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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED DECEMBER 31, 1998
COMMISSION FILE NUMBER 0-20165
STERIS CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 34-1482024
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5960 HEISLEY ROAD, 440-354-2600
MENTOR, OHIO 44060-1834 (Registrant's telephone number,
(Address of principal executive offices) including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ].
The number of Common Shares outstanding as of December 31, 1998: 68,162,413
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PART I FINANCIAL INFORMATION
STERIS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS) (UNAUDITED)
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<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1998
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 15,013 $ 17,172
Accounts receivable 208,725 203,992
Inventories 113,346 87,405
Current portion of deferred income taxes 24,949 23,609
Prepaid expenses and other assets 16,385 12,154
--------- ---------
TOTAL CURRENT ASSETS 378,418 344,332
Property, plant, and equipment 349,549 289,658
Accumulated depreciation (103,293) (84,366)
--------- ---------
Net property, plant, and equipment 246,256 205,292
Intangibles 284,032 240,488
Accumulated amortization (70,873) (66,516)
--------- ---------
Net intangibles 213,159 173,972
Deferred income taxes 11,728 5,710
Other assets 3,128 3,019
--------- ---------
TOTAL ASSETS $ 852,689 $ 732,325
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term indebtedness $ 2,200 $ 2,200
Accounts payable 35,665 37,213
Accrued expenses and other 135,766 130,241
--------- ---------
TOTAL CURRENT LIABILITIES 173,631 169,654
Long-term indebtedness 211,725 152,879
Other long-term liabilities 51,474 50,840
--------- ---------
TOTAL LIABILITIES 436,830 373,373
Shareholders' equity:
Serial preferred shares, without par value, 3,000 shares authorized; no shares
outstanding
Common Shares, without par value, 300,000 shares authorized; issued
and outstanding shares of 68,162 at December 31, 1998 and 68,020 at
March 31, 1998, excluding 317 and 458 treasury shares, respectively 230,774 230,477
Retained earnings 191,100 135,009
Cumulative translation adjustment (6,015) (6,534)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 415,859 358,952
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 852,689 $ 732,325
========= =========
</TABLE>
See notes to consolidated condensed financial statements.
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STERIS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
--------------------------- ---------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net revenues $ 205,794 $ 186,639 $ 570,694 $ 515,156
Cost of goods and services sold 109,260 102,591 303,342 286,087
--------- --------- --------- ---------
Gross profit 96,534 84,048 267,352 229,069
Costs and expenses:
Selling, informational, and
administrative 49,793 46,099 150,017 133,815
Research and development 6,150 5,989 18,253 17,919
--------- --------- --------- ---------
55,943 52,088 168,270 151,734
--------- --------- --------- ---------
Income from operations 40,591 31,960 99,082 77,335
Interest expense (3,097) (2,453) (7,816) (3,848)
Interest income and other 170 263 685 638
--------- --------- --------- ---------
Income before income taxes 37,664 29,770 91,951 74,125
Income tax expense 14,689 11,600 35,860 28,899
--------- --------- --------- ---------
Net income $ 22,975 $ 18,170 $ 56,091 $ 45,226
========= ========= ========= =========
Net income per share - basic $ 0.34 $ 0.27 $ 0.82 $ 0.67
========= ========= ========= =========
Net income per share - diluted $ 0.33 $ 0.26 $ 0.79 $ 0.64
========= ========= ========= =========
</TABLE>
See notes to consolidated condensed financial statements.
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STERIS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)
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<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31
---------------------------
1998 1997
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 56,091 $ 45,226
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 22,882 16,531
Deferred income taxes (7,358) 1,066
Other items (270) (5,118)
Changes in operating assets and liabilities:
Accounts receivable (1,033) (23,128)
Inventories (22,809) (12,675)
Other assets (3,493) (1,917)
Accounts payable and accruals (5,365) (14,536)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 38,645 5,449
INVESTING ACTIVITIES
Purchases of property, plant, equipment, and patents (52,014) (29,377)
Investment in businesses (48,452) (126,505)
Sale of assets 43,084
Proceeds from sales of marketable securities 2,094
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (100,466) (110,704)
FINANCING ACTIVITIES
Payments on long-term obligations (1,114) (4,287)
Borrowing under credit facility 60,000 110,000
Purchase of treasury shares (6,746) (10,051)
Proceeds from exercise of stock options 3,981 4,645
Tax benefits from exercise of stock options 3,022 1,143
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NET CASH PROVIDED BY FINANCING ACTIVITIES 59,143 101,450
Effect of exchange rate changes on cash and cash equivalents 519 (170)
--------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS (2,159) (3,975)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,172 20,576
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 15,013 $ 16,601
========= =========
</TABLE>
See notes to consolidated condensed financial statements.
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STERIS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
PERIODS ENDED DECEMBER 31, 1998 AND 1997
A. - REPORTING ENTITY
STERIS Corporation (the "Company" or "STERIS") develops, manufactures, and
markets infection prevention, contamination prevention, microbial reduction, and
surgical support systems, products, services, and technologies for healthcare,
scientific, research, food, and industrial Customers throughout the world. The
Company has over 4,500 Associates (employees) worldwide, including more than
1,700 direct sales, service, and field support personnel. Customer Support
facilities are located in major global market centers with manufacturing
operations in the United States, Canada, Germany, and Finland. STERIS operates
in a single business segment.
B. - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q; they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. Accordingly, the reader
of these financial statements may wish to refer to the audited consolidated
financial statements of STERIS filed with the Securities and Exchange Commission
as part of STERIS's Form 10-K for the year ended March 31, 1998.
The accompanying consolidated condensed financial statements have been prepared
in accordance with STERIS's customary accounting practices and have not been
audited. Management believes that the financial information included herein
reflects all adjustments necessary for a fair presentation of interim results
and all such adjustments are of a normal and recurring nature. The interim
results reported are not necessarily indicative of the results to be expected
for the fiscal year ending March 31, 1999.
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. Intercompany accounts and transactions have been
eliminated upon consolidation. Certain reclassifications have been made to the
Company's prior year financial statements to agree with current year
classifications.
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STERIS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
C. - EARNINGS PER SHARE
Following is a summary, in thousands, of Common Shares and Common Share
equivalents outstanding used in the calculations of earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
----------------------------------- ------------------------------
1998 1997 1998 1997
-------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Weighted average Common
Shares outstanding - basic 68,174 67,808 68,203 67,886
Dilutive effect of stock options 2,204 2,428 2,398 2,254
-------------- --------------- ------------- --------------
Weighted average Common
Shares and equivalents - diluted 70,378 70,236 70,601 70,140
============== =============== ============= ==============
</TABLE>
On July 28, 1998, the Company announced a 2-for-1 stock split effected by means
of a 100% stock dividend on STERIS Common Shares. The stock split was effective
August 24, 1998 to shareholders of record on August 10, 1998. The net income per
common share and the weighted average number of common shares outstanding as
well as number of shares issued and outstanding for all periods shown on the
Consolidated Condensed Financial Statements and footnotes have been adjusted to
reflect this stock split.
D. - COMPREHENSIVE INCOME
Comprehensive income amounted to $23,493 and $17,484, net of tax, for the
quarters ended December 31, 1998 and 1997, respectively, an increase of 34.4%.
Comprehensive income amounted to $56,610 and $45,056, net of tax, for the nine
months ended December 31, 1998 and 1997, respectively, an increase of 25.6%. The
difference between net income and comprehensive income is the changes in
cumulative translation adjustment for the periods presented.
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STERIS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
E. - INVENTORIES
Inventories were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1998
--------------------- -------------------
<S> <C> <C>
Raw material $43,450 $33,007
Work in process 29,460 17,666
Finished goods 40,436 36,732
--------------------- -------------------
$113,346 $87,405
===================== ===================
</TABLE>
The increase in inventories was due to an increase in the necessary stock levels
to support product sales, anticipated future product sales, the acquisition of
businesses, and to prepare for potential third quarter work stoppages. The
potential work stoppages did not occur.
F. - FINANCING
On January 26, 1999, STERIS entered into a $400,000 Credit Facility, which
replaced the existing revolving Credit Facility. The new Credit Facility
includes an unsecured revolver of $250,000 which matures January 26, 2002. The
remaining $150,000 is an unsecured 364 day facility maturing on January 25,
2000, which can be extended annually for 364 days. The new $400,000 Credit
Facility may be used for general corporate purposes and will bear interest at
either KeyBank National Association's prime rate or LIBOR rates plus a margin.
The Credit Facility contains customary covenants which include maintenance of
certain financial ratios. At December 31, 1998, the outstanding borrowings under
the existing Credit Facility were $205,000.
The Company has now purchased 1.8 million Common Shares as a part of its
previously announced open market buy-back program.
G. - CONTINGENCIES
There are various pending lawsuits and claims arising out of the conduct of
STERIS's business. In the opinion of management, the ultimate outcome of these
lawsuits and claims will not have a material adverse effect on STERIS's
consolidated financial position or results of operations. STERIS presently
maintains product liability insurance coverage in amounts and with deductibles
that it believes are prudent.
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STERIS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
H. - ACQUISITIONS
In late September 1998, the Company completed the acquisition of Hausted Inc.
Hausted is a leading provider of mobile systems for surgical and diagnostic
patient positioning and transport. During the third quarter fiscal 1999, the
Company acquired Royal Sterilization Systems of Arizona and Detach AB. Royal
Sterilization Systems, located in Nogales, Arizona, currently provides contract
sterilization and microbial reduction services to producers of medical devices
in the Southwestern United States and Mexico. Detach AB, located in Sweden,
possesses proprietary technology and produces innovative systems for the
Company's scientific and industrial marketplace. These acquisitions have been
accounted as purchase transactions.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Net revenue increased by 10.3% to $205.8 million in the third quarter fiscal
1999 from $186.6 million in the third quarter fiscal 1998. Net revenue
increased by 10.8% to $570.7 million in the first nine months of fiscal 1999
from $515.2 million in the same period in fiscal 1998. Health Care Group
revenues in the fiscal third quarter increased 7.5% from the prior year period
to $150.4 million, or 73.1% of total Company revenues. Scientific and
Industrial Group revenues were $55.4 million in the third quarter, an increase
of 18.7% from the prior year period. Health Care Group revenues in the first
nine months of fiscal 1999 increased 8.3% from the prior year period to $424.3
million, or 74.3% of total Company revenues. Scientific and Industrial Group
revenues were $146.4 million in the first nine months of fiscal 1999, an
increase of 18.8% from the prior year period. Revenues from consumables and
services were 55.5% of sales for the quarter, up from 48.6% last year.
The costs of products and services sold increased by 6.5% to $109.3 million in
the third quarter fiscal 1999 from $102.6 million in the third quarter fiscal
1998. The costs of products and services sold increased by 6.0% to $303.3
million for the first nine months of fiscal 1999 from $286.1 million for the
first nine months of fiscal 1998. The cost of products and services sold as a
percentage of net revenue was 53.1% for the third quarter fiscal 1999 compared
to 55.0% for the same period in fiscal 1998. The decrease in the cost of
products and services sold as a percentage of net revenue for the third quarter
fiscal 1999 resulted principally from the increased percentage of revenues from
higher margin consumables, accessories, and services, and the product expansion
and expense reduction synergies from the effective integration of acquired
businesses.
Selling, informational, and administrative expenses increased by 8.0% to $49.8
million in the third quarter fiscal 1999 from $46.1 million in the third quarter
fiscal 1998. Selling, informational, and administrative expenses increased by
12.1% to $150.0 million in the first nine months of fiscal 1999 from $133.8
million in the same period of fiscal 1998. The increase in expenses was
attributable to the continued investments in customer support systems,
information technology systems, and to support the increased level of business.
The expenses as a percentage of net revenue decreased to 24.2% in the third
quarter fiscal 1999 from 24.7% in the third quarter fiscal 1998.
Research and development expenses increased by 2.7% to $6.2 million in the
third quarter fiscal 1999 from $6.0 million in the third quarter fiscal 1998.
Research and development expenses increased by 1.9% to $18.3 million in the
first nine months of fiscal 1999 from $17.9 million in the same period fiscal
1998.
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Interest expense increased by 26.3% to $3.1 million in the third quarter fiscal
1999 from $2.5 million in the third quarter fiscal 1998. Interest expense
increased by 103.1% to $7.8 million in the first nine months of fiscal 1999 from
$3.8 million in the same period fiscal 1998. The increase was due to the
additional borrowing under the Credit Facility principally for the purchase of
acquired companies.
Net income for the third quarter of fiscal 1999 increased by 26.4% to $23.0
million ($.33 per share) from $18.2 million ($.26 per share) in the same period
fiscal 1998. Net income for the first nine months of fiscal 1999 increased by
24.0% to $56.1 million ($.79 per share) from $45.2 million ($.64 per share) in
the same period fiscal 1998.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company had $15.0 million in cash and cash equivalents as of December 31,
1998, compared to $17.2 million of the same at March 31, 1998. The decrease was
primarily attributable to the acquisitions of businesses and purchases of
property, plant, and equipment offset by cash received from operations,
borrowings, and the exercise of stock options.
Accounts receivable increased by 2.3% to $208.7 million as of December 31, 1998,
compared to $204.0 million at March 31, 1998. The increase resulted from
increased sales and acquired businesses.
Inventory increased by 29.7% to $113.3 million as of December 31, 1998, compared
to $87.4 million at March 31, 1998. The increase was due to an increase in the
necessary stock levels to support product sales, anticipated future product
sales, the acquisition of businesses, and to prepare for potential third
quarter work stoppages. The potential work stoppages did not occur.
Prepaid expenses and other assets increased by 34.8% to $16.4 million as of
December 31, 1998, compared to $12.2 million at March 31, 1998. The increase was
mainly due to acquired businesses and additional supplies necessary to support
increased sales.
Property, plant, and equipment increased by 20.7% to $349.5 million as of
December 31, 1998, compared to $289.7 million at March 31, 1998. The increase
was due to investments in informational technology systems, manufacturing
equipment, and distribution systems.
Intangibles increased by 18.1% to $284.0 million as of December 31, 1998,
compared to $240.5 million at March 31, 1998. The increase was primarily a
result of acquired businesses.
Noncurrent deferred income taxes increased to $11.7 million as of
December 31, 1998, compared to $5.7 million at March 31, 1998.
Current liabilities increased by 2.3% to $173.6 as of December 31, 1998,
compared to $169.7 million at March 31, 1998. The increase was due to the
acquisition of businesses.
Long-term indebtedness increased by 38.5% to $211.7 million as of December 31,
1998, compared to $152.9 at March 31, 1998. The increase was due principally to
borrowings to acquire businesses.
Other long-term liabilities were $51.5 million as of December 31, 1998, compared
to $50.8 million of the same at March 31, 1998. The increase was due to periodic
accruals.
On January 26, 1999, STERIS entered into a $400 million Credit Facility, which
replaced the
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existing revolving Credit Facility. The new Credit Facility includes an
unsecured revolver of $250 million which matures January 26, 2002. The remaining
$150 million is an unsecured 364 day facility maturing on January 25, 2000,
which can be extended annually for 364 days. The new $400 million Credit
Facility may be used for general corporate purposes and will bear interest at
either KeyBank National Association's prime rate or LIBOR rates plus a margin.
The Credit Facility contains customary covenants which include maintenance of
certain financial ratios. At December 31, 1998, the outstanding borrowings under
the existing Credit Facility were $205 million.
The Company has no material commitments for capital expenditures. The Company
believes that its cash requirements will increase due to increased sales
requiring more working capital, accelerated research and development, and
potential acquisitions or investments in complementary businesses. However, the
Company believes that its available cash, cash flow from operations, and sources
of credit will be adequate to satisfy its capital needs for the foreseeable
future.
CONTINGENCIES
- -------------
For a discussion of contingencies, see Note G to the consolidated condensed
financial statements.
SEASONALITY
- -----------
Historical data indicates that financial results of acquired businesses were
subject to recurring seasonal fluctuations. A number of factors have contributed
to the seasonal patterns, including sales promotion and compensation programs,
customer buying patterns of capital equipment, and international business
practices. Sales and profitability of certain of the acquired and consolidated
product lines have historically been disproportionately weighted toward the
latter part of each quarter and each fiscal year. Various changes in business
practices resulting from the integration of acquired businesses into STERIS may
alter the historical patterns of the previously independent businesses.
YEAR 2000 DATE CONVERSION
- -------------------------
An issue affecting STERIS and most other companies is how computer systems and
applications recognize and process date-sensitive information. Some older
computer programs were written using two digits rather than four to define the
applicable year. As a result, those computer programs have time-sensitive
software that recognize a date using "00" as the year 1900 rather than the year
2000. Without corrective actions, this could cause a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
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The Company has investigated the impact of the year 2000 issue on its products
and does not anticipate any effect on the performance of its products. The
Company is in the process of assessing and implementing necessary changes for
all areas of the Company's business which could be impacted; these include such
areas as business computer systems, technical infrastructure, plant floor
equipment, building infrastructure, end-user computing, and suppliers. The
Company has initiated a project to prepare its computer systems for the year
2000 and is addressing the year 2000 issues. The Company has implemented year
2000 compliant systems in a number of areas, including order entry systems. In a
number of instances, the Company is replacing non-compliant systems with newer
systems which will significantly improve functionality as well as appropriately
interpret the calendar year 2000 and beyond. Although the timing of these
actions may have been influenced by the year 2000 issue, in virtually all
instances they involve capital expenditures that would have occurred in the
normal course of business. The Company plans to complete testing and make any
necessary modifications to its other critical systems and applications in 1999.
While the Company is implementing a year 2000 vendor compliance program, the
Company has little direct control over whether its suppliers will make the
appropriate modifications to their systems and applications on a timely basis.
The Company is in the process of developing contingency plans to address the
potential business disruption scenarios that are being identified.
Operating expenses include costs incurred in preparing systems and applications
for the year 2000. The Company expects to incur internal staff costs as well as
outside services (including consultants) and other expenses related to the
conversion and testing of the systems and applications. These costs, which are
expensed as incurred, have been immaterial to date. The year 2000 costs include
internal modification and testing costs as well as costs associated with supply
chain risk assessment and contingency planning. Based on assessments completed
to date and compliance plans in process, the Company does not expect that the
year 2000 issues will have a material effect on its business operations or
results of operations. However, if appropriate modifications are not made by the
Company's suppliers on a timely basis, or if the Company's actual costs or
timing for the year 2000 conversion differ materially from its present
estimates, the Company's operations and financial results could be significantly
affected.
FORWARD-LOOKING INFORMATION
- ---------------------------
This Form 10-Q contains statements concerning certain trends and other
forward-looking information affecting or relating to the Company and its
industry that are intended to qualify for the protections afforded
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. There are many important factors that could cause actual results to
differ materially from those in the forward-looking statements. Many of these
important factors are outside STERIS's control. Changes in market conditions,
including competitive factors and changes in government regulations, could cause
actual results to differ materially from the Company's expectations. No
assurance can be provided as to any future financial results. Other potentially
negative factors that could cause actual results to differ materially from those
in the forward-looking statements include (a) the possibility that the
continuing integration of acquired businesses will take longer than anticipated,
(b) the potential for increased pressure on pricing that leads to erosion in
profit margins, (c) the possibility that market demand will not develop for new
technologies, products, and applications, (d) the potential effects of
fluctuations in foreign currencies, (e) the potential that the impact of
weakened currencies in Southeast Asia could spread to countries where
12
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the Company does a sizable amount of business, and (f) the possibility of
reduced demand, or reductions in the rate of growth in demand, for the Company's
products.
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
- ------ -----------------
Reference is made to Part I, Item 1., Note G of this Report on Form 10-Q, which
is incorporated herein by reference.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits
--------
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
10.1 Credit Agreement, dated January 26, 1999, among
STERIS Corporation, various financial institutions
and KeyBank National Association, as Agent
27.1 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
None
13
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STERIS Corporation
(Registrant)
/s/ Donald F. Smith
--------------------------
Donald F. Smith
Chief Financial Officer and
Senior Vice President
(Principal Financial Officer)
February 16, 1999
14
<PAGE> 1
Exhibit 10.1
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of January 26, 1999
among
STERIS CORPORATION,
as Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as Banks,
and
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent,
NATIONAL CITY BANK,
as Documentation Agent,
BANK ONE, NA,
as Syndication Agent,
and
PNC BANK, NATIONAL ASSOCIATION,
and
ABN AMRO BANK N.V., PITTSBURGH BRANCH,
as Co-Agents
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE I. DEFINITIONS..........................................................................................1
ARTICLE II. AMOUNT AND TERMS OF CREDIT...........................................................................14
SECTION 2.1. AMOUNT AND NATURE OF CREDIT..................................................14
SECTION 2.2. CONDITIONS TO LOANS AND LETTERS OF CREDIT....................................19
SECTION 2.3. PAYMENT ON NOTES, ETC........................................................20
SECTION 2.4. PREPAYMENT...................................................................20
SECTION 2.5. FACILITY AND OTHER FEES......................................................21
SECTION 2.6. REDUCTION OF COMMITMENT......................................................21
SECTION 2.7. COMPUTATION OF INTEREST AND FEES;
DEFAULT RATE.................................................................22
SECTION 2.8. MANDATORY PAYMENT............................................................22
SECTION 2.9. EXTENSION OF COMMITMENT......................................................22
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO LIBOR LOANS;
INCREASED CAPITAL; TAXES..........................................................................23
SECTION 3.1. RESERVES OR DEPOSIT REQUIREMENTS, ETC........................................23
SECTION 3.2. TAX LAW, ETC.................................................................23
SECTION 3.3. EURODOLLAR DEPOSITS UNAVAILABLE
OR INTEREST RATE UNASCERTAINABLE.............................................24
SECTION 3.4. INDEMNITY....................................................................25
SECTION 3.5. CHANGES IN LAW RENDERING LIBOR LOANS
UNLAWFUL.....................................................................25
SECTION 3.6. FUNDING......................................................................25
SECTION 3.7. CAPITAL ADEQUACY.............................................................25
ARTICLE IV. CONDITIONS PRECEDENT...............................................................................26
SECTION 4.1. NOTES........................................................................26
SECTION 4.2. GUARANTIES OF PAYMENT OF DEBT................................................26
SECTION 4.3. OFFICER'S CERTIFICATES, RESOLUTIONS,
ORGANIZATIONAL DOCUMENTS.....................................................26
SECTION 4.4. LEGAL OPINION................................................................27
SECTION 4.5. GOOD STANDING CERTIFICATES...................................................27
SECTION 4.6. CLOSING AND LEGAL FEES; AGENT FEE LETTER;
CLOSING FEE LETTER...........................................................27
SECTION 4.7. LIEN SEARCHES................................................................27
SECTION 4.8. TERMINATION OF EXISTING CREDIT AGREEMENT.....................................27
SECTION 4.9. NO MATERIAL ADVERSE CHANGE...................................................27
SECTION 4.10. MISCELLANEOUS................................................................27
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C>
ARTICLE V. COVENANTS...........................................................................................27
SECTION 5.1. INSURANCE....................................................................28
SECTION 5.2. MONEY OBLIGATIONS............................................................28
SECTION 5.3. FINANCIAL STATEMENTS.........................................................28
SECTION 5.4. FINANCIAL RECORDS............................................................29
SECTION 5.5. FRANCHISES...................................................................29
SECTION 5.6. ERISA COMPLIANCE.............................................................29
SECTION 5.7. FINANCIAL COVENANTS..........................................................30
SECTION 5.8. BORROWING....................................................................30
SECTION 5.9. LIENS........................................................................31
SECTION 5.10. REGULATIONS U and X..........................................................31
SECTION 5.11. INVESTMENTS AND LOANS........................................................31
SECTION 5.12. MERGER AND SALE OF ASSETS....................................................33
SECTION 5.13. ACQUISITIONS.................................................................33
SECTION 5.14. NOTICE.......................................................................34
SECTION 5.15. ENVIRONMENTAL COMPLIANCE.....................................................34
SECTION 5.16. AFFILIATE TRANSACTIONS.......................................................34
SECTION 5.17. CORPORATE NAMES..............................................................35
SECTION 5.18. USE OF PROCEEDS..............................................................35
SECTION 5.19. SUBSIDIARY GUARANTIES........................................................35
SECTION 5.20. AMENDMENT OF ARTICLES OF INCORPORATION.......................................35
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.....................................................................35
SECTION 6.1. CORPORATE EXISTENCE; FOREIGN QUALIFICATION;
SUBSIDIARIES.................................................................35
SECTION 6.2. CORPORATE AUTHORITY..........................................................36
SECTION 6.3. COMPLIANCE WITH LAWS.........................................................36
SECTION 6.4. LITIGATION AND ADMINISTRATIVE PROCEEDINGS....................................36
SECTION 6.5. TITLE TO ASSETS..............................................................37
SECTION 6.6. LIENS AND SECURITY INTERESTS.................................................37
SECTION 6.7. TAX RETURNS..................................................................37
SECTION 6.8. ENVIRONMENTAL LAWS...........................................................37
SECTION 6.9. CONTINUED BUSINESS...........................................................38
SECTION 6.10. EMPLOYEE BENEFITS PLANS......................................................38
SECTION 6.11. CONSENTS OR APPROVALS........................................................39
SECTION 6.12. SOLVENCY.....................................................................39
SECTION 6.13. FINANCIAL STATEMENTS.........................................................39
SECTION 6.14. REGULATIONS..................................................................39
SECTION 6.15. MATERIAL AGREEMENTS..........................................................39
SECTION 6.16. INTELLECTUAL PROPERTY........................................................39
SECTION 6.17. ACCURATE AND COMPLETE STATEMENTS.............................................39
SECTION 6.18. YEAR 2000 COMPLIANCE.........................................................40
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VII. EVENTS OF DEFAULT.................................................................................40
SECTION 7.1. PAYMENTS.....................................................................40
SECTION 7.2. SPECIAL COVENANTS............................................................40
SECTION 7.3. OTHER COVENANTS..............................................................40
SECTION 7.4. REPRESENTATIONS AND WARRANTIES...............................................40
SECTION 7.5. CROSS DEFAULT................................................................40
SECTION 7.6. ERISA DEFAULT................................................................41
SECTION 7.7. CHANGE IN CONTROL............................................................41
SECTION 7.8. MONEY JUDGMENT...............................................................41
SECTION 7.9. VALIDITY OF LOAN DOCUMENTS...................................................41
SECTION 7.10. SOLVENCY.....................................................................41
ARTICLE VIII. REMEDIES UPON DEFAULT............................................................................41
SECTION 8.1. OPTIONAL DEFAULTS............................................................42
SECTION 8.2. AUTOMATIC DEFAULTS...........................................................42
SECTION 8.3. OFFSETS......................................................................42
SECTION 8.4. EQUALIZATION PROVISION.......................................................42
ARTICLE IX. THE AGENT..........................................................................................43
SECTION 9.1. APPOINTMENT AND AUTHORIZATION................................................43
SECTION 9.2. NOTE HOLDERS.................................................................43
SECTION 9.3. CONSULTATION WITH COUNSEL....................................................43
SECTION 9.4. DOCUMENTS....................................................................43
SECTION 9.5. AGENT AND AFFILIATES.........................................................44
SECTION 9.6. KNOWLEDGE OF DEFAULT.........................................................44
SECTION 9.7. ACTION BY AGENT..............................................................44
SECTION 9.8. NOTICES, DEFAULT, ETC........................................................44
SECTION 9.9. INDEMNIFICATION OF AGENT.....................................................44
SECTION 9.10. SUCCESSOR AGENT..............................................................44
ARTICLE X. MISCELLANEOUS.......................................................................................45
SECTION 10.1. BANKS' INDEPENDENT INVESTIGATION.............................................45
SECTION 10.2. NO WAIVER; CUMULATIVE REMEDIES...............................................45
SECTION 10.3. AMENDMENTS, CONSENTS.........................................................45
SECTION 10.4. NOTICES......................................................................46
SECTION 10.5. COSTS, EXPENSES AND TAXES....................................................46
SECTION 10.6. INDEMNIFICATION..............................................................46
SECTION 10.7. OBLIGATIONS SEVERAL;
NO FIDUCIARY OBLIGATIONS.....................................................47
SECTION 10.8. EXECUTION IN COUNTERPARTS....................................................47
SECTION 10.9. BINDING EFFECT; BORROWER'S ASSIGNMENT........................................47
SECTION 10.10. BANK ASSIGNMENTS/PARTICIPATIONS..............................................47
</TABLE>
iii
<PAGE> 5
<TABLE>
Page
----
<S> <C>
SECTION 10.11. SEVERABILITY OF PROVISIONS; CAPTIONS.........................................50
SECTION 10.12. INVESTMENT PURPOSE...........................................................50
SECTION 10.13. ENTIRE AGREEMENT.............................................................50
SECTION 10.14. GOVERNING LAW; SUBMISSION TO JURISDICTION....................................50
SECTION 10.15. LEGAL REPRESENTATION OF PARTIES..............................................50
SECTION 10.16. JURY TRIAL WAIVER............................................................51
SCHEDULE 1 BANKS AND COMMITMENTS................................................53
SCHEDULE 2 GUARANTORS OF PAYMENT................................................54
EXHIBIT A TRANCHE A NOTE.......................................................55
EXHIBIT B SWING LINE NOTE......................................................57
EXHIBIT C TRANCHE B NOTE.......................................................59
EXHIBIT D COMPLIANCE CERTIFICATE...............................................61
EXHIBIT E NOTICE OF LOAN.......................................................62
EXHIBIT F REQUEST FOR EXTENSION................................................64
EXHIBIT G FORM OF ASSIGNMENT AND
ACCEPTANCE AGREEMENT.................................................65
</TABLE>
iv
<PAGE> 6
This CREDIT AGREEMENT (as it may from time to time be amended, restated
or otherwise modified, this "Agreement") is made effective as of the 26th day of
January, 1999, among STERIS CORPORATION, an Ohio corporation, 5960 Heisley Road,
Mentor, Ohio 44060 ("Borrower"), the banking institutions named on SCHEDULE 1
hereto (collectively,"Banks", and individually, "Bank"), KEYBANK NATIONAL
ASSOCIATION, 127 Public Square, Cleveland, Ohio 44114-1306, as administrative
agent for the Banks under this Agreement ("Agent"), NATIONAL CITY BANK, 1900
East Ninth Street, Cleveland, Ohio 44114-3484, as documentation agent under this
Agreement ("Documentation Agent"), BANK ONE, NA, 600 Superior Avenue, 4th Floor,
Cleveland, Ohio 44114, as syndication agent under this Agreement ("Syndication
Agent"), and PNC BANK, NATIONAL ASSOCIATION and ABN AMRO BANK N.V., PITTSBURGH
BRANCH, as co- agents under this Agreement (collectively, "Co-Agents"). As used
in this Agreement, the term "Agent" shall not include Documentation Agent,
Syndication Agent or Co-Agents.
WITNESSETH:
WHEREAS, Borrower and the Banks desire to contract for the
establishment of credits in the aggregate principal amounts hereinafter set
forth, to be made available to Borrower upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Acquisition" shall mean 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 any Person, or any
business or division of any Person, (b) the acquisition of in excess of fifty
percent (50%) of the Voting Power of any Person, or (c) the acquisition of
another Person (other than a Company) by a merger or consolidation or any other
combination with such Person.
"Adjusted Prime Rate" shall mean a rate per annum equal to the greater
of (a) the Prime Rate or (b) one-half of one percent (1/2%) in excess of the
Federal Funds Effective Rate. Any change in the Adjusted Prime Rate shall be
effective immediately from and after such change in the Adjusted Prime Rate.
"Advantage"shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or otherwise)
received by any Bank in respect of the Debt, if such payment results in that
Bank having less than its pro rata share of the Debt then outstanding, than was
the case immediately before such payment.
1
<PAGE> 7
Affiliate" shall mean any Person, directly or indirectly, controlling,
controlled by or under common control with a Company and "control" (including
the correlative meanings, the terms "controlling", "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Company,
whether through the ownership of voting securities, by contract or otherwise.
"Agent Fee Letter" shall mean the Agent Fee Letter between Borrower and
Agent, dated as of the Closing Date.
"Applicable Tranche A Facility Fee Rate" shall mean, with respect to
the Tranche A Commitment:
(a) for the period from the Closing Date through February 28, 1999,
twenty (20) basis points; and
(b) commencing with the financial statements for the fiscal quarter
ending December 31, 1998, the number of basis points set forth in the following
matrix, based upon the result of the computation of the Leverage Ratio, shall be
used to establish the number of basis points that will go into effect on March
1, 1999 and thereafter:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
APPLICABLE TRANCHE A
LEVERAGE RATIO FACILITY FEE RATE
- -------------------------------------------------------------------------------------------
<S> <C>
Greater than or equal to 2.50 to 1.00 32.50 basis points
- -------------------------------------------------------------------------------------------
Greater than or equal to 2.00 to 1.00, but less than 2.50 to 27.50 basis points
1.00
- -------------------------------------------------------------------------------------------
Greater than or equal to 1.50 to 1.00, but less than 2.00 to 22.50 basis points
1.00
- -------------------------------------------------------------------------------------------
Greater than or equal to 1.00 to 1.00, but less than 1.50 to 20.00 basis points
1.00
- -------------------------------------------------------------------------------------------
Less than 1.00 to 1.00 17.50 basis points
- -------------------------------------------------------------------------------------------
</TABLE>
Changes to the Applicable Tranche A Facility Fee Rate shall be effective on the
first day of the month following the date upon which Agent received, or, if
earlier, should have received, pursuant to Section 5.3(a) and (b) hereof, the
financial statements of the Companies. The above matrix does not modify or
waive, in any respect, the requirements of Section 5.7 hereof, the rights of the
Banks to charge the Default Rate, or the rights and remedies of the Banks
pursuant to Articles VII and VIII hereof.
2
<PAGE> 8
"Applicable Tranche B Facility Fee Rate" shall mean, with respect to
the Tranche B Commitment, the sum of the Applicable Tranche A Facility Fee Rate
(from time to time in effect) minus two and one-half (2 1/2) basis points.
"Applicable Tranche A Margin" shall mean, with respect to Tranche A
Loans that are borrowed as LIBOR Loans:
(a) for the period from the Closing Date through February 28, 1999,
forty-two and one-half (42.50) basis points; and
(b) commencing with the financial statements for the fiscal quarter
ending December 31, 1998, the number of basis points set forth in the following
matrix, based upon the result of the computation of the Leverage Ratio, shall be
used to establish the number of basis points that will go into effect on March
1, 1999 and thereafter:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
APPLICABLE
LEVERAGE RATIO TRANCHE A MARGIN
- ------------------------------------------------------------------------------------------
<S> <C>
Greater than or equal to 2.50 to 1.00 67.50 basis points
- ------------------------------------------------------------------------------------------
Greater than or equal to 2.00 to 1.00, but less than 2.50 to 60.00 basis points
1.00
- ------------------------------------------------------------------------------------------
Greater than or equal to 1.50 to 1.00, but less than 2.00 to 52.50 basis points
1.00
- ------------------------------------------------------------------------------------------
Greater than or equal to 1.00 to 1.00, but less than 1.50 to 42.50 basis points
1.00
- ------------------------------------------------------------------------------------------
Less than 1.00 to 1.00 32.50 basis points
- ------------------------------------------------------------------------------------------
</TABLE>
Changes to the Applicable Tranche A Margin shall be effective on the first day
of the month following the date upon which Agent received, or, if earlier,
should have received, pursuant to Section 5.3(a) and (b) hereof, the financial
statements of the Companies. The above matrix does not modify or waive, in any
respect, the requirements of Section 5.7 hereof, the rights of the Banks to
charge the Default Rate, or the rights and remedies of the Banks pursuant to
Articles VII and VIII hereof.
"Applicable Tranche B Margin" shall mean, with respect to Tranche B
Loans that are borrowed as LIBOR Loans, the sum of the Applicable Tranche A
Margin (from time to time in effect) plus two and one-half (2 1/2) basis points.
"Assignment Agreement" shall mean an Assignment and Acceptance
Agreement in the form of EXHIBIT G hereto.
3
<PAGE> 9
"Business Day" shall mean a day of the year on which banks are not
required or authorized to close in Cleveland, Ohio, and, if the applicable
Business Day relates to any LIBOR Loan, on which dealings are carried on in the
London interbank eurodollar market.
"Capital Distribution" shall mean a payment made, liability incurred or
other consideration given for the purchase, acquisition, redemption or
retirement of any capital stock or other equity interest of any Company or as a
dividend, return of capital or other distribution (other than any stock
dividend, stock split or other equity distribution payable only in capital stock
or other equity of the Company in question) in respect of any Company's capital
stock or other equity interest.
"Change in Control" shall mean (a) the acquisition of, or, if earlier,
the shareholder or director approval of the acquisition of, ownership or voting
control, directly or indirectly, beneficially or of record, on or after the
Closing Date, by any Person or group (within the meaning of Rule 13d-3 of the
SEC under the Securities Exchange Act of 1934, as then in effect), of shares
representing more than forty percent (40%) of the aggregate ordinary Voting
Power represented by the issued and outstanding capital stock of Borrower; or
(b) the occupation of a majority of the seats (other than vacant seats) on the
board of directors of Borrower by Persons who were neither (i) nominated by the
board of directors of Borrower nor (ii) appointed by directors so nominated.
"Closing Date" shall mean the effective date of this Agreement.
"Closing Fee Letter" shall mean the Closing Fee Letter from Borrower to
Agent and the Banks, dated as of the Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"Commitment" shall mean the obligation hereunder of the Banks, during
the applicable Commitment Period, to make Tranche A Loans pursuant to the
Tranche A Commitment and Tranche B Loans pursuant to the Tranche B Commitment,
up to the Total Commitment Amount.
"Commitment Percentage" shall mean, for each Bank, the percentage set
forth opposite such Bank's name under the column headed "Commitment Percentage"
as described on SCHEDULE 1 hereto.
"Commitment Period" shall mean the period from the Closing Date to (a)
January 26, 2002, with respect to the Tranche A Commitment, and (b) January 25,
2000, with respect to the Tranche B Commitment; or such earlier date on which
the Commitment shall have been terminated pursuant to Article VIII hereof.
"Company" shall mean Borrower or a Subsidiary.
"Companies" shall mean Borrower and all Subsidiaries.
4
<PAGE> 10
"Compliance Certificate" shall mean a Compliance Certificate in the
form of EXHIBIT D hereto.
"Computer System" shall mean a computer system and all related
peripherals, including, but not limited to, hardware, software, devices and
systems.
"Consideration" shall mean, in connection with an Acquisition, the
aggregate consideration paid to the seller, including borrowed funds, cash, the
issuance of securities or notes, the assumption of indebtedness as part of the
purchase price of such Acquisition, the payment of consulting fees or fees for a
covenant not to compete and any other consideration paid for the purchase.
"Consolidated" shall mean the resultant consolidation of the financial
statements of Borrower and its Subsidiaries in accordance with GAAP, including
principles of consolidation consistent with those applied in preparation of the
consolidated financial statements referred to in Section 6.13 hereof.
"Consolidated Capital Expenditures" shall mean, for any period, the
amount of capital expenditures as determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated Depreciation and Amortization Charges" shall mean, for
any period, the aggregate of all such charges for fixed assets, leasehold
improvements and general intangibles (specifically including goodwill) of
Borrower for such period, as determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated EBIT" shall mean, for any period, on a Consolidated
basis, (a) Consolidated Net Earnings for such period plus the aggregate amounts
deducted in determining such Consolidated Net Earnings in respect of (i) income
taxes, (ii) Consolidated Interest Expense, and (iii) nonrecurring noncash
charges and losses, minus (b) nonrecurring noncash gains.
"Consolidated EBITDA" shall mean, for any period, (a) Consolidated
EBIT, plus (b) Consolidated Depreciation and Amortization Charges; provided,
that Consolidated EBITDA for any period shall (i) include the appropriate
financial items for any Person or business unit that has been acquired by a
Company for any portion of such period prior to the date of such Acquisition,
and (ii) exclude the appropriate the financial items for any Person or business
unit that has been disposed of by a Company, for the portion of such period
prior to the date of such disposition.
"Consolidated Fixed Charges" shall mean, for any period, on a
Consolidated basis and in accordance with GAAP, the aggregate of (a)
Consolidated Interest Expense, (b) Consolidated Capital Expenditures, (c) actual
cash expenditures for taxes, (d) scheduled principal payments on long-term
Funded Indebtedness, and (e) actual cash expenditures relating to Capital
Distributions.
"Consolidated Interest Expense" shall mean, for any period, interest
expense of Borrower for such period, determined on a Consolidated basis and in
accordance with GAAP.
5
<PAGE> 11
"Consolidated Net Earnings" shall mean, for any period, the net income
(loss) of Borrower for such period, determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated Net Worth" shall mean, at any date, the stockholders'
equity of Borrower, determined on a Consolidated basis and in accordance with
GAAP.
"Controlled Group"shall mean a Company and each Person required to be
aggregated with a Company under Code Sections 414(b), (c), (m) or (o).
"Debt" shall mean, collectively, all Indebtedness incurred by Borrower
to the Banks pursuant to this Agreement and includes the principal of and
interest on all Notes and each extension, renewal or refinancing thereof in
whole or in part, the facility fees, other fees and any prepayment fees payable
hereunder.
"Default Rate" shall mean a rate per annum which shall be two per cent
(2%) in excess of the Adjusted Prime Rate from time to time in effect.
"Derived Tranche A Rate" shall mean a rate per annum equal to the sum
of the Applicable Tranche A Margin (from time to time in effect) plus the LIBOR
Rate.
"Derived Tranche B Rate" shall mean a rate per annum equal to the sum
of the Applicable Tranche B Margin (from time to time in effect) plus the LIBOR
Rate.
"Domestic Subsidiary" shall mean a Subsidiary organized under the laws
of a state of the United States.
"Environmental Laws" shall mean all laws, statutes, ordinances, rules,
regulations, permits, licenses promulgated by the government of the United
States of America or by any state or municipality thereof or by any agency,
instrumentality, regulatory authority or commission of any of the foregoing
concerning health, safety and protection of, or regulation of the discharge of
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated pursuant thereto.
"ERISA Event"shall mean: (a) the existence of any condition or event
with respect to an ERISA Plan which presents a risk of the imposition of an
excise tax or any other liability on a Company or of the imposition of a Lien on
the assets of a Company, (b) a Controlled Group member has engaged in a
non-exempt"prohibited transaction" (as defined under ERISA Section 406 or Code
Section 4975) or a breach of a fiduciary duty under ERISA which could result in
liability to a Company, (c) a Controlled Group member has applied for a waiver
from the minimum funding requirements of Code Section 412 or ERISA Section 302
or a Controlled Group member is required to provide security under Code Section
401(a)(29) or ERISA Section 307, (d) a Reportable Event
6
<PAGE> 12
has occurred with respect to any Pension Plan as to which notice is required to
be provided to the PBGC, (e) a Controlled Group member has withdrawn from a
Multiemployer Plan in a "complete withdrawal" or a"partial withdrawal" (as such
terms are defined in ERISA Sections 4203 and 4205, respectively), (f) a
Multiemployer Plan is in or is likely to be in reorganization under ERISA
Section 4241, (g) an ERISA Plan (and any related trust) which is intended to be
qualified under Code Sections 401 and 501 fails to be so qualified or any"cash
or deferred arrangement" under any such ERISA Plan fails to meet the
requirements of Code Section 401(k), (h) the PBGC takes any steps to terminate a
Pension Plan or appoint a trustee to administer a Pension Plan, or a Controlled
Group member takes steps to terminate a Pension Plan, (i) a Controlled Group
member or an ERISA Plan fails to satisfy any requirements of law applicable to
an ERISA Plan, (j) a claim, action, suit, audit or investigation is pending or
threatened with respect to an ERISA Plan, other than a routine claim for
benefits, or (k) a Controlled Group member incurs or is expected to incur any
liability for post-retirement benefits under any Welfare Plan, other than as
required by ERISA Section 601, et. seq.
or Code Section 4980B.
"ERISA Plan" shall mean an "employee benefit plan" (within the meaning
of ERISA Section 3(3)) that a Controlled Group member at any time sponsors,
maintains, contributes to, has liability with respect to or has an obligation to
contribute to such plan.
"Eurocurrency Reserve Percentage" shall mean, for any Interest Period
in respect of any LIBOR Loan, as of any date of determination, the aggregate of
the then stated maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves), expressed as a decimal, applicable to such
Interest Period (if more than one (1) such percentage is applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) by the Board of Governors of the
Federal Reserve System, any successor thereto, or any other banking authority,
domestic or foreign, to which a Bank may be subject in respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Federal Reserve Board) or in respect of any other category of liabilities,
including deposits by reference to which the interest rate on LIBOR Loans is
determined or any category of extension of credit or other assets that include
the LIBOR Loans. For purposes hereof, such reserve requirements shall include,
without limitation, those imposed under Regulation D of the Federal Reserve
Board, and the LIBOR Loans shall be deemed to constitute Eurocurrency
Liabilities subject to such reserve requirements without benefit of credits for
proration, exceptions or offsets which may be available from time to time to any
Bank under said Regulation D.
"Event of Default" shall mean an event or condition that constitutes an
event of default as defined in Article VII hereof.
"Federal Funds Effective Rate" shall mean, for any day, the rate per
annum (rounded upward to the nearest one one-hundredth of one percent (1/100 of
1%)) announced by the Federal Reserve Bank of New York (or any successor) on
such day as being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous trading day, as
computed and announced by such Federal Reserve Bank (or any successor) in
substantially the
7
<PAGE> 13
same manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the "Federal Funds Effective Rate" as of the Closing
Date.
"Financial Officer" shall mean any of the following officers: chief
executive officer, president, chief financial officer or treasurer.
"Fixed Charge Coverage Ratio" shall mean, for any period, the ratio of
(a) Consolidated EBITDA for such period, to (b) Consolidated Fixed Charges for
such period.
"Foreign Subsidiary" shall mean a Subsidiary that is not a Domestic
Subsidiary.
"Funded Indebtedness" shall mean all Indebtedness for borrowed money,
including, but not limited to, current, long-term and Subordinated Indebtedness,
if any.
"GAAP" shall mean generally accepted accounting principles as then in
effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, applied on a basis consistent with the
past accounting practices and procedures of Borrower.
"Guarantor" shall mean a Person that pledges its credit or property in
any manner for the payment or other performance of the indebtedness, contract or
other obligation of another and includes (without limitation) any guarantor
(whether of payment or of collection), surety, co-maker, endorser or Person that
agrees conditionally or otherwise to make any purchase, loan or investment in
order thereby to enable another to prevent or correct a default of any kind.
"Guarantor of Payment" shall mean each of the Companies listed on
Schedule 2 hereto, or any other Person that shall deliver a Guaranty of Payment
to Agent subsequent to the Closing Date.
"Guaranty of Payment" shall mean each of the guaranties of payment of
the Debt executed and delivered on or after the Closing Date in connection
herewith by the Guarantors of Payment, as the same may be from time to time
amended, restated or otherwise modified.
"Hedge Agreement" shall mean any hedge agreement, interest rate swap,
currency swap agreement, cap, collar or floor agreement, or other interest rate
management device entered into by Borrower with Agent or any of the Banks or any
affiliate of any Bank.
"Indebtedness" shall mean, for any Company (excluding in all cases
trade payables payable in the ordinary course of business by such Company), (a)
all obligations to repay borrowed money, direct or indirect, incurred, assumed,
or guaranteed, (b) all obligations for the deferred purchase price of capital
assets, (c) all obligations under conditional sales or other title retention
agreements, (d) all reimbursement obligations (contingent or otherwise) under
any letter of credit, banker's acceptance, currency swap agreement, interest
rate swap, cap, collar or floor agreement or other interest rate management
device, (e) all synthetic leases, (f) all lease obligations which have been or
should be capitalized on the books of such Company in accordance with GAAP, (g)
all
8
<PAGE> 14
obligations of such Company with respect to asset securitization financing
programs to the extent that there is recourse against such Company or such
Company is liable (contingent or otherwise) under any such program, (h) all
obligations to advance funds to, or to purchase assets, property or services
from, any other Person in order to maintain the financial condition of such
Person, (i) any other transaction (including forward sale or purchase
agreements) having the commercial effect of a borrowing of money entered into by
such Company to finance its operations or capital requirements, and (j) any
guaranty of or other contingent liability with respect to any of the foregoing.
"Interest Adjustment Date" shall mean the last day of each Interest
Period.
"Interest Period" shall mean, with respect to any LIBOR Loan, the
period commencing on the date such LIBOR Loan is made and ending on the last day
of such period, as selected by Borrower pursuant to the provisions hereof and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of such period, as selected
by Borrower pursuant to the provisions hereof. The duration of each Interest
Period for any LIBOR Loan shall be one (1) month, two (2) months, three (3)
months or six (6) months, in each case as Borrower may select upon notice, as
set forth in Section 2.2 hereof, provided that: (a) if Borrower fails to so
select the duration of any Interest Period, Borrower shall be deemed to have
converted such LIBOR Loan to a Prime Rate Loan at the end of the then current
Interest Period; and (b) Borrower may not select any Interest Period for a LIBOR
Loan that ends after the last day of the applicable Commitment Period.
"Leverage Ratio" shall mean, at any time, on a Consolidated basis and
in accordance with GAAP, the ratio of (a) Funded Indebtedness (based upon the
financial statements of the Companies for the most recently completed fiscal
quarter) to (b) Consolidated EBITDA (based upon the financial statements of the
Companies for the most recently completed four (4) fiscal quarters).
"LIBOR Loan" shall mean a Loan described in Section 2.1 hereof on which
Borrower shall pay interest at a rate based upon the LIBOR Rate.
"LIBOR Rate" shall mean, for any Interest Period with respect to a
LIBOR Loan, the quotient (rounded upwards, if necessary, to the nearest one
sixteenth of one percent (1/16th of 1%)) of: (a) the per annum rate of interest,
determined by Agent in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) as of approximately 11:00 A.M.
(London time) two (2) Business Days prior to the beginning of such Interest
Period pertaining to such LIBOR Loan, as provided by Telerate Service,
Bloomberg's or Reuters (or any other similar company or service that provides
rate quotations comparable to those currently provided by such companies) as the
rate in the London interbank market for dollar deposits in immediately available
funds with a maturity comparable to such Interest Period, DIVIDED BY (b) a
number equal to 1.00 MINUS the Eurocurrency Reserve Percentage. In the event
that such rate quotation is not available for any reason, then the rate (for
purposes of clause (a) hereof) shall be the rate, determined by Agent as of
approximately 11:00 A.M. (London time) two (2) Business Days prior to the
beginning of such
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Interest Period pertaining to such LIBOR Loan, to be the average (rounded
upwards, if necessary, to the nearest one sixteenth of one percent (1/16th of
1%)) of the per annum rates at which dollar deposits in immediately available
funds in an amount comparable to such LIBOR Loan and with a maturity comparable
to such Interest Period are offered to the prime banks by leading banks in the
London interbank market. The LIBOR Rate shall be adjusted automatically on and
as of the effective date of any change in the Eurocurrency Reserve Percentage.
"Lien" shall mean any mortgage, security interest, lien, charge,
encumbrance on, pledge or deposit of, or conditional sale or other title
retention agreement with respect to any property (real or personal) or asset.
"Loan" or "Loans" shall mean the credit extended to Borrower by the
Banks in accordance with Section 2.1A or B hereof.
"Loan Documents" shall mean this Agreement, each of the Notes, each of
the Guaranties of Payment and any other documents relating to any of the
foregoing, as any of the foregoing may from time to time be amended, restated or
otherwise modified or replaced.
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, property, condition (financial or otherwise) or prospects
of Borrower and its Subsidiaries taken as a whole.
"Material Subsidiary" shall mean any Subsidiary, the total assets of
which are in excess of One Million Dollars ($1,000,000).
"Maximum Amount" shall mean, for each Bank, the amount set forth
opposite such Bank's name under the column headed "Maximum Amount" as listed on
Schedule 1 hereto.
"Moody's" shall mean Moody's Investors Service, Inc., or any successor
to such company.
"Multiemployer Plan" shall mean a Pension Plan that is subject to the
requirements of Subtitle E of Title IV of ERISA.
"Negotiated Rate" shall mean a fixed rate of interest per annum quoted
to Borrower by Agent based upon Agent's cost of funds, and agreed to by
Borrower.
"Note" shall mean any Tranche A Note, any Tranche B Note, any Swing
Loan Note or any other note delivered pursuant to this Agreement.
"Notice of Loan" shall mean a Notice of Loan in the form of EXHIBIT E
hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or its
successor.
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<PAGE> 16
"Pension Plan" shall mean an ERISA Plan that is a"pension plan" (within
the meaning of ERISA Section 3(2)).
"Permitted Investment" shall mean an investment of a Company in the
stock (or other debt or equity instruments) of a Person, so long as (a) the
Company making the investment is Borrower or a Guarantor of Payment; and (b) the
aggregate amount of all such investments of all Companies does not exceed, at
any time, an aggregate amount equal to ten percent (10%) of the Consolidated Net
Worth of the Companies, based upon the financial statements of the Companies for
the most recently completed fiscal quarter.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, corporation, limited
liability company, institution, trust, estate, government or other agency or
political subdivision thereof or any other entity.
"Prime Rate" shall mean the interest rate established from time to time
by Agent as Agent's prime rate, whether or not such rate is publicly announced;
the Prime Rate may not be the lowest interest rate charged by Agent for
commercial or other extensions of credit. Each change in the Prime Rate shall be
effective immediately from and after such change.
"Prime Rate Loan" shall mean a Loan described in Section 2.1 hereof on
which Borrower shall pay interest at a rate based on the Adjusted Prime Rate.
"Related Writing" shall mean the Loan Documents and any assignment,
mortgage, security agreement, guaranty agreement, subordination agreement,
financial statement, audit report or other writing furnished by Borrower, any
Subsidiary or any Guarantor of Payment, or any of their respective officers, to
the Banks pursuant to or otherwise in connection with this Agreement.
"Reportable Event" shall mean a reportable event as that term is
defined in Title IV of ERISA, except actions of general applicability by the
Secretary of Labor under Section 110 of such Act.
"Request for Extension" shall mean a Request for Extension in the form
of EXHIBIT F hereto.
"Required Banks" shall mean the holders of at least sixty-six and
two-thirds percent (66- 2/3%) of the Total Commitment Amount, or, if there is
any borrowing hereunder, the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate amount outstanding under the Notes (other
than the Swing Line Note).
"SEC" shall mean the United States Securities and Exchange Commission.
"Significant Third Party" shall mean, with respect to each Company, any
supplier, vendor or customer of such Company whose business failure would result
in a material adverse effect on the business, operations, property, condition
(financial or otherwise) or prospects of such Company.
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<PAGE> 17
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a
division of McGraw- Hill, Inc., or any successor to such company.
"Subordinated", as applied to Indebtedness, shall mean that the
Indebtedness has been subordinated (by written terms or written agreement being,
in either case, in form and substance satisfactory to Agent and the Required
Banks) in favor of the prior payment in full of the Debt.
"Subsidiary" of Borrower or any of its Subsidiaries shall mean (a) a
corporation more than fifty percent (50%) of the Voting Power of which is owned,
directly or indirectly, by Borrower or by one or more other subsidiaries of
Borrower or by Borrower and one or more subsidiaries of Borrower, (b) a
partnership or limited liability company of which Borrower, one or more other
subsidiaries of Borrower or Borrower and one or more subsidiaries of Borrower,
directly or indirectly, is a general partner or managing member, as the case may
be, or otherwise has the power to direct the policies, management and affairs
thereof, or (c) any other Person (other than a corporation) in which Borrower,
one or more other subsidiaries of Borrower or Borrower and one or more
subsidiaries of Borrower, directly or indirectly, has at least a majority
ownership interest or the power to direct the policies, management and affairs
thereof.
"Swing Line" shall mean the credit facility established by Agent in
accordance with subpart 2 of Section 2.1A hereof and subpart 2 of Section 2.1B
hereof.
"Swing Line Commitment" shall mean the commitment of Agent to make
Swing Loans to Borrower up to the maximum aggregate amount at any time
outstanding of Five Million Dollars ($5,000,000) on the terms and conditions set
forth in subpart 2 of Section 2.1A hereof and subpart 2 of Section 2.1B hereof.
"Swing Line Exposure" shall mean, at any time, the aggregate principal
amount of all Swing Loans outstanding under subpart 2 of Section 2.1A and
subpart 2 of Section 2.1B hereof.
"Swing Line Note" shall mean the Swing Line Note executed and delivered
pursuant to subpart 2 of Section 2.1A hereof.
"Swing Loan" shall mean a Loan granted to Borrower by Agent in
accordance with subpart 2 of Section 2.1A hereof and subpart 2 of Section 2.1B
hereof.
"Swing Loan Maturity Date" shall mean, (a) with respect to any Swing
Loan made under subpart 2 of Section 2.1A hereof, the earlier of (i) fifteen
(15) days after the date such Swing Loan is made, or (ii) the last day of the
Commitment Period applicable to the Tranche A Commitment; and (b) with respect
to any Swing Loan made under subpart 2 of Section 2.1B hereof, the earlier of
(i) fifteen (15) days after the date such Swing Loan is made, or (ii) the last
day of the Commitment Period applicable to the Tranche B Commitment
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<PAGE> 18
"Total Commitment Amount" shall mean the principal amount of Four
Hundred Million Dollars ($400,000,000) (or such lesser amount as shall be
determined pursuant to Section 2.5 hereof).
"Tranche A Commitment" shall mean the obligation hereunder, during the
applicable Commitment Period, of (a) each Bank to participate in the making of
Tranche A Loans up to the aggregate amount set forth opposite such Bank's name
under the column headed "Tranche A Commitment Amount" as set forth on SCHEDULE 1
hereto (or such lesser amount as shall be determined pursuant to Section 2.5
hereof), and (b) Agent to make Swing Loans pursuant to the Swing Line
Commitment.
"Tranche A Exposure" shall mean, at any time, the sum of (a) the
aggregate principal amount of all Tranche A Loans outstanding, and (b) the
aggregate principal amount of all Swing Loans outstanding under subpart 2 of
Section 2.1A.
"Tranche A Loan" shall mean a Loan granted to Borrower by the Banks in
accordance with Section 2.1A hereof.
"Tranche A Note" shall mean any Tranche A Note executed and delivered
pursuant to Section 2.1A hereof.
"Tranche B Commitment" shall mean the obligation hereunder, during the
applicable Commitment Period, of (a) each Bank to participate in the making of
Tranche B Loans up to the aggregate amount set forth opposite such Bank's name
under the column headed "Tranche B Commitment Amount" as set forth on SCHEDULE 1
hereto (or such lesser amount as shall be determined pursuant to Section 2.5
hereof), and (b) Agent to make Swing Loans pursuant to the Swing Line
Commitment.
"Tranche B Exposure" shall mean, at any time, the sum of (a) the
aggregate principal amount of all Tranche B Loans outstanding, and (b) the
aggregate principal amount of all Swing Loans outstanding under subpart 2 of
Section 2.1B.
"Tranche B Loan" shall mean a Loan granted to Borrower by the Banks in
accordance with Section 2.1B hereof.
"Tranche B Note" shall mean any Tranche B Note executed and delivered
pursuant to Section 2.1B hereof.
"Unmatured Event of Default" shall mean an event or condition that
constitutes, or that with the lapse of any applicable grace period or the giving
of notice or both would constitute, an Event of Default and that has not been
waived by the Required Banks in writing.
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"Voting Power" shall mean, with respect to any Person, the exclusive
ability to control, through the ownership of shares of capital stock,
partnership interests, membership interests or otherwise, the election of
members of the board of directors or other similar governing body of such
Person, and the holding of a designated percentage of Voting Power of a Person
means the ownership of shares of capital stock, partnership interests,
membership interests or other interests of such Person sufficient to control
exclusively the election of that percentage of the members of the board of
directors or similar governing body of such Person.
"Welfare Plan" shall mean an ERISA Plan that is a "welfare plan" within
the meaning of ERISA Section 3(l).
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, any
corporation, limited liability company or other entity all of the securities or
other ownership interest, of which having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"Year 2000 Compliant" shall mean that a Computer System will operate
accurately, without interruption and with no negative change in performance due
to the change of the millennium.
Any accounting term not specifically defined in this Article I shall
have the meaning ascribed thereto by GAAP.
The foregoing definitions shall be applicable to the singular and
plurals of the foregoing defined terms.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
SECTION 2.1. AMOUNT AND NATURE OF CREDIT. Subject to the terms and
conditions of this Agreement, each Bank will participate, to the extent
hereinafter provided, in making Loans to Borrower, in such aggregate amount as
Borrower shall request pursuant to the Commitment; provided, however, that in no
event shall the aggregate principal amount of all Loans outstanding under this
Agreement be in excess of the Total Commitment Amount.
Each Bank, for itself and not one for any other, agrees to participate
in Loans made hereunder during the applicable Commitment Period on such basis
that (a) immediately after the completion of any borrowing by Borrower
hereunder, the aggregate principal amount then outstanding on the Notes (other
than the Swing Line Note) issued to such Bank shall not be in excess of the
Maximum Amount for such Bank, and (b) such aggregate principal amount
outstanding on the Notes (other than the Swing Line Note) issued to such Bank
shall represent that percentage of the aggregate principal amount then
outstanding on all Notes (other than the Swing Line Note) which is such Bank's
Commitment Percentage.
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<PAGE> 20
Each borrowing (other than the Swing Loans) from the Banks hereunder
shall be made pro rata according to the Banks' respective Commitment
Percentages. The Loans may be made as Tranche A Loans, Tranche B Loans and Swing
Loans as follows:
A. Tranche A Commitment.
1. Tranche A Loans. Subject to the terms and conditions of this
Agreement, during the applicable Commitment Period, the Banks shall make a
Tranche A Loan or Tranche A Loans to Borrower in such amount or amounts as
Borrower may from time to time request, but not exceeding in aggregate principal
amount at any time outstanding hereunder the aggregate amount of the Tranche A
Commitments, when such Tranche A Loans are combined with the aggregate principal
amount of all Swing Loans outstanding under subpart 2 of this Section 2.1A.
Borrower shall have the option, subject to the terms and conditions set forth
herein, to borrow Tranche A Loans, maturing on the last day of the applicable
Commitment Period, by means of any combination of (a) Prime Rate Loans, or (b)
LIBOR Loans.
Borrower shall pay interest on the unpaid principal amount of Prime
Rate Loans outstanding from time to time from the date thereof until paid at the
Adjusted Prime Rate from time to time in effect. Interest on such Prime Rate
Loans shall be payable, commencing March 31, 1999, and on the last day of each
succeeding June, September, December and March thereafter and at the maturity
thereof.
Borrower shall pay interest on the unpaid principal amount of each
LIBOR Loan outstanding from time to time, from the date thereof until paid, at
the Derived Tranche A Rate, fixed in advance for each Interest Period (but
subject to changes in the Applicable Tranche A Margin) as herein provided for
each such Interest Period. Interest on such LIBOR Loans shall be payable on each
Interest Adjustment Date with respect to an Interest Period (provided that if an
Interest Period exceeds three (3) months, the interest must be paid every three
(3) months, commencing three (3) months from the beginning of such Interest
Period).
At the request of Borrower, subject to the notice and other provisions
of Section 2.2 hereof, Bank shall convert Prime Rate Loans to LIBOR Loans at any
time and shall convert LIBOR Loans to Prime Rate Loans on any Interest
Adjustment Date.
The obligation of Borrower to repay the Prime Rate Loans and the LIBOR
Loans made by each Bank and to pay interest thereon shall be evidenced by a
Tranche A Note of Borrower in the form of EXHIBIT A hereto, dated the Closing
Date, and payable to the order of such Bank in the principal amount of its
Tranche A Commitment, or, if less, the aggregate unpaid principal amount of
Tranche A Loans made hereunder by such Bank. Subject to the provisions of this
Agreement, Borrower shall be entitled under this subpart 1 of Section 2.1A to
borrow funds, repay the same in whole or in part and re-borrow hereunder at any
time and from time to time during the applicable Commitment Period.
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2. Swing Loans under the Tranche A Commitment. Subject to the terms and
conditions of this Agreement, during the Commitment Period applicable to the
Tranche A Commitment, Agent shall make a Swing Loan or Swing Loans to Borrower
in such amount or amounts as Borrower may from time to time request; provided
that Borrower shall not request any Swing Loan under this subpart 2 of Section
2.1A if, after giving effect thereto, (a) the Tranche A Exposure would exceed
the aggregate amount of the Tranche A Commitments, or (b) the aggregate
outstanding principal amount of all Swing Loans would exceed the Swing Line
Commitment. Each Swing Loan shall be due and payable on the Swing Loan Maturity
Date applicable thereto.
Borrower shall pay interest, for the sole benefit of Agent (and any
Bank that has purchased a participation in such Swing Loan), on the unpaid
principal amount of each Swing Loan outstanding from time to time from the date
thereof until paid at the Negotiated Rate applicable to such Swing Loan.
Interest on each Swing Loan shall be payable on the Swing Loan Maturity Date
applicable thereto. Each Swing Loan shall bear interest for a minimum of one (1)
day.
The obligation of Borrower to repay the Swing Loans and to pay interest
thereon shall be evidenced by a Swing Line Note of Borrower substantially in the
form of EXHIBIT B hereto, dated the Closing Date, and payable to the order of
Agent in the principal amount of the Swing Line Commitment, or, if less, the
aggregate unpaid principal amount of Swing Loans made hereunder by Agent.
Subject to the provisions of this Agreement, Borrower shall be entitled under
this subpart 2 of Section 2.1A to borrow funds, repay the same in whole or in
part and reborrow hereunder at any time and from time to time during the
Commitment Period applicable to the Tranche A Commitment.
On any day that a Swing Loan is outstanding (whether before or after
the maturity thereof), Agent shall have the right to request that each Bank
purchase a participation in such Swing Loan, and Agent shall promptly notify
each Bank thereof (by facsimile or telephone, confirmed in writing). Upon such
notice, but without further action, Agent hereby agrees to grant to each Bank,
and each Bank hereby agrees to acquire from Agent, an undivided participation
interest in such Swing Loan in an amount equal to such Bank's Commitment
Percentage of the aggregate principal amount of such Swing Loan. In
consideration and in furtherance of the foregoing, each Bank hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above, to pay to
Agent, for its sole account, such Bank's ratable share of such Swing Loan
(determined in accordance with such Bank's Commitment Percentage). Each Bank
acknowledges and agrees that its obligation to acquire participations in Swing
Loans pursuant to this subpart 2 of Section 2.1A is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including, without
limitation, the occurrence and continuance of an Unmatured Event of Default or
an Event of Default, and that each such payment shall be made without any
offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever
and whether or not such Bank's Tranche A Commitment shall have been reduced or
terminated. Each Bank shall comply with its obligation under this subpart 2 of
Section 2.1A by wire transfer of immediately available funds, in the same manner
as provided in Section 2.2(b) with respect to Tranche A Loans to be made by such
Bank.
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<PAGE> 22
If Agent so elects, by giving notice to Borrower and the Banks,
Borrower agrees that Agent shall have the right, in its sole discretion, to
require that any Swing Loan be refinanced as a Tranche A Loan. Such Tranche A
Loan shall be a Prime Rate Loan unless and until converted by Borrower to a
LIBOR Loan pursuant to subpart 1 of this Section 2.1A and Section 2.2 hereof.
Upon receipt of such notice by Borrower, Borrower shall be deemed, on such day,
to have requested a Tranche A Loan in the principal amount of the Swing Loan in
accordance with subpart 1 of this Section 2.1A and Section 2.2 hereof. Each Bank
agrees to make a Tranche A Loan on the date of such notice, subject to no
conditions precedent whatsoever. Each Bank acknowledges and agrees that such
Bank's obligation to make a Tranche A Loan pursuant to subpart 1 of this Section
2.1A when required by this subpart 2 of Section 2.1A is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, the occurrence and continuance of an Unmatured
Event of Default or Event of Default, and that its payment to Agent, for the
account of Agent, of the proceeds of such Tranche A Loan shall be made without
any offset, abatement, recoupment, counterclaim, withholding or reduction
whatsoever and whether or not such Bank's Tranche A Commitment shall have been
reduced or terminated. Borrower irrevocably authorizes and instructs Agent to
apply the proceeds of any borrowing pursuant to this paragraph to repay in full
such Swing Loan.
B. Tranche B Commitment.
1. Tranche B Loans. Subject to the terms and conditions of this
Agreement, during the applicable Commitment Period, the Banks shall make a
Tranche B Loan or Tranche B Loans to Borrower in such amount or amounts as
Borrower may from time to time request, but not exceeding in aggregate principal
amount at any time outstanding hereunder the aggregate amount of the Tranche B
Commitments, when such Tranche B Loans are combined with the aggregate principal
amount of all Swing Loans outstanding under subpart 2 of this Section 2.1B;
provided, however, that Borrower shall not request any Tranche B Loan hereunder
unless the Tranche A Commitments shall have been fully funded. Borrower shall
have the option, subject to the terms and conditions set forth herein, to borrow
Tranche B Loans, maturing on the last day of the applicable Commitment Period,
by means of any combination of (a) Prime Rate Loans, or (b) LIBOR Loans.
Borrower shall pay interest on the unpaid principal amount of Prime
Rate Loans outstanding from time to time from the date thereof until paid at the
Adjusted Prime Rate from time to time in effect. Interest on such Prime Rate
Loans shall be payable, commencing March 31, 1999, and on the last day of each
succeeding June, September, December and March thereafter and at the maturity
thereof.
Borrower shall pay interest on the unpaid principal amount of each
LIBOR Loan outstanding from time to time, from the date thereof until paid, at
the Derived Tranche B Rate, fixed in advance for each Interest Period (but
subject to changes in the Applicable Tranche B Margin) as herein provided for
each such Interest Period. Interest on such LIBOR Loans shall be payable on each
Interest Adjustment Date with respect to an Interest Period (provided that if an
Interest Period
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<PAGE> 23
exceeds three (3) months, the interest must be paid every three (3) months,
commencing three (3) months from the beginning of such Interest Period).
At the request of Borrower, subject to the notice and other provisions
of Section 2.2 hereof, Bank shall convert Prime Rate Loans to LIBOR Loans at any
time and shall convert LIBOR Loans to Prime Rate Loans on any Interest
Adjustment Date.
The obligation of Borrower to repay the Prime Rate Loans and the LIBOR
Loans made by each Bank and to pay interest thereon shall be evidenced by a
Tranche B Note of Borrower in the form of EXHIBIT C hereto, dated the Closing
Date, and payable to the order of such Bank in the principal amount of its
Tranche B Commitment, or, if less, the aggregate unpaid principal amount of
Tranche B Loans made hereunder by such Bank. Subject to the provisions of this
Agreement, Borrower shall be entitled under this Section 2.1B to borrow funds,
repay the same in whole or in part and re-borrow hereunder at any time and from
time to time during the applicable Commitment Period.
2. Swing Loans under the Tranche B Commitment. In the event that (a)
the Tranche A Exposure is equal to the aggregate amount of the Tranche A
Commitments, (b) the Swing Line Exposure is less than the amount of the Swing
Line Commitment, (c) the Tranche B Exposure is less than the aggregate amount of
the Tranche B Commitments, and (d) Borrower requests a Swing Loan or Swing
Loans, then, subject to the terms and conditions of this Agreement, during the
Commitment Period applicable to the Tranche B Commitment, Agent may make a Swing
Loan under the Tranche B Commitments so long as (i) the amount of the Tranche B
Exposure would not exceed the aggregate amount of the Tranche B Commitments and
the aggregate outstanding principal amount of all Swing Loans would not exceed
the Swing Line Commitment
Each Swing Loan made under this subpart 2 of Section 2.1B shall be
payable in accordance with the terms applicable to Swing Loans under subpart 2
of Section 2.1A hereof and shall be evidenced by the Swing Line Note. Agent
shall have the same rights to require participation from the Banks with respect
to Swing Loans made pursuant to this subpart 2 of Section 2.1B as are applicable
to Swing Loans under subpart 2 of Section 2.1A hereof.
If Agent so elects, by giving notice to Borrower and the Banks,
Borrower agrees that Agent shall have the right, in its sole discretion, to
require that any Swing Loan be refinanced as a Tranche B Loan. Such Tranche B
Loan shall be a Prime Rate Loan unless and until converted by Borrower to a
LIBOR Loan pursuant to subpart 1 of this Section 2.1B and Section 2.2 hereof.
Upon receipt of such notice by Borrower, Borrower shall be deemed, on such day,
to have requested a Tranche B Loan in the principal amount of the Swing Loan in
accordance with subpart 1 of this Section 2.1B and Section 2.2 hereof. Each Bank
agrees to make a Tranche B Loan on the date of such notice, subject to no
conditions precedent whatsoever. Each Bank acknowledges and agrees that such
Bank's obligation to make a Tranche B Loan pursuant to subpart 1 of this Section
2.1B when required by this subpart 2 of Section 2.1B is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, the occurrence and continuance of an
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<PAGE> 24
Unmatured Event of Default or Event of Default, and that its payment to Agent,
for the account of Agent, of the proceeds of such Tranche B Loan shall be made
without any offset, abatement, recoupment, counterclaim, withholding or
reduction whatsoever and whether or not such Bank's Tranche B Commitment shall
have been reduced or terminated. Borrower irrevocably authorizes and instructs
Agent to apply the proceeds of any borrowing pursuant to this paragraph to repay
in full such Swing Loan.
SECTION 2.2. CONDITIONS TO LOANS. The obligation of the Banks to make,
convert or continue any Loan hereunder or of Agent to make any Swing Loan is
conditioned, in the case of each borrowing, conversion or continuation
hereunder, upon:
(a) all conditions precedent as listed in Article IV hereof shall have
been satisfied;
(b) with respect to the making or conversion of any Tranche A Loan or
Tranche B Loan, receipt by Agent of a Notice of Loan, such notice to be received
by 11:00 A.M. (Cleveland, Ohio time) on the proposed date of borrowing or
conversion with respect to a Prime Rate Loan, and, with respect to the making,
conversion or continuation of any LIBOR Loan, by 11:00 A.M. (Cleveland, Ohio
time) three (3) Business Days prior to the proposed date of such borrowing,
conversion or continuation. Agent shall notify each Bank of the date, amount and
initial Interest Period (if applicable) promptly upon the receipt of such
notice, and, in any event, by 1:00 P.M. (Cleveland, Ohio time) on the date such
notice is received. On the date that any Tranche A Loan or Tranche B Loan is to
be made, each Bank shall provide Agent, not later than 3:00 P.M. (Cleveland,
Ohio time), with the amount in federal or other immediately available funds
required of it;
(c) with respect to the making of any Swing Loan, receipt by Agent of a
Notice of Loan, such notice to be received by 11:00 A.M. (Cleveland, Ohio time)
on the proposed date of borrowing;
(d) each request of Borrower for (i) a Prime Rate Loan shall be in an
amount of not less than One Million Dollars ($1,000,000), increased by
increments of One Hundred Thousand Dollars ($100,000), (ii) a LIBOR Loan shall
be in an amount of not less than Five Million Dollars ($5,000,000), increased by
increments of One Million Dollars ($1,000,000), and (iii) a Swing Loan shall be
in the amount of not less than One Hundred Thousand Dollars ($100,000),
increased by increments of Fifty Thousand Dollars ($50,000);
(e) the fact that no Unmatured Event of Default or Event of Default
shall then exist or immediately after the making, conversion or continuation of
the Loan would exist; and
(f) the fact that each of the representations and warranties contained
in Article VI hereof shall be true and correct in all material respects with the
same force and effect as if made on and as of the date of the making,
conversion, or continuation of such Loan, except to the extent that any thereof
expressly relate to an earlier date.
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At no time shall Borrower request that LIBOR Loans be outstanding for
more than ten (10) different Interest Periods at any time, and, if Prime Rate
Loans are outstanding, then LIBOR Loans shall be limited to nine (9) different
Interest Periods at any time.
Each request by Borrower for the making, conversion or continuation of
a Loan hereunder shall be deemed to be a representation and warranty by Borrower
as of the date of such request as to the facts specified in (e) and (f) above.
Each request for a LIBOR Loan shall be irrevocable and binding on
Borrower and Borrower shall indemnify Agent and the Banks against any loss or
expense incurred by Agent or the Banks as a result of any failure by Borrower to
consummate such transaction including, without limitation, any loss (including
loss of anticipated profits) or expense incurred by reason of liquidation or
re-employment of deposits or other funds acquired by the Banks to fund such
LIBOR Loan. A certificate as to the amount of such loss or expense submitted by
the Banks to Borrower shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.3. PAYMENT ON NOTES, ETC. Unless otherwise provided, all
payments of principal, interest and facility and other fees shall be made to
Agent in immediately available funds for the account of the Banks. Agent, on the
same Business Day, shall distribute to each Bank its ratable share of the amount
of principal, interest, and facility and other fees received by it for the
account of such Bank. Each Bank shall record (a) any principal, interest or
other payment, and (b) the principal amount of the Prime Rate Loans and the
LIBOR Loans and all prepayments thereof and the applicable dates with respect
thereto, by such method as such Bank may generally employ; provided, however,
that failure to make any such entry shall in no way detract from Borrower's
obligations under each such Note. The aggregate unpaid amount of Loans set forth
on the records of Agent shall be rebuttably presumptive evidence of the
principal and interest owing and unpaid on each Note. Whenever any payment to be
made hereunder, including, without limitation, any payment to be made on any
Note, shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall in each case be included in the computation of the interest payable
on such Note; provided, however, that, with respect to any LIBOR Loan, if the
next succeeding Business Day falls in the succeeding calendar month, such
payment shall be made on the preceding Business Day and the relevant Interest
Period shall be adjusted accordingly.
SECTION 2.4. PREPAYMENT.
(a) Borrower shall have the right at any time or from time to time to
prepay, on a pro rata basis for all of the Banks (other than the Swing Line
Note), all or any part of the principal amount of the Notes then outstanding as
designated by Borrower, plus interest accrued on the amount so prepaid to the
date of such prepayment. Borrower shall give Agent notice of prepayment of any
Prime Rate Loan by not later than 11:00 A.M. (Cleveland, Ohio time) on the
Business Day such prepayment is to be made and written notice of the prepayment
of any LIBOR Loan not later than
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1:00 P.M.(Cleveland, Ohio time) three (3) Business Days before the Business Day
on which such prepayment is to be made.
(b) Prepayments of Prime Rate Loans and Swing Loans shall be without
any premium or penalty.
(c) In any case of prepayment of a LIBOR Loan prior to the last date of
the applicable Interest Period, Borrower agrees that if the reinvestment rate,
as quoted by the money desk of Agent (and determined by such money desk with
respect to its cost of funds for the remaining portion of the applicable
Interest Period) ("Reinvestment Rate"), shall be lower than the LIBOR Rate
applicable to the LIBOR Loan which is intended to be prepaid (hereinafter, "Last
LIBOR"), then Borrower shall, upon written notice by Agent, promptly pay to
Agent, for the benefit of the Banks, in immediately available funds, a
prepayment fee equal to the product of (a) a rate (the"Prepayment Rate") which
shall be equal to the difference between the Last LIBOR and the Reinvestment
Rate, times (b) the principal amount of the LIBOR Loan which is to be prepaid,
times (c) (i) the number of days remaining in the Interest Period of the LIBOR
Loan which is to be prepaid divided by (ii) three hundred sixty (360). In
addition, Borrower shall immediately pay directly to Agent, for the account of
the Banks, the amount of any additional costs or expenses (including, without
limitation, cost of telex, wires, or cables) incurred by Agent or the Banks in
connection with the prepayment, upon Borrower's receipt of a written statement
from Agent. Each prepayment of a LIBOR Loan shall be in the aggregate principal
amount of not less than Five Million Dollars ($5,000,000), except in the case of
a mandatory prepayment pursuant to Section 2.8 or Article III hereof.
SECTION 2.5. FACILITY AND OTHER FEES.
(a) Borrower shall pay to Agent, for the ratable account of the Banks,
as a consideration for the Tranche A Commitments hereunder, a facility fee from
the date hereof until the last day of the applicable Commitment Period equal to
(i) the Applicable Tranche A Facility Fee Rate in effect on the payment date,
times (ii) the average daily aggregate amount of the Tranche A Commitments in
effect during such quarter. The facility fee shall be payable quarterly, in
arrears, commencing March 31, 1999, and on the last day of each June, September,
December and March thereafter and on the last day of the applicable Commitment
Period.
(b) Borrower shall pay to Agent, for the ratable account of the Banks,
as a consideration for the Tranche B Commitments hereunder, a facility fee from
the date hereof until the last day of the applicable Commitment Period equal to
(i) the Applicable Tranche B Facility Fee Rate in effect on the payment date,
times (ii) the average daily aggregate amount of the Tranche B Commitments in
effect during such quarter. The facility fee shall be payable quarterly, in
arrears, commencing March 31, 1999, and on the last day of each June, September,
December and March thereafter and on the last day of the applicable Commitment
Period.
(c) Borrower shall pay to Agent, for its sole benefit, all fees set
forth in the Agent Fee Letter.
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SECTION 2.6. REDUCTION OF COMMITMENTS. Borrower may at any time or from
time to time permanently reduce in whole or ratably in part the Tranche A
Commitments or the Tranche B Commitments of the Banks hereunder to an amount not
less than the aggregate principal amount of the Tranche A Loans (including Swing
Loans) or Tranche B Loans, as appropriate, then outstanding; provided, however,
that the Tranche A Commitment shall not be reduced either in whole or in part
unless Borrower shall have first permanently reduced in whole the Tranche B
Commitments. Borrower shall give Agent not fewer than three (3) Business Days'
notice of any such reduction, provided that any partial reduction shall be in an
aggregate amount for all of the Banks of Five Million Dollars ($5,000,000),
increased by increments of One Million Dollars ($1,000,000). Agent shall
promptly notify each Bank of the date of each such reduction and such Bank's
proportionate share thereof. After each such reduction, the facility fees
payable hereunder shall be calculated upon the amount of the Tranche A
Commitments or the Tranche B Commitments, as appropriate, as so reduced. If
Borrower reduces in whole the Tranche A Commitments or the Tranche B Commitments
of the Banks, on the effective date of such reduction (Borrower having prepaid
in full the unpaid principal balance, if any, of the appropriate Notes, together
with all interest and facility and other fees accrued and unpaid), all of the
appropriate Notes shall be delivered to Agent marked "Canceled" and Agent shall
redeliver such Notes to Borrower. Any partial reduction of the Tranche A
Commitments or the Tranche B Commitments shall be effective during the remainder
of the applicable Commitment Period.
SECTION 2.7. COMPUTATION OF INTEREST AND FEES; DEFAULT RATE. With the
exception of Prime Rate Loans, interest on Loans and facility and other fees and
charges hereunder shall be computed on the basis of a year having three hundred
sixty (360) days and calculated for the actual number of days elapsed. With
respect to Prime Rate Loans, interest shall be computed on the basis of a year
having three hundred sixty-five (365) days or three hundred sixty-six (366)
days, as the case may be, and calculated for the actual number of days elapsed.
Anything herein to the contrary notwithstanding, if an Event of Default shall
occur hereunder, the principal of each Note and the unpaid interest thereon
shall bear interest, until paid, at the Default Rate. In no event shall the rate
of interest hereunder exceed the maximum rate allowable by law.
SECTION 2.8. MANDATORY PAYMENT. If (a) the Tranche A Exposure at any
time exceeds the aggregate amount of the Tranche A Commitments, (b) the
aggregate principal amount of all Tranche B Loans outstanding at any time
exceeds the aggregate amount of the Tranche B Commitments, or (c) the aggregate
principal amount of all Loans outstanding at any time exceeds the Total
Commitment Amount, Borrower shall, as promptly as practicable, but in no event
later than the next Business Day, prepay an aggregate principal amount of the
Loans sufficient to bring the aggregate outstanding principal amount of all such
Tranche A Loans within the Tranche A Commitments, Tranche B Loans within the
Tranche B Commitments and Loans within the Commitment. Any prepayment of a LIBOR
Loan pursuant to this Section 2.8 shall be subject to the prepayment fees set
forth in Section 2.4 hereof.
SECTION 2.9. EXTENSION OF COMMITMENT.
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(a) Upon receipt by Agent of a Request for Extension during any fiscal
year of Borrower, contemporaneously with the delivery of the financial
statements required pursuant to Section 5.3 (b) hereof, Borrower may request
that the Banks extend the maturity of the Tranche A Commitment for an additional
year.
(b) Upon receipt by Bank of a Request for Extension during any fiscal
year of Borrower, not more than (60) days, but not less than thirty (30) days,
prior to the last day of the Commitment Period applicable to the Tranche B
Commitment, Borrower may request that the Banks extend the maturity of the
Tranche B Commitment for an additional three hundred sixty-four (364) day
period.
(c) Each such extension shall be in the sole discretion of Agent and
the Banks and shall require the unanimous written consent of each of the Banks.
In addition, Borrower shall pay any attorneys' fees or other expenses of Agent
in connection with the documentation of any such extension, as well as such
other fees as may be agreed upon between Borrower and the Banks.
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO LIBOR
LOANS; INCREASED CAPITAL; TAXES.
SECTION 3.1. RESERVES OR DEPOSIT REQUIREMENTS, ETC. If, at any time,
any law, treaty or regulation (including, without limitation, Regulation D of
the Board of Governors of the Federal Reserve System) or the interpretation
thereof by any governmental authority charged with the administration thereof or
any central bank or other fiscal, monetary or other authority shall impose
(whether or not having the force of law), modify or deem applicable any reserve
and/or special deposit requirement (other than reserves included in the
Eurocurrency Reserve Percentage, the effect of which is reflected in the
interest rate(s) of the LIBOR Loan(s) in question) against assets held by, or
deposits in or for the amount of any LIBOR Loan by, any Bank, and the result of
the foregoing is to increase the cost (whether by incurring a cost or adding to
a cost) to such Bank of making or maintaining hereunder any LIBOR Loan or to
reduce the amount of principal or interest received by such Bank with respect to
such LIBOR Loan, then, upon demand by such Bank, Borrower shall pay to such Bank
from time to time on Interest Adjustment Dates with respect to such LIBOR Loan,
as additional consideration hereunder, additional amounts sufficient to fully
compensate and indemnify such Bank for such increased cost or reduced amount,
assuming (which assumption such Bank need not corroborate) such additional cost
or reduced amount was allocable to such LIBOR Loan. A certificate as to the
increased cost or reduced amount as a result of any event mentioned in this
Section 3.1, setting forth the calculations therefor, shall be promptly
submitted by such Bank to Borrower and shall, in the absence of manifest error,
be conclusive and binding as to the amount thereof. Notwithstanding any other
provision of this Agreement, after any such demand for compensation by any Bank,
Borrower, upon at least three (3) Business Days' prior written notice to such
Bank through Agent, may prepay any affected LIBOR Loan in full or convert such
LIBOR Loan to a Prime Rate Loan regardless of the Interest Period thereof. Any
such prepayment or conversion shall be subject to the prepayment fees set forth
in Section 2.4 hereof. Each Bank shall notify Borrower as promptly as
practicable (with a copy thereof delivered to Agent) of the existence
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of any event that will likely require the payment by Borrower of any such
additional amount under this Section.
SECTION 3.2. TAX LAW, ETC. In the event that by reason of any law,
regulation or requirement or in the interpretation thereof by an official
authority, or the imposition of any requirement of any central bank whether or
not having the force of law, any Bank shall, with respect to this Agreement or
any transaction under this Agreement, be subjected to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other than
any tax imposed upon the total net income of such Bank) and if any such measures
or any other similar measure shall result in an increase in the cost to such
Bank of making or maintaining any LIBOR Loan or in a reduction in the amount of
principal, interest or facility fee receivable by such Bank in respect thereof,
then such Bank shall promptly notify Borrower stating the reasons therefor.
Borrower shall thereafter pay to such Bank, upon demand from time to time on
Interest Adjustment Dates with respect to such LIBOR Loan, as additional
consideration hereunder, such additional amounts as shall fully compensate such
Bank for such increased cost or reduced amount. A certificate as to any such
increased cost or reduced amount, setting forth the calculations therefor, shall
be submitted by such Bank to Borrower and shall, in the absence of manifest
error, be conclusive and binding as to the amount thereof.
If any Bank receives such additional consideration from Borrower
pursuant to this Section 3.2, such Bank shall use its best efforts to obtain the
benefits of any refund, deduction or credit for any taxes or other amounts on
account of which such additional consideration has been paid and shall reimburse
Borrower to the extent, but only to the extent, that such Bank shall receive a
refund of such taxes or other amounts together with any interest thereon or an
effective net reduction in taxes or other governmental charges (including any
taxes imposed on or measured by the total net income of such Bank) of the United
States or any state or subdivision thereof by virtue of any such deduction or
credit, after first giving effect to all other deductions and credits otherwise
available to such Bank. If, at the time any audit of such Bank's income tax
return is completed, such Bank determines, based on such audit, that it was not
entitled to the full amount of any refund reimbursed to Borrower as aforesaid or
that its net income taxes are not reduced by a credit or deduction for the full
amount of taxes reimbursed to Borrower as aforesaid, Borrower, upon demand of
such Bank, shall promptly pay to such Bank the amount so refunded to which such
Bank was not so entitled, or the amount by which the net income taxes of such
Bank were not so reduced, as the case may be.
Notwithstanding any other provision of this Agreement, after any such
demand for compensation by any Bank, Borrower, upon at least three (3) Business
Days' prior written notice to such Bank through Agent, may prepay any affected
LIBOR Loan in full or convert such LIBOR Loan to a Prime Rate Loan regardless of
the Interest Period of any thereof. Any such prepayment or conversion shall be
subject to the prepayment fees set forth in Section 2.4 hereof.
SECTION 3.3. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. In respect of any LIBOR Loan, in the event that Agent shall
have determined that dollar deposits of the relevant amount for the relevant
Interest Period for such
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LIBOR Loan are not available to Agent in the applicable eurodollar market or
that, by reason of circumstances affecting such market, adequate and reasonable
means do not exist for ascertaining the LIBOR Rate applicable to such Interest
Period, as the case may be, Agent shall promptly give notice of such
determination to Borrower and (a) any notice of a new LIBOR Loan (or conversion
of an existing Loan to a LIBOR Loan) previously given by Borrower and not yet
borrowed (or converted, as the case may be) shall be deemed a notice to make a
Prime Rate Loan, and (b) Borrower shall be obligated either to prepay, or to
convert to a Prime Rate Loan, any outstanding LIBOR Loan on the last day of the
then current Interest Period with respect thereto.
SECTION 3.4. INDEMNITY. Without prejudice to any other provisions of
this Article III, Borrower hereby agrees to indemnify each Bank against any loss
or expense which such Bank may sustain or incur as a consequence of any default
by Borrower in payment when due of any amount hereunder in respect of any LIBOR
Loan, including, but not limited to, any loss of profit, premium or penalty
incurred by such Bank in respect of funds borrowed by it for the purpose of
making or maintaining such LIBOR Loan, as determined by such Bank in the
exercise of its sole but reasonable discretion. A certificate as to any such
loss or expense shall be promptly submitted by such Bank to Borrower and shall,
in the absence of manifest error, be conclusive and binding as to the amount
thereof.
SECTION 3.5. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any
time any new law, treaty or regulation, or any change in any existing law,
treaty or regulation, or any interpretation thereof by any governmental or other
regulatory authority charged with the administration thereof, shall make it
unlawful for any Bank to fund any LIBOR Loan which it is committed to make
hereunder with moneys obtained in the eurodollar market, the commitment of such
Bank to fund such LIBOR Loan shall, upon the happening of such event forthwith
be suspended for the duration of such illegality, and such Bank shall by written
notice to Borrower and Agent declare that its commitment with respect to such
LIBOR Loan has been so suspended and, if and when such illegality ceases to
exist, such suspension shall cease and such Bank shall similarly notify Borrower
and Agent. If any such change shall make it unlawful for any Bank to continue in
effect the funding in the applicable eurodollar market of any LIBOR Loan
previously made by it hereunder, such Bank shall, upon the happening of such
event, notify Borrower, Agent and the other Banks thereof in writing stating the
reasons therefor, and Borrower shall, on the earlier of (a) the last day of the
then current Interest Period or (b) if required by such law, regulation or
interpretation, on such date as shall be specified in such notice, either
convert such LIBOR Loan to a Prime Rate Loan or prepay such LIBOR Loan to the
Banks in full. Any such prepayment or conversion shall be subject to the
prepayment fees described in Section 2.4 hereof.
SECTION 3.6. FUNDING. Each Bank may, but shall not be required to, make
LIBOR Loans hereunder with funds obtained outside the United States.
SECTION 3.7. CAPITAL ADEQUACY. If any Bank shall have determined, after
the Closing Date, that the adoption of any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof
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by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank (or its
lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's capital (or the capital of its holding company) as a consequence
of its obligations hereunder to a level below that which such Bank (or its
holding company) could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies or the policies of its holding
company with respect to capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within fifteen (15) days after demand by such
Bank (with a copy to Agent), Borrower shall pay to such Bank such additional
amount or amounts as shall compensate such Bank (or its holding company) for
such reduction. Each Bank shall designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. A certificate of any Bank claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods. Failure on the
part of any Bank to demand compensation for any reduction in return on capital
with respect to any period shall not constitute a waiver of such Bank's rights
to demand compensation for any reduction in return on capital in such period or
in any other period. The protection of this Section shall be available to each
Bank regardless of any possible contention of the invalidity or inapplicability
of the law, regulation or other condition which shall have been imposed.
ARTICLE IV. CONDITIONS PRECEDENT
The obligation of the Banks to make the first Loan and of Agent to make
the first Swing Loan is subject to Borrower satisfying each of the following
conditions:
SECTION 4.1. NOTES. Borrower shall have executed and delivered to each
Bank its Tranche A Note and its Tranche B Note and shall have executed and
delivered to Agent the Swing Line Note.
SECTION 4.2. GUARANTIES OF PAYMENT OF DEBT. Each Guarantor of Payment
shall have executed and delivered to Agent a Guaranty of Payment.
SECTION 4.3. OFFICER'S CERTIFICATE, RESOLUTIONS, ORGANIZATIONAL
DOCUMENTS. Borrower and each Guarantor of Payment shall have delivered to each
Bank an officer's certificate certifying the names of the officers of Borrower
or such Guarantor of Payment authorized to sign the Loan Documents, together
with the true signatures of such officers and certified copies of (a) the
resolutions of the board of directors of Borrower and each Guarantor of Payment
evidencing approval of the execution and delivery of the Loan Documents and the
execution of other Related Writings to which Borrower or such Guarantor of
Payment, as the case
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may be, is a party, and (b) the Articles (or Certificate) of Incorporation and
Regulations (or Bylaws) and all amendments thereto of Borrower and each
Guarantor of Payment.
SECTION 4.4. LEGAL OPINION. Borrower shall have delivered to Agent an
opinion of counsel for Borrower and each Guarantor of Payment, in form and
substance satisfactory to Agent and the Banks.
SECTION 4.5. GOOD STANDING CERTIFICATES. Borrower shall have delivered
a good standing certificate for Borrower and each Guarantor of Payment, issued
on or about the Closing Date by the Secretary of State in the state where
Borrower or such Guarantor of Payment is incorporated and in each state in which
Borrower or such Guarantor of Payment is qualified as a foreign corporation.
SECTION 4.6. CLOSING AND LEGAL FEES; AGENT FEE LETTER; CLOSING FEE
LETTER. Borrower shall have (a) executed and delivered to Agent the Agent Fee
Letter and the Closing Fee Letter, (b) paid to Agent, for its sole benefit, the
fees described in the Agent Fee Letter, (c) paid to Agent, for the pro rata
benefit of the Banks, the fees described in the Closing Fee Letter, and (d) paid
all legal fees and expenses of Agent in connection with the preparation and
negotiation of the Loan Documents.
SECTION 4.7. LIEN SEARCHES. With respect to the property owned or
leased by Borrower and each Guarantor of Payment, Borrower shall have caused to
be delivered to Agent: (a) the results of U.C.C. lien searches, satisfactory to
Agent, in such jurisdictions as may be requested by Agent; (b) the results of
federal and state tax lien and judicial lien searches, satisfactory to Agent, in
such jurisdictions as may be requested by Agent; and (c) U.C.C. termination
statements reflecting termination of all financing statements previously filed
by any party having a security interest not permitted under the terms of this
Agreement.
SECTION 4.8. TERMINATION OF EXISTING CREDIT AGREEMENT. Borrower shall
have terminated the Credit Agreement dated as of May 13, 1996, as amended, among
Borrower, KeyBank National Association, as agent, and the banking institutions
listed on Schedule 1 attached thereto, and the commitments established
thereunder, which termination shall be deemed to have occurred upon payment in
full of the "Debt", as defined therein.
SECTION 4.9. NO MATERIAL ADVERSE CHANGE. No material adverse change, in
the opinion of Agent, shall have occurred in the financial condition, operations
or prospects of the Companies since September 30, 1998.
SECTION 4.10. MISCELLANEOUS. Borrower shall have provided such other
items and shall have satisfied such other conditions as may be reasonably
required by Agent or the Banks.
ARTICLE V. COVENANTS
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Borrower agrees that so long as the Commitment remains in effect and
thereafter until the principal of and interest on all Notes and all other
payments and fees due hereunder shall have been paid in full, Borrower shall
perform and observe, and shall cause each Subsidiary to perform and observe,
each of the following provisions:
SECTION 5.1. INSURANCE. Each Company shall (a) maintain insurance to
such extent and against such hazards and liabilities as is commonly maintained
by companies similarly situated, and (b) within ten (10) days of any Bank's
written request, furnish to such Bank such information about any Company's
insurance as that Bank may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to such Bank and
certified by a Financial Officer of such Company.
SECTION 5.2. MONEY OBLIGATIONS. Each Company shall pay in full (a)
prior in each case to the date when penalties would attach, all taxes,
assessments and governmental charges and levies (except only those so long as
and to the extent that the same shall be contested in good faith by appropriate
and timely proceedings and for which adequate reserves have been established in
accordance with GAAP) for which it may be or become liable or to which any or
all of its properties may be or become subject; (b) all of its wage obligations
to its employees in compliance with the Fair Labor Standards Act (29 U.S.C.
206-207) or any comparable provisions; and (c) all of its other obligations
calling for the payment of money (except only those so long as and to the extent
that the same shall be contested in good faith and for which adequate reserves
have been established in accordance with GAAP) before such payment becomes
overdue.
SECTION 5.3. FINANCIAL STATEMENTS. Borrower shall furnish to each Bank:
(a) within forty-five (45) days after the end of each of the first
three (3) quarter-annual periods of each fiscal year of Borrower, balance sheets
of Borrower as of the end of such period and statements of income (loss),
stockholders' equity and cash flow for the quarter and fiscal year to date
periods, all prepared on a Consolidated basis, in accordance with GAAP, and in
form and detail satisfactory to the Banks and certified by a Financial Officer
of Borrower;
(b) within ninety (90) days after the end of each fiscal year of
Borrower, an annual audit report of Borrower for that year prepared on a
Consolidated basis, in accordance with GAAP, and in form and detail satisfactory
to the Banks and certified by an independent public accountant satisfactory to
the Banks, which report shall include balance sheets and statements of income
(loss), stockholders' equity and cash-flow for that period, together with a
certificate by the accountant setting forth the Unmatured Events of Default and
Events of Default coming to its attention during the course of its audit or, if
none, a statement to that effect;
(c) concurrently with the delivery of the financial statements in (a)
and (b) above, a Compliance Certificate;
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(d) within ninety (90) days after the end of each fiscal year of
Borrower, annual pro-forma projections of Borrower and its Subsidiaries for the
then current fiscal year, to be in form acceptable to Agent;
(e) as soon as available, copies of all notices, reports, definitive
proxy or other statements and other documents sent by Borrower to its
shareholders, to the holders of any of its debentures or bonds or the trustee of
any indenture securing the same or pursuant to which they are issued, or sent by
Borrower (in final form) to any securities exchange or over the counter
authority or system, or to the SEC or any similar federal agency having
regulatory jurisdiction over the issuance of Borrower's securities; and
(f) within ten (10) days of any Bank's written request, such other
information about the financial condition, properties and operations of any
Company as such Bank may from time to time reasonably request, which information
shall be submitted in form and detail reasonably satisfactory to such Bank and
certified by a Financial Officer of the Company or Companies in question.
SECTION 5.4. FINANCIAL RECORDS. Each Company shall at all times
maintain true and complete records and books of account including, without
limiting the generality of the foregoing, appropriate reserves for possible
losses and liabilities, all in accordance with GAAP, and at all reasonable times
(during normal business hours and upon notice to the Company in question) permit
the Banks to examine that Company's books and records and to make excerpts
therefrom and transcripts thereof.
SECTION 5.5. FRANCHISES. Each Company shall preserve and maintain at
all times its existence, rights and franchises except as otherwise permitted
pursuant to Section 5.12.
SECTION 5.6. ERISA COMPLIANCE. No Company shall incur any material
accumulated funding deficiency within the meaning of ERISA, or any material
liability to the PBGC, established thereunder in connection with any ERISA Plan.
Borrower shall furnish to the Banks (a) as soon as possible and in any event
within thirty (30) days after any Company knows or has reason to know that any
Reportable Event with respect to any ERISA Plan has occurred, a statement of the
Financial Officer of such Company, setting forth details as to such Reportable
Event and the action that such Company proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to the PBGC if
a copy of such notice is available to such Company, and (b) promptly after
receipt thereof a copy of any notice such Company, or any member of the
Controlled Group may receive from the PBGC or the Internal Revenue Service with
respect to any ERISA Plan administered by such Company; provided, that this
latter clause shall not apply to notices of general application promulgated by
the PBGC or the Internal Revenue Service, except for ministerial errors or other
minor compliance errors. Borrower shall promptly notify the Banks of any
material taxes assessed, proposed to be assessed or which Borrower has reason to
believe may be assessed against a Company by the Internal Revenue Service with
respect to any ERISA Plan. As used in this Section"material" means the measure
of a matter of significance which shall be determined as being an amount equal
to five percent (5%) of the Consolidated Net Worth of
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Borrower. As soon as practicable, and in any event within twenty (20) days,
after any Company becomes aware that an ERISA Event has occurred, such Company
shall provide Bank with notice of such ERISA Event with a certificate by a
Financial Officer of such Company setting forth the details of the event and the
action such Company or another Controlled Group member proposes to take with
respect thereto. Borrower shall, at the request of Agent or any Bank, deliver or
cause to be delivered to Agent or such Bank, as the case may be, true and
correct copies of any documents relating to the ERISA Plan of any Company.
SECTION 5.7. FINANCIAL COVENANTS.
(a) LEVERAGE RATIO. Borrower shall not suffer or permit at any time the
Leverage Ratio to be greater than 3.00 to 1.00.
(b) NET WORTH. Borrower shall not suffer or permit its Consolidated Net
Worth at any time, based upon the financial statements of the Companies for the
most recently completed fiscal quarter, to fall below the current minimum amount
required, which current minimum amount required shall be Two Hundred Forty-Four
Million Eight Hundred Thousand Dollars ($244,800,000) on the Closing Date
through December 30, 1998, with such current minimum amount required to be
positively increased by the Increase Amount on December 31, 1998, and by an
additional Increase Amount on the last day of each fiscal quarter thereafter. As
used herein, the term "Increase Amount" shall mean an amount equal to (i) fifty
percent (50%) of the positive Consolidated Net Earnings of the Companies for the
fiscal quarter then ended, plus (ii) one hundred percent (100%) of the proceeds
from any equity offering by any Company.
(c) FIXED CHARGE COVERAGE RATIO. Borrower shall not suffer or permit at
any time the Fixed Charge Coverage Ratio to be less than 1.25 to 1.00, based
upon the financial statements of the Companies for the most recently completed
four (4) fiscal quarters.
SECTION 5.8. BORROWING. No Company shall create, incur or have
outstanding any Indebtedness of any kind; provided, that this Section shall not
apply to:
(a) the Loans or any other Indebtedness incurred to Agent or the Banks
pursuant to this Agreement;
(b) Indebtedness under any Hedge Agreement;
(c) secured Indebtedness (including any capital lease obligation) so
long as the aggregate amount of all such Indebtedness outstanding at any time
for all Companies does not exceed an amount equal to ten percent (10%) of the
Consolidated Net Worth of Borrower, based upon the financial statements of
Borrower for the most recently completed fiscal quarter; or
(d) additional unsecured Indebtedness of a Company, to the extent not
otherwise permitted pursuant to subparts (a) through (c) hereof.
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SECTION 5.9. LIENS. No Company shall create, assume or suffer to exist
any Lien upon any of its property or assets, whether now owned or hereafter
acquired; provided that this Section shall not apply to the following:
(a) Liens for taxes not yet due or which are being actively contested
in good faith by appropriate proceedings and for which adequate reserves have
been established in accordance with GAAP;
(b) other statutory Liens incidental to the conduct of its business or
the ownership of its property and assets which (i) were not incurred in
connection with the borrowing of money or the obtaining of advances or credit,
and (ii) which do not in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the operation of its
business;
(c) Liens on property or assets of a Subsidiary to secure obligations
of such Subsidiary to Borrower or a Guarantor of Payment;
(d) purchase money Liens on real estate and fixed assets securing the
loans pursuant to Section 5.8 (c) hereof, provided that such Lien only attaches
to the property being acquired;
(e) the Liens set forth on SCHEDULE 5.9 hereto;
(f) easements or other minor defects or irregularities in title of real
property not interfering in any material respect with the use of such property
in the business of any Company; or
(g) any other Liens so long as the aggregate amount of Indebtedness
secured by such Liens (including, but not limited to, the Indebtedness secured
by Liens described in subparts (c), (d) and (e) hereof) does not exceed for all
Companies at any time an aggregate amount equal to ten percent (10%) of the
Consolidated Net Worth of Borrower, based upon the financial statements of the
Borrower for the most recently completed fiscal quarter. Upon request of Agent,
Borrower shall provide to Agent a list, in form and detailed reasonably
satisfactory to Agent, of all secured Indebtedness (including any capital lease
obligation) of each Company, which list shall include a description of any Lien
granted by any such Company in connection with such Indebtedness.
No Company shall enter into any contract or agreement that would prohibit Agent
or the Banks from acquiring a security interest, mortgage or other Lien on, or a
collateral assignment of, any of the property or assets of such Company.
SECTION 5.10. REGULATIONS U and X. No Company shall take any action
that would result in any non-compliance of the Loans with Regulations U and X of
the Board of Governors of the Federal Reserve System.
SECTION 5.11. INVESTMENTS AND LOANS. No Company shall (a) create,
acquire or hold any Subsidiary, (b) make or hold any investment in any stocks,
bonds or securities
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of any kind, (c) be or become a party to any joint venture or other partnership
without the prior written consent of Agent and the Required Banks, (d) make or
keep outstanding any advance or loan to any Person, or (e) be or become a
Guarantor of any kind, except guarantees securing only indebtedness of the
Companies incurred or permitted pursuant to this Agreement; provided, that this
Section shall not apply to:
(i) any endorsement of a check or other medium of payment for deposit
or collection through normal banking channels or similar transaction in the
normal course of business;
(ii) any investment in direct obligations of the United States of
America or in certificates of deposit issued by a member bank of the Federal
Reserve System;
(iii) any investment in commercial paper or securities which at the
time of such investment is assigned the highest quality rating in accordance
with the rating systems employed by either Moody's or Standard & Poor's;
(iv) the holding of Subsidiaries listed on SCHEDULE 6.1 hereto;
(v) loans to a Company from a Company or investments in a Company by a
Company so long as each such Company is Borrower or a Guarantor of Payment;
(vi) loans from Borrower to a Subsidiary that is not a Guarantor of
Payment, so long as (A) the aggregate amount of all such loans to such
Subsidiary that is not a Guarantor of Payment are not in excess of Fifteen
Million Dollars ($15,000,000), and (B) the aggregate amount of all such loans to
all Subsidiaries, that are not Guarantors of Payment, are not in excess of Fifty
Million Dollars ($50,000,000);
(vii) any guaranty of the Indebtedness permitted pursuant to Section
5.8 hereof;
(viii) any advance or loan to an officer or employee of a Company made
in the ordinary course of such Company's business, so long as all such advances
and loans from all Companies aggregate not more than the maximum principal sum
of Seven Million Five Hundred Thousand Dollars ($7,500,000) at any time
outstanding;
(ix) any Permitted Investment;
(x) the creation, acquisition or holding of any Domestic Subsidiary so
long as such Domestic Subsidiary, if required pursuant to Section 5.19 hereof,
becomes a Guarantor of Payment in accordance with Section 5.19, and, with the
prior written consent of Agent and the Required Banks, the creation, acquisition
or holding of any Foreign Subsidiary; or
(xi) any investment by a Foreign Subsidiary in Borrower or any
Subsidiary.
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SECTION 5.12. MERGER AND SALE OF ASSETS. No Company shall merge or
consolidate with any other Person or sell, lease or transfer or otherwise
dispose of all or a substantial part of its assets to any Person, except that if
no Unmatured Event of Default or Event of Default shall then exist or
immediately thereafter shall begin to exist:
(a) any Subsidiary may merge or consolidate with (i) Borrower (provided
that Borrower shall be the continuing or surviving Person) or (ii) any one or
more Guarantors of Payment, provided that either (A) the continuing or surviving
Person shall be a Wholly-Owned Subsidiary which is a Guarantor of Payment, or
(B) after giving effect to any merger pursuant to this sub-clause (ii), Borrower
and/or one or more Wholly-Owned Subsidiaries which are Guarantors of Payment
shall own not less than the same percentage of the outstanding Voting Power of
the continuing or surviving Person as Borrower and/or one or more Wholly-Owned
Subsidiaries (which are Guarantors of Payment) owned of the merged Subsidiary
immediately prior to such merger;
(b) any Subsidiary may sell, lease, transfer or otherwise dispose of
any of its assets to (i) Borrower, (ii) any Wholly-Owned Subsidiary which is a
Guarantor of Payment, or (iii) any Guarantor of Payment, of which Borrower
and/or one or more Wholly-Owned Subsidiaries, which are Guarantors of Payment,
shall own not less than the same percentage of Voting Power as Borrower and/or
one or more Wholly-Owned Subsidiaries (which are Guarantors of Payment) then own
of the Subsidiary making such sale, lease, transfer or other disposition;
(c) any Company may sell, lease, transfer or otherwise dispose of any
of its assets to any Person (in addition to any such sale, lease, transfer or
disposal to Borrower or a Guarantor of Payment) so long as the aggregate amount
of all such assets sold, leased, transferred or otherwise disposed of by all
Companies during any twelve (12) month period does not exceed Forty Million
Dollars ($40,000,000); or
(d) any Foreign Subsidiary may merge or consolidate with any other
Foreign Subsidiary.
SECTION 5.13. ACQUISITIONS. No Company shall effect an Acquisition
unless:
(a) no Unmatured Event of Default or Event of Default shall then exist
or immediately thereafter shall begin to exist;
(b) the Acquisition is made by (i) Borrower or a Guarantor of Payment
and Borrower or such Guarantor of Payment is the surviving entity of such
Acquisition (in the case of a merger, consolidation or other combination) or the
Person to be acquired becomes a Guarantor of Payment promptly after such
Acquisition (in the case of the acquisition of the stock (or other equity
interest) of a Person), or (ii) a Foreign Subsidiary;
(c) the Companies are in full compliance with the Loan Documents both
prior to and subsequent to such Acquisition; and
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(d) with respect to any Acquisition in which the Consideration paid is
in excess of Fifty Million Dollars ($50,000,000), Borrower provides to Agent and
the Banks, as early as possible and, in any event, not fewer than five (5) days
prior to the date of consummation of such Acquisition, (i) written notice of
such Acquisition, and (ii) historical financial statements of such Person and a
pro forma financial statement of the Companies accompanied by a certificate of a
Financial Officer of Borrower showing pro forma compliance with Section 5.7
hereof, both before and after such Acquisition.
SECTION 5.14. NOTICE. Borrower shall cause a Financial Officer of
Borrower to promptly notify Agent and the Banks whenever any Unmatured Event of
Default or Event of Default may occur hereunder or any representation or
warranty made in Article VI hereof or elsewhere in this Agreement or in any
Related Writing may for any reason cease in any material respect to be true and
complete.
SECTION 5.15. ENVIRONMENTAL COMPLIANCE. Each Company shall comply in
all material respects with any and all Environmental Laws including, without
limitation, all Environmental Laws in jurisdictions in which any Company owns or
operates a facility or site, arranges for disposal or treatment of hazardous
substances, solid waste or other wastes, accepts for transport any hazardous
substances, solid waste or other wastes or holds any interest in real property
or otherwise. Borrower shall furnish to the Banks, promptly after receipt
thereof, a copy of any notice any Company may receive from any governmental
authority, private Person or otherwise that any material litigation or
proceeding pertaining to any environmental, health or safety matter has been
filed or is threatened against such Company, any real property in which such
Company holds any interest or any past or present operation of such Company. No
Company shall allow the release or disposal of hazardous waste, solid waste or
other wastes on, under or to any real property in which any Company holds any
interest or performs any of its operations, in violation of any Environmental
Law. As used in this Section,"litigation or proceeding" means any demand, claim,
notice, suit, suit in equity action, administrative action, investigation or
inquiry whether brought by any governmental authority, private Person or
otherwise. Borrower shall defend, indemnify and hold Agent and the Banks
harmless against all costs, expenses, claims, damages, penalties and liabilities
of every kind or nature whatsoever (including attorneys fees) arising out of or
resulting from the noncompliance of any Company with any Environmental Law.
SECTION 5.16. AFFILIATE TRANSACTIONS. No Company shall, or shall permit
any Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
a Company on terms that are less favorable to such Company or such Subsidiary,
as the case may be, than those that might be obtained at the time in a
transaction with a non-Affiliate; provided, however, that the foregoing shall
not prohibit (a) the payment of customary and reasonable directors' fees to
directors who are not employees of a Company or any Affiliate of a Company; or
(b) any transaction between Borrower and a Subsidiary that Borrower reasonably
determines in good faith is beneficial to Borrower and its Affiliates as a whole
and that
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is not entered into for the purpose of hindering the exercise by Agent or the
Banks of their rights or remedies under this Agreement.
SECTION 5.17. CORPORATE NAMES. Neither Borrower nor any Guarantor of
Payment shall change its corporate name, unless, in each case, Borrower shall
provide Agent with written notice thereof.
SECTION 5.18. USE OF PROCEEDS. Borrower's use of the proceeds of the
Notes shall be solely for working capital and other general corporate purposes
of Borrower and its Subsidiaries which are Guarantors of Payment and for
Acquisitions permitted pursuant to the terms of this Agreement.
SECTION 5.19. SUBSIDIARY GUARANTIES. Each Subsidiary created, acquired
or held subsequent to the Closing Date, shall immediately execute and deliver to
Agent a Guaranty of Payment of all of the Debt, such agreement to be in form and
substance acceptable to Agent and the Required Banks, along with such corporate
governance and authorization documents and an opinion of counsel as may be
deemed necessary or advisable by Agent and the Required Banks; provided,
however, that a Subsidiary shall not be required to execute such Guaranty of
Payment if (a) (i) such Subsidiary is not a Material Subsidiary, and (ii) the
aggregate of the total assets of all such Subsidiaries that are not Material
Subsidiaries does not exceed the aggregate amount of Three Million Dollars
($3,000,000), or (b) such Subsidiary is a Foreign Subsidiary and the execution
and delivery of a Guaranty of Payment by such Subsidiary will result in adverse
tax consequences for Borrower. Borrower shall provide Agent and the Banks with
prompt written notice in the event that any Subsidiary (that is not already a
Guarantor of Payment) becomes a Material Subsidiary.
SECTION 5.20. AMENDMENT OF ARTICLES OF INCORPORATION. Neither Borrower
nor any Guarantor of Payment shall amend its Articles (Certificate) of
Incorporation, or charter or equivalent documents in any manner that would
affect the validity or enforceability of any Loan Document without the prior
written consent of Agent.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that the statements set forth in this
Article VI are true, correct and complete.
SECTION 6.1. CORPORATE EXISTENCE; FOREIGN QUALIFICATION; SUBSIDIARIES.
(a) Each Company is an entity duly organized, validly existing, and in
good standing under the laws of its state of organization and is duly qualified
and authorized to do business and is in good standing as a foreign entity in
each jurisdiction where the character of its property or its business activities
makes such qualification necessary, except where the failure to so qualify would
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not have a material adverse effect on the business, operations or condition
(financial or otherwise) of such Company.
(b) SCHEDULE 6.1 hereto sets forth (i) the state of organization of
Borrower, and (ii) each state or other jurisdiction in which Borrower is
qualified to do business as a foreign corporation.
(c) SCHEDULE 6.1 hereto sets forth (i) each Subsidiary of Borrower and
each Subsidiary of each Company, (ii) such Subsidiary's state of organization,
(iii) each state or other jurisdiction in which such Subsidiary is qualified to
do business as a foreign entity, and (iv) the direct or indirect ownership of
Borrower in such Subsidiary.
SECTION 6.2. CORPORATE AUTHORITY. Each Company has the right and power
and is duly authorized and empowered to enter into, execute and deliver the Loan
Documents to which it is a party and to perform and observe the provisions of
the Loan Documents. The Loan Documents to which each Company is a party have
been duly authorized and approved by such Company's Board of Directors and are
the valid and binding obligations of such Company, enforceable against such
Company in accordance with their respective terms. The execution, delivery and
performance of the Loan Documents will not conflict with nor result in any
breach in any of the provisions of, or constitute a default under, or result in
the creation of any Lien (other than Liens permitted under Section 5.9 hereof)
upon any assets or property of any Company under the provisions of, such
Company's Certificate (Articles) of Incorporation, Bylaws (Regulations) or any
agreement.
SECTION 6.3. COMPLIANCE WITH LAWS. Each Company:
(a) holds permits, certificates, licenses, orders, registrations,
franchises, authorizations, and other approvals from federal, state, local, and
foreign governmental and regulatory bodies necessary for the conduct of its
business and is in compliance with all applicable laws relating thereto, except
where a failure to do so would not have a Material Adverse Effect;
(b) is in compliance with all federal, state, local, or foreign
applicable statutes, rules, regulations, and orders including, without
limitation, those relating to environmental protection, occupational safety and
health, and equal employment practices, except where a failure to so comply
would not have a Material Adverse Effect; and
(c) is not in violation of or in default under any agreement to which
it is a party or by which its assets are subject or bound, except where such
violation or default would not have a Material Adverse Effect.
SECTION 6.4. LITIGATION AND ADMINISTRATIVE PROCEEDINGS. Except as
disclosed on SCHEDULE 6.4 hereto, there are (a) no lawsuits, actions,
investigations, or other proceedings pending or threatened against any Company,
or in respect of which any Company may have any liability, in any court or
before any governmental authority, arbitration board, or other
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tribunal, (b) no orders, writs, injunctions, judgments, or decrees of any court
or government agency or instrumentality to which any Company is a party or by
which the property or assets of any Company are bound, and (c) no grievances,
disputes, or controversies outstanding with any union or other organization of
the employees of any Company, or threats of work stoppage, strike, or pending
demands for collective bargaining which, as to subsections (a) through (c)
hereof, would have or would be reasonably expected to have a Material Adverse
Effect.
SECTION 6.5. TITLE TO ASSETS. Each Company has good title to and
ownership of all property it purports to own, which property is free and clear
of all Liens, except those permitted under Section 5.9 hereto.
SECTION 6.6. LIENS AND SECURITY INTERESTS. On and after the Closing
Date, except for Liens permitted pursuant to Section 5.9 hereof, (a) there is no
financing statement outstanding covering any personal property of any Company,
(b) there is no mortgage outstanding covering any real property of any Company
and (c) no real or personal property of any Company is subject to any security
interest or Lien of any kind. No Company has entered into any contract or
agreement which exists on or after the Closing Date that would prohibit Agent or
the Banks from acquiring a security interest, mortgage or other Lien on, or a
collateral assignment of, any of the property or assets of any Company.
SECTION 6.7. TAX RETURNS. All federal, state and local tax returns and
other reports required by law to be filed in respect of the income, business,
properties and employees of each Company have been filed and all taxes,
assessments, fees and other governmental charges which are due and payable have
been paid, except as otherwise permitted herein or except where the failure to
do so will not have a Material Adverse Effect. The provision for taxes on the
books of each Company is adequate for all years not closed by applicable
statutes and for the current fiscal year.
SECTION 6.8. ENVIRONMENTAL LAWS. Each Company is in compliance with any
and all Environmental Laws, including, without limitation, all Environmental
Laws in all jurisdictions in which any Company owns or operates, or has owned or
operated, a facility or site, arranges or has arranged for disposal or treatment
of hazardous substances, solid waste or other wastes, accepts or has accepted
for transport any hazardous substances, solid waste or other wastes or holds or
has held any interest in real property or otherwise, except where a failure to
so comply would not have a Material Adverse Effect. No litigation or proceeding
arising under, relating to or in connection with any Environmental Law is
pending or, to the best knowledge of each Company, threatened, against any
Company, any real property in which any Company holds or has held an interest or
any past or present operation of any Company which, if determined adversely,
would have a Material Adverse Effect. No release, threatened release or disposal
of hazardous waste, solid waste or other wastes is occurring, or has occurred
(other than those that are currently being cleaned up in accordance with
Environmental Laws), on, under or to any real property in which any Company
holds any interest or performs any of its operations, in violation of any
Environmental Law. As used in this Section, "litigation or proceeding" means any
demand, claim, notice, suit, suit in equity,
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action, administrative action, investigation or inquiry whether brought by any
governmental authority, private Person or otherwise.
SECTION 6.9. CONTINUED BUSINESS. There exists no actual, pending, or,
to Borrower's knowledge, any threatened termination, cancellation or limitation
of, or any modification or change in the business relationship of any Company
and any customer or supplier, or any group of customers or suppliers, whose
purchases or supplies, individually or in the aggregate, are material to the
business of any Company, and there exists no present condition or state of facts
or circumstances which would have a Material Adverse Effect or prevent a Company
from conducting such business or the transactions contemplated by this Agreement
in substantially the same manner in which it was previously conducted.
SECTION 6.10. EMPLOYEE BENEFITS PLANS. SCHEDULE 6.10 hereto identifies
each ERISA Plan. No ERISA Event has occurred or is expected to occur with
respect to an ERISA Plan. Full payment has been made of all amounts which a
Controlled Group member is required, under applicable law or under the governing
documents, to have been paid as a contribution to or a benefit under each ERISA
Plan. The liability of each Controlled Group member with respect to each ERISA
Plan has been fully funded based upon reasonable and proper actuarial
assumptions, has been fully insured, or has been fully reserved for on its
financial statements. No changes have occurred or are expected to occur that
would cause a material increase in the cost of providing benefits under the
ERISA Plan. With respect to each ERISA Plan that is intended to be qualified
under Code Section 401(a): (a) the ERISA Plan and any associated trust
operationally comply with the applicable requirements of Code Section 401(a);
(b) the ERISA Plan and any associated trust have been amended to comply with all
such requirements as currently in effect, other than those requirements for
which a retroactive amendment can be made within the "remedial amendment period"
available under Code Section 401(b) (as extended under Treasury Regulations and
other Treasury pronouncements upon which taxpayers may rely); (c) the ERISA Plan
and any associated trust have received a favorable determination letter from the
Internal Revenue Service stating that the ERISA Plan qualifies under Code
Section 401(a), that the associated trust qualifies under Code Section 501(a)
and, if applicable, that any cash or deferred arrangement under the ERISA Plan
qualifies under Code Section 401(k), unless the ERISA Plan was first adopted at
a time for which the above-described "remedial amendment period" has not yet
expired; (d) the ERISA Plan currently satisfies the requirements of Code Section
410(b), without regard to any retroactive amendment that may be made within the
above-described "remedial amendment period"; and (e) no contribution made to the
ERISA Plan is subject to an excise tax under Code Section 4972. With respect to
any Pension Plan, the "accumulated benefit obligation" of Controlled Group
members with respect to the Pension Plan (as determined in accordance with
Statement of Accounting Standards No. 87, "Employers' Accounting for Pensions")
does not exceed the fair market value of Pension Plan assets. The aggregate
potential amount of liability that would result if all Controlled Group members
withdrew from all Multiemployer Plans in a "complete withdrawal" (within the
meaning of ERISA Section 4203) would not exceed One Million Dollars
($1,000,000).
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SECTION 6.11. CONSENTS OR APPROVALS. No consent, approval or
authorization of, or filing, registration or qualification with, any
governmental authority or any other Person is required to be obtained or
completed by Borrower in connection with the execution, delivery or performance
of any of the Loan Documents, which has not already been obtained or completed.
SECTION 6.12. SOLVENCY. Borrower has received consideration which is
the reasonable equivalent value of the obligations and liabilities that Borrower
has incurred to the Banks. Borrower is not insolvent as defined in any
applicable state or federal statute, nor will Borrower be rendered insolvent by
the execution and delivery of the Loan Documents to Agent and the Banks.
Borrower is not engaged or about to engage in any business or transaction for
which the assets retained by it are or will be an unreasonably small amount of
capital, taking into consideration the obligations to Agent and the Banks
incurred hereunder. Borrower does not intend to, nor does it believe that it
will, incur debts beyond its ability to pay such debts as they mature.
SECTION 6.13. FINANCIAL STATEMENTS. The Consolidated financial
statements of Borrower for the fiscal year ended March 31, 1998, and the interim
financial statements for the period ended September 30, 1998, furnished to Agent
and the Banks, are true and complete, have been prepared in accordance with
GAAP, and fairly present the Companies' financial condition as of the dates of
such financial statements and the results of their operations for the periods
then ended. Since the dates of such statements, there has been no material
adverse change in any Company's financial condition, properties or business nor
any change in any Company's accounting procedures.
SECTION 6.14. REGULATIONS. Borrower is not engaged principally or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System of the
United States of America). Neither the granting of any Loan (or any conversion
thereof) nor the use of the proceeds of the Loans will violate, or be
inconsistent with, the provisions of Regulation U or X of said Board of
Governors.
SECTION 6.15. MATERIAL AGREEMENTS. Except as disclosed in Borrower's
most recent quarterly or annual statement required to be filed with the SEC, no
Company is a party to any material agreement which, if violated, breached, or
terminated for any reason, would have or would be reasonably expected to have a
Material Adverse Effect.
SECTION 6.16. INTELLECTUAL PROPERTY. Each Company owns, possesses, or
has the right to use all of the patents, patent applications, trademarks,
service marks, copyrights, licenses, and rights with respect to the foregoing
necessary for the conduct of its business without any known conflict with the
rights of others.
SECTION 6.17. ACCURATE AND COMPLETE STATEMENTS. Neither the Loan
Documents nor any written statement made by any Company in connection with any
of the Loan Documents contains any untrue statement of a material fact or omits
a material fact necessary to
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make the statements contained therein or in the Loan Documents not misleading.
After due inquiry by Borrower, there is no known fact which any Company has not
disclosed to Agent and the Banks which has or would have a Material Adverse
Effect.
SECTION 6.18. YEAR 2000 COMPLIANCE. Each Company's Computer Systems
are, or have been modified to be, Year 2000 Compliant, except to the extent that
noncompliance will not have a Material Adverse Effect. Borrower has implemented,
or will implement, a compliance program with respect to each Significant Third
Party.
ARTICLE VII. EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default hereunder:
SECTION 7.1. PAYMENTS. If the principal of or interest on any Note or
any facility or other fee shall not be paid in full punctually when due and
payable.
SECTION 7.2. SPECIAL COVENANTS. If any Company or any Guarantor of
Payment shall fail or omit to perform and observe Sections 5.7, 5.8, 5.9, 5.12
or 5.13 hereof.
SECTION 7.3. OTHER COVENANTS. If any Company or any Guarantor of
Payment shall fail or omit to perform and observe any agreement or other
provision (other than those referred to in Sections 7.1 or 7.2 hereof) contained
or referred to in this Agreement or any Related Writing that is on such
Company's or Guarantor of Payment's part, as the case may be, to be complied
with, and that Unmatured Event of Default shall not have been fully corrected
within thirty (30) days after the giving of written notice thereof to Borrower
by Agent or any Bank that the specified Unmatured Event of Default is to be
remedied.
SECTION 7.4. REPRESENTATIONS AND WARRANTIES. If any representation,
warranty or statement made in or pursuant to this Agreement or any Related
Writing or any other material information furnished by any Company or any
Guarantor of Payment to the Banks or any thereof or any other holder of any
Note, shall be false or erroneous in any material respect.
SECTION 7.5. CROSS DEFAULT. If any Company or any Guarantor of Payment
shall default in the payment of principal or interest due and owing upon any
other obligation (other than with respect to the Debt) for borrowed money in
excess of the aggregate, for all such obligations for all such Companies and
Guarantors of Payment, of One Million Dollars ($1,000,000) beyond any period of
grace provided with respect thereto or in the performance or observance of any
other agreement, term or condition contained in any agreement under which such
obligation is created, if the effect of such default is to allow the
acceleration of the maturity of such Indebtedness or to permit the holder
thereof to cause such Indebtedness to become due prior to its stated maturity.
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SECTION 7.6. ERISA DEFAULT. The occurrence of one or more ERISA Events
which (a) the Required Banks determine could have a Material Adverse Effect, or
(b) results in a Lien on any of the assets of any Company.
SECTION 7.7. CHANGE IN CONTROL. If any Change in Control shall occur.
SECTION 7.8. MONEY JUDGMENT. A final judgment or order for the payment
of money shall be rendered against any Company or any Guarantor of Payment by a
court of competent jurisdiction, which remains unpaid or unstayed and
undischarged for a period (during which execution shall not be effectively
stayed) of thirty (30) days after the date on which the right to appeal has
expired, provided that the aggregate of all such judgments for all such
Companies and Guarantors of Payment shall exceed Two Million Dollars
($2,000,000).
SECTION 7.9. VALIDITY OF LOAN DOCUMENTS. (a) Any material provision, in
the reasonable opinion of Agent, of the Credit Agreement, any Note or any
Guaranty of Payment shall at any time for any reason cease to be valid and
binding and enforceable against Borrower or any Guarantor of Payment; (b) the
validity, binding effect or enforceability of any Loan Document against Borrower
or any Guarantor of Payment shall be contested by any Company; (c) Borrower or
any Guarantor of Payment shall deny that it has any or further liability or
obligation thereunder; or (d) any Loan Document shall be terminated, invalidated
or set aside, or be declared ineffective or inoperative or in any way cease to
give or provide to Agent and the Banks the benefits purported to be created
thereby.
SECTION 7.10. SOLVENCY. If Borrower or any Guarantor of Payment shall
(a) discontinue business (except as expressly permitted pursuant to Section 5.12
hereof), (b) generally not pay its debts as such debts become due, (c) make a
general assignment for the benefit of creditors, (d) apply for or consent to the
appointment of a receiver, a custodian, a trustee, an interim trustee or
liquidator of all or a substantial part of its assets, (e) be adjudicated a
debtor or have entered against it an order for relief under Title 11 of the
United States Code, as the same may be amended from time to time, (f) file a
voluntary petition in bankruptcy or file a petition or an answer seeking
reorganization or an arrangement with creditors or seeking to take advantage of
any other law (whether federal or state) relating to relief of debtors, or admit
(by answer, by default or otherwise) the material allegations of a petition
filed against it in any bankruptcy, reorganization, insolvency or other
proceeding (whether federal or state) relating to relief of debtors, (g) suffer
or permit to continue unstayed and in effect for thirty (30) consecutive days
any judgment, decree or order entered by a court of competent jurisdiction,
which approves a petition seeking its reorganization or appoints a receiver,
custodian, trustee, interim trustee or liquidator of all or a substantial part
of its assets, or (h) take, or omit to take, any action in order thereby to
effect any of the foregoing.
ARTICLE VIII. REMEDIES UPON DEFAULT
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Notwithstanding any contrary provision or inference herein or
elsewhere,
SECTION 8.1. OPTIONAL DEFAULTS. If any Event of Default referred to in
Section 7.1, 7.2., 7.3, 7.4, 7.5, 7.6, 7.7, 7.8 or 7.9 hereof shall occur, the
Required Banks shall have the right, in their discretion, by directing Agent, on
behalf of the Banks, to give written notice to Borrower, to:
(a) terminate the Commitment and the credits hereby established, if not
previously terminated, and, immediately upon such election, the obligations of
the Banks, and each thereof, to make any further Loan hereunder immediately
shall be terminated, and/or
(b) accelerate the maturity of all of the Debt (if the Debt is not
already due and payable), whereupon all of the Debt shall become and thereafter
be immediately due and payable in full without any presentment or demand and
without any further or other notice of any kind, all of which are hereby waived
by Borrower.
SECTION 8.2. AUTOMATIC DEFAULTS. If any Event of Default referred to in
Section 7.10 hereof shall occur:
(a) all of the Commitment and the credits hereby established shall
automatically and immediately terminate, if not previously terminated, and no
Bank thereafter shall be under any obligation to grant any further Loan
hereunder, and
(b) the principal of and interest then outstanding on all Notes, and
all of the Debt to the Banks, shall thereupon become and thereafter be
immediately due and payable in full (if the Debt is not already due and
payable), all without any presentment, demand or notice of any kind, which are
hereby waived by Borrower.
SECTION 8.3. OFFSETS. If there shall occur or exist any Event of
Default referred to in Section 7.10 hereof or if the maturity of the Notes is
accelerated pursuant to Section 8.1 or 8.2 hereof, each Bank shall have the
right at any time to set off against, and to appropriate and apply toward the
payment of, any and all Debt then owing by Borrower to that Bank (including,
without limitation, any participation purchased or to be purchased pursuant to
Section 8.5 hereof), whether or not the same shall then have matured, any and
all deposit balances and all other indebtedness then held or owing by that Bank
to or for the credit or account of Borrower, all without notice to or demand
upon Borrower or any other Person, all such notices and demands being hereby
expressly waived by Borrower.
SECTION 8.4. EQUALIZATION PROVISION. Each Bank agrees with the other
Banks that if it, at any time, shall obtain any Advantage over the other Banks
or any thereof in respect of the Debt (except as to Swing Loans as set forth in
subpart 2 of Section 2.1A hereof or subpart 2 of Section 2.1B hereof and except
under Article III hereof), it shall purchase from the other Banks, for cash and
at par, such additional participation in the Debt as shall be necessary to
nullify
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<PAGE> 48
the Advantage. If any such Advantage resulting in the purchase of an additional
participation as aforesaid shall be recovered in whole or in part from the Bank
receiving the Advantage, each such purchase shall be rescinded, and the purchase
price restored (but without interest unless the Bank receiving the Advantage is
required to pay interest on the Advantage to the Person recovering the Advantage
from such Bank) ratably to the extent of the recovery. Each Bank further agrees
with the other Banks that if it at any time shall receive any payment for or on
behalf of Borrower on any indebtedness owing by Borrower to that Bank by reason
of offset of any deposit or other indebtedness, it will apply such payment first
to any and all Debt owing by Borrower to that Bank (including, without
limitation, any participation purchased or to be purchased pursuant to this
Section or any other Section of this Agreement). Borrower agrees that any Bank
so purchasing a participation from the other Banks or any thereof pursuant to
this Section may exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank was a
direct creditor of Borrower in the amount of such participation.
ARTICLE IX. AGENT
The Banks authorize KeyBank National Association and KeyBank National
Association hereby agrees to act as agent for the Banks in respect of this
Agreement upon the terms and conditions set forth elsewhere in this Agreement,
and upon the following terms and conditions:
SECTION 9.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers hereunder as are delegated to Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
Neither Agent nor any of its directors, officers, attorneys or employees shall
be liable for any action taken or omitted to be taken by it or them hereunder or
in connection herewith, except for its or their own gross negligence or willful
misconduct.
SECTION 9.2. NOTE HOLDERS. Agent may treat the payee of any Note as the
holder thereof until written notice of transfer shall have been filed with it,
signed by such payee and in form satisfactory to Agent.
SECTION 9.3. CONSULTATION WITH COUNSEL. Agent may consult with legal
counsel selected by it and shall not be liable for any action taken or suffered
in good faith by it in accordance with the opinion of such counsel.
SECTION 9.4. DOCUMENTS. Agent shall not be under any duty to examine
into or pass upon the validity, effectiveness, genuineness or value of any Loan
Documents or any other Related Writing furnished pursuant hereto or in
connection herewith or the value of any collateral obtained hereunder, and Agent
shall be entitled to assume that the same are valid, effective and genuine and
what they purport to be.
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<PAGE> 49
SECTION 9.5. AGENT AND AFFILIATES. With respect to the Loans, Agent
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not Agent, and Agent and its affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with any Company or any affiliate thereof.
SECTION 9.6. KNOWLEDGE OF DEFAULT. It is expressly understood and
agreed that Agent shall be entitled to assume that no Unmatured Event of Default
or Event of Default has occurred and is continuing, unless Agent has been
notified by a Bank in writing that such Bank believes that an Unmatured Event of
Default or Event of Default has occurred and is continuing and specifying the
nature thereof.
SECTION 9.7. ACTION BY AGENT. So long as Agent shall be entitled,
pursuant to Section 9.6 hereof, to assume that no Unmatured Event of Default or
Event of Default shall have occurred and be continuing, Agent shall be entitled
to use its discretion with respect to exercising or refraining from exercising
any rights which may be vested in it by, or with respect to taking or refraining
from taking any action or actions which it may be able to take under or in
respect of, this Agreement. Agent shall incur no liability under or in respect
of this Agreement by acting upon any notice, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or to be signed by
the proper party or parties, or with respect to anything which it may do or
refrain from doing in the reasonable exercise of its judgment, or which may seem
to it to be necessary or desirable in the premises.
SECTION 9.8. NOTICES, DEFAULT, ETC. In the event that Agent shall have
acquired actual knowledge of any Unmatured Event of Default or Event of Default,
Agent shall promptly notify the Banks and shall take such action and assert such
rights under this Agreement as the Required Banks shall direct and Agent shall
inform the other Banks in writing of the action taken. Agent may take such
action and assert such rights as it deems to be advisable, in its discretion,
for the protection of the interests of the holders of the Notes.
SECTION 9.9. INDEMNIFICATION OF AGENT. The Banks agree to indemnify
Agent (to the extent not reimbursed by Borrower), ratably according to their
respective Commitment Percentages from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against Agent in its capacity as agent in any way
relating to or arising out of this Agreement or any Loan Document or any action
taken or omitted by Agent with respect to this Agreement or any Loan Document,
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorney fees) or disbursements resulting from Agent's gross
negligence, willful misconduct or from any action taken or omitted by Agent in
any capacity other than as agent under this Agreement.
SECTION 9.10. SUCCESSOR AGENT. Agent may resign as agent hereunder by
giving not fewer than thirty (30) days' prior written notice to Borrower and the
Banks. If Agent shall
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resign under this Agreement, then either (a) the Required Banks shall appoint
from among the Banks a successor agent for the Banks (with the consent of
Borrower so long as an Event of Default has not occurred and which consent shall
not be unreasonably withheld), or (b) if a successor agent shall not be so
appointed and approved within the thirty (30) day period following Agent's
notice to the Banks of its resignation, then Agent shall appoint a successor
agent who shall serve as agent until such time as the Required Banks appoint a
successor agent. Upon its appointment, such successor agent shall succeed to the
rights, powers and duties as agent, and the term "Agent" shall mean such
successor effective upon its appointment, and the former agent's rights, powers
and duties as agent shall be terminated without any other or further act or deed
on the part of such former agent or any of the parties to this Agreement.
ARTICLE X. MISCELLANEOUS
SECTION 10.1. BANKS' INDEPENDENT INVESTIGATION. Each Bank, by its
signature to this Agreement, acknowledges and agrees that Agent has made no
representation or warranty, express or implied, with respect to the
creditworthiness, financial condition, or any other condition of any Company or
with respect to the statements contained in any information memorandum furnished
in connection herewith or in any other oral or written communication between
Agent and such Bank. Each Bank represents that it has made and shall continue to
make its own independent investigation of the creditworthiness, financial
condition and affairs of the Companies in connection with the extension of
credit hereunder, and agrees that Agent has no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any credit or other
information with respect thereto (other than such notices as may be expressly
required to be given by Agent to the Banks hereunder), whether coming into its
possession before the granting of the first Loans hereunder or at any time or
times thereafter.
SECTION 10.2. NO WAIVER; CUMULATIVE REMEDIES. No omission or course of
dealing on the part of Agent, any Bank or the holder of any Note in exercising
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder. The remedies herein provided are cumulative and in addition
to any other rights, powers or privileges held by operation of law, by contract
or otherwise.
SECTION 10.3. AMENDMENTS, CONSENTS. No amendment, modification,
termination, or waiver of any provision of any Loan Document nor consent to any
variance therefrom, shall be effective unless the same shall be in writing and
signed by the Required Banks and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Anything herein to the contrary notwithstanding, unanimous consent of the Banks
shall be required with respect to (a) any increase in the Commitment hereunder
or any part thereof, (b) the extension of maturity of the Notes, the payment
date of interest thereunder, or the payment of facility or other fees or amounts
payable hereunder, (c) any reduction in the rate of interest on the Notes, or in
any amount of principal or interest due on any Note, or the payment of
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<PAGE> 51
facility or other fees hereunder or any change in the manner of pro rata
application of any payments made by Borrower to the Banks hereunder, (d) any
change in any percentage voting requirement, voting rights, or the Required
Banks definition in this Agreement, (e) the release of any Guarantor of Payment,
or (f) any amendment to this Section 10.3 or Section 8.5 hereof. Notice of
amendments or consents ratified by the Banks hereunder shall immediately be
forwarded by Borrower to all Banks. Each Bank or other holder of a Note shall be
bound by any amendment, waiver or consent obtained as authorized by this
Section, regardless of its failure to agree thereto.
SECTION 10.4. NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing and, if to Borrower,
mailed or delivered to it, addressed to it at the address specified on the
signature pages of this Agreement, if to a Bank, mailed or delivered to it,
addressed to the address of such Bank specified on the signature pages of this
Agreement, or, as to each party, at such other address as shall be designated by
such party in a written notice to each of the other parties. All notices,
statements, requests, demands and other communications provided for hereunder
shall be given by overnight delivery or first class mail with postage prepaid by
registered or certified mail, addressed as aforesaid, or sent by facsimile with
telephonic confirmation of receipt, except that all notices hereunder shall not
be effective until received.
SECTION 10.5. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on
demand all costs and expenses of Agent, including, but not limited to, (a)
administration, travel and out-of-pocket expenses, including but not limited to
attorneys fees and expenses, of Agent in connection with the preparation,
negotiation and closing of the Loan Documents and the administration of the Loan
Documents, the collection and disbursement of all funds hereunder and the other
instruments and documents to be delivered hereunder, (b) extraordinary expenses
of Agent in connection with the administration of the Loan Documents and the
other instruments and documents to be delivered hereunder, and (c) the
reasonable fees and out-of-pocket expenses of special counsel for the Banks,
with respect to the foregoing, and of local counsel, if any, who may be retained
by said special counsel with respect thereto. Borrower further agrees to pay all
costs and expenses, including reasonable attorneys' fees, of Agent or any Bank
in connection with the restructuring or enforcement of the Debt, the Loan
Documents or any Related Writing. In addition, Borrower shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution and delivery of the Loan Documents, and the other instruments
and documents to be delivered hereunder, and agrees to hold Agent and each Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.
SECTION 10.6. INDEMNIFICATION. Borrower agrees to defend, indemnify and
hold harmless Agent and the Banks from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorney fees) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against Agent or any
Bank in connection with any investigative, administrative or judicial proceeding
(whether or not such Bank or Agent shall be designated a party thereto) or any
other
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claim by any Person relating to or arising out of this Agreement or any actual
or proposed use of proceeds of the Loans or any of the Debt, or any activities
of any Company or any of their affiliates; provided that no Bank nor Agent shall
have the right to be indemnified under this Section for its own gross negligence
or willful misconduct as determined by a court of competent jurisdiction. All
obligations provided for in this Section 10.6 shall survive any termination of
this Agreement.
SECTION 10.7. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS. The
obligations of the Banks hereunder are several and not joint. Nothing contained
in this Agreement and no action taken by Agent or the Banks pursuant hereto
shall be deemed to constitute the Banks a partnership, association, joint
venture or other entity. No default by any Bank hereunder shall excuse the other
Banks from any obligation under this Agreement; but no Bank shall have or
acquire any additional obligation of any kind by reason of such default. The
relationship among Borrower and the Banks with respect to the Loan Documents and
the Related Writings is and shall be solely that of debtor and creditors,
respectively, and neither Agent nor any Bank has any fiduciary obligation toward
Borrower with respect to any such documents or the transactions contemplated
thereby.
SECTION 10.8. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
SECTION 10.9. BINDING EFFECT; BORROWER'S ASSIGNMENT. This Agreement
shall become effective when it shall have been executed by Borrower, Agent and
by each Bank and thereafter shall be binding upon and inure to the benefit of
Borrower, Agent and each of the Banks and their respective successors and
assigns, except that Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of Agent and
all of the Banks.
SECTION 10.10. BANK ASSIGNMENTS/PARTICIPATIONS.
A. Assignments of Commitments. Each Bank shall have the right at any
time or times to assign to another financial institution, without recourse, all
or a percentage of all of the following: (a) that Bank's Commitment, (b) all
Loans made by that Bank, and (c) that Bank's Notes, and any participation
purchased pursuant to subpart 2 of Section 2.1A, subpart 2 of Section 2.1B or
Section 8.5 hereof; provided, however, in each such case, that the assignor and
the assignee shall have complied with the following requirements:
(i) Prior Consent. No assignment may be consummated pursuant
to this Section 10.10 without the prior written consent of Borrower and
Agent (other than an assignment by any Bank to any affiliate of such
Bank which affiliate is either wholly-owned by such Bank or is
wholly-owned by a Person that wholly owns, either directly or
indirectly, such Bank), which consent of Borrower and Agent shall not
be unreasonably withheld; provided,
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however, that, Borrower's consent shall not be required if, at the time
of the proposed assignment, any Event of Default shall then exist.
Anything herein to the contrary notwithstanding, any Bank may at any
time make a collateral assignment of all or any portion of its rights
under the Loan Documents to a Federal Reserve Bank, and no such
assignment shall release such assigning Bank from its obligations
hereunder;
(ii) Minimum Amount. Each such assignment shall be in a
minimum amount of the lesser of Ten Million Dollars ($10,000,000) of
the assignor's Commitment and interest herein or the entire amount of
the assignor's Commitment and interest herein;
(iii) Assignment Fee; Assignment Agreement. Unless the
assignment shall be to an affiliate of the assignor or the assignment
shall be due to merger of the assignor or for regulatory purposes,
either the assignor or the assignee shall remit to Agent, for its own
account, an administrative fee of Three Thousand Five Hundred Dollars
($3,500). Unless the assignment shall be due to merger of the assignor
or a collateral assignment for regulatory purposes, the assignor shall
(A) cause the assignee to execute and deliver to Borrower and Agent an
Assignment Agreement, and (B) execute and deliver, or cause the
assignee to execute and deliver, as the case may be, to Agent such
additional amendments, assurances and other writings as Agent may
reasonably require; and
(iv) Non-U.S. Assignee. If the assignment is to be made to an
assignee which is organized under the laws of any jurisdiction other than the
United States or any state thereof, the assignor Bank shall cause such assignee,
at least five (5) Business Days prior to the effective date of such assignment,
(A) to represent to the assignor Bank (for the benefit of the assignor Bank,
Agent and Borrower) that under applicable law and treaties no taxes will be
required to be withheld by Agent, Borrower or the assignor with respect to any
payments to be made to such assignee in respect of the Loans hereunder, (B) to
furnish to the assignor (and, in the case of any assignee registered in the
Register (as defined below), Agent and Borrower) either(1) U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 1001 or (2) United
States Internal Revenue Service Form W-8 or W-9, as applicable (wherein such
assignee claims entitlement to complete exemption from U.S. federal withholding
tax on all interest payments hereunder), and (C) to agree (for the benefit of
the assignor, Agent and Borrower) to provide the assignor Bank (and, in the case
of any assignee registered in the Register, Agent and Borrower) a new Form 4224
or Form 1001 or Form W-8 or W-9, as applicable, upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such assignee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
Upon satisfaction of the requirements specified in clauses (i) through
(iv) above, Borrower shall execute and deliver (A) to Agent, the assignor and
the assignee, any consent or release (of all or a portion of the obligations of
the assignor) required to be delivered by Borrower in connection with the
Assignment Agreement, and (B) to the assignee, an appropriate Note or Notes.
After
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delivery of the new Note or Notes, the assignor's Note or Notes being replaced
shall be returned to Borrower marked "replaced".
Upon satisfaction of the requirements of set forth in (i) through (iv),
and any other condition contained in this Section 10.10A, (A) the assignee shall
become and thereafter be deemed to be a "Bank" for the purposes of this
Agreement, (B) in the event that the assignor's entire interest has been
assigned, the assignor shall cease to be and thereafter shall no longer be
deemed to be a "Bank" and (C) the signature pages hereto and SCHEDULE 1 hereto
shall be automatically amended, without further action, to reflect the result of
any such assignment.
Agent shall maintain at its address referred to in Section 10.4 a copy
of each Assignment Agreement delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment of,
and principal amount of the Loans owing to, each Bank from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and Borrower, Agent and the Banks may treat each financial institution whose
name is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement. The Register shall be available for inspection
by Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
B. Sale of Participations. Each Bank shall have the right at any time
or times, without the consent of Agent or Borrower, to sell one or more
participations or sub-participations to a financial institution, as the case may
be, in all or any part of (a) that Bank's Commitment, (b) that Bank's Commitment
Percentage, (c) any Loan made by that Bank, and (d) any Note delivered to that
Bank pursuant to this Agreement, and any participation, if any, purchased
pursuant to subpart 2 of Section 2.1A or Section 8.5 hereof or this Section
10.10B.
The provisions of Article III and Section 10.6 shall inure to the
benefit of each purchaser of a participation or sub-participation and Agent
shall continue to distribute payments pursuant to this Agreement as if no
participation has been sold.
If any Bank shall sell any participation or sub-participation, that
Bank shall, as between itself and the purchaser, retain all of its rights
(including, without limitation, rights to enforce against the Borrower the Loan
Documents and the Related Writings) and duties pursuant to the Loan Documents
and the Related Writings, including, without limitation, that Bank's right to
approve any waiver, consent or amendment pursuant to Section 10.3, except if and
to the extent that any such waiver, consent or amendment would:
(i) reduce any fee or commission allocated to the participation or
sub-participation, as the case may be,
(ii) reduce the amount of any principal payment on any Loan
allocated to the participation or sub-participation, as the
case may be, or reduce the principal amount of any Loan so
allocated or the rate of interest payable thereon, or
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(iii) extend the time for payment of any amount allocated to the
participation or sub- participation, as the case may be.
No participation or sub-participation shall operate as a delegation of
any duty of the seller thereof. Under no circumstance shall any participation or
sub-participation be deemed a novation in respect of all or any part of the
seller's obligations pursuant to this Agreement.
SECTION 10.11. SEVERABILITY OF PROVISIONS; CAPTIONS. Any provision of
this Agreement that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several captions to Sections and subsections herein are
inserted for convenience only and shall be ignored in interpreting the
provisions of this Agreement.
SECTION 10.12. INVESTMENT PURPOSE. Each of the Banks represents and
warrants to Borrower that it is entering into this Agreement with the present
intention of acquiring any Note issued pursuant hereto for investment purposes
only and not for the purpose of distribution or resale, it being understood,
however, that each Bank shall at all times retain full control over the
disposition of its assets.
SECTION 10.13. ENTIRE AGREEMENT. This Agreement, any Note and any other
Loan Document or other agreement, document or instrument attached hereto or
executed on or as of the Closing Date integrate all the terms and conditions
mentioned herein or incidental hereto and supersede all oral representations and
negotiations and prior writings with respect to the subject matter hereof.
SECTION 10.14. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement, each of the Notes and any Related Writing shall be governed by and
construed in accordance with the laws of the State of Ohio and the respective
rights and obligations of Borrower and the Banks shall be governed by Ohio law,
without regard to principles of conflict of laws. Borrower hereby irrevocably
submits to the non-exclusive jurisdiction of any Ohio state or federal court
sitting in Cleveland, Ohio, over any action or proceeding arising out of or
relating to this Agreement, the Debt or any Related Writing, and Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Ohio state or federal court. Borrower, on behalf
of itself and its Subsidiaries, hereby irrevocably waives, to the fullest extent
permitted by law, any objection it may now or hereafter have to the laying of
venue in any action or proceeding in any such court as well as any right it may
now or hereafter have to remove such action or proceeding, once commenced, to
another court on the grounds of FORUM NON CONVENIENS or otherwise. Borrower
agrees that a final, nonappealable judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
SECTION 10.15. LEGAL REPRESENTATION OF PARTIES. The Loan Documents were
negotiated by the parties with the benefit of legal representation.
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SECTION 10.16. JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE BANKS
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR
ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
<TABLE>
<S> <C>
Address: 5960 Heisley Road STERIS CORPORATION
Mentor, Ohio 44060
Attention: Chief Financial By: /s/ Bill R. Sanford
Officer -------------------------------------
Bill R. Sanford, Chairman of the
Board, President, and Chief
Executive Officer
and /s/ Michael A. Keresman, III
-------------------------------------
Michael A. Keresman, III, Senior
Vice President and Chief Financial
Officer
Address: Key Center KEYBANK NATIONAL ASSOCIATION,
127 Public Square as Agent and as a Bank
Cleveland, Ohio 44114
Attention: Large Corporate By: /s/ J.T. Taylor
Banking Division -------------------------------------
J.T. Taylor, Vice President
Address: 1900 East Ninth Street NATIONAL CITY BANK,
7th Floor, Locator: 2077 as a Bank and as Documentation Agent
Cleveland, Ohio 44114
Attention: Large Corporate By: /s/ Terri L. Cable
Group -------------------------------------
Terri L. Cable, Senior Vice President
Address: 600 Superior Avenue BANK ONE, NA,
Cleveland, Ohio 44114-2650 as a Bank and as Syndication Agent
Attention:_______________
By: /s/ Babette Casey Coerdt
-------------------------------------
Vice President and Group Manager
</TABLE>
51
<PAGE> 57
<TABLE>
<S> <C> <C>
Address: One Cleveland Center PNC BANK, NATIONAL ASSOCIATION,
1375 E. 9th Street, Ste. 1250 as a Bank and as Co-Agent
Cleveland, Ohio 44114
Attention: Corporate Banking By: /s/ Bryon A. Pike
-------------------------------------
Vice President
Address: Pittsburgh Branch ABN AMRO BANK N.V.,
One PPG Place, Ste. 2950 PITTSBURGH BRANCH,
Pittsburgh, PA 15222-5400 as a Bank and as Co-Agent
By: /s/ D. Hasbrook
------------------------------------
Group Vice President and Director
Address: THE BANK OF NEW YORK
-----------------------
----------------------- By: /s/ Robert Joyce
----------------------- ------------------------------------
Attention: Corporate Banking Vice President
Address: HARRIS TRUST AND SAVINGS BANK
-----------------------
----------------------- By: /s/ Kwang S. Son
----------------------- ------------------------------------
Attention: Corporate Banking Assistant Vice President
</TABLE>
52
<PAGE> 58
SCHEDULE 1
<TABLE>
<CAPTION>
TRANCHE A TRANCHE B
COMMITMENT COMMITMENT COMMITMENT
BANKING INSTITUTIONS PERCENTAGE AMOUNT AMOUNT MAXIMUM AMOUNT
-------------------- ---------- ------ ------ --------------
<S> <C> <C> <C> <C>
KeyBank National 20.00% $ 50,000,000 $ 30,000,000 $ 80,000,000
Association
National City Bank 18.75% $ 46,875,000 $ 28,125,000 $ 75,000,000
Bank One, NA 18.75% $ 46,875,000 $ 28,125,000 $ 75,000,000
ABN AMRO Bank N.V., 12.50% $ 31,250,000 $ 18,750,000 $ 50,000,000
Pittsburgh Branch
PNC Bank, National 12.50% $ 31,250,000 $ 18,750,000 $ 50,000,000
Association
The Bank of New York 8.75% $ 21,875,000 $ 13,125,000 $ 35,000,000
Harris Trust and Savings 8.75% $ 21,875,000 $ 13,125,000 $ 35,000,000
Bank
100.00% $250,000,000 $150,000,000 $400,000,000
Total Commitment Amount $400,000,000
</TABLE>
53
<PAGE> 59
SCHEDULE 2
GUARANTORS OF PAYMENT
Medical & Environmental Designs, Inc., a Missouri corporation
Ecomed, Inc., an Indiana corporation
American Sterilizer Company, a Pennsylvania corporation
STERIS International Sales Corporation, a Delaware corporation
STERIS Europe, Inc., a Delaware corporation
STERIS Asia Pacific, Inc., a Delaware corporation
STERIS Latin America, Inc., a Delaware corporation
STERIS Inc., a Delaware corporation
STERIS USA Distribution Corporation, an Ohio corporation
Calgon Vestal, Inc., a Delaware corporation
HTD Holding Corp., a Delaware corporation
HSTD LLC, a Delaware limited liability company
Hausted, Inc., a Delaware corporation
Isomedix Inc., a Delaware corporation
Isomedix Operations Inc., a Delaware corporation
Isomedix (Puerto Rico), Inc., a Delaware corporation
Surgicot, Inc., a Delaware corporation
54
<PAGE> 60
EXHIBIT A
TRANCHE A NOTE
$ Cleveland, Ohio
January 26, 1999
FOR VALUE RECEIVED, the undersigned, STERIS CORPORATION, an Ohio
corporation, ("Borrower"), promises to pay on the last day of the Commitment
Period, as defined in the Credit Agreement (as hereinafter defined), to the
order of __________________ ("Bank") at the Main Office of KEYBANK NATIONAL
ASSOCIATION, as Agent, 127 Public Square, Cleveland, Ohio 44114-1306 the
principal sum of
...................................................................... DOLLARS
or the aggregate unpaid principal amount of all Tranche A Loans made by Bank to
Borrower pursuant to Section 2.1A of the Credit Agreement, whichever is less, in
lawful money of the United States of America. As used herein,"Credit Agreement"
means the Credit Agreement dated as of January 26, 1999, among Borrower, the
banks named therein and KeyBank National Association, as Agent, as the same may
from time to time be amended, restated or otherwise modified. Capitalized terms
used herein shall have the meanings ascribed to them in the Credit Agreement.
Borrower also promises to pay interest on the unpaid principal amount
of each Tranche A Loan from time to time outstanding, from the date of such
Tranche A Loan until the payment in full thereof, at the rates per annum which
shall be determined in accordance with the provisions of Section 2.1A of the
Credit Agreement. Such interest shall be payable on each date provided for in
such Section 2.1A; provided, however, that interest on any principal portion
which is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing
Prime Rate Loans and LIBOR Loans, and payments of principal of any thereof,
shall be shown on the records of Bank by such method as Bank may generally
employ; provided, however, that failure to make any such entry shall in no way
detract from Borrower's obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the Credit Agreement, the principal hereof
and the unpaid interest thereon shall bear interest, until paid, at a rate per
annum equal to the Default Rate. All payments of principal of and interest on
this Note shall be made in immediately available funds.
This Note is one of the Tranche A Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.
55
<PAGE> 61
Except as expressly provided in the Credit Agreement, Borrower
expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE BANKS WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
STERIS CORPORATION
By:
-------------------------------------
Bill R. Sanford, Chairman of the
Board, President, and Chief
Executive Officer
and
-------------------------------------
Michael A. Keresman, III, Senior
Vice President and Chief Financial
Officer
56
<PAGE> 62
EXHIBIT B
SWING LINE NOTE
$5,000,000 Cleveland, Ohio
January 26, 1999
FOR VALUE RECEIVED, the undersigned, STERIS CORPORATION, an Ohio
corporation ("Borrower"), promises to pay to the order of KEYBANK NATIONAL
ASSOCIATION ("Bank") at the Main Office of KEYBANK NATIONAL ASSOCIATION, Agent,
127 Public Square, Cleveland, Ohio 44114-1306 the principal sum of
FIVE MILLION AND 00/100.............................................. DOLLARS
or, if less, the aggregate unpaid principal amount of all Swing Loans, as
defined in the Credit Agreement (as hereinafter defined) made by Bank to
Borrower pursuant to subpart 2 of Section 2.1A or subpart 2 of Section 2.1B of
the Credit Agreement, in lawful money of the United States of America on the
earlier of the last day of the Commitment Period, as defined in the Credit
Agreement, or, with respect to each Swing Loan, the Swing Loan Maturity Date
applicable thereto. As used herein, "Credit Agreement" means the Credit
Agreement dated as of January 26, 1999, among Borrower, the banks named therein
and KeyBank National Association, as Agent, as the same may from time to time be
amended, restated or otherwise modified. Capitalized terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
Borrower also promises to pay interest on the unpaid principal amount
of each Swing Loan from time to time outstanding, from the date of such Swing
Loan until the payment in full thereof, at the rates per annum which shall be
determined in accordance with the provisions of subpart 2 of Section 2.1A of the
Credit Agreement. Such interest shall be payable on each date provided for in
such subpart 2 of such Section 2.1A; provided, however, that interest on any
principal portion which is not paid when due shall be payable on demand.
The principal sum hereof from time to time and the payments of
principal and interest thereon of either hereof, shall be shown on the records
of Bank by such method as Bank may generally employ; provided, however, that
failure to make any such entry shall in no way detract from Borrower's
obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the Credit Agreement, the principal hereof
and the unpaid interest thereon shall bear interest, until paid, at a rate per
annum equal to the Default Rate. All payments of principal of and interest on
this Note shall be made in immediately available funds.
This Note is the Swing Line Note referred to in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the right of the
undersigned to anticipate payments
57
<PAGE> 63
hereof, the right of the holder hereof to declare this Note due prior to its
stated maturity, and other terms and conditions upon which this Note is issued.
Except as expressly provided in the Credit Agreement, Borrower
expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE BANKS WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
STERIS CORPORATION
By:
------------------------------------------
Bill R. Sanford, Chairman of the
Board, President, and Chief
Executive Officer
and
------------------------------------------
Michael A. Keresman, III, Senior
Vice President and Chief Financial
Officer
58
<PAGE> 64
EXHIBIT C
TRANCHE B NOTE
$ Cleveland, Ohio
January 26, 1999
FOR VALUE RECEIVED, the undersigned, STERIS CORPORATION, an Ohio
corporation, ("Borrower"), promises to pay on the last day of the Commitment
Period, as defined in the Credit Agreement (as hereinafter defined), to the
order of __________________ ("Bank") at the Main Office of KEYBANK NATIONAL
ASSOCIATION, as Agent, 127 Public Square, Cleveland, Ohio 44114-1306 the
principal sum of
..................................................................... DOLLARS
or the aggregate unpaid principal amount of all Tranche B Loans made by Bank to
Borrower pursuant to Section 2.1B of the Credit Agreement, whichever is less, in
lawful money of the United States of America. As used herein,"Credit Agreement"
means the Credit Agreement dated as of January 26, 1999, among Borrower, the
banks named therein and KeyBank National Association, as Agent, as the same may
from time to time be amended, restated or otherwise modified. Capitalized terms
used herein shall have the meanings ascribed to them in the Credit Agreement.
Borrower also promises to pay interest on the unpaid principal amount
of each Tranche B Loan from time to time outstanding, from the date of such
Tranche B Loan until the payment in full thereof, at the rates per annum which
shall be determined in accordance with the provisions of Section 2.1B of the
Credit Agreement. Such interest shall be payable on each date provided for in
such Section 2.1B; provided, however, that interest on any principal portion
which is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing
Prime Rate Loans and LIBOR Loans, and payments of principal of any thereof,
shall be shown on the records of Bank by such method as Bank may generally
employ; provided, however, that failure to make any such entry shall in no way
detract from Borrower's obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the Credit Agreement, the principal hereof
and the unpaid interest thereon shall bear interest, until paid, at a rate per
annum equal to the Default Rate. All payments of principal of and interest on
this Note shall be made in immediately available funds.
This Note is one of the Tranche B Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.
59
<PAGE> 65
Except as expressly provided in the Credit Agreement, Borrower
expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE BANKS WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
STERIS CORPORATION
By:
-------------------------------------
Bill R. Sanford, Chairman of the
Board, President, and Chief
Executive Officer
and
-------------------------------------
Michael A. Keresman, III, Senior
Vice President and Chief Financial
Officer
60
<PAGE> 66
EXHIBIT D
COMPLIANCE CERTIFICATE
For Fiscal Quarter ended ____________________
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) I am the duly elected President or Chief Financial Officer of
STERIS CORPORATION, an Ohio corporation ("Borrower");
(2) I am familiar with the terms of that certain Credit Agreement,
dated as of January 26, 1999, among the undersigned, the Banks, as defined in
the Credit Agreement, and KeyBank National Association, as Agent (as the same
may from time to time be amended, restated or otherwise modified, the "Credit
Agreement", the terms defined therein and not otherwise defined in this
Certificate being used herein as therein defined), and the terms of the other
Loan Documents, and I have made, or have caused to be made under my supervision,
a review in reasonable detail of the transactions and condition of Borrower and
its Subsidiaries during the accounting period covered by the attached financial
statements;
(3) The review described in paragraph (2) above did not disclose, and I
have no knowledge of, the existence of any condition or event that constitutes
or constituted an Unmatured Event of Default or Event of Default, at the end of
the accounting period covered by the attached financial statements or as of the
date of this Certificate;
(4) Borrower hereby represents that the representations and warranties
made by the Borrower contained in each Loan Document are true and correct as
though made on and as of the date hereof; and,
(5) Set forth on Attachment I hereto are calculations of the financial
covenants set forth in Section 5.7 of the Credit Agreement, which calculations
show compliance with the terms thereof.
IN WITNESS WHEREOF, I have signed this certificate the ___ day of
_________, 19___.
STERIS CORPORATION
By:
-------------------------------------
Title:
-----------------------------------
61
<PAGE> 67
EXHIBIT E
NOTICE OF LOAN
_______________________, 19____
KeyBank National Association, as Agent
127 Public Square
Cleveland, Ohio 44114-0616
Attention:
Ladies and Gentlemen:
The undersigned, STERIS CORPORATION, refers to the Credit Agreement,
dated as of January 26, 1999 ("Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, the Banks, as
defined in the Credit Agreement, and KeyBank National Association, as Agent, and
hereby gives you notice, pursuant to Section 2.2 of the Credit Agreement that
the undersigned hereby requests a Loan under the Credit Agreement, and in
connection therewith sets forth below the information relating to the Loan (the
"Proposed Loan") as required by Section 2.2 of the Credit Agreement:
(a) The Business Day of the Proposed Loan is __________, 19__.
(b) The amount of the Proposed Loan is $_______________.
(c) If applicable, the Proposed Loan is to be a Tranche A
Loan____/Tranche B Loan___*/Swing Loan_____. (Check one.)
(d) The Proposed Loan is to be a Prime Rate Loan ____ /LIBOR Loan ___.
(Check one.)
(e) If the Proposed Loan is a LIBOR Loan, the Interest Period
requested is one month ___, two months ___, three months ___, six
months ____ (Check one.)
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Loan:
(i) the representations and warranties contained in each Loan
Document are correct, before and after giving effect to the Proposed
Loan and the application of the proceeds therefrom, as though made on
and as of such date;
- ---------------------------------
* Tranche B Loans only available if the Tranche A Commitment has been fully
funded.
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<PAGE> 68
(ii) no event has occurred and is continuing, or would result
from such Proposed Loan, or the application of proceeds therefrom,
which constitutes an Unmatured Event of Default or Event of Default;
and
(iii) the conditions set forth in Section 2.2 and Article IV
of the Credit Agreement have been satisfied.
Very truly yours,
STERIS CORPORATION
By:
Title:
----------------------------------
63
<PAGE> 69
EXHIBIT F
REQUEST FOR EXTENSION
[Date]_______________________, _____
KeyBank National Association, as Agent
127 Public Square
Cleveland, Ohio 44114
Attention: __________________
Ladies and Gentlemen:
The undersigned, STERIS CORPORATION, refers to the Credit Agreement,
dated as of January 26, 1999 ("Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, the Banks, as
defined in the Credit Agreement, and KeyBank National Association, as Agent, and
hereby gives you notice, pursuant to Section 2.9 of the Credit Agreement that
the undersigned hereby requests an extension as set forth below (the
"Extension") under the Credit Agreement, and in connection with the Extension
sets forth below the information relating to the Extension as required by
Section 2.9 of the Credit Agreement. The undersigned hereby requests Bank to:
(a) ____ Extend the Commitment Period applicable to the Tranche A
Commitment from _______ to ________.
(b) ____ Extend the Commitment Period applicable to the Tranche B
Commitment from _______ to ________.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Extension: (i) the
representations and warranties contained in each Loan Document are correct,
before and after giving effect to the Extension and the application of the
proceeds therefrom, as though made on and as of such date; (ii) no event has
occurred and is continuing, or would result from such Extension, or the
application of proceeds therefrom, which constitutes an Unmatured Event of
Default or Event of Default; and (iii) the conditions set forth in Section 2.2
and Article IV of the Credit Agreement have been satisfied.
Very truly yours,
STERIS CORPORATION
By:
-------------------------------------
Title:
----------------------------------
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<PAGE> 70
EXHIBIT G
FORM OF
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This Assignment and Acceptance Agreement (this "Assignment Agreement")
between ______________________ (the "Assignor") and ______________________ (the
"Assignee") is dated as of ________, 199_. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. Assignor is a party to a Credit Agreement,
dated as of January 26, 1999 (which, as it may from time to time be amended,
restated or otherwise modified is herein called the "Credit Agreement"), among
STERIS CORPORATION, an Ohio corporation ("Borrower"), the banking institutions
named on SCHEDULE 1 thereto (collectively, "Banks" and, individually, "Bank"),
and KEYBANK NATIONAL ASSOCIATION, as agent for the Banks ("Agent"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. Assignor hereby sells and assigns to
Assignee, and Assignee hereby purchases and assumes from Assignor, an interest
in and to Assignor's rights and obligations under the Credit Agreement,
effective as of the Assignment Effective Date (as hereinafter defined), equal to
the percentage interest specified on ANNEX 1 hereto (hereinafter, "Assignee's
Percentage") of Assignor's right, title and interest in and to (a) the
Commitment of Assignor as set forth on ANNEX 1 (hereinafter, "Assigned Amount"),
(b) any Loan made by Assignor which is outstanding on the Assignment Effective
Date, (c) any Note delivered to Assignor pursuant to the Credit Agreement, and
(d) the Credit Agreement and the other Related Writings. After giving effect to
such sale and assignment and on and after the Assignment Effective Date,
Assignee shall be deemed to have a "Commitment Percentage" under the Credit
Agreement equal to the Commitment Percentage set forth in subparts I.C on Annex
1 hereto.
3. ASSIGNMENT EFFECTIVE DATE. The Assignment Effective Date (the
"Assignment Effective Date") shall be two (2) Business Days (or such other time
agreed to by Agent) after the following conditions precedent have been
satisfied:
(a) receipt by Agent of this Assignment Agreement, including Annex 1
hereto, properly executed by Assignor and Assignee and accepted and consented to
by Agent and, if necessary pursuant to the provisions of Section 10.10(A)(i) of
the Credit Agreement, by Borrower;
(b) receipt by Agent from Assignor of a fee of Three Thousand Five
Hundred Dollars ($3,500), in accordance with Section 10.10A of the Credit
Agreement;
(c) receipt by Agent from Assignee of an administrative questionnaire,
or other similar document, which shall include (i) the address for notices under
the Credit Agreement, (ii) the address
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<PAGE> 71
of its Lending Office, (iii) wire transfer instructions for delivery of funds by
Agent, (iv) and such other information as Agent shall request; and
(d) receipt by Agent from Assignor or Assignee of any other information
required pursuant to Section 10.10 of the Credit Agreement or otherwise
necessary to complete the transaction contemplated hereby.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of
Loans hereunder, Assignee shall pay Assignor, on the Assignment Effective Date,
an amount in Dollars equal to Assignee's Percentage. Any interest, fees and
other payments accrued prior to the Assignment Effective Date with respect to
the Assigned Amount shall be for the account of Assignor. Any interest, fees and
other payments accrued on and after the Assignment Effective Date with respect
to the Assigned Amount shall be for the account of Assignee. Each of Assignor
and Assignee agrees that it will hold in trust for the other part any interest,
fees or other amounts which it may receive to which the other party is entitled
pursuant to the preceding sentence and to pay the other party any such amounts
which it may receive promptly upon receipt thereof.
5. CREDIT DETERMINATION; LIMITATIONS ON ASSIGNOR'S LIABILITY. Assignee
represents and warrants to Assignor, Borrower, Agent and the other Banks (a)
that it is capable of making and has made and shall continue to make its own
credit determinations and analysis based upon such information as Assignee
deemed sufficient to enter into the transaction contemplated hereby and not
based on any statements or representations by Assignor, (b) Assignee confirms
that it meets the requirements to be an assignee as set forth in Section 10.10
of the Credit Agreement; (c) Assignee confirms that it is able to fund the Loans
as required by the Credit Agreement; (d) Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement and the Related Writings are required to be performed by it as
a Bank thereunder; and (e) Assignee represents that it has reviewed each of the
Loan Documents. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to Assignor and that Assignor makes no
representation or warranty of any kind to Assignee and shall not be responsible
for (i) the due execution, legality, validity, enforceability, genuineness,
sufficiency or collectability of the Credit Agreement or any Related Writings,
(ii) any representation, warranty or statement made in or in connection with the
Credit Agreement or any of the Related Writings, (iii) the financial condition
or creditworthiness of Borrower or any Guarantor of Payment, (iv) the
performance of or compliance with any of the terms or provisions of the Credit
Agreement or any of the Related Writings, (v) inspecting any of the property,
books or records of Borrower, or (vi) the validity, enforceability, perfection,
priority, condition, value or sufficiency of any collateral securing or
purporting to secure the Loans. Neither Assignor nor any of its officers,
directors, employees, agents or attorneys shall be liable for any mistake, error
of judgment, or action taken or omitted to be taken in connection with the
Loans, the Credit Agreement or the Related Writings, except for its or their own
bad faith or willful misconduct. Assignee appoints Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement as
are delegated to Agent by the terms thereof.
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<PAGE> 72
6. INDEMNITY. Assignee agrees to indemnify and hold Assignor harmless
against any and all losses, cost and expenses (including, without limitation,
attorneys' fees) and liabilities incurred by Assignor in connection with or
arising in any manner from Assignee's performance or non-performance of
obligations assumed under this Assignment Agreement.
7. SUBSEQUENT ASSIGNMENTS. After the Assignment Effective Date,
Assignee shall have the right pursuant to Section 10.10 of the Credit Agreement
to assign the rights which are assigned to Assignee hereunder, provided that (a)
any such subsequent assignment does not violate any of the terms and conditions
of the Credit Agreement, any of the Related Writings, or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Credit Agreement or any of the Related Writings
has been obtained, (b) the assignee under such assignment from Assignee shall
agree to assume all of Assignee's obligations hereunder in a manner satisfactory
to Assignor and (c) Assignee is not thereby released from any of its obligations
to Assignor hereunder.
8. REDUCTIONS OF AGGREGATE AMOUNT OF COMMITMENTS. If any reduction in
the Total Commitment Amount occurs between the date of this Assignment Agreement
and the Assignment Effective Date, the percentage of the Total Commitment Amount
assigned to Assignee shall remain the percentage specified in Section 1 hereof
and the dollar amount of the Commitment of Assignee shall be recalculated based
on the reduced Total Commitment Amount.
9. ACCEPTANCE OF AGENT; NOTICE BY ASSIGNOR. This Assignment Agreement
is conditioned upon the acceptance and consent of Agent and, if necessary
pursuant to Section 10.10A of the Credit Agreement, upon the acceptance and
consent of Borrower; provided, that the execution of this Assignment Agreement
by Agent and, if necessary, by Borrower is evidence of such acceptance and
consent.
10. ENTIRE AGREEMENT. This Assignment Agreement embodies the entire
agreement and understanding between the parties hereto and supersede all prior
agreements and understandings between the parties hereto relating to the subject
matter hereof.
11. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Ohio.
12. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth under each party's name on the signature pages hereof.
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<PAGE> 73
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
ASSIGNOR:
Address: --------------------------- ----------------------------------
---------------------------
---------------------------
Attn: By:
---------------------- -------------------------------
Phone: Title:
--------------------- ----------------------------
Fax:
-----------------------
ASSIGNEE:
Address: --------------------------- ----------------------------------
---------------------------
---------------------------
Attn: By:
---------------------- -------------------------------
Phone: Title:
--------------------- ----------------------------
Fax:
-----------------------
Accepted and Consented to this ___ day
of ___, 199_:
KEYBANK NATIONAL ASSOCIATION,
as Agent
By:
--------------------------
Title:
------------------------
Accepted and Consented to this ___ day
of _______, 19__:
STERIS CORPORATION
By:
--------------------------
Title:
------------------------
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<PAGE> 74
ANNEX 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
On and after ___________, 199_ (the "Assignment Effective Date"), the
Commitment of Assignee, and, if this is less than an assignment of all of
Assignor's interest, Assignor, shall be as follows:
I. ASSIGNEE'S COMMITMENT
A. Assignee's Percentage __________%
B. Assigned Amount $__________
C. Assignee's Commitment Percentage
under the Credit Agreement __________%
II. ASSIGNOR'S COMMITMENT
A. Assignor's Commitment Percentage
under the Credit Agreement __________%
B. Assignor's Commitment Amount
under the Credit Agreement $__________
69
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
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