issuing Bank or the Agent pursuant to this
subsection 3.03(b) may be oral if immediately confirmed
in writing (including by facsimile); provided that the
lack of such an immediate confirmation shall not affect
the conclusiveness or binding effect of such notice.
In the event that any amount of any drawing under any
Letter of Credit is not reimbursed by the Company on
the Honor Date, such unreimbursed amount shall bear
interest until it is either deemed to be an L/C
Borrowing as provided in subsection (d) or deemed to be
converted to a Base Rate Loan as provided in this
subsection (b), at a rate per annum equal to the Base
Rate, plus the Applicable Margin then in effect for
Base Rate Loans.
(c) Each Bank shall upon receipt of any
notice pursuant to subsection 3.03(b) make available to
the Agent for the account of the Issuing Bank an amount
in Dollars and in immediately available funds equal to
its Pro Rata Share of the amount of the drawing,
whereupon such Bank shall (subject to subsection
3.03(d)) be deemed to have made a Revolving Loan
consisting of a Base Rate Loan to the Company in that
amount. The Agent will promptly give notice of the
occurrence of the Reimbursement Date, but failure of
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the Agent to give any such notice on the Reimbursement
Date or in sufficient time to enable any Bank to effect
such payment on such date shall not relieve such Bank
from its obligations under this Section 3.03.
(d) With respect to any unreimbursed drawing
that is not converted into Revolving Loans in whole or
in part, because of the Company's failure to satisfy
the conditions set forth in Section 5.02 or for any
other reason, the Company shall be deemed to have
incurred from the Issuing Bank an L/C Borrowing in the
amount of such drawing, which L/C Borrowing shall be
due and payable on demand (together with interest) and
shall bear interest at a rate per annum equal to the
Base Rate, plus the Applicable Margin then in effect
for Base Rate Loans, plus 2% per annum. In such event,
each Bank shall upon receipt of any notice pursuant to
subsection 3.03(b) make available to the Agent for the
account of the Issuing Bank an amount in Dollars and in
immediately available funds equal to its Pro Rata Share
of the amount of the drawing. Each Bank's payment to
the Issuing Bank pursuant to this subsection 3.03(d)
shall be deemed payment in respect of its participation
in such L/C Borrowing and shall constitute an L/C
Advance from such Bank in satisfaction of its
participation obligation under this Section 3.03.
(e) If any Bank fails to make available to
the Agent for the account of the Issuing Bank the
amount of such Bank's Pro Rata Share of the amount of
any drawing by no later than 12:00 noon (San Francisco
time) on the Reimbursement Date, then interest shall
accrue on such Bank's obligation to make such payment,
from the Reimbursement Date to the date such Bank makes
such payment, at (i) the Federal Funds Rate in effect
from time to time during the period commencing on the
Reimbursement Date and ending on the date three
Business Days thereafter, and (ii) thereafter at the
Base Rate as in effect from time to time, payable on
demand of the Agent.
(f) Each Bank's obligation in accordance
with this Agreement to make or participate in the
Revolving Loans or L/C Advances, as contemplated by
this Section 3.03, as a result of a drawing under a
Letter of Credit, shall be absolute and unconditional
and without recourse to the Issuing Bank and shall not
be affected by any circumstance, including (i) any set-
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off, counterclaim, recoupment, defense or other right
which such Bank may have against the Issuing Bank, the
Company or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default, an
Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event
whatsoever, whether or not similar to any of the
foregoing; provided, however, that each Bank's
obligation to make Revolving Loans under this Section
3.03 is subject to the conditions set forth in Section
5.02.
3.04 Repayment of Participations.
(a) (a) Upon (and only upon) receipt by
the Agent for the account of the Issuing Bank of
immediately available funds from the Company (i) in
reimbursement of any payment made by the Issuing Bank
under the Letter of Credit with respect to which any
Bank has paid the Agent for the account of the Issuing
Bank for such Bank's participation in the Letter of
Credit pursuant to Section 3.03 or (ii) in payment of
interest thereon, the Agent will pay to each Bank, in
the same funds as those received by the Agent for the
account of the Issuing Bank, the amount of such Bank's
Pro Rata Share of such funds, and the Issuing Bank
shall receive the amount of the Pro Rata Share of such
funds of any Bank that did not so pay the Agent for the
account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is
required at any time to return to the Company, or to a
trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of
the payments made by the Company to the Agent for the
account of the Issuing Bank pursuant to subsection
3.04(a) in reimbursement of a payment made under the
Letter of Credit or interest or fee thereon, each Bank
shall, on demand of the Agent, forthwith return to the
Agent or the Issuing Bank the amount of its Pro Rata
Share of any amounts so returned by the Agent or the
Issuing Bank plus interest thereon from the date such
demand is made to the date such amounts are returned by
such Bank to the Agent or the Issuing Bank, at a rate
per annum equal to the Federal Funds Rate in effect
from time to time.
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3.05 Role of the Issuing Bank.
(a) (a) Each Bank and the Company agree
that, in paying any drawing under a Letter of Credit,
the Issuing Bank shall not have any responsibility to
obtain any document (other than any sight draft and
certificates expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of
the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the
respective correspondents, participants or assignees of
the Issuing Bank shall be liable to any Bank for:
(i) any action taken or omitted in connection herewith
at the request or with the approval of the Banks
(including the Majority Banks, as applicable); (ii) any
action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of
any L/C-Related Document.
(c) The Company hereby assumes all risks of
the acts or omissions of any beneficiary or transferee
with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended
to, and shall not, preclude the Company's pursuing such
rights and remedies as it may have against the
beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, nor any of the
respective correspondents, participants or assignees of
the Issuing Bank, shall be liable or responsible for
any of the matters described in clauses (i) through
(vii) of Section 3.06; provided, however, anything in
such clauses to the contrary notwithstanding, that the
Company may have a claim against the Issuing Bank, and
the Issuing Bank may be liable to the Company, to the
extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered
by the Company which the Company proves were caused by
the Issuing Bank's willful misconduct or gross
negligence or the Issuing Bank's willful failure to pay
under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation
of the foregoing: (i) the Issuing Bank may accept
documents that appear on their face to be in order,
without responsibility for further investigation,
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regardless of any notice or information to the
contrary; and (ii) the Issuing Bank shall not be
responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for
any reason.
3.06 Obligations Absolute.
The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the
Issuing Bank for a drawing under a Letter of Credit,
and to repay any L/C Borrowing and any drawing under a
Letter of Credit converted into Revolving Loans, shall
be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement
and each such other L/C-Related Document under all
circumstances, including the following:
(i) any lack of validity or
enforceability of this Agreement or any L/C-
Related Document;
(ii) any change in the time, manner or
place of payment of, or in any other term of, all
or any of the obligations of the Company in
respect of any Letter of Credit or any other
amendment or waiver of or any consent to departure
from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-
off, defense or other right that the Company may
have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person
for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any
other Person, whether in connection with this
Agreement, the transactions contemplated hereby or
by the L/C-Related Documents or any unrelated
transaction;
(iv) any draft, demand, certificate or
other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement
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therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or
otherwise of any document required in order to
make a drawing under any Letter of Credit;
(v) any payment by the Issuing Bank
under any Letter of Credit against presentation of
a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or
any payment made by the Issuing Bank under any
Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor
to any beneficiary or any transferee of any Letter
of Credit, including any arising in connection
with any Insolvency Proceeding;
(vi) any exchange, release or non-
perfection of any collateral, or any release or
amendment or waiver of or consent to departure
from any other guarantee, for all or any of the
obligations of the Company in respect of any
Letter of Credit; or
(vii) any other circumstance or
happening whatsoever, whether or not similar to
any of the foregoing, including any other
circumstance that might otherwise constitute a
defense available to, or a discharge of, the
Company or a guarantor.
3.07 Cash Collateral Pledge.
Upon (i) the request of the Agent, (A) if the
Issuing Bank has honored any full or partial drawing
request on any Letter of Credit and such drawing has
resulted in an L/C Borrowing hereunder, or (B) if, as
of the Revolving Termination Date, any Letters of
Credit may for any reason remain outstanding and
partially or wholly undrawn, or (ii) the occurrence of
the circumstances described in subsection 2.08(b)
requiring the Company to Cash Collateralize Letters of
Credit, then the Company shall immediately Cash
Collateralize the L/C Obligations in an amount equal to
such L/C Obligations. The Company shall, to the extent
necessary, make such additional pledges from time to
time as shall be necessary to ensure that all L/C
Obligations remain at all times fully cash
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collateralized. The Company hereby grants the Agent,
for the benefit of the Agent, the Issuing Bank and the
Banks, a security interest in all such cash and deposit
account balances contemplated by this Section 3.07 or
Section 9.02. Cash collateral held under this Section
3.07 or Section 9.02 shall be maintained in blocked
deposit accounts at BofA.
3.08 Letter of Credit Fees.
(a) (a) The Company shall pay to the
Agent for the account of each of the Banks a letter of
credit fee with respect to the Standby Letters of
Credit equal to the rate per annum equal to the
Applicable Fee Amount of the actual daily maximum
amount available to be drawn of the outstanding Standby
Letters of Credit, computed on a quarterly basis in
arrears on the last Business Day of each calendar
quarter based upon Standby Letters of Credit
outstanding for that quarter as calculated by the
Agent. Such letter of credit fees shall be due and
payable quarterly in arrears on the last Business Day
of each calendar quarter during which Standby Letters
of Credit are outstanding, commencing on the first such
quarterly date to occur after the Closing Date, to the
Revolving Termination Date, with the final payment to
be made on the Revolving Termination Date.
(b) The Company shall pay to the Issuing
Bank, for the Issuing Bank's sole account, a letter of
credit fronting fee for each Letter of Credit Issued by
the Issuing Bank in accordance with the terms of the
Fee Letter. Such Letter of Credit fronting fee shall
be due and payable on each date of Issuance of a Letter
of Credit.
(c) The Company shall pay to the Issuing
Bank, for the Issuing Bank's sole account, a letter of
credit fee with respect to the amount from time to time
available to be drawn under Commercial Letters of
Credit in such amount and on such dates as shall
separately be agreed between the Issuing Bank and the
Company.
(d) The Company shall pay to the Issuing
Bank, for the Issuing Bank's sole account, from time to
time on demand the normal issuance, presentation,
amendment and other processing
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fees, and other standard costs and charges, of the
Issuing Bank relating to letters of credit as from time
to time in effect.
3.09 Applicability of Uniform Customs and Practice
and ISP98
. Unless otherwise expressly agreed by the
Issuing Bank and the Company when a Letter of Credit is
issued and subject to applicable laws, performance
under Letters of Credit by the Issuing Bank, its
correspondents, and beneficiaries will be governed by
(i) with respect to Standby Letters of Credit, the
rules of the "International Standby Practices 1998"
(ISP98) or such later revision as may be published by
the Institute of International Banking Law & Practice
on any date any Standby Letter of Credit may be issued,
and (ii) with respect to Commercial Letters of Credit,
the rules of the Uniform Customs and Practice for
Documentary Credits, as published in its most recent
version by the International Chamber of Commerce (the
"ICC") on the date any Commercial Letter of Credit is
issued.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes.
(a) (a) Any and all payments by the
Company to each Bank or the Agent under this Agreement
and any other Loan Document shall be made free and
clear of, and without deduction or withholding for, any
Taxes. In addition, the Company shall pay all Other
Taxes.
(b) If the Company shall be required by law
to deduct or withhold any Taxes, Other Taxes or Further
Taxes from or in respect of any sum payable hereunder
to any Bank or the Agent, then:
(i) the sum payable shall be increased
as necessary so that, after making all required
deductions and withholdings (including deductions
and withholdings applicable to additional sums
payable under this Section),
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such Bank or the Agent, as the case may be,
receives and retains an amount equal to the sum it
would have received and retained had no such
deductions or withholdings been made;
(ii) the Company shall make such
deductions and withholdings;
(iii) the Company shall pay the full
amount deducted or withheld to the relevant taxing
authority or other authority in accordance with
applicable law; and
(iv) the Company shall also pay to each
Bank or the Agent for the account of such Bank, at
the time interest is paid, Further Taxes in the
amount that the respective Bank specifies as
necessary to preserve the after-tax yield such
Bank would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold
harmless each Bank and the Agent for the full amount of
(i) Taxes, (ii) Other Taxes, and (iii) Further Taxes in
the amount that the respective Bank specifies as
necessary to preserve the after-tax yield such Bank
would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability
(including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto,
whether or not such Taxes, Other Taxes or Further Taxes
were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the
date such Bank or the Agent makes written demand
therefor.
(d) Within 30 days after the date of any
payment by the Company of Taxes, Other Taxes or Further
Taxes, the Company shall furnish to each Bank or the
Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of
payment reasonably satisfactory to such Bank or the
Agent.
(e) If the Company is required to pay any
amount to any Bank or the Agent pursuant to subsection
(b) or (c) of this Section, then such Bank shall use
reasonable efforts (consistent with legal and
regulatory restrictions) to change the
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jurisdiction of its Lending Office so as to eliminate
any such additional payment by the Company which may
thereafter accrue, if such change in the sole judgment
of such Bank is not otherwise disadvantageous to such
Bank.
(f) Each non-United States Bank represents
and warrants to the Agent and the Company as of the
date hereof that under applicable law and treaties no
tax will be required to be withheld by such Bank with
respect to any payments to be made to such Bank
hereunder.
4.02 Illegality.
(a) (a) If any Bank determines that the
introduction of any Requirement of Law, or any change
in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it
unlawful, or that any central bank or other
Governmental Authority has asserted that it is
unlawful, for any Bank or its applicable Lending Office
to make Offshore Rate Loans, then, on notice thereof by
such Bank to the Company through the Agent, any
obligation of that Bank to make Offshore Rate Loans
shall be suspended until such Bank notifies the Agent
and the Company that the circumstances giving rise to
such determination no longer exist.
(b) If a Bank determines that it is unlawful
to maintain any Offshore Rate Loan, the Company shall,
upon its receipt of notice of such fact and demand from
such Bank (with a copy to the Agent), prepay in full
such Offshore Rate Loans of that Bank then outstanding,
together with interest accrued thereon and amounts
required under Section 4.04, either on the last day of
the Interest Period thereof, if such Bank may lawfully
continue to maintain such Offshore Rate Loans to such
day, or immediately, if such Bank may not lawfully
continue to maintain such Offshore Rate Loan. If the
Company is required to so prepay any Offshore Rate
Loan, then concurrently with such prepayment, the
Company shall borrow from the affected Bank, in the
amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or
maintain Offshore Rate Loans has been so terminated or
suspended, the Company may elect, by giving notice to
such Bank through the
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Agent that all Loans which would otherwise be made by
such Bank as Offshore Rate Loans shall be instead Base
Rate Loans.
4.03 Increased Costs and Reduction of Return.
(a) (a) If any Bank determines that, due
to either (i) the introduction of or any change in or
in the interpretation of any law or regulation or
(ii) the compliance by that Bank with any guideline or
request from any central bank or other Governmental
Authority (whether or not having the force of law),
there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining any
Offshore Rate Loans or participating in Letters of
Credit, or, in the case of the Issuing Bank, any
increase in the cost to the Issuing Bank of agreeing to
issue, issuing or maintaining any Letter of Credit or
of agreeing to make or making, funding or maintaining
any unpaid drawing under any Letter of Credit, then the
Company shall be liable for, and shall from time to
time, upon demand (with a copy of such demand to be
sent to the Agent), pay to the Agent for the account of
such Bank, additional amounts as are sufficient to
compensate such Bank for such increased costs.
(b) If any Bank shall have determined that
(i) the introduction of any Capital Adequacy
Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by
any central bank or other Governmental Authority
charged with the interpretation or administration
thereof, or (iv) compliance by such Bank (or its
Lending Office) or any corporation controlling such
Bank with any Capital Adequacy Regulation, affects or
would affect the amount of capital required or expected
to be maintained by such Bank or any corporation
controlling such Bank and (taking into consideration
such Bank's or such corporation's policies with respect
to capital adequacy and such Bank's desired return on
capital) determines that the amount of such capital is
increased as a consequence of its Commitment, loans,
credits or obligations under this Agreement, then, upon
demand of such Bank to the
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Company through the Agent, the Company shall pay to
such Bank, from time to time as specified by such Bank,
additional amounts sufficient to compensate such Bank
for such increase.
4.04 Funding Losses
. The Company shall reimburse each Bank and hold
each Bank harmless from any loss or expense which such
Bank may sustain or incur as a consequence of:
(a) the failure of the Company to make on a
timely basis any payment of principal of any Offshore
Rate Loan;
(b) the failure of the Company to borrow,
continue or convert a Loan after the Company has given
(or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/ Continuation;
(c) the failure of the Company to make any
prepayment in accordance with any notice delivered
under Section 2.07 or 2.08;
(d) the prepayment (including pursuant to
Section 2.07, 2.08 or 4.02(b)) or other payment
(including after acceleration thereof) of an Offshore
Rate Loan on a day that is not the last day of the
relevant Interest Period; or
(e) the conversion under Section 2.04 of any
Offshore Rate Loan to a Base Rate Loan on a day that is
not the last day of the relevant Interest Period;
including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to
maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were
obtained. For purposes of calculating amounts payable
by the Company to the Banks under this Section and
under subsection 4.03(a), each Offshore Rate Loan made
by a Bank (and each related reserve, special deposit or
similar requirement) shall be conclusively deemed to
have been funded at the LIBOR used in determining the
Offshore Rate for such Offshore Rate Loan by a matching
deposit or other borrowing in the interbank eurodollar
market for a comparable amount and for
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a comparable period, whether or not such Offshore Rate
Loan is in fact so funded.
4.05 Inability to Determine Rates
. If the Agent determines that for any reason
adequate and reasonable means do not exist for
determining the Offshore Rate for any requested
Interest Period with respect to a proposed Borrowing of
Offshore Rate Loans or conversion or continuation of
Offshore Rate Loans, or that the Offshore Rate
applicable pursuant to subsection 2.10(a) for any
requested Interest Period with respect to a proposed
Borrowing of Offshore Rate Loans or a conversion into
or continuation of Offshore Rate Loans does not
adequately and fairly reflect the cost to the Banks of
funding such Loans, the Agent will promptly so notify
the Company and each Bank. Thereafter, the obligation
of the Banks to make or maintain Offshore Rate Loans,
as the case may be, hereunder shall be suspended until
the Agent revokes such notice in writing. Upon receipt
of such notice, the Company may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then
submitted by it. If the Company does not revoke such
Notice, the Banks shall make, convert or continue the
Loans, as proposed by the Company, in the amount
specified in the applicable notice submitted by the
Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of Offshore Rate
Loans.
4.06 Reserves on Offshore Rate Loans
. The Company shall pay to each Bank, as long as
such Bank shall be required under regulations of the
FRB to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or
deposits (currently known as "Eurocurrency
liabilities"), additional interest on the unpaid
principal amount of each Offshore Rate Loan equal to
the actual costs of such reserves allocated to such
Loan by such Bank (as determined by such Bank in good
faith, which determination shall be conclusive absent
manifest error), payable on each date on which interest
is payable on such Loan, provided the Company shall
have received at least 15 days' prior written notice
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(with a copy to the Agent) of such additional interest
from the Bank. If a Bank fails to give notice 15 days
prior to the relevant Interest Payment Date, such
additional interest shall be payable 15 days from
receipt of such notice.
4.07 Certificates of Banks
(a) . (a) Any Bank claiming
reimbursement or compensation under this Article IV
shall deliver to the Company (with a copy to the Agent)
a certificate setting forth in reasonable detail the
amount payable to such Bank hereunder and such
certificate shall be conclusive and binding on the
Company in the absence of manifest error.
(b) Failure or delay on the part of any
Bank, the Swingline Bank or the Issuing Bank to demand
compensation, reimbursement or indemnity under this
Article IV for Taxes, Further Taxes, Other Taxes,
increased costs, reduction in amounts received or
receivable, or reduction in return on capital shall not
constitute a waiver of such Bank's or the Issuing
Bank's right to demand such compensation; provided that
neither any Bank nor the Issuing Bank shall be entitled
to compensation under this Article IV for any amounts
with respect to any date unless such Bank, the
Swingline Bank or the Issuing Bank, as the case may be,
shall have notified the Company not more than 90 days
after the later of (i) such date and (ii) the date on
which such Bank, the Swingline Bank or the Issuing
Bank, as applicable, shall have become aware of such
Taxes, Further Taxes, Other Taxes, costs or reductions.
4.08 Substitution of Banks
. Upon the receipt by the Company from any Bank
(an "Affected Bank") of a claim for compensation under
Section 4.03, the Company may: (i) request one or more
of the other Banks to acquire and assume all or part of
such Affected Bank's Loans and Commitment; or
(ii) designate a replacement lending institution (which
shall be an Eligible Assignee) to acquire and assume
all or a ratable part of such Affected Bank's Loans and
Commitment (a "Replacement Bank"); provided, however,
that the Company shall be liable for the payment upon
demand of all costs and other amounts arising under
Section 4.04 that result from the acquisition of any
Affected Bank's Loan and/or Commitment (or
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any portion thereof) by a Bank or Replacement Bank, as
the case may be, on a date other than the last day of
the applicable Interest Period with respect to any
Offshore Rate Loan then outstanding. Any such
designation of a Replacement Bank under clause (i) or
(ii) shall be effected in accordance with, and subject
to the terms and conditions of, the assignment
provisions contained in Section 11.08, and shall in any
event be subject to the prior written consent of the
Agent, the Issuing Bank and the Swingline Bank (which
consent shall not be unreasonably withheld or delayed).
4.09 Survival
. The agreements and obligations of the Company
in this Article IV shall survive the termination of the
Commitments, the termination or expiration of all
Letters of Credit and the payment of all other
Obligations.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions of Initial Credit Extensions
. The obligation of each Bank and the Swingline
Bank to make its initial Credit Extension hereunder and
the obligation of the Issuing Bank to Issue its initial
Letter of Credit shall be subject to the condition that
the Agent shall have received on or before the Closing
Date all of the following, in form and substance
reasonably satisfactory to the Agent and each Bank, and
in sufficient copies for each Bank:
(a) Credit Agreement and Notes. This
Agreement executed on or before July 30, 1999 by each
party hereto and Notes executed by the Company for the
Banks requesting Notes;
(b) Resolutions; Incumbency. Each of the
following:
(i) Copies of the resolutions of the
board of directors of the Company authorizing the
transactions contemplated hereby, certified as of
the Closing Date by
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(ii) the Secretary or an Assistant
Secretary of the Company; and
(iii) certificates of the Secretary or
Assistant Secretary of the Company, dated as of
the Closing Date, certifying the names, titles and
true signatures of the officers of the Company
authorized to execute, deliver and perform this
Agreement and all other Documents to be delivered
by it hereunder;
(c) Organization Documents; Good Standing.
Each of the following:
(i) the articles of incorporation and
the bylaws of the Company as in effect on the
Closing Date, certified by the Secretary or
Assistant Secretary of the Company as of the
Closing Date; and
(ii) a status certificate for the
Company from the Secretary of State (or similar,
applicable Governmental Authority) of its state of
incorporation, as of a recent date;
(d) Legal Opinions. Each of the following:
(i) an opinion of Stoel Rives LLP,
counsel to the Company and addressed to the Agent
and the Banks, dated the Closing Date,
substantially in the form of Exhibit D; and
(ii) a favorable opinion of Brobeck,
Phleger & Harrison LLP, special counsel to the
Agent, dated the Closing Date;
(e) Payment of Fees. Evidence of payment by
the Company of all accrued and unpaid fees, costs and
expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of BofA to
the extent invoiced prior to or on the Closing Date,
plus such additional amounts of Attorney Costs as shall
constitute BofA's reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing
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proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between
the Company and BofA); including any such costs, fees
and expenses arising under or referenced in Sections
2.11 and 11.04;
(f) Documents and Actions Relating to the
Transaction. A certificate of a Responsible Officer of
the Company certifying (i) that the Tender Offer Expiry
Date has passed and there has been validly tendered, in
accordance with the terms of the Tender Offer, and for
a share price not in excess of $20.00, sufficient
shares to satisfy the Minimum Condition and evidence
that all material terms and conditions of the Offer,
other than payment for tendered shares, have been
satisfied; and (ii) that all (A) authorizations,
consents or approvals of, notices to or filings with,
any Governmental Authority, including pursuant to the
HSR Act, and (B) approvals and consents of any other
Person, required in connection with the Tender Offer,
the Transaction or the execution, delivery and
performance of the Transaction Documents, shall have
been obtained or made and that all applicable waiting
periods have expired without notice of any action which
seeks to restrain, enjoin or otherwise prohibit or
significantly delay the Transaction having been taken
by any Governmental Authority;
(g) Documents and Actions Relating to the
Bridge Credit Agreement. A certificate of a
Responsible Officer of the Company certifying that all
conditions precedent to the closing of the loans under
the Bridge Credit Agreement shall have been satisfied
in accordance with the terms and conditions thereof
(other than any conditions relating to the closing of
the transactions contemplated by this Agreement);
(h) Certificate. A certificate signed by a
Responsible Officer, dated as of the Closing Date,
stating that:
(i) the representations and warranties
contained in Article VI are true and correct on
and as of such date, as though made on and as of
such date (except to the extent such
representations and warranties expressly refer to
an earlier date, in which case they shall be true
and correct as of such earlier date); and
(ii) no Default or Event of Default
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exists or would result from the Credit Extension.
(i) Existing Credit Facility. Evidence satisfactory
to the Agent that the commitments to extend credit under the
Existing Credit Facility have been terminated and that all
principal, interest, charges and fees due thereunder have been
paid or that arrangements reasonably satisfactory to the Agent
for the payment thereof have been made by the Company (the
Company and each Bank party hereto that is lender under the
Existing Credit Facility acknowledging that such commitments
shall be terminated simultaneously with the closing hereunder);
and
(j) Other Documents.
(i) The audited balance sheet of the
Company and its Subsidiaries as at March 29, 1998,
and the related consolidated statements of income,
shareholders' equity and cash flows for the fiscal
year then ended, and the unaudited consolidated
balance sheet of the Company and its Subsidiaries
as at March 28, 1999, and the related consolidated
statements of income, shareholders' equity and
cash flows, for the fiscal quarter then ended,
certified by a Responsible Officer of the Company;
(ii) the pro forma balance sheet of and
five-year financial statement projections for the
Company and its Subsidiaries and the Acquired
Company and its Subsidiaries as of and commencing
at the Closing Date, and a completed Compliance
Certificate as of the Closing Date based on such
pro forma balance sheet and projections, each
giving effect to the Transaction and the
transactions contemplated in connection therewith
and reflecting good faith estimated purchase price
accounting adjustments, certified by a Responsible
Officer of the Company;
(iii) a true and complete copy of the
Merger Agreement and such other Transaction
Documents as any Bank or the Agent may reasonably
specify, certified by a Responsible Officer of the
Company; and
(iv) such other approvals, opinions,
documents or materials as the Agent or any Bank
may reasonably request;
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(k) Notice, Application. The Agent shall
have received a Notice of Borrowing or in the case of
any Issuance of any Letter of Credit, the Issuing Bank
and the Agent shall have received an L/C Application or
L/C Amendment Application, as required under Section
3.02;
(l) Representations and Warranties. The
representations and warranties in Article VI shall be
true and correct on and as of the Closing Date with the
same effect as if made on and as of the Closing Date
(except to the extent such representations and
warranties expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier
date); and
(m) No Existing Default. No Default or
Event of Default shall exist or shall result from the
Credit Extension.
5.02 Conditions to Subsequent Credit Extensions
. The obligation of each Bank and the Swingline
Bank to make any subsequent Credit Extension after the
Closing Date and the obligation of the Issuing Bank to
Issue any Letter of Credit after the Closing Date shall
be subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or
Issuance Date:
(a) Notice, Application. The Agent shall
have received a Notice of Borrowing or in the case of
any Issuance of any Letter of Credit, the Issuing Bank
and the Agent shall have received an L/C Application or
L/C Amendment Application, as required under Section
3.02;
(b) Representations and Warranties. The
representations and warranties in Article VI shall be
true and correct on and as of such Borrowing Date or
Issuance Date with the same effect as if made on and as
of such Borrowing Date or Issuance Date (except to the
extent such representations and warranties expressly
refer to an earlier date, in which case they shall be
true and correct as of such earlier date) and except
that this subsection (b) shall be deemed instead to
refer to the last day of the most recent quarter and
year for which financial statements have then been
delivered in respect of the representation and warranty
made in subsection 6.11(a));
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(c) No Existing Default. No Default or
Event of Default shall exist or shall result from such
Borrowing or Issuance; and
(d) No Material Adverse Effect. There has
occurred since December 31, 1998 (as to the Company and
its Subsidiaries) and February 28, 1999 (as to the
Acquired Company and its Subsidiaries), no event or
circumstances that has resulted or could reasonably be
expected to result in a Material Adverse Effect.
Each Notice of Borrowing, and L/C Application or L/C
Amendment Application submitted by the Company
hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of
each such notice and as of each Borrowing Date or
Issuance Date, as applicable, that the conditions in
this Section 5.02 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent
and each Bank that:
6.01 Corporate Existence and Power.
The Company and each of its Subsidiaries:
(a) (i) (in the case of the Company) is a
corporation duly organized and validly existing under
the laws of the State of Oregon, and (ii) (in the case
of any Subsidiary) is a corporation, limited liability
company or partnership duly organized or formed, as the
case may be, validly existing and in good standing (if
applicable) under the laws of the jurisdiction of its
incorporation or formation;
(b) (i) has the organizational power and
authority and all material governmental licenses,
authorizations, consents and approvals to own its
assets and carry on its business and (ii) has the
organizational power and authority and all governmental
licenses, authorizations, consents and approvals to
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execute, deliver, and perform its obligations under the
Documents to which it is a party;
(c) is duly qualified, licensed and in good
standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the
conduct of its business requires such qualification,
license or good standing; and
(d) is in compliance with all material
Requirements of Law; except, in each case referred to
in clause (a)(ii), (b)(i), (c) or (d) where failure to
do so could not reasonably be expected to have a
Material Adverse Effect.
6.02 Corporate Authorization; No Contravention
. The execution, delivery and performance by the
Company and its Subsidiaries of this Agreement and each
other Document to which such Person is party, have been
duly authorized by all necessary corporate action, and
do not and will not:
(a) contravene the terms of any of that
Person's Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien (other
than Permitted Liens) under, any document evidencing
any Contractual Obligation to which such Person is a
party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its
property is subject; or
(c) violate any Requirement of Law.
6.03 Governmental Authorization
. No approval, consent, exemption, authorization,
or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in
connection with (i) the execution, delivery or
performance by, or enforcement against, the Company or
any of its Subsidiaries of this Agreement or any other
Document or (ii) the consummation of the Tender Offer
or the Transaction, except, in the case of this clause
(ii),
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(A) such as will be obtained before the Tender
Offer Expiry Date or (B) where failure to obtain or
effect any of the foregoing could not reasonably be
expected to have a Material Adverse Effect.
6.04 Binding Effect
(a) (a) This Agreement and each other
Document to which the Company or any of its
Subsidiaries is a party constitute the legal, valid and
binding obligations of the Company or the Subsidiary
party thereto, enforceable against such Person in
accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable
principles relating to enforceability.
(b) The Merger Agreement is in full force
and effect, enforceable against the parties thereto in
accordance with its terms, and has not been amended or
modified in any material respect since its date of
execution. The Offer has not been amended or modified
in any material respect.
6.05 Litigation
. Except as specifically disclosed in Schedule
6.05, there are no actions, suits, proceedings, claims
or disputes pending, or to the best knowledge of the
Company, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority,
against the Company, the Acquired Company, or its
Subsidiaries or any of their respective properties
which:
(a) purport to affect or pertain to this
Agreement or any other Document, or any of the
transactions contemplated hereby or thereby; or
(b) if determined adversely to the Company
or its Subsidiaries, would reasonably be expected to
have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature
has been issued by any court or other Governmental
Authority purporting to enjoin or restrain
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the execution, delivery or performance of this
Agreement or any other Document, or directing that the
transactions provided for herein or therein not be
consummated as herein or therein provided.
6.06 No Defaults
. No Default or Event of Default exists or would
result from the incurring of any Obligations by the
Company. Neither the Company nor any Subsidiary is in
default under or with respect to any Contractual
Obligation in any respect which, individually or
together with all such defaults, could reasonably be
expected to have a Material Adverse Effect, or that
would create an Event of Default under subsection
9.01(e).
6.07 ERISA Compliance
. Except as specifically disclosed in Schedule
6.07:
(a) Each Plan is in compliance in all
material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a)
of the Code has received a favorable determination
letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the
loss of such qualification where the failure to be so
qualified could reasonably be expected to have a
Material Adverse Effect. The Company and each ERISA
Affiliate has made all required contributions to any
Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
(b) There are no pending or, to the best
knowledge of Company, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with
respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse
Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with
respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse
Effect.
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(c) (i) No ERISA Event has occurred or is
reasonably expected to occur; (ii) no Pension Plan has
any Unfunded Pension Liability; (iii) neither the
Company nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title
IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007
of ERISA); (iv) neither the Company nor any ERISA
Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with
the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and
(v) neither the Company nor any ERISA Affiliate has
engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
6.08 Use of Proceeds; Margin Regulations
. The proceeds of the Loans are to be used solely
for the purposes set forth in and permitted by Section
7.12 and Section 8.07. Neither the Company nor any
Subsidiary is generally engaged in the business of
purchasing or selling Margin Stock or extending credit
for the purpose of purchasing or carrying Margin Stock.
6.09 Title to Properties; Liens.
The Company and each Subsidiary have good record
and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or
used in the ordinary conduct of their respective
businesses, except for such properties and defects in
title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse
Effect. The property of the Company and its
Subsidiaries is subject to no Liens, other than
Permitted Liens.
6.10 Taxes.
The Company and its Significant Subsidiaries
have filed all Federal and other material tax returns
and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them
or their properties, income or assets otherwise due and
payable, except those which are being contested in good
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faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP.
There is no proposed tax assessment against the Company
or any Subsidiary that would, if made, have a Material
Adverse Effect.
6.11 Financial Condition.
(a) (a) The audited consolidated balance
sheet of the Company and its Subsidiaries dated
March 29, 1998, the unaudited balance sheet of the
Company and its Subsidiaries dated March 28, 1999 and,
in each case, the related consolidated statements of
income or operations, shareholders' equity and cash
flows for the fiscal period ended on that date:
(i) were prepared in accordance with
GAAP consistently applied throughout the periods
covered thereby, except as otherwise expressly
noted therein, subject to the absence of footnotes
and ordinary, good faith year end audit
adjustments in the case of quarterly financial
statements;
(ii) fairly present in all material
respects the financial condition of the Company
and its Subsidiaries as of the date thereof and
the results of operations and cash flows for the
periods covered thereby; and
(iii) except as specifically disclosed
in Schedule 6.11, reflect, by footnote disclosure
or otherwise, all material Indebtedness and other
liabilities, direct or contingent, of the Company
and its consolidated Subsidiaries as of the date
thereof, including liabilities for taxes, material
commitments and Contingent Obligations.
(b) The pro forma financial statements of
the Company and its Subsidiaries referred to in
subsection 5.01(k)(ii) were prepared on a basis
consistent with GAAP as applied to the Company's
financial statements, have been prepared in good faith
by the Company based on reasonable assumptions, are
based on the best information available to the Company
as of the date of delivery thereof, accurately reflect
all material adjustments required to be made to give
effect to the Transaction, and present fairly on a pro
forma basis the estimated consolidated financial
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position of the Company as of the date thereof,
assuming consummation of the Transaction.
(c) Since December 31, 1998 (as to the
Company and its Subsidiaries) and February 28, 1999 (as
to the Acquired Company and its Subsidiaries) there has
not been any Material Adverse Effect.
6.12 Environmental Matters
. The Company conducts in the ordinary course of
business a review of the effect of existing
Environmental Laws and existing Environmental Claims on
its business, operations and properties, and as a
result thereof the Company has reasonably concluded
that, except as specifically disclosed in Schedule
6.12, such Environmental Laws and Environmental Claims
could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.13 Regulated Entities
. None of the Company, any Person controlling the
Company, or any Subsidiary is an "Investment Company"
within the meaning of the Investment Company Act of
1940. The Company is not subject to regulation under
the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any
state public utilities code, or any other Federal or
state statute or regulation limiting its ability to
incur Indebtedness.
6.14 No Burdensome Restrictions; No Restrictions
on Subsidiary Dividends
. Neither the Company nor any Subsidiary is a party to
or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document or any
Requirement of Law, which could reasonably be expected
to have a Material Adverse Effect. Except as permitted
by Section 8.16, neither the Company nor any Subsidiary
is a party to or bound by any Contractual Obligation
which expressly restricts, limits or prohibits the
payment of dividends by any Subsidiary or the making of
any other distribution in respect of such Subsidiary's
capital stock.
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6.15 Copyrights, Patents, Trademarks and Licenses,
Etc.
The Company or its Subsidiaries own or are
licensed or otherwise have the right to use all of the
material patents, trademarks, service marks, trade
names, copyrights, contractual franchises,
authorizations and other rights that are reasonably
necessary for the operation of their respective
businesses, without conflict with the rights of any
other Person. To the best knowledge of the Company, no
slogan or other advertising device, product, process,
method, substance, part or other material now employed,
or now contemplated to be employed, by the Company or
any Subsidiary infringes upon any rights held by any
other Person. Except as specifically disclosed in
Schedule 6.05, no claim or litigation regarding any of
the foregoing is pending or, to the best knowledge of
the Company, threatened, and no patent, invention,
device, application, principle or any statute, law,
rule, regulation, standard or code is pending or, to
the best knowledge of the Company, proposed, which, in
either case, could reasonably be expected to have a
Material Adverse Effect.
6.16 Subsidiaries
. As of the Closing Date (after giving effect to
the Transaction), the Company has no Subsidiaries other
than those specifically disclosed in Schedule 6.16.
6.17 Insurance.
Except as specifically disclosed in Schedule 6.17,
the properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance
companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in
similar businesses and owning similar properties in
localities where the Company or such Subsidiary
operates except to the extent the Company and its
Subsidiaries maintain a plan or plans of self-insurance
to such extent and covering such risks as is usual for
companies of similar size engaged in similar businesses
and owning similar properties.
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6.18 Solvency
. The Company and its Significant Subsidiaries
(taken as a whole) are Solvent.
6.19 Swap Obligations
. Neither the Company nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap
Contracts, other than Permitted Swap Obligations. The
Company has undertaken its own independent assessment
of its consolidated assets, liabilities and commitments
and has considered appropriate means of mitigating and
managing risks associated with such matters and has not
relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into
any Swap Contract.
6.20 Year 2000.
On the basis of a comprehensive review and
assessment of the Company's and its Subsidiaries'
systems and equipment and inquiry made of the Company's
and its Subsidiaries' material suppliers, vendors and
customers, the Company's management is of the view that
the "Year 2000 problem" (that is, the inability of
computers, as well as embedded microchips in non-
computing devices, to perform properly date-sensitive
functions with respect to certain dates prior to and
after December 31, 1999), including costs of
remediation, will not result in a Material Adverse
Effect. The Company and its Subsidiaries have developed
feasible contingency plans adequately to ensure
uninterrupted and unimpaired business operation in the
event of failure of their own or a third party's
systems or equipment due to the Year 2000 problem,
including those of vendors, customers, and suppliers,
as well as a general failure of or interruption in its
communications and delivery infrastructure.
6.21 Merger Representations
. All representations and warranties of the
Purchaser or the Company in the Merger Agreement are
true and correct in all material respects as of each
date made or deemed made. To the Company's knowledge,
all representations and warranties of the Acquired
Company in the Merger Agreement are true and correct in
all material respects as of each date made or deemed
made.
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6.22 Full Disclosure.
None of the representations or warranties made
by the Company or any Subsidiary in the Documents as of
the date such representations and warranties are made
or deemed made, and none of the statements contained in
the Offer or in any other exhibit, report, statement or
certificate furnished by or on behalf of the Company or
any Subsidiary in connection with the Documents
(including the offering and disclosure materials
delivered by or on behalf of the Company to the Banks
prior to the Closing Date), contains any untrue
statement of a material fact or omits any material fact
required to be stated therein or necessary to make the
statements made therein, in light of the circumstances
under which they are made, not misleading as of the
time when made or delivered; provided that to the
extent any such information, report, financial
statement, exhibit or schedule was based upon or
constitutes a forecast or projection, the Company
represents only that it acted in good faith and
utilized reasonable assumptions and due care in the
preparation of such information, report, financial
statement, exhibit or schedule (it being understood
that forecasts and projections by their nature involve
approximations and uncertainties).
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment
hereunder, or any Loan or other Obligation shall remain
unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, unless the Majority Banks waive
compliance in writing:
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7.01 Financial Statements
. The Company shall deliver to each Bank, with a
copy to the Agent, in form and detail reasonably
satisfactory to the Agent and the Majority Banks:
(a) as soon as available, but not later than
100 days after the end of each fiscal year, a copy of
the audited consolidated balance sheet of the Company
and its Subsidiaries as at the end of such year and the
related consolidated statements of income or
operations, shareholders' equity and cash flows for
such year, setting forth in each case in comparative
form the figures for the previous fiscal year, and
accompanied by the opinion of
PricewaterhouseCoopers LLP or another
nationally-recognized independent public accounting
firm (the "Independent Auditor") which report shall
state that such consolidated financial statements
present fairly the financial position and the results
of operations and cash flows as of the end of and for
the periods indicated in conformity with GAAP applied
on a basis consistent with prior years. Such opinion
shall not be qualified as to (i) going concern,
(ii) any limitation in the scope of the audit, or
(iii) possible errors generated by financial reporting
and related systems due to the Year 2000 problem; and
(b) as soon as available, but not later than
55 days after the end of each fiscal quarter of each
fiscal year, a copy of the unaudited consolidated
balance sheet of the Company and its Subsidiaries as of
the end of such quarter and the related consolidated
statements of income, shareholders' equity and cash
flows for the period commencing on the first day and
ending on the last day of such quarter, and certified
by a Responsible Officer as presenting fairly, in
accordance with GAAP (subject to the absence of
footnotes and ordinary, good faith year-end audit
adjustments), the financial position and results of
operations and cash flows of the Company and the
Subsidiaries as of the end of and for such period.
As to any information contained in materials furnished
pursuant to subsection 7.02(b), the Company shall not
be separately required to furnish such information
under subsection (a) or (b) above, but the foregoing
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shall not be in derogation of the obligation of the
Company to furnish the information and materials
described in subsection (a) and (b) above at the times
specified therein.
7.02 Certificates; Other Information
. The Company shall furnish to each Bank, with a
copy to the Agent:
(a) as soon as available, and in any event
within 55 days after the end of each fiscal quarter, a
Compliance Certificate executed by a Responsible
Officer;
(b) promptly, copies of all financial
statements and reports that the Company sends to its
shareholders, and copies of all financial statements
and regular, periodical or special reports (including
Forms 10K, 10Q and 8K) that the Company or any
Subsidiary may make to, or file with, the SEC; and
(c) promptly, such additional information
regarding the business, financial or corporate affairs
of the Company or any Subsidiary as the Agent, at the
request of any Bank, or any Bank, may from time to time
reasonably request.
7.03 Notices
. The Company shall promptly notify the Agent and
each Bank:
(a) but in no event more than 10 days after
a Responsible Officer becomes aware of the occurrence
or existence thereof, of the occurrence of any Default
or Event of Default,
(b) but in not event more than 10 days after
a Responsible Officer becomes aware of the occurrence
thereof, of any matter that has resulted or could
reasonably be expected to result in a Material Adverse
Effect, including (i) any breach or non-performance of,
or any default under, any Contractual Obligation of the
Company or any of its Subsidiaries which has resulted
or could reasonably be expected to result in a Material
Adverse Effect; and (ii) any dispute, litigation,
investigation, proceeding or suspension which may exist
at any time between the Company or any of its
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Subsidiaries and any Governmental Authority (including
under or pursuant to any Environmental Laws) which has
resulted or could reasonably be expected to result in a
Material Adverse Effect;
(c) of the commencement of, or any material
development in, any litigation or proceeding affecting
the Company or any Subsidiary (i) which, if adversely
determined, would reasonably be expected to have a
Material Adverse Effect, or (ii) in which the relief
sought is an injunction or other stay of the
performance of this Agreement or any Document;
(d) of any other litigation or proceeding
affecting the Company or any of its Subsidiaries which
the Company would be required to report to the SEC
pursuant to the Exchange Act, within four Business Days
after reporting the same to the SEC;
(e) of the occurrence of any of the
following events affecting the Company or any ERISA
Affiliate (but in no event more than 10 days after a
Responsible Officer becomes aware of such event), and
deliver to the Agent and each Bank a copy of any notice
with respect to such event that is filed with a
Governmental Authority and any notice delivered by a
Governmental Authority to the Company or any ERISA
Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the
Unfunded Pension Liability of any Pension Plan;
(iii) the adoption of, or the
commencement of contributions to, any Plan subject
to Section 412 of the Code by the Company or any
ERISA Affiliate; or
(iv) the adoption of any amendment to a
Plan subject to Section 412 of the Code, if such
amendment results in a material increase in
contributions or Unfunded Pension Liability; and
(f) of any material change in accounting
policies or financial reporting practices by the
Company or any of its consolidated Subsidiaries,
including any change in GAAP that will have an effect
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on Consolidated Net Worth.
Each notice under this Section shall be accompanied by
a written statement by a Responsible Officer setting
forth details of the occurrence referred to therein,
and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at
what time. Each notice under subsection 7.03(a) shall
describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document
that have been (or foreseeably will be) breached or
violated, but the failure to correctly list all such
sections shall not, of itself, constitute a failure to
comply with this Section.
7.04 Preservation of Corporate Existence, Etc.
The Company shall, and shall cause each
Significant Subsidiary to, except in connection with
transactions permitted by Section 8.02 or 8.03:
(a) (i) (in the case of the Company)
preserve and maintain in full force and effect its
legal existence under the laws of the State of Oregon,
and (ii) (in the case of any Significant Subsidiaries)
preserve and maintain in full force and effect its
(A) legal existence and (B) good standing (if
applicable) under the laws of its state or jurisdiction
of incorporation or formation;
(b) preserve and maintain in full force and
effect all governmental rights, privileges,
qualifications, permits, licenses and franchises
necessary or desirable in the normal conduct of its
business;
(c) use reasonable efforts, in the ordinary
course of business, to preserve its business
organization and goodwill; and
(d) preserve or renew all of its registered
patents, trademarks, trade names and service marks;
except, in the case of clause (a)(ii), (b), (c) or (d),
where failure to do so could not reasonably be expected
to have a Material Adverse Effect.
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7.05 Maintenance of Property
. Except as permitted by Section 8.02, the
Company shall, and shall cause each Subsidiary to,
maintain, and preserve all its property which is used
or useful in its business in good working order and
condition, ordinary wear and tear excepted and make all
necessary repairs thereto and renewals and replacements
thereof, except where the failure to do so could not
reasonably be expected to have a Material Adverse
Effect. The Company and each Subsidiary shall use the
standard of care typical in the industry in the
operation and maintenance of its facilities.
7.06 Insurance
. The Company shall, and shall cause each
Significant Subsidiary to, maintain with financially
sound and reputable independent insurers, insurance
with respect to its properties and business against
loss or damage of the kinds customarily insured against
by Persons engaged in the same or similar business, of
such types and in such amounts as are customarily
carried under similar circumstances by such other
Persons except to the extent the Company and its
Subsidiaries maintain a plan or plans of self-insurance
to such extent and covering such risks as is usual for
companies of similar size engaged in similar businesses
and owning similar properties.
7.07 Payment of Obligations
. The Company shall, and shall cause each of its
Significant Subsidiaries to, pay and discharge as the
same shall become due and payable, all their respective
obligations and liabilities, including:
(a) all tax liabilities, assessments and
governmental charges or levies upon it or its
properties or assets, unless the same are being
contested in good faith by appropriate proceedings and
adequate reserves in accordance with GAAP are being
maintained by the Company or such Subsidiary; and
(b) all Indebtedness, as and when due and
payable, but subject to any subordination provisions
contained in any instrument or agreement evidencing
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such Indebtedness (except where failure to do so would
not otherwise constitute a Default or Event of Default
hereunder).
7.08 Compliance with Laws
. The Company shall comply, and shall cause each
Subsidiary to comply, in all material respects with all
Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including
the Federal Fair Labor Standards Act), except (i) such
as may be contested in good faith or as to which a bona
fide dispute may exist (ii) or where the failure to
comply could not reasonably be expected to have a
Material Adverse Effect.
7.09 Compliance with ERISA
. The Company shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in
compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such
qualification; and (c) make all required contributions
to any Plan subject to Section 412 of the Code.
7.10 Inspection of Property and Books and Records
. The Company shall, and shall cause each
Subsidiary to, maintain proper books of record and
account, in which full, true and correct entries in
conformity with local statutory reporting requirements
or GAAP consistently applied, as applicable, shall be
made of all financial transactions and matters
involving the assets and business of the Company and
such Subsidiary. The Company shall permit, and shall
cause each Subsidiary to permit, representatives and
independent contractors of the Agent or any Bank to
visit and inspect any of their respective properties,
to examine their respective corporate, financial,
operating and other records, and make copies thereof or
abstracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective
directors, officers, and independent public
accountants, all at such reasonable times during normal
business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Company;
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provided, however, when an Event of Default exists the
Agent or any Bank may do any of the foregoing at the
expense of the Company at any time during normal
business hours and without advance notice.
7.11 Environmental Laws
. The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and
maintain its property in material compliance with all
Environmental Laws, except (i) such as may be contested
in good faith or as to which a bona fide dispute may
exist and adequate reserves are being maintained with
respect thereto in accordance with GAAP or (ii) where
the failure to comply could not reasonably be expected
to have a Material Adverse Effect.
7.12 Use of Proceeds
. The Company shall use the proceeds of the Loans
and the Letters of Credit: (i) to fund the purchase of
shares tendered pursuant to the Tender Offer, the
consummation of the Merger and the payment of fees,
costs and expenses arising out of the Transaction;
(ii) to refinance Indebtedness of the Acquired Company;
(iii) to refinance the Indebtedness of the Company and
certain of its Subsidiaries under the Existing Credit
Facility; and (iv) for working capital and other
general corporate purposes not in contravention of any
Requirement of Law or of any Document (including for
purposes of undertaking Acquisitions; provided that
such Acquisitions do not contravene any provision of
this Agreement or of any other Document or any
applicable Requirement of Law).
7.13 Merger
. The Company shall ensure that the Merger is
consummated within 120 days after the Purchaser first
purchases shares of the Acquired Company pursuant to
the Tender Offer.
7.14 Further Assurances.
(a) (a) The Company shall ensure that all
written information, exhibits and reports furnished to
the Agent or the Banks do not and will not contain any
untrue statement of a material fact and do not and will
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not omit to state any material fact or any fact
necessary to make the statements contained therein not
misleading in light of the circumstances in which made,
and will promptly disclose to the Agent and the Banks
and correct any defect or error that may be discovered
therein or in any Document or in the execution,
acknowledgement or recordation thereof.
(b) Promptly upon request by the Agent or
the Majority Banks, the Company shall do, execute,
acknowledge, and deliver, any and all such further
acts, certificates, assurances and other instruments
the Agent or such Banks, as the case may be, may
reasonably require from time to time in order to carry
out more effectively the purposes of this Agreement or
any other Loan Document.
ARTICLE VIII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment
hereunder, or any Loan or other Obligation shall remain
unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, unless the Majority Banks waive
compliance in writing:
8.01 Negative Pledges; Liens
. The Company shall not: (i) enter into or suffer
to exist any agreement (other than this Agreement, any
other Loan Document, the indenture for the Existing
Securities, the Bridge Credit Agreement, the indenture
for the Senior Notes, and the documents for any
purchase money obligations or capital leases (solely
with respect to the property securing such obligation
or subject to such lease) prohibiting or conditioning
the creation or assumption of any Lien upon any of its
properties, revenues or assets, whether now owned or
hereafter acquired, or (ii) permit any of its
Subsidiaries to enter into or suffer to exist any
agreement (other than agreements existing on the
Closing Date, the documents for any purchase money
obligations or capital leases (solely with respect to
the property securing such obligation or subject to
such lease) and any Permitted Receivables Purchase
Facility (solely with respect to the Permitted
Receivables and related assets which are the subject
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thereof)) prohibiting or conditioning the creation or
assumption of any Lien upon any of their properties,
revenues or assets, whether now owned or hereafter
acquired. Additionally, the Company shall not, and
shall not suffer or permit any Subsidiary to, directly
or indirectly, make, create, incur, assume or suffer to
exist any Lien upon or with respect to any part of its
property, whether now owned or hereafter acquired,
other than the following ("Permitted Liens"):
(a) any Lien existing on the Closing Date
and set forth in Schedule 8.01 securing Indebtedness
outstanding on such date;
(b) any Lien in favor of the Agent and the
Banks created under any Loan Document to Cash
Collateralize the L/C Obligations;
(c) Liens for taxes, fees, assessments or
other governmental charges which are not delinquent or
remain payable without penalty, or to the extent that
non-payment thereof is permitted by subsection 7.07(a),
provided that no notice of lien has been filed or
recorded under the Code;
(d) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar
Liens arising in the ordinary course of business which
are not delinquent or remain payable without penalty or
which are being contested in good faith and by
appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the
property subject thereto;
(e) Liens (other than any Lien imposed by
ERISA) consisting of pledges or deposits required in
the ordinary course of business in connection with
workers' compensation, unemployment insurance and other
social security legislation;
(f) Liens securing (i) the non-delinquent
performance of bids, trade contracts (other than for
borrowed money), leases (other than capital leases),
statutory obligations, (ii) contingent obligations on
surety and appeal bonds, and (iii) other non-delinquent
obligations of a like nature; in each case, incurred in
the ordinary course of business, provided all such
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Liens in the aggregate would not (even if enforced)
cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial
attachment liens, provided that (i) the enforcement of
such Liens is effectively stayed within 60 days after
the entry thereof or (ii) all such unstayed Liens at
any time outstanding for the Company and its
Subsidiaries do not exceed $35,000,000 in the aggregate
;
(h) easements, rights-of-way, restrictions
and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not
substantial in amount, and which do not in any case
materially detract from the value of the property
subject thereto or interfere with the ordinary conduct
of the businesses of the Company and its Subsidiaries;
(i) Liens on specific tangible assets of
Persons which become Subsidiaries after the date of
this Agreement; provided, however, that (A) such Liens
existed at the time the respective Persons became
Subsidiaries and were not created in anticipation
thereof, (B) any such Lien does not by its terms cover
any assets after the time such Person becomes a
Subsidiary which were not covered immediately prior
thereto (other than proceeds of the asset), and (C) any
such Lien does not by its terms secure any Indebtedness
other than Indebtedness existing immediately prior to
the time such Person becomes a Subsidiary;
(j) purchase money Liens on any property
acquired or held by the Company or any of its
Subsidiaries in the ordinary course of business,
securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of
acquiring, constructing, developing or improving such
property; provided that (i) any such Lien attaches to
such property concurrently with or within 20 days after
the acquisition thereof, (ii) such Lien attaches solely
to the property (including the proceeds thereof) so
acquired in such transaction, and (iii) the principal
amount of the Indebtedness secured thereby does not
exceed 100% of the cost of acquisition, construction,
development or improvement of such property;
(k) Liens securing obligations in respect of
capital leases on assets subject to such leases;
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(l) Liens arising solely by virtue of any
statutory or common law provision relating to banker's
liens, rights of set-off or similar rights and remedies
as to deposit accounts or other funds maintained with a
creditor depository institution; provided that (i) such
deposit account is not a dedicated cash collateral
account and is not subject to restrictions against
access by the Company in excess of those set forth by
regulations promulgated by the FRB, and (ii) such
deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository
institution;
(m) Liens consisting of pledges of cash
collateral or government securities to secure on a
mark-to-market basis Permitted Swap Obligations only,
provided that (i) the counterparty to any Swap Contract
relating to such Permitted Swap Obligation is under a
similar requirement to deliver similar collateral from
time to time to the Company or the Subsidiary party
thereto on a mark-to-market basis; and (ii) the
aggregate value of such collateral so pledged by the
Company and the Subsidiaries together in favor of any
counterparty does not at any time exceed $35,000,000;
(n) Liens in connection with any Permitted
Receivables Purchase Facility; and
(o) any other Liens if the aggregate amount
of Indebtedness of the Company or any of its
Subsidiaries that is secured by such Liens does not
exceed $75,000,000 in the aggregate at any time;
provided that in the case of any Subsidiary such
Indebtedness is permitted to be incurred under Section
8.05.
8.02 Disposition of Assets
. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of
(whether in one or a series of transactions) any
property (including accounts and notes receivable, with
or without recourse) or enter into any agreement to do
any of the foregoing, except:
(a) dispositions of inventory, used,
worn-out, obsolete or surplus equipment, or defaulted
receivables, all in the ordinary course of business;
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(b) the sale of equipment to the extent that
such equipment is exchanged for credit against the
purchase price of similar replacement equipment, or the
proceeds of such sale are reasonably promptly applied
to the purchase price of such replacement equipment;
and
(c) dispositions by the Company of divisions
or Subsidiaries, dispositions by Subsidiaries of
divisions, and dispositions of the assets of divisions
of the Company or any Subsidiary, in aggregate amount
not to exceed $75,000,000 in any one year (the "Annual
Limit"); provided that if in any year the aggregate
amount of such dispositions is an amount less than the
Annual Limit (the "Unused Amount"), the Annual Limit
for subsequent years may be increased by such Unused
Amount; and provided further that on a cumulative basis
from and after the Closing Date, all such dispositions
shall not in the aggregate exceed 10% of Consolidated
Total Assets as of the end of the fiscal quarter
immediately preceding the date of determination;
(d) dispositions of Permitted Receivables
pursuant to Permitted Receivables Purchase Facilities
in an aggregate amount not to exceed $150,000,000;
(e) the lease or sublease of property by the
Company or any Subsidiary to other Persons in the
ordinary course of business;
(f) as permitted by Section 8.03;
(g) the sale of cash equivalents and other
short term money market investments in the ordinary
course of business pursuant to the Company's usual and
customary cash management policies and procedures;
(h) in the case of a Subsidiary,
dispositions to the Company or a Wholly-Owned
Subsidiary; and
(i) dispositions of assets by the Company or
any Subsidiary as required to ensure compliance with
the HSR Act in connection with (and in order to
consummate) the Acquisition; provided that immediately
after giving effect to such disposition: (A) no Default
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or Event of Default shall have occurred and be
continuing or would result therefrom, and (B) the
Company shall be in compliance, on a pro forma basis
after giving effect to such disposition, with the
covenants contained in Sections 8.13 through 8.15
recomputed as of the last day of the most recently
ended fiscal quarter of the Company as if such
disposition had occurred on the first day of each
relevant period for testing such compliance, and the
Company shall have delivered to the Agent a certificate
of a Responsible Officer of the Company to such effect,
together with all relevant financial computations
evidencing such compliance.
8.03 Consolidations and Mergers
. The Company shall not, and shall not suffer or
permit any Subsidiary to, merge, consolidate with or
into, or convey, transfer, lease or otherwise dispose
of (whether in one transaction or in a series of
transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to or in
favor of any Person, except:
(a) any Subsidiary may merge with the
Company, provided that the Company shall be the
continuing or surviving Person, or with any one or more
Subsidiaries, provided that if any transaction shall
be between a Subsidiary and a Wholly-Owned Subsidiary,
the Wholly-Owned Subsidiary shall be the continuing or
surviving Person;
(b) as permitted by Section 8.02;
(c) any Subsidiary may sell all or
substantially all of its assets (upon voluntary
liquidation or otherwise), to the Company or to a
Wholly-Owned Subsidiary; and
(d) the Company or any Subsidiary may merge
with any Person so long as (i) (A) the Company or such
Subsidiary shall be the continuing or surviving
corporation or (B) in the case of a merger with a
Subsidiary, the acquired Person is, as a result of the
merger transaction, a Wholly-Owned Subsidiary of the
Company and (ii) immediately prior to and after giving
effect to such merger, there shall be no Default or
Event or Default.
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8.04 Loans and Investments
. The Company shall not purchase or acquire, or
suffer or permit any Subsidiary to purchase or acquire,
or make any commitment therefor, any capital stock,
equity interest, or any obligations or other securities
of, or any interest in, any Person, or make or commit
to make any Acquisitions, or make or commit to make any
advance, loan, extension of credit or capital
contribution to or any other investment in, any Person
including any Affiliate of the Company ("Investments"),
except for:
(a) Investments held by the Company or
Subsidiary in the form of cash equivalents and short
term money market investments in the ordinary course of
business pursuant to the Company's usual and customary
cash management policies and procedures;
(b) extensions of credit in the nature of
accounts receivable or notes receivable arising from
the sale or lease of goods or services in the ordinary
course of business and Investments resulting from the
collection or disposition of defaulted receivables in
the ordinary course of business;
(c) Investments in the capital stock of
Subsidiaries, and extensions of credit by the Company
to any of its Subsidiaries or by any of its
Subsidiaries to the Company or to any other
Subsidiaries, in the ordinary course of business;
(d) the Transaction;
(e) Investments incurred in order to
consummate other Acquisitions otherwise permitted
herein, provided that (i) such Acquisitions are
undertaken in accordance with all applicable
Requirements of Law; and (ii) immediately prior to and
after giving effect thereto, no Default or Event of
Default would exist;
(f) Investments constituting Permitted Swap
Obligations or payments or advances under Swap
Contracts relating to Permitted Swap Obligations;
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(g) employee loans and guarantees in
accordance with the Company's usual and customary
practices with respect thereto;
(h) Investments existing on the Closing
Date;
(i) Investments constituting noncash
consideration received in connection with a disposition
permitted by Section 8.02;
(j) Investments resulting from the transfer
of Permitted Receivables and related assets to a
Subsidiary, and the sale thereof by such Subsidiary, in
each case pursuant to a Permitted Receivables Purchase
Facility; and
(k) other Investments not exceeding
$25,000,000 in the aggregate at any time outstanding.
8.05 Limitation on Indebtedness
. The Company shall not suffer or permit any
Subsidiary to, create, incur, assume, suffer to exist,
or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except
(a) Indebtedness existing on the Closing
Date referred to in Schedule 8.05; provided that (i)
the Indebtedness of the Acquired Company in respect of
all validly tendered and not withdrawn 8% Senior Notes
described in such Schedule shall be required to be paid
and satisfied in full within five Business Days
following the Closing Date; and (ii) the Indebtedness
in respect of the other Subsidiary Indebtedness
described in such Schedule shall be required to be paid
and satisfied in full, and any applicable credit
facility terminated, within the time specified in such
Schedule;
(b) Indebtedness (including capital leases)
incurred in the ordinary course of business to finance
the acquisition, construction, development or
improvement of specific property;
(c) Indebtedness permitted by Sections
8.04(c) and 8.08;
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(d) Indebtedness of any Subsidiary formed
for the purpose of and incurred in connection with any
Permitted Receivables Purchase Facility;
(e) Indebtedness of a Subsidiary acquired
after the Closing Date and Indebtedness of a Person
merged or consolidated with or into a Subsidiary after
the Closing Date, which Indebtedness in each case
existed at the time of such acquisition, merger,
consolidation or conversion into a Subsidiary and was
not created in contemplation of such event and where
such acquisition, merger or consolidation is permitted
by this Agreement, provided that immediately and after
giving effect thereto, no Default or Event of Default
would exist;
(f) Extensions, renewals or refinancings of
Indebtedness permitted under Subsections (a), (b), (d)
and (e) so long as (i) such Indebtedness ("Refinancing
Indebtedness") is in an aggregate principal amount not
greater than the aggregate principal amount of the
Indebtedness being extended, renewed or refinanced plus
the amount of any interest or premiums required to be
paid thereon and fees and expenses associated
therewith, (ii) such Refinancing Indebtedness has a
later or equal final maturity and a longer or equal
weighted average life than the Indebtedness being
extended, renewed or refinanced, (iii) the interest
rate applicable to such Refinancing Indebtedness shall
be at market interest rate as of the time of such
extension, renewal or refinancing and (iv) the
covenants, events of default and other provisions
thereof, taken as a whole, shall be no less favorable
to the Subsidiary than those contained in the
Indebtedness being refinanced; and
(g) Other Indebtedness not to exceed
$75,000,000 in the aggregate at any time outstanding,
minus the aggregate amount of Contingent Obligations
permitted to be outstanding under subsection 8.08(f).
8.06 Transactions with Affiliates
. The Company shall not, and shall not suffer or
permit any Subsidiary to, enter into any transaction
with any Affiliate of the Company, except in the
ordinary course of business upon fair and reasonable
terms no less favorable to the Company or such
Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate
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of the Company or such Subsidiary; provided that this
Section 8.06 shall not apply to transactions between
the Company and its Subsidiaries or between and among
Subsidiaries.
8.07 Use of Proceeds
. The Company shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan
proceeds or any Letter of Credit, directly or
indirectly, (i) (A) to purchase or carry Margin Stock,
(B) to repay or otherwise refinance indebtedness of the
Company or others incurred to purchase or carry Margin
Stock, or (C) to extend credit for the purpose of
purchasing or carrying any Margin Stock, in each case
in violation of, or for a purpose which violates, or
would be inconsistent with, Regulation T, U or X of the
FRB, or (ii) to finance an Acquisition which is
contested at any time by the board of directors or
equivalent governing body of the acquired Person or the
Person from whom the Acquisition is to be made (an
"Unfriendly Acquisition") or for a bid to make an
Unfriendly Acquisition.
8.08 Contingent Obligations
. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume or
suffer to exist any Contingent Obligations except:
(a) endorsements for collection or deposit
in the ordinary course of business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company in
respect of Indebtedness and other obligations of any of
its Subsidiaries, or Contingent Obligations of any
Subsidiary in respect of Indebtedness and other
obligations of another Subsidiary or of the Company, in
each case to the extent such Indebtedness and other
obligations are permitted hereunder;
(d) Contingent Obligations of the Company
and its Subsidiaries existing as of the Closing Date
and listed in Schedule 8.08;
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(e) Contingent Obligations with respect to
Surety Instruments incurred in the ordinary course of
business; and
(f) Contingent Obligations of the Company
and its Subsidiaries in respect of Indebtedness and
other obligations of any Persons (other than
Subsidiaries) in an amount not to exceed $25,000,000 in
the aggregate at any time outstanding.
8.09 ERISA
. The Company shall not, and shall not suffer or
permit any of its ERISA Affiliates to: (a) engage in a
prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has
resulted or could reasonably expected to result in
liability of the Company in an aggregate amount in
excess of $5,000,000; or (b) engage in a transaction
that could be subject to Section 4069 or 4212(c) of
ERISA.
8.10 Change in Business
. The Company shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line
of business substantially different from and not
reasonably related or incidental to the Existing Lines
of Business or, in the case of a Subsidiary formed for
the purpose of a Permitted Receivables Purchase
Facility, to engage in any business other than the
purpose for which such Subsidiary was formed and
business activities reasonably incidental or related
thereto.
8.11 Accounting Changes
. The Company shall not, and shall not suffer or
permit any Significant Subsidiary to, make any
significant change in accounting treatment or reporting
practices, except as required by local statutory
reporting requirements or GAAP, or change the fiscal
year of the Company or of any Subsidiary, except to
change the fiscal year of a Significant Subsidiary to
conform its fiscal year to the Company's.
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8.12 Transaction Documents
. Neither the Company nor any of its Subsidiaries
shall alter, amend or otherwise change or supplement
the Merger Agreement or waive any material term or
provision thereof.
8.13 Minimum Consolidated Net Worth
. The Company shall not permit its Consolidated
Net Worth as of the last day of any fiscal quarter
(commencing with the quarter ending June 27, 1999) to
be less than (a) the greater of (1) 80% of its
Consolidated Net Worth on June 27, 1999 and (2) 80% of
its Consolidated Net Worth as at the end of the fiscal
month immediately preceding the month in which the
Closing Date occurs, plus (b) 50% of Consolidated Net
Income (without giving effect to any net loss for any
period) from and after the end of the fiscal month
immediately preceding the month in which the Closing
Date occurs, plus (c) 50% of all Net Equity Proceeds
from and after the Closing Date.
8.14 Fixed Charge Coverage Ratio
. The Company shall not permit its Fixed Charge
Coverage Ratio as determined as of the last day of any
fiscal quarter (commencing with the quarter ending
June 30, 1999), to be less than 1.40 to 1.00.
8.15 Leverage Ratio
. The Company shall not permit its Leverage Ratio
as determined as of the last day of each fiscal quarter
(commencing with the quarter ending June 27, 1999) to
be greater than (i) 4.25 to 1.00 through the quarter
ending March 31, 2000 and (ii) 3.875 to 1.00 through
the quarter ending March 31, 2001 and (iii) 3.50
thereafter.
8.16 No Restrictions on Subsidiary Dividends
. The Company shall not, and shall not suffer or
permit any Subsidiary to, enter into or be bound by any
Contractual Obligation which expressly restricts,
limits or prohibits the payment of dividends by any
Subsidiary or the making of any other distribution in
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respect of such Subsidiary's capital stock; provided,
however, that the foregoing shall not prohibit any
restrictions, limitations or prohibitions:
(a) existing on the Closing Date;
(b) contained in any debt instrument
relating to a Person which becomes a Subsidiary after
the Closing Date, provided that (i) such encumbrances
and restrictions are not applicable to any Person other
than such Subsidiary or the property or assets of such
Subsidiary, and (ii) such instrument was in existence
at the time of such acquisition and not created in
contemplation of or in connection with such
acquisition;
(c) imposed on a Subsidiary formed for the
purpose of implementing a Permitted Receivables
Purchase Facility; or
(d) existing under, or by reason of,
applicable law or as required by or pursuant to
agreements with any Governmental Authorities.
ARTICLE IX
EVENTS OF DEFAULT
9.01 Event of Default
. Any of the following shall constitute an "Event
of Default":
(a) Non-Payment. The Company fails to make,
(i) when and as required to be made herein, payments of
any amount of principal of any Loan, or (ii) within
five days after the same becomes due, payment of any
interest, fee or any other amount payable hereunder or
under any other Loan Document; or
(b) Representation or Warranty. Any
representation or warranty by the Company or any
Subsidiary made or deemed made herein, in any other
Loan Document, or which is contained in any
certificate, document or financial or other statement
by the Company, any Subsidiary, or any Responsible
Officer, furnished at any time under this Agreement, or
in or under any other Loan Document, is incorrect in
any material respect on or as of the date made; or
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(c) Specific Defaults. The Company fails to
perform or observe any term, covenant or agreement
contained in any of Section 7.01, 7.02(a), 7.03,
7.04(a)(i), 7.13 or in Article VIII; or
(d) Other Defaults. The Company or any
Subsidiary party thereto fails to perform or observe
any other term or covenant contained in this Agreement
or any other Loan Document, and such default shall
continue unremedied for a period of 30 days after the
earlier of (i) the date upon which a Responsible
Officer knew or reasonably should have known of such
failure or (ii) the date upon which written notice
thereof is given to the Company by the Agent or any
Bank; or
(e) Cross-Default. (i) The Company or any
Subsidiary (A) fails to make any payment in respect of
any Indebtedness or Contingent Obligation (other than
in respect of Swap Contracts), having an aggregate
principal amount (including undrawn committed or
available amounts and including amounts owing to all
creditors under any combined or syndicated credit
arrangement) of more than $35,000,000 when due (whether
by scheduled maturity, required prepayment,
acceleration, demand, or otherwise); or (B) fails to
perform or observe any other condition or covenant, or
any other event shall occur or condition exist, under
any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, if the effect of
such failure, event or condition is to cause, or to
permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior
to its stated maturity, or such Contingent Obligation
to become payable or cash collateral in respect thereof
to be demanded; (ii) there occurs under any Swap
Contract an Early Termination Date (as defined in such
Swap Contract) resulting from (1) any event of default
under such Swap Contract as to which the Company or any
Subsidiary is the Defaulting Party (as defined in such
Swap Contract) or (2) any Termination Event (as so
defined) as to which the Company or any Subsidiary is
an Affected Party (as so defined), and, in either
event, the Swap Termination Value owed by the Company
or such
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Subsidiary as a result thereof is greater than
$35,000,000; or (iii) there occurs any termination,
liquidation, unwind or similar event or circumstance
under any Permitted Receivables Purchase Facility,
which permits any purchaser of receivables thereunder
to cease purchasing such receivables or to apply all
collections on previously purchased receivables
thereunder to the repayment of such purchaser's
interest in such previously purchased receivables other
than any such event or circumstance that arises solely
as a result of a down-grading of the credit rating of
any bank or financial institution not affiliated with
the Company that provides liquidity, credit or other
support in connection with such facility; or
(f) Insolvency; Voluntary Proceedings. The
Company or any Significant Subsidiary (i) ceases or
fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods,
if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing;
or
(g) Involuntary Proceedings. (i) Any
involuntary Insolvency Proceeding is commenced or filed
against the Company or any Significant Subsidiary, or
any writ, judgment, warrant of attachment, execution or
similar process, is issued or levied against a
substantial part of the Company's or any Significant
Subsidiary's properties, and any such proceeding or
petition shall not be dismissed, or such writ,
judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded
within 60 days after commencement, filing or levy;
(ii) the Company or any Significant Subsidiary admits
the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company or any
Significant Subsidiary acquiesces in the appointment of
a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a
substantial portion of its property or business; or
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(h) ERISA. (i) An ERISA Event shall occur
with respect to a Pension Plan or Multiemployer Plan
which has resulted or could reasonably be expected to
result in liability of the Company under Title IV of
ERISA to the Pension Plan, Multiemployer Plan or the
PBGC in an aggregate amount in excess of $35,000,000;
(ii) the aggregate amount of Unfunded Pension Liability
among all Pension Plans at any time exceeds
$50,000,000; or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any
installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of
$35,000,000 ; or
(i) Monetary Judgments. One or more non-
interlocutory judgments, non-interlocutory orders,
decrees or arbitration awards is entered against the
Company or any Significant Subsidiary involving in the
aggregate a liability (to the extent not covered by
independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or
related or unrelated series of transactions, incidents
or conditions, of $35,000,000 or more, and the same
shall remain unvacated and unstayed pending appeal for
a period of 10 days after the entry thereof; or
(j) Non-Monetary Judgments. Any
non-monetary judgment, order or decree is entered
against the Company or any Significant Subsidiary which
does or would reasonably be expected to have a Material
Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or
(k) Change of Control. (i) Any Person or
two or more Persons acting in concert acquires
beneficial ownership (within the meaning of Rule 13d-3
of the SEC under the Exchange Act), directly or
indirectly, of securities of the Company (or other
securities convertible into such securities)
representing 25% or more of the combined voting power
of all securities of the Company entitled to vote in
the election of directors; or (ii) during any period of
up to 12 consecutive months, individuals who at the
beginning of such 12-month period were directors of
theCompany ceasing for any reason to constitute a
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majority of the Board of Directors of the Company
unless the persons replacing such individuals were
nominated by the Board of Directors of the Company; or
(iii) any Person or two or more Persons acting in
concert acquiring by contract or otherwise, or entering
into a contract or arrangement which upon consummation
will result in its or their acquisition of, or control
over, securities of the Company (or other securities
convertible into such securities) representing 25% or
more of the combined voting power of all securities of
the Company entitled to vote in the election of
directors; or
(l) Material Adverse Change. There occurs a
material adverse change in, or a material adverse
effect upon, the operations, business, or condition
(financial or otherwise) of the Company, the Acquired
Company and its Subsidiaries taken as a whole.
9.02 Remedies
. If any Event of Default occurs, the Agent
shall, at the request of, or may, with the consent of,
the Majority Banks, do any or all of the following:
(a) declare the obligation of each Bank to
make any Loans hereunder and any obligation of the
Issuing Bank to Issue any Letters of Credit hereunder
to be terminated, whereupon such obligations and each
Bank's Commitment and the L/C Commitment shall be
terminated;
(b) declare an amount equal to the maximum
aggregate amount that is or at any time thereafter may
become available for drawing under any outstanding
Letters of Credit (whether or not any beneficiary shall
have presented, or shall be entitled at such time to
present, the drafts or other documents required to draw
under such Letters of Credit) to be immediately due and
payable, which amount shall be held by the Agent as
security for the Company's reimbursement obligations
for drawings that may subsequently occur under
outstanding Letters of Credit, and declare the unpaid
principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing
or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Company; and
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(c) exercise on behalf of itself and the
Banks all rights and remedies available to it and the
Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any
event specified in subsection (f) or (g) of Section
9.01 (in the case of clause (i) of subsection (g) upon
the expiration of the 60-day period mentioned therein),
the obligation of each Bank to make Loans and any
obligation of the Issuing Bank to Issue Letters of
Credit shall automatically terminate and the unpaid
principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall
automatically become due and payable without further
act of the Agent, the Issuing Bank or any Bank.
ARTICLE X
THE AGENT
10.01 Appointment and Authorization; "Agent."
(a) (a) Each Bank hereby irrevocably
(subject to Section 10.09) appoints, designates and
authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the
terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other
Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have
any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist
against the Agent. Without limiting the generality of
the foregoing sentence, the use of the term "agent" in
this Agreement with reference to the Agent is not
intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of
any applicable law. Instead, such term is used merely
as a matter of market custom, and is intended to create
or reflect only an administrative relationship between
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independent contracting parties.
(b) The Issuing Bank shall act on behalf of
the Banks with respect to any Letters of Credit Issued
by it and the documents associated therewith until such
time and except for so long as the Agent may agree at
the request of the Majority Lenders to act for the
Issuing Bank with respect thereto; provided, however,
that the Issuing Bank shall have all of the benefits
and immunities (i) provided to the Agent in this
Article X with respect to any acts taken or omissions
suffered by the Issuing Bank in connection with Letters
of Credit Issued by it or proposed to be Issued by it
and the application and agreements for letters of
credit pertaining to the Letters of Credit as fully as
if the term "Agent," as used in this Article X,
included the Issuing Bank with respect to such acts or
omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank.
10.02 Delegation of Duties
. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters
pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any
agent or attorney-in-fact that it selects with
reasonable care.
10.03 Liability of Agent
. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement
or any other Loan Document or the transactions
contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by
the Company or any Subsidiary or Affiliate of the
Company, or any officer thereof, contained in this
Agreement or in any other Document, or in any
certificate, report, statement or other document
referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or
any other Document, or the validity,
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effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Document, or
for any failure of the Company or any other party to
any Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any
obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any
other Document, or to inspect the properties, books or
records of the Company or any of the Company's
Subsidiaries or Affiliates.
10.04 Reliance by Agent
(a) (a) The Agent shall be entitled
to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or
conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Company),
independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the
Majority Banks as it deems appropriate and, if it so
requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of
taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or
consent of the Majority Banks and such request and any
action taken or failure to act pursuant thereto shall
be binding upon all of the Banks.
(b) For purposes of determining compliance
with the conditions specified in Section 5.01, each
Bank that has executed this Agreement shall be deemed
to have consented to, approved or accepted or to be
satisfied with, each document or other matter either
sent (or made available) by the Agent to such Bank for
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consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by
or acceptable or satisfactory to such Bank.
10.05 Notice of Default
. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment
of principal, interest and fees required to be paid to
the Agent for the account of the Banks, unless the
Agent shall have received written notice from a Bank or
the Company referring to this Agreement, describing
such Default or Event of Default and stating that such
notice is a "notice of default." The Agent will notify
the Banks of its receipt of any such notice. The Agent
shall take such action with respect to such Default or
Event of Default as may be requested by the Majority
Banks in accordance with Article IX; provided, however,
that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of the
Banks.
10.06 Credit Decision
. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or
warranty to it, and that no act by the Agent
hereinafter taken, including any review of the affairs
of the Company and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Agent-
Related Person to any Bank. Each Bank represents to
the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on
such documents and information as it has deemed
appropriate, made its own appraisal of and
investigation into the business, prospects, operations,
property, financial and other condition and
creditworthiness of the Company and its Subsidiaries,
and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own
decision to enter into this Agreement and to extend
credit to the Company hereunder. Each Bank also
represents that it will, independently and without
reliance upon any Agent-Related Person and based on
such documents and information as it shall deem
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appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business,
prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except
for notices, reports and other documents expressly
herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or
other information concerning the business, prospects,
operations, property, financial and other condition or
creditworthiness of the Company or any Subsidiary which
may come into the possession of any of the
Agent-Related Persons.
10.07 Indemnification of Agent
. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon
demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), in
accordance with the Banks' Pro Rata Shares, from and
against any and all Indemnified Liabilities; provided,
however, that no Bank shall be liable for the payment
to the Agent-Related Persons of any portion of such
Indemnified Liabilities to the extent they are found by
a final decision of a court of competent jurisdiction
to have resulted solely from such Person's gross
negligence or willful misconduct. Without limitation
of the foregoing, each Bank shall reimburse the Agent
upon demand for its ratable share of any costs or
out-of-pocket expenses (including reasonable Attorney
Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities
under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such
expenses by or on behalf of the Company. The
undertaking in this Section shall survive the
termination of the Commitments, the termination or
expiration of all Letters of Credit, the payment of all
other Obligations hereunder and the resignation or
replacement of the Agent.
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10.08 Agent in Individual Capacity
. BofA and its Affiliates may make loans to,
issue letters of credit for the account of, accept
deposits from, acquire equity interests in and
generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with
the Company and its Subsidiaries and Affiliates as
though BofA were not the Agent or the Issuing Bank
hereunder and without notice to or consent of the
Banks. The Banks acknowledge that, pursuant to such
activities, BofA or its Affiliates may receive
information regarding the Company or its Subsidiaries
or Affiliates (including information that may be
subject to confidentiality obligations in favor of the
Company or such Subsidiary or Affiliate) and
acknowledge that the Agent shall be under no obligation
to provide such information to them. With respect to
its Loans, BofA shall have the same rights and powers
under this Agreement as any other Bank and may exercise
the same as though it were not the Agent or the Issuing
Bank.
10.09 Successor Agent
. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days'
notice to the Banks. If the Agent resigns under this
Agreement, the Majority Banks shall appoint from among
the Banks a successor agent for the Banks. If no
successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may
appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks. Upon
the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all
the rights, powers and duties of the retiring Agent and
the term "Agent" shall mean such successor agent and
the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this
Article X and Sections 11.04 and 11.05 shall inure to
its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
If no successor agent has accepted appointment as Agent
by the date which is 30 days following a retiring
Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become
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effective and the Banks shall perform all of the duties
of the Agent hereunder until such time, if any, as the
Majority Banks appoint a successor agent as provided
for above. Notwithstanding the foregoing, however,
BofA may not be removed as the Agent at the request of
the Majority Banks unless BofA shall also
simultaneously be replaced as "Issuing Bank" and
"Swingline Bank" hereunder pursuant to documentation in
form and substance reasonably satisfactory to BofA.
10.10 Withholding Tax
(a) . (a) If any Bank is a "foreign
corporation, partnership or trust" within the meaning
of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441
or 1442 of the Code, such Bank agrees with and in favor
of the Agent, to deliver to the Agent (which will
deliver a copy to the Company):
(i) if such Bank claims an exemption
from, or a reduction of, withholding tax under a
United States tax treaty, two properly completed
and executed copies of IRS Form W-8BEN before the
payment of any interest or fees in the first
calendar year and before the payment of any
interest or fees in each third succeeding calendar
year during which interest or fees may be paid
under this Agreement;
(ii) if such Bank claims that interest
or fees paid under this Agreement is exempt from
United States withholding tax because it is
effectively connected with a United States trade
or business of such Bank, two properly completed
and executed copies of IRS Form W-8ECI before the
payment of any interest or fees is due in the
first taxable year of such Bank and in each
succeeding taxable year of such Bank during which
interest or fees may be paid under this Agreement;
and
(iii) such other form or forms as may be
required under the Code or other laws of the
United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent (which
will notify the Company) of any change in circumstances
which would modify or render invalid any claimed
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exemption or reduction.
(b) If any Bank claims exemption from, or
reduction of, withholding tax under a United States tax
treaty by providing IRS Form W-8BEN and such Bank
sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Company
owing to such Bank, such Bank agrees to notify the
Agent (which will notify the Company) of the percentage
amount in which it is no longer the beneficial owner of
Obligations of the Company owing to such Bank. To the
extent of such percentage amount, the Agent will treat
such Bank's IRS Form W-8BEN as no longer valid.
(c) If any Bank claiming exemption from
United States withholding tax by filing IRS Form W-8ECI
with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the
Obligations of the Company owing to such Bank, such
Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed
by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction
in the applicable withholding tax, the Agent may
withhold from any interest payment to such Bank an
amount equivalent to the applicable withholding tax
after taking into account such reduction. However, if
the forms or other documentation required by subsection
(a) of this Section are not delivered to the Agent,
then the Agent may withhold from any interest payment
to such Bank not providing such forms or other
documentation an amount equivalent to the applicable
withholding tax imposed by Sections 1441 and 1442 of
the Code, without reduction.
(e) If the IRS or any other Governmental
Authority of the United States or other jurisdiction
asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of
any Bank (because the appropriate form was not
delivered or was not properly executed, or because such
Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any
other reason) such Bank shall indemnify the Agent fully
for all amounts paid, directly or indirectly, by the
Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any
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jurisdiction on the amounts payable to the Agent under
this Section, together with all costs and expenses
Banks under this subsection shall survive the or
expiration of all Letters of Credit, the payment of all
other Obligations hereunder and the resignation or
replacement of the Agent.
10.11 Co-Agents; Lead Managers
. None of the Banks identified on the facing page
or signature pages of this Agreement as a
"co-syndication agent" shall have any right, power,
obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Banks
as such. Without limiting the foregoing, none of the
Banks so identified as a "co-syndication agent" shall
have or be deemed to have any fiduciary relationship
with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so
identified in deciding to enter into this Agreement or
in taking or not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
11.01 Amendments and Waivers
. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent
with respect to any departure by the Company or any
applicable Subsidiary therefrom, shall be effective
unless the same shall be in writing and signed by the
Majority Banks (or by the Agent at the written request
of the Majority Banks) and the Company and acknowledged
by the Agent, and then any such waiver or consent shall
be effective only in the specific instance and for the
specific purpose for which given; provided, however,
that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Banks and the
Company and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any
Bank, the L/C Commitment of the Issuing Bank or the
Swingline Commitment of the Swingline Bank (or
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reinstate any Commitment terminated pursuant to Section
9.02);
(b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the
Banks (or any of them) hereunder or under any other
Loan Document (including the date of any mandatory
prepayment hereunder);
(c) reduce the principal of, or the rate of
interest specified herein on any Loan, or (subject to
clause (iii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the
Loans which is required for the Banks or any of them to
take any action hereunder; or
(e) amend this Section 11.01, Section 2.14,
the definition of "Majority Banks" herein, or any
provision herein providing for consent or other action
by all Banks or some specified amount of Banks;
and, provided further, that (i) no amendment, waiver or
consent shall, unless in writing and signed by the
Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, increase the L/C
Commitment of the Issuing Bank or otherwise affect the
rights or duties of the Issuing Bank under this
Agreement or any L/C-Related Document relating to any
Letter of Credit Issued or to be Issued by it, (ii) no
amendment, waiver or consent shall, unless in writing
and signed by the Agent in addition to the Majority
Banks or all the Banks, as the case may be, affect the
rights or duties of the Agent under this Agreement or
any other Loan Document, (iii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in
a writing executed by the parties thereto, and (iv) no
amendment, waiver or consent shall, unless in writing
and signed by the Swingline Bank in addition to the
Majority Banks or all the Banks, as the case may be,
increase the Swingline Commitment or otherwise affect
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the rights or duties of the Swingline Bank under this
Agreement.
11.02 Notices
(a) . (a) All notices, requests,
consents, approvals, waivers and other communications
shall be in writing (including, unless the context
expressly otherwise provides, by facsimile
transmission), and mailed, faxed or delivered, to the
address or facsimile number specified for notices on
Schedule 11.02; or, as directed to the Company or the
Agent, to such other address as shall be designated by
such party in a written notice to the other parties,
and as directed to any other party, at such other
address as shall be designated by such party in a
written notice to the Company and the Agent.
(b) All such notices, requests and
communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in
legible form by facsimile machine, respectively, or if
mailed, upon the fifth Business Day after the date
deposited into the mails, or if delivered, upon
delivery (provided that all notices of a Default or an
Event of Default shall be given by overnight delivery
or facsimile transmission, and provided further that
any failure to do so shall not impair or limit the
rights and remedies of the Agent and the Banks
resulting from the existence of such Default or Event
of Default); except that notices pursuant to
Article II, III or X to the Agent shall not be
effective until actually received by the Agent at the
address specified for the Agent on Schedule 11.02;
notices pursuant to Article III to the Issuing Bank
shall not be effective until actually received by the
Issuing Bank at the address specified for such Person
on Schedule 11.02; and notices pursuant to Article II
to the Swingline Bank shall not be effective until
actually received by the Swingline Bank, at the address
specified for such Person on Schedule 11.02.
(c) Any agreement of the Agent and the Banks
herein to receive certain notices by telephone or
facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall
be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Company to
give such notice and the Agent and the Banks shall
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not have any liability to the Company or other Person
on account of any action taken or not taken by the
Agent or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to
repay the Loans and L/C Obligations shall not be
affected in any way or to any extent by any failure by
the Agent and the Banks to receive written confirmation
of any telephonic or facsimile notice or the receipt by
the Agent and the Banks of a confirmation which is at
variance with the terms understood by the Agent and the
Banks to be contained in the telephonic or facsimile
notice.
11.03 No Waiver; Cumulative Remedies
. No failure to exercise and no delay in
exercising, on the part of the Agent or any Bank, any
right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights provided for in
this Agreement and the other Loan Documents are
cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in
equity, or under any other instrument, document or
agreement now existing or hereafter arising.
11.04 Costs and Expenses
. The Company shall:
(a) whether or not the transactions
contemplated hereby are consummated, pay or reimburse
BofA (including in its capacity as Agent and Issuing
Bank) within five Business Days after demand (subject
to subsection 5.01(e)) for all costs and expenses
reasonably incurred by BofA (including in its capacity
as Agent and Issuing Bank) in connection with (i) the
development, preparation, delivery, closing,
administration and execution of, and any amendment,
supplement, waiver or modification to (in each case,
whether or not consummated), this Agreement, any Loan
Document and any other documents prepared in connection
herewith or therewith, (ii) the consummation of the
transactions contemplated hereby and thereby, and
(iii) the syndication and assignment following the
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Closing Date of all or any part of BofA's interest as
Bank hereunder, in each case, including reasonable
Attorney Costs incurred by BofA (including in its
capacity as Agent and Issuing Bank) with respect
thereto; and
(b) pay or reimburse the Agent, the Lead
Arranger and each Bank within five Business Days after
demand (subject to subsection 5.01(e)) for all costs
and expenses (including Attorney Costs) incurred by
them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during
the existence of an Event of Default or after
acceleration of the Loans (including in connection with
any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate
proceeding).
11.05 Company Indemnification
. Whether or not the transactions contemplated
hereby are consummated, the Company shall indemnify,
defend and hold the Agent-Related Persons, and each
Bank and each of its respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each
an "Indemnified Person") harmless from and against any
and all liabilities, claims, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including
reasonable Attorney Costs) of any kind or nature
whatsoever which may at any time (including at any time
following repayment of the Loans and the termination of
the Letters of Credit and the termination, resignation
or replacement of the Agent or replacement of any Bank)
be imposed on, incurred by or asserted against any such
Person arising out of any demand made on or claim
asserted against an Indemnified Person in any way
relating to or arising out of this Agreement, the
Transaction, the other Documents or any document
contemplated by or referred to therein, or the
transactions contemplated hereby, or any action taken
or omitted by any such Person under or in connection
with any of the foregoing, including with respect to
any investigation, litigation or proceeding (including
any Insolvency Proceeding or appellate proceeding)
related to or arising out of this Agreement or the
Transaction or the Loans or Letters of Credit or the
use of the proceeds thereof, whether or
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not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified
Liabilities"); provided that the Company shall have no
obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities to the extent they
are found by a final decision of a court of competent
jurisdiction or in binding arbitration to have resulted
primarily from the gross negligence or willful
misconduct of or from materially misleading information
relating to and provided in writing by such Indemnified
Person. The agreements in this Section and in Section
11.04 shall survive the termination of the Commitments,
the termination or expiration of all Letters of Credit
and the payment of all other Obligations.
11.06 Marshalling; Payments Set Aside
. Neither the Agent nor the Banks shall be under
any obligation to marshal any assets in favor of the
Company or any other Person or against or in payment of
any or all of the Obligations. To the extent that the
Company makes a payment to the Agent or the Banks, or
the Agent or the Banks exercise their right of set-off,
and such payment or the proceeds of such set-off or any
part thereof are subsequently invalidated, declared to
be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by
the Agent or such Bank in its discretion) to be repaid
to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise,
then (a) to the extent of such recovery the obligation
or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect
as if such payment had not been made or such set-off
had not occurred, and (b) each Bank severally agrees to
pay to the Agent upon demand its Pro Rata Share of any
amount so recovered from or repaid by the Agent.
11.07 Successors and Assigns
. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted
assigns, except that the Company may not assign or
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transfer any of its rights or obligations under this
Agreement without the prior written consent of the
Agent and each Bank.
11.08 Assignments, Participations, Etc.
(a) (a) Any Bank may, with the
written consent of the Company and the Agent, the
Issuing Bank and the Swingline Bank (which in each case
shall not be unreasonably withheld), at any time assign
and delegate to one or more Eligible Assignees (each an
"Assignee") all, or any ratable part of all, of the
Loans, the Commitment, the L/C Obligations and the
other rights and obligations of such Bank hereunder;
provided, however, that (i) no written consent of the
Company shall be required during the existence of a
Default or an Event of Default; (ii) no written consent
of the Company or the Agent, the Issuing Bank or the
Swingline Bank shall be required in connection with any
assignment and delegation by a Bank to an Eligible
Assignee that is another Bank or an Affiliate of such
Bank; and (iii) except in connection with an assignment
of all of a Bank's rights and obligations with respect
to its Commitment, Loans and L/C Obligations, any such
assignment to an Eligible Assignee that is not a Bank
hereunder shall be equal to or greater than $5,000,000;
and (iv) no such partial assignment need be of a
ratable part of the Loans, the Commitment and the other
interests, rights and obligations hereunder of such
assigning Bank; and provided further, however, that the
Company and the Agent may continue to deal solely and
directly with such Bank in connection with the interest
so assigned to an Assignee until (A) such Bank and its
Assignee shall have delivered to the Company and the
Agent an Assignment and Acceptance Agreement
substantially in the form of Exhibit E ("Assignment and
Acceptance"), together with any Note or Notes subject
to such assignment; (B) a written notice of such
assignment, together with payment instructions,
addresses and related information with respect to the
Assignee, in substantially the form of the Notice of
Assignment and Acceptance attached as Schedule 1 to the
Assignment and Acceptance, shall have been given to the
Company and the Agent by such Bank and the Assignee;
(C) the assignor Bank or Assignee shall have paid to
the Agent a processing fee in the amount of $3,500 and
(D) the Agent, the Company the Issuing Bank and the
Swingline Bank each shall have provided any required
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consent to such assignment in accordance with this
Section. In connection with any assignment by BofA,
its Swingline Commitment may be assigned in whole (and
not part) and only in connection with an assignment
transaction involving an assignment of all of its
Commitment and Loans, and the Assignment and Acceptance
may be appropriately modified to include an assignment
and delegation of its Swingline Commitment and any
outstanding Swingline Loans.
(b) From and after the date that the Agent
notifies the assignor Bank that the Agent has received
(and, if required, provided its consent with respect
thereto and received any other consents required under
this Section 11.08) an executed Assignment and
Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the
rights and obligations of a Bank under the Loan
Documents, (ii) this Agreement shall be deemed to be
amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and
the resulting adjustment of the Commitments arising
therefrom, and (iii) the assignor Bank shall, to the
extent that rights and obligations hereunder and under
the other Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under
the Loan Documents; provided, however, that the
assignor Bank shall not relinquish its rights under
Article IV or under Sections 11.04 and 11.05 to the
extent such rights relate to the time prior to the
effective date of the Assignment and Acceptance. The
Commitment allocated to each Assignee shall reduce the
Commitment of the assigning Bank pro tanto.
(c) Within five Business Days after the
Company's receipt of notice by the Agent that it has
received (and, if necessary, consented to) an executed
Assignment and Acceptance and payment of the processing
fee (and provided that the Issuing Bank, the Swingline
Bank and the Company each consent to such assignment in
accordance with subsection 11.08(a)), the Company shall
execute and deliver to the Agent any new Notes
requested by such Assignee evidencing such Assignee's
assigned Loans and Commitment and, if the assignor Bank
has retained a portion of its Loans and its Commitment,
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replacement Notes as requested by the assignor Bank
evidencing the Loans and Commitment retained by the
assignor Bank (such Notes to be in exchange for, but
not in payment of, the Notes held by such Bank, if
any).
(d) Any Bank may at any time sell to one or
more commercial banks or other Persons not Affiliates
of the Company (a "Participant") participating
interests in any Loans, the Commitment of that Bank and
the other interests of that Bank (the "Originating
Bank") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Bank's
obligations under this Agreement shall remain
unchanged, (ii) the originating Bank shall remain
solely responsible for the performance of such
obligations, (iii) the Company, the Issuing Bank and
the Agent shall continue to deal solely and directly
with the originating Bank in connection with the
originating Bank's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no
Bank shall transfer or grant any participating interest
under which the Participant has rights to approve any
amendment to, or any consent or waiver with respect to,
this Agreement or any other Loan Document, except to
the extent such amendment, consent or waiver would
require unanimous consent of the Banks as described in
the first proviso to Section 11.01. In the case of any
such participation, the Participant shall be entitled
to the benefit of Sections 4.01, 4.03 and 11.05 as
though it were also a Bank hereunder (but, in the case
of Sections 4.01 and 4.03, solely to the extent that
the amounts claimed thereunder by such Participant do
not exceed the amounts that could be claimed thereunder
by the Bank which sold a participation interest to such
Participant had such Bank not sold such participation
interest), and, if amounts outstanding under this
Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect
of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as
a Bank under this Agreement.
(e) Notwithstanding any other provision in
this Agreement, any Bank may at any time create a
security interest in, or pledge, all or any portion of
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its rights under and interest in this Agreement and any
Note held by it (other than in respect of Swingline
Loans) in favor of any Federal Reserve Bank in
accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 C.F.R. 203.14, and such Federal
Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law.
11.09 Confidentiality
. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions
and exercise due care to maintain the confidentiality
of all information identified as "confidential" or
"secret" by the Company and provided to it by the
Company or any Subsidiary, or by the Agent on the
Company's or such Subsidiary's behalf, under this
Agreement or any other Loan Document, and neither it
nor any of its Affiliates shall use any such
information other than in connection with or in
enforcement of this Agreement and the other Loan
Documents or in connection with other business now or
hereafter existing or contemplated with the Company or
any Subsidiary; except to the extent such information
(i) was or becomes generally available to the public
other than as a result of disclosure by such Bank, or
(ii) was or becomes available on a non-confidential
basis from a source other than the Company, provided
that such source is not bound by a confidentiality
agreement with the Company known to such Bank;
provided, however, that any Bank may disclose such
information (A) at the request or pursuant to any
requirement of any Governmental Authority to which such
Bank is subject or in connection with an examination of
such Bank by any such authority; (B) pursuant to
subpoena or other court process; (C) when required to
do so in accordance with the provisions of any
applicable Requirement of Law; (D) to the extent
reasonably required in connection with any litigation
or proceeding to which the Agent, any Bank or their
respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document;
(F) to such Bank's independent auditors, legal counsel
and other professional advisors; (G) to any Participant
or Assignee, actual or potential, provided that such
Person agrees in writing to keep such information
confidential to the same extent required of the Banks
hereunder; (H) as to any Bank or its Affiliate, as
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expressly permitted under the terms of any other
document or agreement regarding confidentiality to
which the Company or any Subsidiary is party or is
deemed party with such Bank or such Affiliate; and
(I) to its Affiliates; provided, that with respect to
disclosures under clauses (B) and (D), such Bank shall
use commercially reasonable efforts to notify the
Company (unless such notification is prohibited by any
applicable Requirement of Law) of the proposed
disclosure before such disclosure is made to reasonably
afford the Company the opportunity to seek to prevent
such disclosure.
11.10 Set-off
. In addition to any rights and remedies of the
Banks provided by law, if an Event of Default exists or
the Loans have been accelerated, each Bank is
authorized at any time and from time to time, without
prior notice to the Company, any such notice being
waived by the Company to the fullest extent permitted
by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at
any time owing by, such Bank to or for the credit or
the account of the Company against any and all
Obligations owing to such Bank, now or hereafter
existing, irrespective of whether or not the Agent or
such Bank shall have made demand under this Agreement
or any Loan Document and although such Obligations may
be contingent or unmatured. Each Bank agrees promptly
to notify the Company and the Agent after any such
set-off and application made by such Bank; provided,
however, that the failure to give such notice shall not
affect the validity of such set-off and application.
11.11 Automatic Debits of Fees
. With respect to any principal, interest,
commitment fee, arrangement fee, letter of credit fee
or other fee, or any other cost or expense (including
Attorney Costs) due and payable to the Agent, the
Issuing Bank, BofA or the Lead Arranger under the Loan
Documents, the Company hereby irrevocably authorizes
BofA to debit any deposit account of the Company with
BofA in an amount such that the aggregate amount
debited from all such deposit accounts does not exceed
such principal, interest, fee or other cost or expense.
If there are insufficient funds in such deposit
accounts to cover the amount of the payment then
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<PAGE>
due, such debits will be reversed (in whole or in part,
in BofA's sole discretion) and such amount not debited
shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.
11.12 Notification of Addresses, Lending
Offices, Etc.
Each Bank shall notify the Agent in writing of
any changes in the address to which notices to such
Bank should be directed, of addresses of any Lending
Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other
administrative information as the Agent shall
reasonably request.
11.13 Counterparts
. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed,
shall be deemed an original, and all of said
counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.14 Severability
. The illegality or unenforceability of any
provision of this Agreement or any instrument or
agreement required hereunder shall not in any way
affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any
instrument or agreement required hereunder.
11.15 No Third Parties Benefited
. This Agreement is made and entered into for the
sole protection and legal benefit of the Company, the
Banks, the Agent and the Agent-Related Persons, the
Indemnified Persons and their permitted successors and
assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with,
this Agreement or any of the other Loan Documents.
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<PAGE>
11.16 Governing Law and Jurisdiction
(a) . (a) THIS AGREEMENT AND ANY NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE
AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
OF THE COMPANY, THE AGENT AND THE BANKS IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO.
11.17 Waiver of Jury Trial
. THE COMPANY, THE BANKS AND THE AGENT EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY
OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. THE COMPANY, THE BANKS AND THE AGENT
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
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<PAGE>
11.18 Entire Agreement
. This Agreement, together with the other Loan
Documents, embodies the entire agreement and
understanding among the Company, the Issuing Bank, the
Swingline Bank, the Banks and the Agent, and supersedes
all prior or contemporaneous agreements and
understandings of such Persons, verbal or written,
relating to the subject matter hereof and thereof.
(remainder of page intentionally left blank)
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered in San
Francisco, California, by their proper and duly
authorized officers as of the day and year first above
written.
PRECISION CASTPARTS CORP.
By: /s/ W.D. Larsson
_________________________
Title: Vice President and Chief
Financial Officer
_________________________
BANK OF AMERICA, N.A.,
as Agent, Issuing Bank, Swingline Bank
and Bank
By: /s/ Kenneth J. Beck
Title: Vice President
________________________________
THE BANK OF NOVA SCOTIA, as Co-Syndication
Agent and Bank
By: /s/ Mike Brown
________________________________
Title: Vice President
________________________________
WACHOVIA BANK, N.A., as Co-Syndication
Agent and Bank
By: /s/ Jessica Wright
________________________________
Title: Vice President
________________________________
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<PAGE>
ABN AMRO BANK N.V.
By: /s/ David McGinnis
________________________________
Title: Vice.President
By: /s/ Paul Fault
________________________________
Title: Vice President
________________________________
ALLSTATE LIFE INSURANCE COMPANY
By: /s/Jerry Zinkula
________________________________
Title: Senior Portfolio Manager
________________________________
ARAB BANK PLC
By: /s/ Emmanuel Caravanos
________________________________
Title: VP-Operations
________________________________
BANQUE NATIONALE DE PARIS
By: /s/ Katherine Wolfe
________________________________
Title: Vice President
________________________________
By: /s/ Sandra F. Bertram
________________________________
Title: Assistant Vice President
________________________________
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<PAGE>
BANCA NAZIONALE DEL LAVORO S.P.A.-
NEW YORK BRANCH
By: /s/ Roberto Mancone
_______________________________
Title: Senior Loan Officer
By: /s/ Leonardo Valentini
_______________________________
Title: First Vice President
_______________________________
BANK HAPOALIM B.M.
By: /s/ Shaun Briedbart
________________________________
Title: Vice President
________________________________
By: /s/ Conrad Wagner
________________________________
Title: First Vice President
________________________________
BANK POLSKA KASA OPIEKI S.A.
PEKAO S.A. GROUP
By: /s/Barry W. Henry
________________________________
Title: Vice President
Senior Lending Officer
________________________________
THE BANK OF NEW YORK
By: /s/ Elizabeth Ying
_______________________________
Title: Vice President
_______________________________
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<PAGE>
THE DAI-ICHI KANGYO BANK, LTD.
NEW YORK BRANCH
By: /s/ Paresh R. Shah
_______________________________
Title: Assistant Vice President
_______________________________
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ William H. Powell
_______________________________
Title: Assistant Vice President
_______________________________
FIRST SECURITY BANK, N.A.
By: /s/ Mark C. Johnson
_______________________________
Title: Senior Vice President
_______________________________
FIRST UNION NATIONAL BANK
By: /s/ Paul L. Menconi
_______________________________
Title: Vice President
______________________________
FLEET NATIONAL BANK
By: /s/ Roger C. Boucher
_______________________________
Title: Senior Vice President
_______________________________
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<PAGE>
THE FUJI BANK, LIMITED
By: /s/Hiromitsu Ugawa
_______________________________
Title: Senior Vice President
_______________________________
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Kazutoshi Kuwahara
_______________________________
Title: General Manager
_______________________________
KEYBANK NATIONAL ASSOCIATION
By: /s/ Mary K. Young
_______________________________
Title: Assistant Vice President
_______________________________
THE MITSUBISHI TRUST & BANKING CORPORATION
By: /s/ Nobuo Tominaga
_______________________________
Title: Chief Manager
_______________________________
THE SANWA BANK, LIMITED
By: /s/ Steven Yamada
_______________________________
Title: Vice President
_______________________________
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<PAGE>
THE SUMITOMO BANK, LIMITED
By: /s/ Bob Granfelt
_______________________________
Title: Vice President and Manager
_______________________________
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Brennan K. Church
_______________________________
Title: Assistant Vice President
_______________________________
WELLS FARGO BANK, N.A.
By: /s/ Donald A. Hartmann
_______________________________
Title: Senior Vice President
_______________________________
</Page>
(continued.)
