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 March 29, 1996. Commission File Number 0-16093
CONMED CORPORATION
(Exact name of the registrant as specified in its charter)
New York 16-0977505
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
310 Broad Street, Utica, New York 13501
(Address of principal executive offices) (Zip Code)
(315) 797-8375
(Registrant's telephone number, 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 shares outstanding of registrant's common stock, as of
April 22, 1996 is 14,906,140 shares.
<PAGE>
CONMED CORPORATION
TABLE OF CONTENTS
FORM 10-Q
PART I FINANCIAL INFORMATION
Item Number
Item 1. Financial Statements
- Consolidated Statements of Income
- Consolidated Balance Sheets
- Consolidated Statements of Cash Flows
- Notes to Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit Index
<PAGE>
Item 1.
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(thousands except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
For the three months ended
--------------------------
March 31, March 29,
1995 1996
-------- --------
<S> <C> <C>
Net sales .......................................... $ 19,753 $ 29,200
-------- --------
Cost and expenses:
Cost of sales .................................... 10,725 15,167
Selling and administrative ....................... 5,338 7,556
Research and development ......................... 664 683
-------- --------
Total operating expenses .................. 16,727 23,406
-------- --------
Income from operations ............................. 3,026 5,794
Interest income (expense), net ..................... (194) (682)
-------- --------
Income before taxes ................................ 2,832 5,112
Provision for income taxes ......................... 992 1,840
-------- --------
Net income ......................................... $ 1,840 $ 3,272
======== ========
Weighted average common shares and equivalents ..... 10,383 12,570
======== ========
Earnings per share ................................. $ .18 $ .26
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONMED CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
(unaudited)
<TABLE>
<CAPTION>
December 29, March 29,
1995 1996
-------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents ............................ $ 1,539 $ 11,549
Accounts receivable, net ............................. 22,649 23,933
Income taxes receivable .............................. 961
Inventories (Note 4) ................................. 20,943 24,243
Deferred income taxes ................................ 2,678 2,678
Prepaid expenses and other current assets ............ 476 513
-------- --------
Total current assets .......................... 49,246 62,916
Property, plant and equipment, net ..................... 19,728 29,127
Deferred income taxes .................................. 2,907 2,907
Covenant not to compete ................................ 1,153 1,043
Goodwill ............................................... 41,438 60,124
Patents, trademarks, and other assets .................. 4,931 6,456
-------- --------
Total assets .................................. $119,403 $162,573
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt .................... $ 6,000 $ --
Accounts payable ..................................... 2,351 2,932
Income taxes payable ................................. 1,297
Accrued payroll and withholdings ..................... 2,282 3,644
Accrued pension ...................................... 274 467
Other current liabilities ............................ 989 2,885
-------- --------
Total current liabilities ..................... 11,896 11,225
Long-term debt ......................................... 26,340
Accrued pension ........................................ 276 276
Deferred compensation .................................. 868 896
Long-term leases ....................................... 3,521 3,384
Other long-term liabilities ............................ 1,500 1,496
-------- --------
44,401 17,277
-------- --------
</TABLE>
<PAGE>
CONMED CORPORATION
CONSOLIDATED BALANCE SHEETS -- Continued
(in thousands except share amounts)
(unaudited)
<TABLE>
<CAPTION>
December 29, March 29,
1995 1996
-------- --------
<S> <C> <C>
Shareholders' equity:
Preferred stock, par value $.01 per share;
authorized 500,000 shares; none outstanding ... -- --
Common stock, par value $.01 per share;
20,000,000 authorized; 11,000,105 and
14,885,090 issued and outstanding in
1995 and 1996, respectively ...................... 110 149
Paid-in capital ...................................... 44,560 111,543
Retained earnings .................................... 30,332 33,604
-------- --------
75,002 145,296
-------- --------
Total liabilities and shareholders' equity .......... $119,403 $162,573
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the three months ended
--------------------------
March 31, March 29,
1995 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income ......................................... $ 1,840 $ 3,272
-------- --------
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation ................................ 641 800
Amortization ................................ 300 631
Increase (decrease) in cash flows
from changes in assets and liabilities
Accounts receivable ................ (299) 1,290
Inventories ........................ (923) (445)
Prepaid expenses and
other current assets ............. (380) 117
Other assets ....................... (68) (1,244)
Accounts payable ................... 346 581
Income taxes payable ............... 896 2,258
Income tax benefit of stock
option exercises ................. -- 1,032
Accrued payroll and withholdings ... (472) 1,362
Accrued pension .................... 139 193
Accrued patent litigation costs .... (1) --
Other current liabilities .......... 379 (1,337)
Deferred compensation and
other long-term liabilities ...... 129 (273)
-------- --------
687 4,965
-------- --------
Net cash provided by operating activities ... 2,527 8,237
-------- --------
Cash flows from investing activities:
Cash used to liquidate liabilities
associated with the Birtcher acquisition ......... (8,282) --
Acquisition of NDM, net of cash acquired ........... -- (30,721)
Acquisition of property, plant, and equipment ...... (1,684) (1,015)
-------- --------
Net cash used by investing activities ....... (9,966) (31,736)
-------- --------
</TABLE>
<PAGE>
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS -- Continued
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the three months ended
--------------------------
March 31, March 29,
1995 1996
-------- --------
<S> <C> <C>
Cash flows from financing activities:
Proceeds of long term debt ......................... 11,250 32,660
Proceeds from issuance of common stock ............. -- 65,990
Payments on long-term debt and leases .............. (6,471) (65,141)
-------- --------
Net cash provided by financing activities ...... 4,779 33,509
-------- --------
Net increase (decrease) in cash
and cash equivalents ............................... (2,660) 10,010
Cash and cash equivalents at beginning of year ....... 3,615 1,539
-------- --------
Cash and cash equivalents at end of period ........... $ 955 $ 11,549
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the quarter for:
Interest .................................. $ 9 $ 882
Income taxes .............................. 163 124
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONMED CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Consolidation
The consolidated financial statements include the accounts of CONMED
Corporation (the Company), and its subsidiaries. The Company is primarily
engaged in the development, manufacturing and marketing of disposable medical
products and related devices. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Note 2 - Interim financial information
The statements for the three months ended March 31, 1995 and March 29,
1996 are unaudited; in the opinion of the Company such unaudited statements
include all adjustments (which comprise only normal recurring accruals)
necessary for a fair presentation of the results for such periods. The
consolidated financial statements for the year ending December 27, 1996 are
subject to adjustment at the end of the year when they will be audited by
independent accountants. The results of operations for the three months ended
March 31, 1995 and March 29, 1996 are not necessarily indicative of the results
of operations to be expected for any other quarter nor for the year ending
December 27, 1996. The consolidated financial statements and notes thereto
should be read in conjunction with the financial statements and notes for the
years ended December 30, 1994 and December 29, 1995 included in the Company's
Annual Report to the Securities and Exchange Commission on Form 10-K.
Note 3 - Earnings per share
Earnings per share was computed by dividing net income by the weighted
average number of shares of common stock and common stock equivalents
outstanding during the quarter.
Note 4 - Inventories
The components of inventory are as follows (in thousands):
<TABLE>
<CAPTION>
December 29, March 29,
1995 1996
------- -------
<S> <C> <C>
Raw materials .......................... $ 7,209 $ 8,032
Work-in-process ........................ 5,680 5,336
Finished goods ......................... 8,054 10,875
------- -------
Total ......................... $20,943 $24,243
======= =======
</TABLE>
<PAGE>
Note 5 - Business Acquisitions
On March 14, 1995, the Company acquired Birtcher Medical Systems, Inc.
("Birtcher") through an exchange of the Company's common stock for all of the
outstanding common and preferred stock of Birtcher. In connection with this
transaction, the Company issued 1,590,000 shares of common stock valued at
$17,750,000 and assumed approximately $3,500,000 of net liabilities.
Accordingly, the results of operations of the acquired business are included in
the consolidated results of the Company from the date of acquisition. The
acquisition was accounted for using the purchase method of accounting. Goodwill
associated with the acquisition is being amortized on a straight-line basis over
a 40 year period.
On May 22, 1995, the Company acquired the business and certain assets
of the Master Medical Corporation ("Master Medical") for a cash purchase price
of approximately $9,500,000 and assumption of $500,000 of liabilities.
Accordingly, the results of operations of the acquired business are included in
the consolidated results of the Company from the date of acquisition. The
acquisition was accounted for using the purchase method of accounting. Goodwill
associated with the acquisition is being amortized on a straight-line basis over
a 15 year period.
On February 23, 1996, the Company acquired the business and certain
assets of New Dimensions in Medicine, Inc. ("NDM") for a cash purchase price of
approximately $31.3 million and the assumption of $2.7 million of liabilities.
Accordingly, the results of operations of the acquired business are included in
the consolidated results of the Company from the date of acquisition. Goodwill
associated with the acquisition is being amortized on a straight line basis over
a 40 year period. The allocation of the purchase price for this acquisition is
based on management's preliminary estimates; it is possible that re-allocations
will be required during the next twelve months as additional information becomes
available. Management does not believe that such re-allocation will have a
material effect on the Company's results of operations or financial position.
On an unaudited pro forma basis, assuming each of the acquisitions had
occurred as of the beginning of the period, the consolidated results of the
Company would have been as follows: (in thousands, except per share amounts):
<TABLE>
<CAPTION>
For the Quarter For the Quarter
Ended March 31, 1995 Ended March 29, 1996
-------------------- --------------------
<S> <C> <C>
Pro forma revenues ........................ $ 32,110 $32,700
======== =======
Pro forma net income ...................... $ 3,215 $ 3,576
======== =======
Pro forma earnings per
common, and common
equivalent shares ...................... $ .27 $ .28
======== =======
</TABLE>
<PAGE>
Note 6 - Stock Split and Stock Offering
On October 31, 1995, the Board of Directors of the Company declared a
three-for-two split of the Company's common stock, to be effected in the form of
a stock dividend, payable on November 30, 1995 to shareholders of record on
November 13, 1995. Accordingly, common stock, retained earnings, earnings per
share, the number of shares outstanding, and the weighted average number of
shares and equivalents outstanding, have been restated to retroactively reflect
the split.
On March 20, 1996, the Company completed a public offering of its
common stock whereby 3,000,000 and 850,000 shares of common stock were sold by
the Company and certain shareholders, respectively. The common shares sold by
the shareholders were received upon the exercise of a warrant and options during
the first quarter of 1996. Net proceeds to the Company related to the sale of
3,000,000 shares and exercise of the warrants and option amounted to
approximately $62,500,000 and $3,500,000, respectively. Of the aggregate
proceeds, $65,000,000 was used to eliminate the Company's indebtedness under its
credit agreements.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Three months ended March 29, 1996 compared to three months ended March 31, 1995
Sales for the quarter ended March 29, 1996 were $29,200,000, an
increase of 47.8% compared to sales of $19,753,000 in the quarter ended March
31, 1995. The increase was substantially a result of the Birtcher, Master
Medical and NDM acquisitions.
Cost of sales also increased to $15,167,000 in the current quarter
compared to the $10,725,000 in the same quarter a year ago as a result of
increased sales volume. The Company's gross margin percentage was 48.1% for the
first quarter of 1996 as compared to 45.7% for the first quarter of 1995 and an
average of 47.8% for the remaining three quarters of 1995. The continued
improvement in gross margin percentage reflects the economies of scale and
manufacturing efficiencies resulting from the completed acquisitions, and the
cost saving resulting from the fourth quarter 1995 move of the Company's ECG
electrode manufacturing facility from Haverhill, Massachusetts to Rome, New
York.
Selling and administrative costs increased to $7,556,000 compared to
$5,338,000 in the first quarter of 1995. This increased dollar amount resulted
primarily from the effects of the acquisitions. As a percentage of sales,
however, selling and administration declined to 25.9% from 27.0% in the prior
comparable period due to economies of scale resulting from the acquisitions of
Birtcher, Master Medical and NDM.
Research and development expense remained substantially the same in the
first quarter of 1996 compared to 1995.
<PAGE>
The first quarter of 1996 had interest expense of $682,000 compared to
interest expense of $194,000 in the first quarter of 1995. As discussed under
Liquidity and Capital Resources, maximum borrowings during the first quarter of
1996 were $65,000,000 of which $32,660,000 related to borrowings associated with
the February 23, 1996 acquisition of NDM. All such indebtedness was repaid in
late March 1996 with proceeds from the Company's equity offering. Aggregate
indebtedness at March 31, 1995 was $20,000,000 of which approximately
$11,000,000 was incurred in the first quarter of 1995 to facilitate the Birtcher
acquisition.
The provision for income tax increased in 1996 due to the higher income
before tax.
Liquidity and Capital Resources
Management believes that cash generated from operations, its current
cash resources and funds available under its banking agreement will provide
sufficient liquidity to ensure continued working capital for operations and
funding of capital expenditures in the foreseeable future.
Prior to the equity offering discussed below, the Company's credit
facility consisted of a $65,000,000 secured term loan and secured revolving line
of credit of $15,000,000. In connection with the NDM acquisition on February 23,
1996, the Company borrowed $32,660,000 bringing aggregate borrowings under the
credit facility to $65,000,000. On March 20, 1996, the Company completed an
equity offering of common stock and used $65,000,000 of the proceeds to
eliminate the indebtedness of the Company. Upon the closing of this equity
offering, the Company's credit facility was amended to consist of a $60,000,000
secured revolving line of credit which expires in March 2001. This facility
carries an interest rate of 0.5%-1.25% over LIBOR depending on defined cash flow
performance ratios.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
List of Exhibits
Exhibit No. Description of Instrument
- - ----------- -------------------------
10.1 First Amendment of Credit Agreements dated March 13, 1996
10.2 Amended and Restated Credit Agreement-Revolving Credit Facility dated as
of March 13, 1996
11 Computation of weighted average number of shares of common stock
Reports on Form 8-K
(1) On February 16, 1996, the Company filed a report on Form 8-K which included
the historic financial statements of a business being acquired.
(2) On February 16, 1996 (as amended on February 26, 1996), the Company filed a
report on Form 8-K which included the consolidated financial statements of
the Company for the three years ended December 29, 1995 and the Company's
amended credit agreements.
(3) On March 8, 1996, the Company filed a report on Form 8-K which included pro
forma financial information for a business acquired.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONMED CORPORATION
(Registrant)
Date: May 10, 1996
/s/ Robert D. Shallish, Jr.
---------------------------------
Robert D. Shallish, Jr.
Vice President - Finance
(Principal Financial Officer)
<PAGE>
Exhibit Index
Exhibit
- - -------
10.1 - First Amendment of Credit Agreements
dated March 13, 1996
10.2 - Amended and Restated Credit Agreement -
Revolving Credit Facility
dated as of March 13, 1996
11 - Computations of weighted average
number of shares of common stock
FIRST AMENDMENT OF CREDIT AGREEMENTS
Dated: March 13, 1996
This sets forth the First Amendment of that certain Credit Agreement -
Term Loan Facility dated as of December 29, 1995 (the "Term Loan Agreement") and
that certain Credit Agreement - Revolving Credit Facility dated as of December
29, 1995 (the "Revolving Credit Agreement") between THE CHASE MANHATTAN BANK,
NATIONAL ASSOCIATION ("Chase"), FLEET BANK ("Fleet"), NATWEST BANK N.A.
("NatWest"), CREDIT LYONNAIS CAYMAN ISLAND BRANCH ("Credit Lyonnais") and CONMED
CORPORATION ("Borrower"). Hereafter, the Term Loan Agreement and the Revolving
Credit Agreement are sometimes referred to collectively as the "Credit
Agreements" and Chase, Fleet, NatWest and Credit Lyonnais are sometimes referred
to collectively as the "Banks." Terms which are capitalized in this First
Amendment and not otherwise defined herein, and which are defined in the Credit
Agreements, shall have the meanings ascribed to them in the Credit Agreements.
RECITALS
A. The Term Loan Agreement provides for Term Loans to Borrower in the
aggregate amount of $65,000,000.00 and the Revolving Credit Agreement provides
for Revolving Credit Loans to Borrower in the aggregate amount of
$15,000,000.00.
B. Borrower is in the process of preparing for a public offering of its
common shares ("Borrower's Public Offering") and Borrower anticipates that the
net proceeds of this offering will be at least $49,000,000.00. Borrower and the
Banks have agreed that the net proceeds of Borrower's Public Offering will be
applied against Loans made pursuant to the Credit Agreements and that if the
outstanding balance of the Loans under the Credit Agreements is reduced by at
least $49,000,000.00, any remaining balance under the Term Loan Agreement shall
be converted to a Revolving Credit Loan and the Commitments for Loans under the
Revolving Credit Agreement shall be increased to an aggregate of $60,000,000.00.
C. In light of the anticipated reduction of its overall borrowings from
the Banks, Borrower has requested that the number of Banks be reduced from four
to three. Accordingly, assuming satisfaction of the conditions precedent set
forth below, NatWest will not be a party to the amended credit facility.
D. Borrower and the Banks have also agreed to certain other changes in
the terms of the Loans as set forth in the Amended and Restated Credit
Agreement-Revolving Credit Facility attached as Exhibit A.
TERMS
NOW, THEREFORE, in consideration of the matters recited and the mutual
promises and undertakings herein, and for other good and valuable consideration
the receipt and sufficiency of which are acknowledged, Borrower and the Banks
hereby agree as follows:
<PAGE>
1. Prepayment of Loans. Notwithstanding the provisions of Section
2.06(c) of the Term Loan Agreement and the Revolving Credit Agreement, Borrower
and the Banks agree that the entire proceeds of Borrower's Public Offering, less
fees and expenses incurred and less proceeds due to "Selling Shareholders" as
defined in Borrower's prospectus, shall be prepaid against the Loans as provided
in this Amendment (the "Prepayments"). Further, Section 2.08(b) of the Credit
Agreements notwithstanding, existing Fixed Rate Loans may be prepaid other than
on the last day of an Interest Period, but Borrower shall be responsible for
payment of any LIBOR breakage costs, fees or expenses resulting from such
prepayment of a Fixed Rate Loan.
2. Application of Prepayments. The Prepayments shall be applied first
to satisfy in full all Loans under the Credit Agreements made by NatWest. The
Commitments of NatWest shall thereupon terminate and NatWest shall no longer be
a party to the Credit Agreements. Further, NatWest shall return all Promissory
Notes, Security Agreements, and Guaranty's to Borrower marked "paid" or
"canceled." The then remaining balance of the Prepayments shall be applied pro
rata against the Term Loans made by each of the remaining Banks. Any remaining
balance after all amounts due the Banks under the Term Loan Agreement shall be
applied against Loans under the Revolving Credit Agreement.
3. Conversion to Revolving Credit Loans. After application of the
Prepayments provided for in paragraph 2, any remaining principal balance on the
Term Loans shall be converted to Revolving Credit Loans and the Term Loan
Agreement shall terminate automatically.
4. Conditions Precedent. The effectiveness of this Amendment is subject
to the satisfaction of all conditions precedent set forth in Article 5 of the
Credit Agreement and to the satisfaction of the following additional conditions
precedent:
a. The net proceeds of Borrower's Public Offering shall be
prepaid against the Loans; and
b. The principal balance of all Loans under the Credit
Agreements shall be reduced by at least forty-nine million dollars
($49,000,000.00). These conditions precedent must be satisfied in full
by 5:00 p.m. on May 1, 1996 or this Amendment shall be of no force and
effect.
5. Amendment of Revolving Credit Agreement. Effective as of the
Prepayments and the satisfaction of the other conditions precedent, the
Revolving Credit Agreement shall automatically be amended as set forth in the
attached Amended and Restated Credit Agreement - Revolving Credit Facility.
6. Affirmation of Facility Documents. Except as hereby amended, the
terms of the Credit Agreements shall remain in full force and effect. Borrower
hereby reaffirms the Credit Agreements, as amended, and all of its obligations
thereunder as well as under all Notes, Security Agreements and other Facility
Documents.
<PAGE>
7. Joinder By Subsidiaries. Borrower has five subsidiaries: CONMED
Andover Medical, Inc., Consolidated Medical Equipment International, Inc., Aspen
Laboratories, Inc., Birtcher Medical Systems, Inc., and NDM, Inc. Each
Subsidiary is a Guarantor of all of Borrower's obligations to the Banks pursuant
to Unlimited Corporate Guaranty Agreements dated December 29, 1995, and each
Subsidiary has executed Guarantor's Security Agreements to secure payment and
performance of its obligations under the Guaranties. Each Guarantor executes
this First Amendment to acknowledge and consent to Borrower's execution and
delivery of this First Amendment and the Amended and Restated Credit Agreement -
Revolving Credit Facility, and agrees that nothing contained herein or therein
shall be deemed to limit in any way its liability under its Guaranty or Security
Agreement. In addition, each Guarantor ratifies and reaffirms its Guaranty and
the other Facility Documents executed by the Guarantor, and all obligations
thereunder.
8. Counterparts. This Amendment and all documents relating to it may be
executed in counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Amendment by signing
a counterpart.
The foregoing is established by the following signatures of the
parties.
BORROWER:
CONMED CORPORATION
By:___________________________
Name: Joseph J. Corasanti
Title: Vice President
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name: Frederick K. Miller
Title: Vice President
<PAGE>
BANKS:
THE CHASE MANHATTAN BANK NATWEST BANK N.A.
(NATIONAL ASSOCIATION)
By:___________________________
By:___________________________ Name: Cameron Gateman
Name: Frederick K. Miller Title: Vice President
Title: Vice President
CREDIT LYONNAIS CAYMAN
FLEET BANK ISLAND BRANCH
By:___________________________
Name: Bruce W. Goodnough By:___________________________
Title: Vice President Name:
Title: Authorized Signature
GUARANTORS:
CONMED ANDOVER MEDICAL, INC. BIRTCHER MEDICAL SYSTEMS, INC.
By:________________________________
By:________________________________ Its:_______________________________
Its:_______________________________
CONSOLIDATED MEDICAL EQUIPMENT NDM, INC.
INTERNATIONAL, INC.
By:________________________________
Its:_______________________________
By:________________________________
Its:_______________________________
ASPEN LABORATORIES, INC.
By:________________________________
Its:_______________________________
AMENDED AND RESTATED
CREDIT AGREEMENT - REVOLVING CREDIT FACILITY
dated as of March 13, 1996
among
CONMED CORPORATION
the Banks signatory hereto
and
THE CHASE MANHATTAN BANK, N.A.
as Agent
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS
Section 1.01 Definitions
Section 1.02 Accounting Terms
ARTICLE 2 THE CREDIT
Section 2.01 The Loans
Section 2.02 The Notes
Section 2.03 Purpose
Section 2.04 Borrowing Procedures
Section 2.05 Prepayments and Conversions
Section 2.06 Mandatory Prepayments
Section 2.07 Fixed Rate Loans-Interest Periods;
Renewals
Section 2.08 Changes of Commitment
Section 2.09 Certain Notices
Section 2.10 Minimum Amounts
Section 2.11 Interest
Section 2.12 Fees
Section 2.13 Payments Generally
Section 2.14 Late Payment Fees
ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs
Section 3.02 Limitation on Types of Loans
Section 3.03 Illegality
Section 3.04 Certain Conversions
Section 3.05 Certain Compensation
Section 3.06 HLT Classification
ARTICLE 4 COLLATERAL SECURITY
Section 4.01 Collateral
Section 4.02 Setoff
Section 4.03 Guaranties
ARTICLE 5 CONDITIONS PRECEDENT
Section 5.01 Documentary Conditions Precedent
Section 5.02 Additional Conditions Precedent
Section 5.03 Term Loan Borrowings
Section 5.04 Deemed Representations
ARTICLE 6 REPRESENTATIONS AND WARRANTIES
Section 6.01 Incorporation, Good Standing and Due
Qualification
Section 6.02 Corporate Power and Authority;
No Conflicts
Section 6.03 Legally Enforceable Agreements
Section 6.04 Litigation
Section 6.05 Financial Statements
Section 6.06 Ownership and Liens
Section 6.07 Taxes
Section 6.08 ERISA
Section 6.09 Subsidiaries and Ownership of Stock
Section 6.10 Credit Arrangements
Section 6.11 Operation of Business
Section 6.12 Hazardous Materials
Section 6.13 No Default on Outstanding Judgments
or Orders
Section 6.14 No Defaults on Other Agreements
Section 6.15 Labor Disputes and Acts of God
Section 6.16 Governmental Regulation
Section 6.17 Partnerships
Section 6.18 No Forfeiture
Section 6.19 Solvency
Section 6.20 Integrated Group
ARTICLE 7 AFFIRMATIVE COVENANTS
Section 7.01 Maintenance of Existence
Section 7.02 Conduct of Business
Section 7.03 Maintenance of Properties
Section 7.04 Maintenance of Records
Section 7.05 Maintenance of Insurance
Section 7.06 Compliance with Laws
Section 7.07 Right of Inspection
Section 7.08 Reporting Requirements
Section 7.09 Guaranties
ARTICLE 8 NEGATIVE COVENANTS
Section 8.01 Debt
Section 8.02 Guaranties, Etc.
Section 8.03 Liens
Section 8.04 Leases
Section 8.05 Investments
Section 8.06 Loans, Dividends
Section 8.07 Sale of Assets
Section 8.08 Stock of Subsidiaries, Etc.
Section 8.09 Transactions with Affiliates
Section 8.10 Mergers, Etc.
Section 8.11 Acquisitions
Section 8.12 No Activities Leading to Forfeiture
Section 8.13 New Businesses
Section 8.14 Negative Pledge
ARTICLE 9 FINANCIAL COVENANTS
Section 9.01 Minimum Working Capital
Section 9.02 Minimum Tangible Net Worth
Section 9.03 Leverage Ratio
Section 9.04 Cash Flow Coverage Ratio
ARTICLE 10 EVENTS OF DEFAULT
Section 10.01 Events of Default
Section 10.02 Remedies
ARTICLE 11 THE AGENT; RELATIONS AMONG BANKS AND BORROWER
Section 11.01 Appointment, Powers and Immunities
of Agent
Section 11.02 Reliance by Agent
Section 11.03 Defaults
Section 11.04 Rights of Agent as a Bank
Section 11.05 Indemnification of Agent
Section 11.06 Documents
Section 11.07 Non-Reliance on Agent and Other Banks
Section 11.08 Failure of Agent to Act
Section 11.09 Resignation or Removal of Agent
Section 11.10 Amendments Concerning Agency Function
Section 11.11 Liability of Agent
Section 11.12 Transfer of Agency Function
Section 11.13 Non-Receipt of Funds by the Agent
Section 11.14 Withholding Taxes
Section 11.15 Several Obligations and Rights of Banks
Section 11.16 Pro Rata Treatment of Loans, Etc.
Section 11.17 Sharing of Payments Among Banks
Section 11.18 Hedge Agreements; Notices and Limitations
ARTICLE 12 MISCELLANEOUS
Section 12.01 Amendments and Waivers
Section 12.02 Usury
Section 12.03 Expenses
Section 12.04 Survival
Section 12.05 Assignment; Participations
Section 12.06 Notices
Section 12.07 Jurisdiction; Immunities
Section 12.08 Table of Contents; Headings
Section 12.09 Severability
Section 12.10 Counterparts
Section 12.11 Integration
Section 12.12 Governing Law
Section 12.13 Confidentiality
Section 12.14 Treatment of Certain Information
Section 12.15. Incorporation By Reference; Conflicts
Section 12.16. Cooperation and Further Assurances
EXHIBITS
Exhibit A Promissory Note
Exhibit B Authorization Letter
Exhibit C Guaranty
Exhibit D Security Agreement
Exhibit E Opinion of Counsel for Borrower
Exhibit F Opinion of Counsel for Each Guarantor
Exhibit G Confidentiality Agreement
Exhibit H Borrowing Notice
SCHEDULES
Schedule I Subsidiaries of Borrower
Schedule II Credit Arrangements
Schedule III Hazardous Materials
Schedule IV Employee Benefits; Funding Status
</TABLE>
<PAGE>
This is an AMENDED AND RESTATED CREDIT AGREEMENT - REVOLVING CREDIT
FACILITY originally dated as of December 29, 1995 among CONMED CORPORATION, a
corporation organized under the laws of the State of New York (the "Borrower"),
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), FLEET BANK, and CREDIT LYONNAIS
CAYMAN ISLAND BRANCH, (each individually a "Bank" and collectively the "Banks")
and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking
association organized under the laws of the United States of America, as agent
for the Banks (in such capacity, together with its successors in such capacity,
the "Agent").
A. The Borrower and the Banks are parties to a certain Credit Agreement
- - - Revolving Credit Facility dated as of December 29, 1995, which is hereby
amended and restated to read as set forth herein. NatWest Bank N.A. is no longer
a party to this Agreement.
B. This Amended and Restated Credit Agreement - Revolving Credit
Facility shall become effective on the Effective Date as hereafter defined.
TERMS
NOW, THEREFORE, in consideration of the matters recited and the
promises contained herein, the Borrower, the Banks and the Agent agree as
follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa):
"Account" means any right to payment for goods sold or leased or for
services rendered, which is not evidenced by an instrument or chattel paper,
whether or not it has been earned by performance, whether secured or unsecured,
now existing or hereafter arising, and the proceeds thereof.
"Affiliate" means any Person: (a) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower or
any of its Subsidiaries; (b) which directly or indirectly beneficially owns or
holds 20% or more of any class of voting stock of the Borrower or any such
Subsidiary; (c) 20% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Borrower or such Subsidiary; or (d)
which is a partnership in which the Borrower or any of its Subsidiaries is a
general partner. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Agent's Office" means the principal office of Agent in Syracuse, New
York, presently located at One Lincoln Center, Syracuse, New York 13202.
"Agreement" means this Credit Agreement, as amended or supplemented
from time to time. References to Articles, Sections, Exhibits, Schedules and the
like refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
"Authorization Letter" means the letter agreement executed by the
Borrower in the form of Exhibit B.
"Banking Day" means any day on which commercial banks are not
authorized or required to close in New York City and whenever such day relates
to a Eurodollar Loan or notice with respect to any Eurodollar Loan, a day on
which dealings in Dollar deposits are also carried out in the London interbank
market.
"Birtcher" means Birtcher Medical Systems, Inc., a wholly-owned
subsidiary of Borrower.
"Borrower's Public Offering" means Borrower's pending public offering
of approximately 2,200,000 shares of its common stock, par value $0.01 per
share. (Up to an additional 457,500 shares may be sold by Borrower pursuant to
the Underwriters' Overallotment Option as described in the prospectus.)
"Capital Expenditures" means for any period, the Dollar amount of gross
expenditures (including obligations under Capital Leases) made for fixed assets,
real property, plant and equipment, and all renewals, improvements and
replacements thereto (but not repairs thereof) incurred during such period.
Assets acquired in the NDM Acquisition shall not be considered "Capital
Expenditures" for purposes of this Agreement.
"Capital Lease" means any lease which has been capitalized on the books
of the lessee in accordance with GAAP.
"Cash Flow" the amount of earnings before interest and taxes measured
on a consolidated basis for Borrower and any subsidiaries, for any twelve month
period ending on the last day of Borrower's fiscal quarters.
"Cash Flow Coverage Ratio" means the ratio of Measured Cash Flow to
Current Debt Service, measured on a consolidated basis for Borrower and its
Subsidiaries for any twelve month period ending on the last day of each of
Borrower's fiscal quarters.
"Chase" means The Chase Manhattan Bank (National Association)
"Closing Date" means the date this Agreement has been executed by the
Borrower, the Banks and the Agent.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means any and all personal property of Borrower and of the
Guarantors as set forth in Article 4 of this Agreement, together with any other
property of Borrower and the Guarantors in which the Banks hereafter acquire a
security interest or mortgage. "Commitment" means, with respect to each Bank,
the obligation of such Bank to make its Loan under this Agreement in the
principal amount following, as such amount may be reduced or otherwise modified
from time to time:
Chase $30,000,000.00
Fleet $20,000,000.00
Credit Lyonnais $10,000,000.00
--------------
Total: $60,000,000.00
"Consolidated Capital Expenditures" means Capital Expenditures of the
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Current Assets" means Current Assets of the Borrower and
its Consolidated Subsidiaries, as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Current Liabilities" means Current Liabilities of the
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Worth" means Net Worth of the Borrower and its
Consolidated Subsidiaries, as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Borrower in accordance
with GAAP.
"Consolidated Total Liabilities" means the total liabilities of
Borrower and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP.
"Credit Lyonnais" means Credit Lyonnais Cayman Island Branch, a banking
corporation organized under the laws of France.
"Current Assets" means all assets of the Borrower treated as current
assets in accordance with GAAP.
"Current Debt Service" means current maturities of long term Debt.
"Current Liabilities" means all liabilities of the Borrower treated as
current liabilities in accordance with GAAP, including without limitation (a)
all obligations payable on demand or within one year after the date in which the
determination is made and (b) installment and sinking fund payments required to
be made within one year after the date on which determination is made, but
excluding all such liabilities or obligations which are renewable or extendable
at the option of the Borrower to a date more than one year from the date of
determination.
"Debt" means, with respect to any Person: (a) indebtedness of such
Person for borrowed money; (b) indebtedness for the deferred purchase price of
property or services (except trade payables in the ordinary course of business);
(c) Unfunded Benefit Liabilities of such Person (if such Person is not the
Borrower, determined in a manner analogous to that of determining Unfunded
Benefit Liabilities of the Borrower); (d) the face amount of any outstanding
letters of credit issued for the account of such Person; (e) obligations arising
under acceptance facilities; (f) guaranties, endorsements (other than for
collection in the ordinary course of business) and other contingent obligations
to purchase, to provide funds for payment, to supply funds to invest in any
Person, or otherwise to assure a creditor against loss; (g) obligations secured
by any Lien on property of such Person; and (h) obligations of such Person as
lessee under Capital Leases; and (i) Hedge Exposure of such Person under Hedge
Agreements.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to
the extent permitted by law, any other amount payable by the Borrower under this
Agreement or any Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period from and
including the due date, to, but excluding the date on which such amount is paid
in full equal to 2% above the Variable Rate as in effect from time to time plus
the Margin (if any) (provided that, if the amount so in default is principal of
a Fixed Rate Loan and the due date thereof is a day other than the last day of
the Interest Period therefor, the "Default Rate" for such principal shall be,
for the period from and including the due date and to but excluding the last day
of the Interest period therefor, 2% above the interest rate for such Loan as
provided in Section 2.10 hereof and, thereafter, the Variable Rate plus 2% as
provided for above in this definition).
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Drawdown Date" means the dates on which the Borrower makes the
borrowing hereunder, which date may not be later than the last day of the
Drawdown Period, i.e., the Termination Date.
"Drawdown Period" means the period commencing on the date hereof and
terminating on the Termination Date.
"Effective Date" means the date Borrower makes the Prepayments required
under Section 5.03 of this Agreement.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, fran chises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equipment" means goods other than Inventory which are used or bought
for use primarily in business, now existing or hereafter acquired, and the
proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which the Borrower is a member, or (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the
Borrower is a member.
"Eurodollar Loan" (i.e., a "LIBOR Loan") means any Loan when and to the
extent the interest rate therefor is determined on the basis of the definition
"Fixed Base Rate."
"Event of Default" has the meaning given such term in Section 10.01.
"Facility Documents" means this Agreement and the Exhibits and
Schedules hereto, the Notes, the Security Agreement, the Pledge Agreement, the
Authorization Letter, and the Guaranty.
"Final Maturity Date" means March 13, 2001 when the final principal
payment, all accrued interest, and any other amounts due under this Agreement or
the Notes shall be due and pay able in full.
"Fixed Base Rate" means with respect to any Interest Period for a Fixed
Rate Loan, i.e., for a Eurodollar Loan, the arithmetic mean, as calculated by
the Agent, of the respective rates per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) quoted at approximately 11:00 a.m. London time by the
principal London branch of the Reference Bank two Banking Days prior to the
first day of such Interest Period for the offering to leading banks in the
London interbank market of Dollar deposits in immediately available funds, for a
period, and in an amount, comparable to the Interest Period and principal amount
of the Eurodollar Loan which shall be made by such Reference Bank and
outstanding during such Interest Period.
"Fixed Rate" means, for any Fixed Rate Loan for any Interest Period
therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Agent to be equal to the quotient of (i) the Fixed Base
Rate for such Loan for such Interest Period, divided by (ii) one minus the
Reserve Requirement for such Loan for such Interest Period.
"Fixed Rate Loan" means any Eurodollar Loan.
"Fleet" means Fleet Bank, a banking corporation organized under the
laws of the State of New York.
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting the Borrower or any of its Subsidiaries or Affiliates before any
court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such party
that any of them is a suspect in or a target of any governmental inquiry or
investiga tion, which may result in an indictment of any of them or the seizure
or forfeiture of any of their property.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 5.05 (except for changes concurred in by the Borrower's independent
certified public accountants).
"Guarantor" shall collectively mean all Subsidiaries of Borrower now or
hereafter existing and their respective successors and assigns.
"Guaranty" means the guaranty in the form of Exhibit C delivered by a
Guarantor under the terms of this Agreement.
"Hedge Agreements" means and includes any and all agreements entered
into and in effect from time to time between Borrower or a Subsidiary and any
third party providing any foreign exchange and/or an interest rate hedging
facility.
"Hedge Exposure" means the U.S. dollar amount of all obligations for
the payment of money by Borrower or any Subsidiary under any Hedge Agreement as
of any date of computation as if the Hedge Agreement were to be terminated or
declared in default on such date (after giving effect to any netting
provisions).
"Interest Period" means, with respect to any Fixed Rate Loan, the
period commencing on the date such Loan is made, converted from another type of
Loan or renewed, as the case may be, and ending, as the Borrower may select
pursuant to Section 2.07, on the numerically corresponding day in the first,
second, third, or sixth calendar month thereafter, provided that each such
Interest Period which commences on the last Banking Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate calendar month.
"Inventory" means goods held for sale or lease or to be furnished under
contracts of service, or raw materials, work-in-process or materials used or
consumed in a business, now existing or hereafter arising, and the proceeds
thereof.
"Lending Office" means, for each Bank and for each type of Loan, the
lending office of such Bank (or of an affiliate of such Bank) designated as such
for such type of Loan on its signa ture page hereof or such other office of such
Bank (or of an affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Borrower as the office by which its Loans of such
type are to be made and maintained.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loan" means any loan made by a Bank pursuant to Section 2.01.
"Margin" means for each Variable Rate Loan and Eurodollar Loan the
applicable margin on the following table, computed as of the date of this
Agreement based upon Borrower's financial statements for the immediately
preceding four Quarterly Dates for income statement items and the most recent
Quarterly Date for balance sheet items, and adjusted thereafter on each
Quarterly Date based on information for the immediately preceding four Quarterly
Dates for income statement items and the immediately preceding Quarterly Date
for balance sheet items.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Ratio of Total Ratio less than 1.0 less than ratio 2.0 less than ratio Ratio greater than 3.0
Funded Debt to Cash or equal to 1.0 less than or equal to 2.0 less than or equal to 3.0
Flow
Applicable Margin- 50 basis 75 basis points 100 basis points 125 basis points
Fixed Rate Loans points
(Eurodollar)
Applicable Margin 0 0 0 0
Variable Rate Loans
(Prime)
</TABLE>
The foregoing notwithstanding, it is agreed that from the Effective
Date through June 30, 1996, the Applicable Margin for Fixed Rate Loans will be
125 basis points and the Applicable Margin for Variable Rate Loans will be 0
basis points.
"Mortgage" means the Mortgage in the form of Exhibit I to be executed
pursuant to Section 4.01 of this Agreement.
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"N D M, Inc." means Borrower's wholly owned subsidiary, N D M, Inc. a
New York corporation.
"Net Worth" means, at any date of determination thereof, the excess of
total assets over total liabilities, excluding, however, from the determination
of total assets, minority interests, if any, in Subsidiaries.
"Note" means a promissory note of the Borrower in the form of Exhibit A
hereto evidencing the Loans made by a Bank hereunder.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Prime Rate" means that rate of interest from time to time announced by
the Reference Bank at its principal office as its prime commercial lending rate.
"Principal Office" means the principal office of the Reference Bank,
presently located at 1 Chase Manhattan Plaza, New York, New York 10081.
"Quarterly Date" means the last day of each of Borrower's fiscal
quarters for so long as the Commitment and any Loans made pursuant to this
Agreement remain outstanding.
"Reference Bank" means The Chase Manhattan Bank (National Association).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Bank, any change after
the date of this Agreement in United States federal, state, municipal or foreign
laws or regulations (including without limitation Regulation D) or the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks including such Bank of or under any United States,
federal, state, municipal or foreign laws or regulations (whether or not having
the force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"Required Banks" means, at any time while no Loans are outstanding,
Banks having at least 66.667% of the aggregate amount of the Commitments and, at
any time while Loans are outstanding, Banks holding at least 66.667% of the
aggregate principal amount of the Loans.
"Reserve Requirement" means, for any Interest Period for any Fixed Rate
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System
in New York City with deposits exceeding $1,000,000,000 against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes deposits by
reference to which the Fixed Base Rate for Eurodollar Loans is to be determined
as provided in the definition of "Fixed Base Rate" in this Section 1.01 or (ii)
any category of extensions of credit or other assets which include Eurodollar
Loans.
"Security Agreement" means the security agreement in the form of
Exhibit D executed by Borrower and each Guarantor pursuant to Sections 4.01 and
4.03 of this Agreement, as hereafter amended from time to time.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.
"Termination Date" means March 12, 2001; provided that if such date is
not a Banking Day, the Termination Date shall be the next succeeding Banking Day
(or, if such next succeeding Banking Day falls in the next calendar month, the
next preceding Banking Day).
"Total Funded Debt" means, with respect to Borrower and any
Subsidiaries, all indebtedness (including current maturities) for money borrowed
which by its terms matures more than one year from the date as of which such
indebtedness is incurred, and any indebtedness for money borrowed maturing
within one year from such date which is renewable or extendable at the option of
the obligor to a date beyond one year from such date (whether or not theretofore
renewed or extended), including any such indebtedness renewable or extendable at
the option of the obligor under, or payable from the proceeds of other
indebtedness which may be incurred pursuant to, the provisions of any revolving
credit agreement or other similar agreement.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the fair
market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the pro visions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the Prime Rate for such day.
"Variable Rate Loan" means any Loan when and to the extent the interest
rate for such Loan is determined in relation to the Variable Rate.
Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP. All terms relating to Collateral and not otherwise defined herein shall
have the meanings ascribed to them in the Uniform Commercial Code of the State
of New York.
ARTICLE 2. THE CREDIT.
Section 2.01. The Loans. (a) Subject to the terms and conditions of
this Agreement, each of the Banks severally agrees to make revolving credit
loans (the "Loans") to the Borrower from time to time from and including the
date hereof to and including the Termination Date up to but not exceeding the
aggregate principal amount outstanding under its Commitment. The Loans may be
outstanding as Variable Rate Loans or Fixed Rate Loans (each a "type" of Loans).
The type of Loans of each Bank shall be made and maintained at such Bank's
Lending Office for such type of Loans.
(b) The Loans shall be due and payable on the Final Maturity Date.
Interest on the Loans shall be due and payable as hereinafter provided.
(c) Any borrowing under any existing Credit Agreement between Borrower
and the Banks which is outstanding as of the date of this Agreement, shall be
deemed to be a Loan made pursuant to this Agreement.
(d) Unless hereafter extended in writing by the Agent with the
unanimous approval of the Banks, this Amended and Restated Credit Agreement
shall automatically terminate and be of no further force and effect unless all
of the Conditions Precedent set forth in Article 5 of this Agreement are either
satisfied or waived by the Banks by 5:00 p.m. on May 1, 1996, and in that event,
the Existing Credit Agreements shall continue to be in full force and effect.
Section 2.02. The Notes. The Loans of each Bank shall be evidenced by a
single promissory note in favor of such Bank in the form of Exhibit A, dated the
date of this Agreement, duly completed and executed by the Borrower.
Section 2.03. Purpose. The Borrower shall use the proceeds of the Loans
for working capital and general corporate purposes. Further, up to $20,000,000
of Loan Proceeds in the aggregate may be used for Acquisitions as described in
Section 8.11 without the prior approval of the Banks. Proceeds shall not be used
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying "margin stock" within the meaning of Regulation U.
Section 2.04. Borrowing Procedures. The Borrower shall make the
borrowings hereunder not later than the last day of the Drawdown Period and
shall give the Agent notice of such borrowing (which shall be on a Banking Day
if such day is not the last day of the Drawdown Period) at or before 10:00 a.m.,
New York City time, on the Drawdown Date for a Variable Rate Loan. Fixed Rate
Loans shall require at least three Banking Days' notice. Not later than 1:00
p.m. New York City time on the date of such borrowing, each Bank shall, through
its Lending Office and subject to the conditions of this Agreement, make the
amount of the Loan to be made by it on such day available to the Agent at the
Agent's Office and in immediately available funds for the account of the
Borrower. The amount so received by the Agent shall, subject to the conditions
of this Agreement, be made available to the Borrower, in immediately available
funds, by the Agent crediting an account of the Borrower designated by the
Borrower and maintained with the Agent at the Agent's Office.
Section 2.05. Prepayments and Conversions. The Borrower shall have the
right to make prepayments of principal, or to convert one type of Loan into
another type of Loan, at any time or from time to time; provided that: (a) the
Borrower shall give the Agent notice of each such prepayment or conversion as
provided in Section 2.09; and (b) Fixed Rate Loans may be prepaid or converted
only on the last day of an Interest Period for such Loans. During the Drawdown
Period, Borrower may reborrow principal amounts prepaid provided that all
conditions precedent hereunder are satisfied and provided that the principal
amount outstanding from each Bank may not exceed the amount of its Commitment.
Section 2.06. Mandatory Prepayments. Anything herein to the contrary
notwithstanding, Borrower shall be obligated to make the following prepayments
("Mandatory Prepayments") of amounts outstanding hereunder at the times
indicated below, to the extent that any such amounts remain after application to
amounts outstanding under the Credit Agreement - Term Loan Facility, as provided
in Section 2.06 of that Agreement:
(a) 100% of the net proceeds in excess of $100,000 received by Borrower
from the sale or disposition of all or any part of the assets of Borrower or its
subsidiaries (other than in the ordinary course of business), upon Borrower's
(or the Subsidiary's, as appropriate) receipt of such proceeds;
(b) 100% of all insurance proceeds received by Borrower which are not
reasonably promptly applied toward repair or replacement of the damaged,
destroyed, or impaired property to which such proceeds relate, upon receipt by
Borrower of such proceeds; and
(c) 80% of the proceeds of the sale by Borrower of any equity
securities of Borrower (other than shares sold to employees pursuant to employee
stock option plans), upon receipt by Borrower of such proceeds.
Any Mandatory Prepayments shall be applied against the Loans hereunder
or the Term Loans without penalty or premium (other than costs associated with
the mandatory prepayment of Fixed Rate Loans on dates other than the last day of
the Interest Period with respect to each such Loan), as determined by the
Required Banks in their sole discretion. Mandatory Prepayments shall be divided
among the Banks based upon each Bank's pro rata share of the amounts outstanding
hereunder at the time of the Mandatory Prepayment.
Section 2.07. Fixed Rate Loans - Interest Periods; Renewals. (a) In the
case of each Fixed Rate Loan, the Borrower shall select an Interest Period of
any duration in accordance with the definition of Interest Period in Section
1.01, subject to the following limitations: (i) no Interest Period may extend
beyond the Final Maturity Date; (ii) notwithstanding clause (i) above, no
Interest Period shall have a duration less than one month, and if any such
proposed Interest Period would otherwise be for a shorter period, such Interest
Period shall not be available; (iii) if an Interest Period would end on a day
which is not a Banking Day, such Interest Period shall be extended to the next
Banking Day, unless such Banking Day would fall in the next calendar month in
which event such Interest Period shall end on the immediately preceding Banking
Day; (iv) only three Fixed Rate Interest Periods may be outstanding at any one
time.
(b) Upon notice to the Agent as provided in Section 2.09, the Borrower
may renew any Fixed Rate Loan on the last day of the Interest Period therefor as
the same type of Loan with an Interest Period of the same or different duration
in accordance with the limitations provided above. If the Borrower shall fail to
give notice to the Agent of such a renewal, such Fixed Rate Loan shall
automatically become a Variable Rate Loan on the last day of the current
Interest Period.
Section 2.08. Changes of Commitments. The Borrower shall have the right
to reduce or terminate the amount of unused Commitments at any time or from time
to time, provided that: (a) the Borrower shall give notice of each such
reduction or termination to the Agent as provided in Section 2.09; and (b) each
partial reduction shall be applied pro rata among the Banks and shall be at
least equal to $250,000 for each Bank. The Commitments once reduced or
terminated may not be reinstated.
Section 2.09. Certain Notices. All notices by the Borrower to the Agent
pursuant to this Article 2 shall be given on a Banking Day and shall be given
first by telephone and confirmed by telecopier. Such notices shall be
irrevocable and shall be effective as of the date given only if the telecopy
confirmation is received by the Agent not later than 1:00 p.m. New York City
time with respect to Fixed Rate Loans, and 10:00 a.m. New York City time with
respect to Variable Rate Loans. Where telecopy confirmation is received by the
Agent after 1:00 p.m. with respect to Fixed Rate Loans, and 10:00 a.m. with
respect to Variable Rate Loans, the notice shall be deemed to be given as of the
next Banking Day. In the case of borrowings and prepayments of, conversions into
and renewals of (a) Variable Rate Loans, such notices shall be given on the date
of such borrowing, conversion or renewal; and (b) in the case of Fixed Rate
Loans such notices shall be given three Banking Days prior thereto. Each notice
shall specify the type of Loans to be borrowed, converted, prepaid or renewed
(and, in the case of a conversion, the type of Loans to result from such
conversion and, in the case of Fixed Rate Loans, the Interest Period(s)
therefor) and the date of the borrowing, prepayment, conversion or renewal
(which shall be a Banking Day). Each notice of reduction or termination shall
specify the amount of the Commitments to be reduced or terminated. Notices shall
be similar in form to the attached Exhibit H. The Agent shall promptly notify
the Banks of the contents of each such notice.
Section 2.10. Minimum Amounts. Except for borrowings which exhaust the
full remaining amounts of the Commitments, prepayments or conversions which
result in the prepayment or conversion of all Loans of a particular type or
conversions made pursuant to Section 3.04, each borrowing, prepayment,
conversion and renewal of principal the Loans of a particular type shall be in
an amount at least equal to $2,000,000 in the aggregate for the Banks
(borrowings, prepayments, conversions or renewals of or into Loans of different
types or, in the case of Fixed Rate Loans, having different Interest Periods at
the same time hereunder to be deemed separate borrowings, prepayments,
conversions and renewals for the purposes of the foregoing, one for each type of
Interest Period). Each borrowing, prepayment, conversion or renewal shall be in
increments of principal of $100,000.00.
Section 2.11. Interest. (a) Interest shall accrue on the outstanding
and unpaid principal amount of each Loan for the period from and including the
date of such Loan to but excluding the date such Loan is due at the following
rates per annum: (i) for a Variable Rate Loan, at a variable rate per annum
equal to the Variable Rate plus any Margin and (ii) for a Fixed Rate Loan, at a
fixed rate equal to the Fixed Rate plus the Margin. If the principal amount of
any Loan and any other amount payable by the Borrower hereunder or under the
Note shall not be paid when due (at stated maturity, by acceleration or
otherwise), interest shall accrue on such amount to the fullest extent permitted
by law from and including such due date to but excluding the date such amount is
paid in full at the Default Rate.
(b) The interest rate on each Variable Rate Loan shall change when the
Variable Rate changes and interest on each such Loan shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed. Interest on
each Fixed Rate Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
the Borrower and the Banks.
(c) Accrued interest shall be due and payable in arrears upon any
payment of principal or conversion and (i) for each Variable Rate Loan, on the
first day of each calendar quarter commencing the first such date after such
Loan; (ii) for each Fixed Rate Loan, on the last day of the Interest Period with
respect thereto and, in the case of an Interest Period greater than three months
at three-month intervals (determined on the same basis as a three month Interest
Period) after the first day of such Interest Period; provided that interest
accruing at the Default Rate shall be due and payable from time to time on
demand of the Agent.
Section 2.12. Fees. (a) During the period from the Effective Date
through the earlier of the date the Commitments are terminated or June 30, 1996,
the Borrower shall pay to the Agent for the account of each Bank a commitment
fee on the daily average unused Commitment of such Bank equal to twenty basis
points (.20%). Commencing July 1, 1996, the Borrower shall pay to the Agent for
the account of each Bank a commitment fee on the daily average unused Commitment
of such Bank for the period from and including July 1, 1996, to the earlier of
the date the Commitments are terminated or the Termination Date, at a rate per
annum equal to the amount on the following table computed based upon Borrower's
financial statements for the immediately preceding four Quarterly Dates for
income statement items and the most recent Quarterly Date for balance sheet
items, and adjusted thereafter on each Quarterly Date based on information for
the immediately preceding four Quarterly Dates for income statement items and
the immediately preceding Quarterly Date for balance sheet items.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Ratio of Total Ratio less than 1.0 less than ratio 2.0 less than ratio Ratio greater than 3.0
Funded Debt to Cash or equal to 1.0 less than or equal to 2.0 less than or equal to 3.0
Flow
Commitment .15% .20% .25% .375%
Fee
</TABLE>
The commitment fee shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. The accrued commitment fee shall be due and
payable in arrears upon any reduction or termination of the Commitments and on
the 1st day of each calendar quarter, commencing on April 1, 1996.
(b) The Borrower shall pay to the Agent an agency fee (in cash or such
other type of compensation as may be mutually agreed), in the amount (and on the
dates) heretofore mutually agreed.
Section 2.13. Payments Generally. All payments under this Agreement or
the Notes shall be made to the Agent in immediately available funds not later
than 1:00 p.m. New York City time on the relevant dates specified in this
Article 2, and such payment received by Agent after 1:00 p.m. shall be deemed to
have been made on the next succeeding Banking Day. The Borrower shall, at the
time of making each payment under this Agreement or the Notes, by telecopy
specify to the Agent the principal or other amount payable by the Borrower under
this Agreement or the Notes to which such payment is to be applied (and in the
event that it fails to so specify, or if a Default or Event of Default has
occurred and is continuing, the Agent may apply such payment as it may elect in
its sole discretion (subject to Section 11.16)). Borrower shall make all
payments through its deposit account with Agent and Agent is hereby authorized
to deduct all payments due hereunder from such account. Except as otherwise
provided herein, if the due date of any payment under this Agreement or the
Notes would otherwise fall on a day which is not a Banking Day, such date shall
be extended to the next succeeding Banking Day and interest shall be payable for
any principal so extended for the period of such extension. Provided the Agent
receives payment in immediately available funds by 1:00 p.m. on a Banking Day,
Agent shall remit the portion of such payment due to each of the Banks by wire
transfer initiated prior to 3:00 p.m. on the same Banking Day. If payment is not
received on a Banking Day or by 1:00 p.m., Agent shall remit the amount of such
payment due each of the Banks by wire transfer on the next Banking Day.
Any Bank may (but shall not be obligated to) debit the amount of any
such payment which is not made by 4:00 p.m. on the first Banking Day after the
due date to any ordinary deposit account of the Borrower with such Bank, and any
Bank so doing shall promptly notify the Agent.
Section 2.14. Late Payment Fees. (a) If Borrower fails to make any
payment when due, Agent may, and at the request of the Required Banks shall,
require the payment of a late charge to be assessed each day on the amount
overdue based upon the following formulas:
(i) For overdue interest:
(Amount overdue) x 110% x (Prime Rate + 2%)
-------------------------------------------
365
(ii) For overdue principal:
(Amount overdue) x 110% x (Prime Rate + 2%)
-------------------------------------------
365
(b) Late charges may be added to the amount owing on any future
payment, and such assessment and/or collection of late charges shall in no way
impair the Banks' right to pursue any other rights or remedies they may have
upon default.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs. (a) The Borrower shall pay directly to
each Bank from time to time on demand such amounts as such Bank may determine to
be necessary to compensate it for any costs which such Bank determines are
attributable to its making or maintaining any Fixed Rate Loans under this
Agreement or its Note or its obligation to make any such Loans hereunder, or any
reduction in any amount receivable by such Bank hereunder in respect of any such
Loans or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Note in respect of any of such
Loans (other than taxes imposed on the overall net income of such Bank or of its
Lending Office for any of such Loans by the jurisdiction in which such Bank has
its principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Bank
(including any of such Loans or any deposits referred to in the definition of
"Fixed Base Rate" in Section 1.01); or (iii) imposes any other condition
affecting this Agreement or its Note (or any of such extensions of credit or
liabilities). Each Bank will notify the Borrower of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this Section 3.01(a) as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. If any Bank requests
compensation from the Borrower under this Section 3.01(a), or under Section
3.01(c), the Borrower may, by notice to such Bank (with a copy to the Agent),
require that such Bank's Loans of the type with respect to which such
compensation is requested be converted in accordance with Section 3.04.
(b) Without limiting the effect of the foregoing provisions of this
Section 3.01, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the interest rate on
Eurodollar loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes Eurodollar
loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Bank so elects by
notice to the Borrower (with a copy to the Agent), the obligation of such Bank
to make or renew, and to convert Loans of any other type into, Loans of such
type hereunder shall be suspended until the date such Regulatory Change ceases
to be in effect (and all Loans of such type held by such Bank then outstanding
shall be converted in accordance with Section 3.04).
(c) Without limiting the effect of the foregoing provisions of this
Section 3.01 (but without duplication), the Borrower shall pay directly to each
Bank from time to time on request such amounts as such Bank may determine to be
necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance by it or any of its affiliates pursuant to any
law or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law and whether in effect on the
date of this Agreement or thereafter) of any court or governmental or monetary
authority of capital in respect of its Loans hereunder or its obligation to make
Loans hereunder (such compensation to include, without limitation, an amount
equal to any reduction in return on assets or equity of such Bank to a level
below that which it could have achieved but for such law, regulation,
interpretation, directive or request). Each Bank will notify the Borrower if it
is entitled to compensation pursuant to this Section 3.01(c) as promptly as
practicable after it determines to request such compensation.
(d) Determinations and allocations by a Bank for purposes of this
Section 3.01 of the effect of any Regulatory Change pursuant to subsections (a)
or (b), or of the effect of capital maintained pursuant to subsection (c), on
its costs of making or maintaining Loans or its obligation to make Loans, or on
amounts receivable by, or the rate of return to, it in respect of Loans or such
obligation, and of the additional amounts required to compensate such Bank under
this Section 3.01, shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
Section 3.02. Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if:
(a) the Agent determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "Fixed Base Rate" in Section 1.01 are not being provided in the
relevant amounts or for the relevant maturities for purposes of determining the
rate of interest for any type of Fixed Rate Loans as provided in this Agreement;
or
(b) the Required Banks determine (which determination shall be
conclusive) and notify the Agent that the relevant rates of interest referred to
in the definition of "Fixed Base Rate" in Section 1.01 upon the basis of which
the rate of interest for any type of Fixed Rate Loans is to be determined do not
adequately cover the cost to the Banks of making or maintaining such Loans;
then the Agent shall give the Borrower and each Bank prompt notice thereof, and
so long as such condition remains in effect, the Banks shall be under no
obligation to make or renew Loans of such type or to convert Loans of any other
type into Loans of such type and the Borrower shall, on the last day(s) of the
then current Interest Period(s) for the outstanding Loans of the affected type,
either prepay such Loans or convert such Loans into another type of Loans in
accordance with Section 2.05.
Section 3.03. Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Bank or its Lending
Office to (a) honor its obligation to make or renew Eurodollar Loans hereunder
or convert Loans of any type into Loans of such type, or (b) maintain Eurodollar
Loans hereunder, then such Bank shall promptly notify the Borrower thereof (with
a copy to the Agent) and such Bank's obligation to make or renew Eurodollar
Loans and to convert other types of Loans into Loans of such type hereunder
shall be suspended until such time as such Bank may again make, renew, or
convert and maintain such affected Loans and such Bank's outstanding Eurodollar
Loans, as the case may be, shall be converted in accordance with Section 3.04.
Section 3.04. Certain Conversions pursuant to Sections 3.01 and 3.03.
If the Loans of any Bank of a particular type (Loans of such type being herein
called "Affected Loans" and such type being herein called the "Affected Type")
are to be converted pursuant to Section 3.01 or 3.03, such Bank's Affected Loans
shall be automatically converted into Variable Rate Loans on the last day(s) of
the then current Interest Period(s) for the Affected Loans (or, in the case of a
conversion required by Section 3.01(b) or 3.03, on such earlier date as such
Bank may specify to the Borrower with a copy to the Agent) and, unless and until
such Bank gives notice as provided below that the circumstances specified in
Section 3.01 or 3.03 which gave rise to such conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have been so
converted, all payments and prepayments of principal which would otherwise be
applied to such Bank's Affected Loans shall be applied instead to its Variable
Rate Loans;
(b) all Loans which would otherwise be made or renewed by such Bank as
Loans of the Affected Type shall be made instead as Variable Rate Loans and all
Loans of such Bank which would otherwise be converted into Loans of the Affected
Type shall be converted instead into (or shall remain as) Variable Rate Loans;
and
If such Bank gives notice to the Borrower (with a copy to the Agent)
that the circumstances specified in Section 3.01 or 3.03 which gave rise to the
conversion of such Bank's Affected Loans pursuant to this Section 3.04 no longer
exist (which such Bank agrees to do promptly upon such circumstances ceasing to
exist) at a time when Loans of the Affected Type are outstanding, such Bank's
Variable Rate Loans shall be automatically converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Loans of the Affected
Type to the extent necessary so that, after giving effect thereto, all Loans
held by the Banks holding Loans of the Affected Type and by such Bank are held
pro rata (as to principal amounts, types and Interest Periods) in accordance
with their respective Commitments.
Section 3.05. Certain Compensation. The Borrower shall pay to the Agent
for the account of each Bank, upon the request of such Bank through the Agent,
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense which such Bank determines
is attributable to:
(a) any payment, prepayment, conversion or renewal of a Fixed Rate Loan
made by such Bank on a date other than the last day of an Interest Period for
such Loan (whether by reason of acceleration, mandatory prepayment or
otherwise); or
(b) any failure by the Borrower to borrow, convert into or renew a
Fixed Rate Loan to be made, converted into or renewed by such Bank on the date
specified therefor in the relevant notice under Section 2.04, 2.05 or 2.07, as
the case may be.
Without limiting the foregoing, such compensation shall include an
amount equal to the excess, if any, of: (i) the amount of interest which
otherwise would have accrued on the principal amount so paid, prepaid, converted
or renewed or not borrowed, converted or renewed for the period from and
including the date of such payment, prepayment or conversion or failure to
borrow, convert or renew to but excluding the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or renew, to but excluding the last day of the Interest Period for such Loan
which would have commenced on the date specified therefor in the relevant
notice) at the applicable rate of interest for such Loan provided for herein;
over (ii) the amount of interest (as reasonably determined by such Bank) such
Bank would have bid in the London interbank market for Dollar deposits for
amounts comparable to such principal amount and maturities comparable to such
period. A determination of any Bank as to the amounts payable pursuant to this
Section 3.05 shall be conclusive absent manifest error.
Section 3.06. HLT Classification. If, after the date hereof, the Agent
is advised by any Bank that such Bank has received notice from any governmental
authority, central bank or comparable agency having jurisdiction over such Bank
that the definition of highly leveraged transaction has been modified with the
result that its Loans hereunder are classified as a "highly leveraged
transaction" (an "HLT Classification") or if the Borrower takes any action which
causes this transaction to be subject to HLT Classification, the Agent shall
promptly give notice of such HLT Classification to the Borrower and the other
Banks and the Agent. The Banks and the Borrower shall commence negotiations in
good faith to agree on whether and, if so, the extent to which commitment fees,
interest rates and/or margins hereunder should be increased so as to reflect
such HLT Classification. If the Borrower and the Required Banks fail to agree on
such increases within 10 days after notice is given by the Agent as provided
above, then (i) the Agent, if requested by the Required Banks shall, by notice
to the Borrower immediately terminate the Commitments, and (ii) the Borrower
shall be obligated to prepay on the date of such termination of the Commitments
each outstanding Loan by paying the aggregate principal amount to be prepaid
together with all accrued interest thereon to the date of such prepayment;
provided that, if the Borrower prepays any Fixed Rate Loans pursuant to this
clause, the Borrower shall compensate the Banks for any resulting funding
losses. The Banks acknowledge that a HLT Classification is not a Default or an
Event of Default hereunder.
ARTICLE 4. COLLATERAL SECURITY.
Section 4.01 Security. As security for the payment of all Loans made
hereunder, and for the obligations of each Guarantor under its Guaranty,
Borrower and the Guarantors hereby agree that the Banks shall at all times have,
pursuant to the Security Agreements executed as of December 29, 1995, the form
of which is attached as Exhibit D, a continuing general security interest in all
personal property of Borrower and each Guarantor as more fully described in the
Security Agreement. In addition, as provided in the Security Agreement, the
Banks shall at all times have a perfected first priority security interest in
100% of the stock of all Subsidiaries of Borrower, now owned or hereafter
acquired.
Section 4.02 Setoff. As additional collateral security for the payment
of the Notes and of any and all other obligations and liabilities of Borrower
and each Guarantor to the Banks hereunder, whether due or to become due, direct
or contingent, now existing or hereafter arising, and however created or
acquired, the Banks shall at all times have and are hereby given a security
interest in and a lien upon and right of offset against all moneys, deposit
balances, securities or other property or interest therein of Borrower and each
Guarantor now or at any time after the date of this Loan Agreement held or
received by or for or left in the possession or control of any of the Banks,
whether for safekeeping, custody, transmission, collection, pledge or for any
other or different purpose. The foregoing right of setoff shall at all times be
subject to the Banks' obligation to share payments as set forth in Section
11.17.
Section 4.03 Guaranties. The Guaranties and Security Agreements dated
December 29, 1995, executed and delivered by the Guarantors to the Banks shall
remain in full force and effect and shall apply to, and secure payment of, all
Loans. Any entity that hereafter becomes a subsidiary of Borrower shall promptly
execute and deliver a Guaranty and Security in favor of the Banks, together with
all resolutions, opinions, and financing statements relating thereto.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.01. Documentary Conditions Precedent. The obligations of the
Banks to make the Loans constituting the initial borrowing hereunder are subject
to the condition precedent that the Agent and the Banks shall have received on
or before the date of such Loans each of the following, in form and substance
satisfactory to the Agent, the Banks, and their counsel:
The Facility Documents executed and delivered as of December 29, 1995
are hereby ratified and confirmed and shall satisfy the foregoing requirements
except that Borrower shall execute and deliver new Notes in the amount of the
Commitments of the Banks set forth in this Amended and Restated Credit Agreement
- - - Revolving Credit Facility.
(a) the Notes duly executed by the Borrower;
(b) the Authorization Letter duly executed by the Borrower;
(c) Security Agreements and UCC-1 Financing Statements duly executed by
the Borrower and each Guarantor;
(d) the Guaranty duly executed by each Guarantor;
(e) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, attesting to all corporate action taken by the
Borrower, including resolutions of its Board of Directors and sole shareholder
authorizing the execution, delivery and performance of the Facility Documents to
which it is a party and each other document to be delivered pursuant to this
Agreement;
(f) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, certifying the names and true signatures of
the officers of the Borrower authorized to sign the Facility Documents to which
it is a party and the other documents to be delivered by the Borrower under this
Agreement;
(g) a certificate of a duly authorized officer of the Borrower, dated
the Closing Date, stating that the representations and warranties in Article 6
are true and correct on such date as though made on and as of such date and that
no event has occurred and is continuing which constitutes a Default or Event of
Default;
(h) a favorable opinion of counsel for the Borrower, dated the Closing
Date, in substantially the form of Exhibit E and as to such other matters as the
Agent or any Bank may reasonably request;
(i) a certificate of the Secretary or Assistant Secretary of each
Guarantor, dated the Closing Date, attesting to all corporate action taken by
the Guarantor, including resolutions of its Board of Directors authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party;
(j) a certificate of the Secretary or Assistant Secretary of each
Guarantor, dated the Closing Date, certifying the names and true signatures of
the officers of each Guarantor authorized to sign the Facility Documents to
which it is a party;
(k) a favorable opinion of counsel for each Guarantor dated the Closing
Date, in substantially the form of Exhibit F and as to such other matters as the
Agent or any Bank may reasonably request;
(l) a certificate of a duly authorized officer of each Guarantor, dated
the Closing Date, stating that the representations and warranties in the
Facility Documents to which it is a party are true and correct on such date as
though made on and as of such date and that no event has occurred and is
continuing which constitutes a Default or Event of Default, and
(m) Certificates from the applicable Secretaries of State showing
Borrower and each Guarantor to be corporations in good standing in the States of
their incorporation.
Section 5.02. Additional Conditions Precedent. The obligations of the
Banks to make any Loans pursuant to a borrowing which increases the amount
outstanding hereunder (including the initial borrowing) shall be subject to the
further conditions precedent that on the date of such Loans:
(a) the following statements shall be true:
(i) the representations and warranties contained in Article 6
and in any other Facility Document are true and correct on and as of
the date of such Loans as though made on and as of such date; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Loans.
(b) The Banks shall have reviewed, and shall be satisfied with, the
condition (financial and otherwise), operations, assets, title and nature of
assets, liabilities and prospects of the Borrower and its Subsidiaries.
(c) The Banks shall have reviewed, and shall be satisfied with, (i) the
Borrower's tax assumptions, and (ii) the corporate, organizational, capital, and
legal structure of the Borrower, and its Subsidiaries.
(d) The Banks shall be satisfied that the borrowings under this
Agreement are in full compliance with all legal requirements, including without
limitation Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System, and all securities law requirements.
(e) The Banks shall be satisfied that the Borrower, and its
Subsidiaries comply in all material respects with all applicable U.S. federal,
state and local laws and regulations, including all Environmental Laws.
(f) The Banks shall continue to be satisfied with the insurance program
of the Borrower and its Subsidiaries.
(g) The Banks shall have reviewed, and shall be satisfied with,
information concerning any litigation relating to or arising out any of the
transactions contemplated by this Agreement.
(h) the Agent shall have received such other approvals, opinions or
documents as the Agent or any Bank may reasonably request.
(i) Guaranties to each Bank from each Subsidiary shall be in full force
and effect and unrevoked.
(j) The Security Agreements of Borrower and each Guarantor, and all
other Facility Documents, shall be in full force and effect.
Section 5.03. Prepayment From Public Offering. The obligations of the
Banks to make any Loans hereunder shall be subject to the further condition
precedent that Borrower shall have prepaid the entire proceeds of Borrower's
Public Offering, net of related fees and expenses and net of proceeds due to
"Selling Shareholders" as defined in borrower's prospectus relating to
Borrower's Public Offering, against outstanding Loans due the Banks resulting in
a reduction in outstanding principal of at least $49,000,000.00.
Section 5.04. Deemed Representations. Each notice of borrowing
hereunder and acceptance by the Borrower of the proceeds of such borrowing shall
constitute a representation and warranty that the statements contained in
Section 5.02(a) are true and correct both on the date of such notice and, unless
the Borrower otherwise notifies the Agent prior to such borrowing, as of the
date of such borrowing.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 6.01. Incorporation, Good Standing and Due Qualification. Each
of the Borrower and its Subsidiaries is duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its assets and to transact the business
in which it is now engaged or proposed to be engaged, and is duly qualified as a
foreign corporation and in good standing under the laws of each other
jurisdiction in which such qualification is required.
Section 6.02. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Borrower of the Facility Documents to
which it is a party have been duly authorized by all necessary corporate action
and do not and will not: (a) require any consent or approval of its
stockholders; (b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing, registration, consent or approval under, any law,
rule, regulation (including, without limitation, Regulation U), order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Borrower or any of its Subsidiaries or Affiliates; (d)
result in a breach of or constitute a default or require any consent under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its properties may
be bound or affected; (e) result in, or require, the creation or imposition of
any Lien upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower; or (f) cause the Borrower (or any Subsidiary or
Affiliate, as the case may be) to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument.
Section 6.03. Legally Enforceable Agreements. Each Facility Document to
which the Borrower is a party is, or when delivered under this Agreement will
be, a legal, valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally.
Section 6.04. Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened, against or affecting
the Borrower or any of its Sub sidiaries before any court, governmental agency
or arbitrator, which may, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties or business of
the Borrower or any such Subsidiary or of the ability of the Borrower to perform
its obligations under the Facility Documents to which it is a party.
Section 6.05. Financial Statements. The consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as at December 30, 1994, and the
related consolidated income statement and statements of cash flows and changes
in stockholders' equity of the Borrower and its Consolidated Subsidiaries for
the fiscal year then ended, and the accompanying footnotes, together with the
opinion thereon, of Price Waterhouse LLP, independent certified public
accountants, copies of which have been furnished to each of the Banks, are
complete and correct and fairly present the financial condition of the Borrower
and its Consolidated Subsidiaries as at such date and the results of the
operations of the Borrower and its Consolidated Subsidiaries for the periods
covered by such statements, all in accordance with GAAP consistently applied
(subject to adjustments under Financial Accounting Standards 106 and 109). There
are no liabilities of the Borrower or any of its Consolidated Subsidiaries,
fixed or contingent, which are material but are not reflected in the financial
statements or in the notes thereto, other than liabilities arising in the
ordinary course of business since December 30, 1994. No information, exhibit or
report furnished by the Borrower to the Banks in connection with the negotiation
of this Agreement contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statements contained
therein not materially misleading. Since December 30, 1994, there has been no
material adverse change in the condition (financial or otherwise), business,
operations or prospects of the Borrower or any of its Subsidiaries.
Section 6.06. Ownership and Liens. Each of the Borrower and its
Consolidated Subsidiaries has good, clear and marketable title to, or valid
leasehold interests in, all of its properties and assets, real and personal,
including the properties and assets, and leasehold interests reflected in the
financial statements referred to in Section 6.05 (other than any properties or
assets disposed of in the ordinary course of business), and none of the
properties and assets owned by the Borrower or any of its Subsidiaries and none
of its leasehold interests is subject to any Lien, except as disclosed in such
financial statements or as may be permitted hereunder. Upon consummation of the
NDM Acquisition in accordance with the Asset Purchase Agreement, NDM, Inc. will
acquire good, clear and marketable title to the assets to be acquired from NDM.
Section 6.07. Taxes. Each of the Borrower and its Subsidiaries has
filed all tax returns (federal, state and local) required to be filed and has
paid all taxes, assessments and gov ernmental charges and levies thereon to be
due, including interest and penalties. The federal income tax liability of the
Borrower and its Subsidiaries has been audited by the Internal Revenue Service
and has been finally determined and satisfied for all taxable years up to and
including the taxable year ended in 1990.
Section 6.08. ERISA. Each Plan, and, to the best knowledge of the
Borrower, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other applicable Federal or
state law, and no event or condition is occurring or exists concerning which the
Borrower would be under an obligation to furnish a report to the Bank in
accordance with Section 7.08(h) hereof. The funded status of each Plan is as set
forth in Schedule IV.
Section 6.09. Subsidiaries and Ownership of Stock. Schedule I is a
complete and accurate list of the Subsidiaries of the Borrower, showing the
jurisdiction of incorporation or organi zation of each Subsidiary and showing
the percentage of the Borrower's ownership of the outstanding stock or other
interest of each such Subsidiary. All of the outstanding capital stock or other
interest of each such Subsidiary has been validly issued, is fully paid and
nonassessable and is owned by the Borrower free and clear of all Liens.
Section 6.10. Credit Arrangements. Schedule II is a complete and
correct list of all credit agreements, indentures, installment purchase
agreements, guaranties, Capital Leases and other investments, agreements and
arrangements presently in effect providing for or relating to extensions of
credit (including agreements and arrangements for the issuance of letters of
credit or for accep tance financing) in respect of which the Borrower or any of
its Subsidiaries is in any manner directly or contingently obligated; and the
maximum principal or face amounts of the credit in question, outstanding and
which can be outstanding, are correctly stated, and all Liens of any nature
given or agreed to be given as security therefor are correctly described or
indicated in such Schedule.
Section 6.11. Operation of Business. Each of the Borrower and its
Subsidiaries possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, necessary to conduct its business
substantially as now conducted and as presently proposed to be conducted, and
neither the Borrower nor any of its Subsidiaries is in violation of any valid
rights of others with respect to any of the foregoing.
Section 6.12. Hazardous Materials. The Borrower and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization would not have a material adverse
effect on the consolidated financial condition, operations, business or
prospects of the Borrower and its Consolidated Subsidiaries. The Borrower and
each of its Subsidiaries are in compliance with the terms and conditions of all
such permits, licenses and authorizations, and are also in compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a material
adverse effect on the consolidated financial condition, operations, business or
prospects of the Borrower and its Consolidated Subsidiaries.
In addition, except as set forth in Schedule III hereto:
(a) No notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or threatened by any
governmental or other entity with respect to any alleged failure by the Borrower
or any of its Subsidiaries to have any permit, license or authoriza tion
required in connection with the conduct of the business of the Borrower or any
of its Subsidiaries or with respect to any generation, treatment, storage,
recycling, transportation, release or disposal, or any release as defined in 42
U.S.C. ss. 9601(22) ("Release"), of any substance regulated under Environmental
Laws ("Hazardous Materials") generated by the Borrower or any of its
Subsidiaries.
(b) Neither the Borrower nor any of its Subsidiaries has handled any
Hazardous Material, other than as a generator, on any property now or previously
owned or leased by the Borrower or any of its Subsidiaries to an extent that it
has, or may reasonably be expected to have, a material adverse effect on the
consolidated financial condition, operations, business or prospects taken as a
whole of the Borrower and its Consolidated Subsidiaries; and
(i) no polychlorinated biphenyl is or has been present at any
property now or previously owned or leased by the Borrower or any of
its Subsidiaries;
(ii) no asbestos is or has been present at any property now or
previously owned or leased by the Borrower or any of its Subsidiaries;
(iii) there are no underground storage tanks for Hazardous
Materials, active or abandoned, at any property now or previously owned
or leased by the Borrower or any of its Subsidiaries; and
(iv) no Hazardous Materials have been Released, in a
reportable quantity, where such a quantity has been established by
statute, ordinance, rule, regulation or order, at, on or under any
property now or previously owned by the Borrower or any of its
Subsidiaries.
(c) Neither the Borrower nor any of its Subsidiaries has transported or
arranged for the transportation of any Hazardous Material to any location which
is listed on the National Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), listed
for possible inclusion on the National Priorities List by the Environmental
Protection Agency in the Comprehensive Environmental Response and Liability
Information System as provided by 40 C.F.R. ss. 300.5 ("CERCLIS") or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to claims against the
Borrower or any of its Subsidiaries for clean-up costs, remedial work, damages
to natural resources or for personal injury claims, including, but not limited
to, claims under CERCLA.
(d) No Hazardous Material generated by the Borrower or any of its
Subsidiaries has been recycled, treated, stored, disposed of or released (as
defined in CERCLA) by the Borrower or any of its Subsidiaries at any location
other than those listed in Schedule III hereto.
(e) No oral or written notification of a Release of a Hazardous
material has been filed by or on behalf of the Borrower or any of its
Subsidiaries and no property now or previously owned or leased by the Borrower
or any of its Subsidiaries is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA, on CERCLIS or on any similar
state list of sites requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to any Environmental
Laws on any of the real property or properties owned or leased by the Borrower
or any of its Subsidiaries, and no government actions have been taken or are in
process which could subject any of such properties to such Liens and neither the
Borrower nor any of its Subsidiaries would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any property
owned by it in any deed to such property.
(g) There have been no environmental investigations, studies, audits,
test, reviews or other analyses conducted by or which are in the possession of
the Borrower or any of its Subsidiaries in relation to any property or facility
now or previously owned or leased by the Borrower or any of its Subsidiaries
which have not been made available to the Banks.
Section 6.13. No Default on Outstanding Judgments or Orders. Each of
the Borrower and its Subsidiaries has satisfied all judgments and neither the
Borrower nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other governmental authority, commission, board,
bureau, agency or instrumentality, domestic or foreign.
Section 6.14. No Defaults on Other Agreements. Neither the Borrower nor
any of its Subsidiaries is a party to any indenture, loan or credit agreement or
any lease or other agreement or instrument or subject to any charter or
corporate restriction which could have a material adverse effect on the
business, properties, assets, operations or conditions, financial or otherwise,
of the Borrower or any of its Subsidiaries, or the ability of the Borrower or
any of its Subsidiaries to carry out its obligations under the Facility
Documents to which it is a party. Neither the Borrower nor any of its
Subsidiaries is in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a party.
Section 6.15. Labor Disputes and Acts of God. Neither the business nor
the properties of the Borrower or of any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), materially and adversely
affecting such business or properties or the operation of the Borrower or such
Subsidiary.
Section 6.16. Governmental Regulation. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940, the Interstate Commerce
Act, the Federal Power Act or any statute or regulation limiting its ability to
incur indebtedness for money borrowed as contemplated hereby.
Section 6.17. Partnerships. Neither the Borrower nor any of its
Subsidiaries is a partner in any partnership.
Section 6.18. No Forfeiture. Neither the Borrower nor any of its
Subsidiaries or Affiliates is engaged in or proposes to be engaged in the
conduct of any business or activity which could result in a Forfeiture
Proceeding and no Forfeiture Proceeding against any of them is pending or
threatened.
Section 6.19. Solvency.
(a) The present fair saleable value of the assets of the Borrower and
each Subsidiary, respectively, after giving effect to all the transactions
contemplated by the Facility Documents and the funding of all Commitments
hereunder, exceeds the amount that will be required to be paid on or in respect
of the existing debts and other liabilities (including contingent liabilities)
of the Borrower and its Subsidiaries as they mature.
(b) The respective property of the Borrower and each Subsidiary does
not constitute unreasonably small capital for the Borrower or any Subsidiary to
carry out its business as now conducted and as proposed to be conducted
including the capital needs of the Borrower or its Subsidiaries.
(c) Neither Borrower nor any Subsidiary intends to, nor does it believe
that it will, incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be received by the
Borrower and each Subsidiary, and of amounts to be payable on or in respect of
debt of the Borrower and each Subsidiary). The cash available to the Borrower
and its Subsidiaries, after taking into account all other anticipated uses of
the cash of the Borrower and its Subsidiaries, is anticipated to be sufficient
to pay all such amounts on or in respect of debt of the Borrower and its
Subsidiaries when such amounts are required to be paid.
(d) The Borrower does not believe that final judgments against it or
any Subsidiary in actions for money damages will be rendered at a time when, or
in an amount such that, the Borrower and its Subsidiaries will be unable to
satisfy any such judgments promptly in accordance with their terms (taking into
account the maximum reasonable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be rendered). The
cash available to the Borrower and its Subsidiaries after taking into account
all other anticipated uses of the cash of the Borrower and its Subsidiaries
(including the payments on or in respect of debt referred to in paragraph (c) of
this Section 6.19), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
Section 6.20. Integrated Group. Borrower and its Subsidiaries function
as an integrated group and Borrower and each Subsidiary will derive benefits,
directly and indirectly, from the Loans, both in their separate capacity and as
members of the integrated group, because the successful operation of Borrower
and its Subsidiaries is dependant upon the continued successful operation and
functions of Borrower and each Subsidiary and of the integrated group as a
whole. All Loans will be made to and through Borrower, but it is agreed that
each Subsidiary will benefit from the Loans along with Borrower as members of
the integrated and consolidated group.
ARTICLE 7. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower shall:
Section 7.01. Maintenance of Existence. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its corporate existence
and good standing in the jurisdiction of its incorporation, and qualify and
remain qualified, and cause each of its Subsidiaries to qualify and remain
qualified, as a foreign corporation in each jurisdiction in which such
qualification is required.
Section 7.02. Conduct of Business. Continue, and cause each of its
Subsidiaries to continue, to engage in an efficient and economical manner in a
business of the same general type as conducted by it on the date of this
Agreement.
Section 7.03. Maintenance of Properties. Maintain, keep and preserve,
and cause each of its Subsidiaries to maintain, keep and preserve, all of its
properties, (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
Section 7.04. Maintenance of Records. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, in which complete
entries will be made in accordance with GAAP, reflecting all financial
transactions of the Borrower and its Subsidiaries.
Section 7.05. Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same or a similar business and
similarly situated, which insurance may provide for reasonable deductibility
from coverage thereof.
Section 7.06. Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders (including, but not limited to, environmental laws,
rules, regulations and orders), such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property.
Section 7.07. Right of Inspection. At any reasonable time and from time
to time, permit the Agent or any Bank or any agent or representative thereof, to
examine and make copies and abstracts from the records and books of account of,
and visit the properties of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and any such
Subsidiary with any of their respective officers and directors and the
Borrower's independent accountants.
Section 7.08. Reporting Requirements. Furnish directly to each of the
Banks:
(a) as soon as available and in any event within 90 days after the end
of each fiscal year of the Borrower, a consolidated and consolidating balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated and consolidating income statement and statements
of cash flows and changes in stockholders' equity of the Borrower and its
Consolidated Subsidiaries for such fiscal year, all in reasonable detail and
stating in comparative form the respective consolidated and consolidating
figures for the corresponding date and period in the prior fiscal year and all
prepared in accordance with GAAP and as to the consolidated statements
accompanied by an opinion thereon acceptable to the Agent and each of the Banks
by Price Waterhouse LLP or other independent accountants of national standing
selected by the Borrower;
(b) as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and a consolidated and
consolidating income statement and statements of cash flows and changes in stock
holders' equity, of the Borrower and its Consolidated Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, all in reasonable detail and stating in comparative form the
respective consolidated and consolidating figures for the corresponding date and
period in the previous fiscal year and all prepared in accordance with GAAP and
certified by the chief financial officer of the Borrower (subject to year-end
adjustments);
(c) promptly upon receipt thereof, copies of any reports submitted to
the Borrower or any of its Subsidiaries by independent certified public
accountants in connection with examination of the financial statements of the
Borrower or any such Subsidiary made by such accountants;
(d) simultaneously with the delivery of the financial statements
referred to above, a certificate of the chief financial officer of the Borrower
(i) certifying that to the best of his knowledge no Default or Event of Default
has occurred and is continuing or, if a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, and (ii) with computations
demonstrating compliance with the covenants contained in Article 9;
(e) simultaneously with the delivery of the annual financial statements
referred to in Section 7.08(a), a certificate of the independent public
accountants who audited such statements to the effect that, in making the
examination necessary for the audit of such statements, they have obtained no
knowledge of any condition or event which constitutes a Default or Event of
Default, or if such accountants shall have obtained knowledge of any such
condition or event, specifying in such certificate each such condition or event
of which they have knowledge and the nature and status thereof;
(f) promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, affecting the
Borrower or any of its Subsidiaries which, if determined adversely to the
Borrower or such Subsidiary, could have a material adverse effect on the
financial condition, properties, or operations of the Borrower or such
Subsidiary;
(g) as soon as possible and in any event within 10 days after the
occurrence of each Default or Event of Default a written notice setting forth
the details of such Default or Event of Default and the action which is proposed
to be taken by the Borrower with respect thereto;
(h) as soon as possible, and in any event within ten days after the
Borrower knows or has reason to know that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan have occurred or
exist, a statement signed by a senior financial officer of the Borrower setting
forth details respecting such event or condition and the action, if any, which
the Borrower or its ERISA Affiliate proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or given to PBGC by the
Borrower or an ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA, with respect to a Plan, as to which PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (provided that a failure
to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA including, without limitation, the failure to make
on or before its due date a required installment under Section 412(m)
of the Code or Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with Section
412(d) of the Code) and any request for a waiver under Section 412(d)
of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by the Borrower or
an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Plan, or the receipt by the Borrower or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by the Borrower or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the
receipt of the Borrower or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary or any
Multiemployer Plan against the Borrower or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed within
30 days;
(vi) the adoption of an amendment to any Plan that pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA would result in
the loss of tax-exempt status of the trust of which such Plan is a part
if the Borrower or an ERISA Affiliate fails to timely provide security
to the Plan in accordance with the provisions of said Sections;
(vii) any event or circumstance exists which may reasonably be
expected to constitute grounds for the Borrower or any ERISA Affiliate
to incur liability under Title IV of ERISA or under Sections 412(c)(11)
or 412(n) of the Code with respect to any Plan; and
(viii) the Unfunded Benefit Liabilities of one or more Plans
increase after the date of this Agreement in an amount which is
material in relation to the financial condition of the Borrower and its
Subsidiaries, on a consolidated basis; provided, however, that such
increase shall not be deemed to be material so long as it does not
exceed $300,000 during any consecutive one year period .
(i) promptly after the request of any Bank, copies of each annual
report filed pursuant to Section 104 of ERISA with respect to each Plan
(including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to the Borrower or an ERISA
Affiliate;
(j) promptly after the furnishing thereof, copies of any statement or
report furnished to any other party pursuant to the terms of any indenture, loan
or credit or similar agreement and not otherwise required to be furnished to the
Banks pursuant to any other clause of this Section 7.08;
(k) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which the Borrower or any of its
Subsidiaries sends to its stock holders, and copies of all regular, periodic and
special reports, and all registration statements which the Borrower or any such
Subsidiary files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national securities
exchange;
(l) promptly after the commencement thereof or promptly after the
Borrower knows of the commencement or threat thereof, notice of any Forfeiture
Proceeding;
(m) a quarterly report from Borrower's environmental counsel on the
status of environmental matters relating to Birtcher; and
(n) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as the Agent
or any Bank may from time to time reasonably request.
Section 7.09. Guaranties. Cause any Subsidiary hereafter created or
acquired to execute and deliver a Guaranty.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower shall not:
Section 8.01. Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt
except:
(a) Debt of the Borrower under this Agreement or the Notes, or under
the Credit Agreement - Term Loan Facility and Notes issued pursuant thereto;
(b) Debt described in Schedule II, including renewals, extensions or
refinancings thereof, provided that the principal amount thereof does not
increase;
(c) Debt of the Borrower subordinated on terms satisfactory to the
Banks to the Borrower's obligations under this Agreement and the Notes;
(d) Debt of the Borrower to any such Subsidiary or of any Subsidiary to
the Borrower or another such Subsidiary;
(e) accounts payable to trade creditors for goods or services which are
not aged more than 180 days from billing date and current operating liabilities
(other than for borrowed money) which are not more than 180 days past due, in
each case incurred in the ordinary course of business and paid within the
specified time, unless contested in good faith and by appropriate proceedings;
(f) Debt in respect of letters of credit issued by Chase for the
account of the Borrower or any such Subsidiary in an aggregate face amount
outstanding at any time of up to $100,000;
(g) Debt of the Borrower or any such Subsidiary secured by purchase
money Liens permitted by Section 8.03;
(h) Hedge Exposure under Hedge Agreements with any counterparty that
was a Bank at the time it entered into the Hedge Agreement, provided that
Borrower and its Subsidiaries shall not enter into Hedge Agreements with any
third party other than a Bank and that their maximum, aggregate Hedge Exposure
shall not exceed $2,000,000 at any time; or
(i) A lease from the Oneida County Industrial Development Agency of the
former Carl's Drug Company property located at 5836 Success Drive, West Rome
Industrial Park, Rome, New York (the "Rome Property") at nominal annual rental,
which lease will be accounted for as a Capital Lease, together with governmental
financing of up to $1,100,000 for acquisition and improvement expenditures of
the Rome Property.
Section 8.02. Guaranties, Etc. Assume, guarantee, endorse or otherwise
be or become directly or contingently responsible or liable, or permit any of
its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, asset, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, other than Borrower or a subsidiary except guaranties
by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business.
Section 8.03. Liens. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(a) Liens in favor of Agent and/or the Banks securing the Loans
hereunder;
(b) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment insurance, social
security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(f) judgment and other similar Liens arising in connection with court
proceedings; provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Borrower or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens securing obligations of a Subsidiary to the Borrower or
another Subsidiary;
(i) Liens described in Schedule II including renewals, extensions or
refinancings of the obligations secured thereby, provided that the principal
amount does not increase and the Liens are not extended to other property or
obligations;
(j) Liens securing Borrower's obligations relating to letters of credit
permitted under Section 8.01(f) or Hedge Agreements permitted under Section
8.01(h).
(k) purchase money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such acquisition, or
a Lien incurred in connection with any conditional sale or other title retention
agreement or a Capital Lease; provided that:
(i) any property subject to any of the foregoing is acquired
by the Borrower or any such Subsidiary in the ordinary course of its
business and the Lien on any such property is created contemporaneously
with such acquisition;
(ii) the obligation secured by any Lien so created, assumed or
existing shall not exceed 100% of the lesser of cost or fair market
value as of the time of acquisition of the property covered thereby to
the Borrower or such Subsidiary acquiring the same;
(iii) each such Lien shall attach only to the property so
acquired and fixed improvements thereon;
(iv) the Debt secured by all such Liens shall not exceed
$200,000 at any time outstanding in the aggregate; and
(v) the obligations secured by such Lien are permitted by the
provisions of Section 8.01 and the related expenditure is permitted
under Section 9.03.
Section 8.04. Leases. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except: (a) leases existing on the date of this Agreement and any extensions or
renewals thereof; (b) leases (other than Capital Leases) which do not in the
aggregate require the Borrower and its Subsidiaries on a consolidated basis to
make payments (including taxes, insurance, maintenance and similar expense which
the Borrower or any Subsidiary is required to pay under the terms of any lease)
in any fiscal year of the Borrower in excess of $1,000,000; (c) leases between
the Borrower and any Subsidiary or between any Subsidiaries; (d) Capital Leases
permitted by Section 8.03; and (e) a lease with The Oneida County Industrial
Development Agency, Rome Property. Payments under existing Birtcher leases and
renewals of same for premises located at 50 Technology Drive and 15330 Barranca
Parkway, Irvine, California shall be disregarded in calculating Borrower's
compliance with the limitations set forth in subsection 8.04(b).
Section 8.05. Loans; Investments. Make, or permit any of its
Subsidiaries to make, any loan or advance to any Person, other than Borrower or
a Subsidiary, or purchase or otherwise acquire, or permit any such Subsidiary to
purchase or otherwise acquire, any capital stock, assets, obligations or other
securities of, make any capital contribution to, or otherwise invest in, or
acquire any interest in, any Person, except: (a) a Subsidiary; (b) direct
obligations of the United States of America or any agency thereof with
maturities of five years or less from the date of acquisition; (c) commercial
paper of a domestic issuer rated at least "A-1" by Standard & Poor's Corporation
or "P-1" by Moody's Investors Service, Inc.; (d) certificates of deposit with
maturities of one year or less from the date of acquisition issued by any
commercial bank operating within the United States of America having capital and
surplus in excess of $750,000,000; (e) bank repurchase agreements of 30 days or
less duration backed by direct obligations of the United States of America or
any agencies thereof; and (f) for stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to the
Borrower or any Subsidiary.
Section 8.06. Dividends. Without the consent of the Banks, declare or
pay any dividends, purchase, redeem, retire or otherwise acquire for value any
of its capital stock now or hereafter outstanding, or make any distribution of
assets to its stockholders as such whether in cash, assets or in obligations of
the Borrower, or allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption or retirement of
any shares of its capital stock, or make any other distribution by reduction of
capital or otherwise in respect of any shares of its capital stock or permit any
of its Subsidiaries to purchase or otherwise acquire for value any stock of the
Borrower or another such Subsidiary, except that: (a) the Borrower may declare
and deliver dividends and make distributions payable solely in common stock of
the Borrower; (b) the Borrower may purchase or otherwise acquire shares of its
capital stock by exchange for or out of the proceeds received from a
substantially concurrent issue of new shares of its capital stock; and (c) a
Subsidiary may pay dividends and make other distributions to Borrower.
Section 8.07. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests); except: (a) for inventory
disposed of in the ordinary course of business; (b) for the sale or other
disposition of assets no longer used or useful in the conduct of its business;
(c) that Borrower may convey the Rome Property to the Oneida County Industrial
Development Agency, which property will be leased back to Borrower as permitted
under Section 8.04(d) of this Agreement; (d) that any Subsidiary may sell,
lease, assign, or otherwise transfer its assets to the Borrower; and (e) that
Borrower may sell, lease, assign or otherwise transfer assets to any Subsidiary
so long as a Guaranty is in full force and effect for such Subsidiary.
Section 8.08. Stock of Subsidiaries, Etc. Sell or otherwise dispose of
any shares of capital stock of any of its Subsidiaries, except in connection
with a transaction permitted under Section 8.10, or permit any such Subsidiary
to issue any additional shares of its capital stock, except directors'
qualifying shares.
Section 8.09. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate or permit any of its Subsidiaries
to enter into any transaction, including, without limitation, the purchase, sale
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of, and pursuant to the reasonable requirements
of, the Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than would obtain in
a comparable arm's length transaction with a Person not an Affiliate.
Section 8.10. Mergers, Etc. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or acquire all or substantially all of the
assets or the business of any Person (or enter into any agreement to do any of
the foregoing), or permit any of its Subsidiaries to do so except that: (a) any
such Subsidiary may merge into or transfer assets to the Borrower; and (b) any
Subsidiary may merge into or consolidate with or transfer assets to any other
Subsidiary.
Section 8.11. Acquisitions. Enter into any transaction pursuant to
which the Borrower or any of its Subsidiaries (a) acquires equity securities (or
warrants, options or other rights to acquire such securities) of any corporation
other than the Borrower or any corporation which is not then a Subsidiary of the
Borrower, pursuant to a solicitation of tenders therefor, or in one or more
negotiated block, market or other transactions not involving a tender offer, or
a combination of any of the foregoing, or (b) makes any corporation a Subsidiary
of the Borrower, or causes any such corporation to be merged into the Borrower
or any of its Subsidiaries, in any case pursuant to a merger, purchase of assets
or any reorganization providing for the delivery or issuance to the holders of
such corporation's then outstanding securities, in exchange for such securities,
of cash or securities of the Borrower or any of its Subsidiaries, or a
combination thereof, or (c) purchases all or substantially all of the business
or assets of any corporation. The foregoing notwithstanding, without the prior
approval of the Banks, Borrower may borrow up to an aggregate of $20,000,000
under this Agreement for acquisitions that would otherwise be precluded under
this Section 8.11.
Section 8.12. No Activities Leading to Forfeiture. Neither the Borrower
nor any of its Subsidiaries or affiliates shall engage in or propose to be
engaged in the conduct of any business or activity which could result in a
Forfeiture Proceeding.
Section 8.13. New Businesses. Engage in, or permit any Subsidiary to
engage in, any business other than those presently conducted.
Section 8.14. Negative Pledge. Neither the Borrower nor any of its
Subsidiaries shall cause or permit, or agree or consent to cause or permit in
the future (upon the happening of a contingency or otherwise), any real property
now or hereafter owned by Borrower or such Subsidiary to be subject to any lien,
mortgage or encumbrance. Neither Borrower not any Subsidiary shall cause or
permit, or agree to cause or permit in the future, said real property to be
sold, conveyed or otherwise alienated.
ARTICLE 9. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement:
Section 9.01. Minimum Net Worth. The Borrower shall maintain at all
times a Consolidated Net Worth of not less than the greater of (a) the amount
that is $3,000,000 less than Borrower's Consolidated Net Worth as shown on the
first quarterly financial statement furnished to the Banks pursuant to Section
7.08 following Borrower's Public Offering, or (b) $123,000,000. This minimum net
worth requirement shall increase each quarter by an amount equal to 90% of
Borrower's consolidated net income during the immediate preceding calendar
quarter.
Section 9.02. Leverage Ratio. The Borrower shall maintain at all times
a ratio of Consolidated Total Liabilities to Consolidated Net Worth of not
greater than .75 to 1:00.
Section 9.03. Current Ratio. The Borrower shall maintain at all times a
ratio of Consolidated Current Assets to Consolidated Current Liabilities of not
less than 2.0 to 1:00.
Section 9.04. Total Funded Debt to Cash Flow. The Borrower shall
maintain at all times a ratio of Total Funded Debt to Cash Flow of not more than
3.5 to 1.0.
ARTICLE 10. EVENTS OF DEFAULT.
Section 10.01. Events of Default. Any of the following events shall be
an "Event of Default":
(a) the Borrower shall: (i) fail to pay the principal of any Note under
this Agreement as and when due and payable; or (ii) fail to pay interest on any
Note under this Agreement or any fee or other amount due hereunder as and when
due and payable;
(b) any representation or warranty made or deemed made by the Borrower
in this Agreement or in any other Facility Document or by any Guarantor in any
Facility Document to which it is a party or which is contained in any
certificate, document, opinion, financial or other statement furnished at any
time under or in connection with any Facility Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
(c) the Borrower shall: (i) fail to perform or observe any term,
covenant or agreement contained in Section 2.03 or Articles 7, 8 or 9 or
elsewhere in this Agreement; or (ii) fail to perform or observe any term,
covenant or agreement on its part to be performed or observed (other than the
obligations specifically referred to elsewhere in this Section 10.01) in any
Facility Document and such failure shall continue for 30 consecutive days;
(d) the Borrower, any Guarantor or any of their respective Subsidiaries
shall: (i) fail to pay any indebtedness, including but not limited to
indebtedness for borrowed money (other than the payment obligations described in
(a) above), of the Borrower, such Guarantor or such Subsidiary, as the case may
be, or any interest or premium thereon, within 180 days of billing date in the
case of trade accounts payable, 180 days from the due date in the case of other
current operating liabilities (other than for borrowed money), and within thirty
days of the date when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) for all other Debt; or (ii) fail to perform
or observe any term, covenant or condition on its part to be performed or
observed under any agreement or instrument relating to any such indebtedness,
when required to be performed or observed, if the effect of such failure to
perform or observe is to accelerate, or to permit the acceleration of, after the
giving of notice or passage of time, or both, the maturity of such indebtedness,
whether or not such failure to perform or observe shall be waived by the holder
of such indebtedness; or any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) the Borrower, any Guarantor or any of their respective
Subsidiaries: (i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become due; or (ii) shall
make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (iii) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (iv) shall have had any such petition or application filed or any
such proceeding shall have been commenced, against it, in which an adjudication
or appointment is made or order for relief is entered, and which petition,
application or proceeding remains undismissed for a period of 30 days or more;
or shall be the subject of any proceeding under which its assets may be subject
to seizure, forfeiture or divestiture (other than a proceeding in respect of a
Lien permitted under Section 8.03 (b)); or (v) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property; or (vi)
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of 30 days or more;
(f) one or more judgments, decrees or orders for the payment of money
in excess of $100,000 in the aggregate shall be rendered against the Borrower,
any Guarantor or any of their respective Subsidiaries and such judgments,
decrees or orders shall continue unsatisfied and in effect for a period of 30
consecutive days without being vacated, discharged, satisfied or stayed or
bonded pending appeal;
(g) any event or condition shall occur or exist with respect to any
Plan or Multiemployer Plan concerning which the Borrower is under an obligation
to furnish a report to the Bank in accordance with Section 7.08(h) hereof and as
a result of such event or condition, together with all other such events or
conditions, the Borrower or any ERISA Affiliate has incurred or in the opinion
of the Bank is reasonably likely to incur a liability to a Plan, a Multiemployer
Plan, the PBGC, or a Section 4042 Trustee (or any combination of the foregoing)
which is material in relation to the financial position of the Borrower and its
Subsidiaries, on a consolidated basis; provided, however, that any such amount
shall not be deemed to be material so long as all such amounts do not exceed in
the aggregate during any consecutive one year period $500,000;
(h) The Unfunded Benefit Liabilities of one or more Plans have
increased after the date of this Agreement in an amount which is material (as
specified in Section 10.01(g) hereof);
(i) (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rules 13d-3 of the
Securities and Exchange commission under the Securities Exchange Act of 1934) of
5% or more of the outstanding shares of voting stock of the Borrower unless such
persons are qualified to file SEC Schedule 12G under SEC Rules 13d- 1(b)(1) and
13d-2(b); or (ii) during any period of 12 consecutive months, commencing before
or after the date of this Agreement, individuals who at the beginning of such
12-month period were directors of the Borrower cease for any reason to
constitute a majority of the board of directors of the Borrower unless such
persons are replaced as directors by persons nominated by the then current board
of directors;
(j) (A) any Forfeiture Proceeding shall have been commenced or the
Borrower shall have given any Bank written notice of the commencement of any
Forfeiture Proceeding as provided in Section 7.08(l) or (B) any Bank has a good
faith basis to believe that a Forfeiture Proceeding has been threatened or
commenced;
(k) any Guaranty shall at any time after its execution and delivery and
for any reason cease to be in full force and effect or shall be declared null
and void, or the validity or enforceability thereof shall be contested by the
Guarantor, or the Guarantor shall revoke or terminate its Guaranty with respect
to future advances, or shall deny it has any further liability or obligation
thereunder, or shall fail to perform its obligations thereunder; or
(l) any loss contingency for costs and expenses relating to
environmental remediation becomes accruable as a liability on the financial
statements of Borrower under Financial Accounting Standards Board Standard No.
5, and such liability exceeds either $5,000,000 in the aggregate, regardless of
when due and payable, or $750,000 if payable within one year.
(m) an Event of Default shall occur and be continuing under the Credit
Agreement - Term Loan Facility or any Facility Document (as defined therein)
relating thereto.
Section 10.02. Remedies. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Banks, by notice to
the Borrower, (a) declare the Commit ments to be terminated, whereupon the same
shall forthwith terminate, and (b) declare the outstanding principal of the
Notes, all interest thereon and all other amounts payable under this Agreement
and the Notes to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that, in the case of an
Event of Default referred to in Section 10.01(e) or Section 10.01(j)(A) above,
the Commitments shall be immediately terminated, and the Notes, all interest
thereon and all other amounts payable under this Agreement shall be immediately
due and payable without notice, presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower. Further, Agent, acting on behalf of the Banks, and with the consent or
direction of the Required Banks, may then exercise any and all rights and
remedies available under the Facility Documents or at law or in equity.
ARTICLE 11. THE AGENT; RELATIONS AMONG BANKS AND BORROWER.
Section 11.01. Appointment, Powers and Immunities of Agent. Each Bank
hereby irrevocably (but subject to removal by the Required Banks pursuant to
Section 11.09) appoints and authorizes the Agent to act as its agent hereunder
and under any other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Facility
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Facility Document, and shall not by reason
of this Agreement be a trustee for any Bank. The Agent shall not be responsible
to the Banks for any recitals, statements, representations or warranties made by
the Borrower or any officer or official of the Borrower or any other Person
contained in this Agreement or any other Facility Document, or in any
certificate or other document or instrument referred to or provided for in, or
received by any of them under, this Agreement or any other Facility Document, or
for the value, legality, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility Document or any other
document or instrument referred to or provided for herein or therein, for the
perfection or priority of any collateral security for the Loans or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder. The Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or attorneys-in-
fact selected by it with reasonable care. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable or responsible for any
action taken or omitted to be taken by it or them hereunder or under any other
Facility Document or in connection herewith or therewith, except for its or
their own gross negligence or willful misconduct. The Borrower shall pay any fee
agreed to by the Borrower and the Agent with respect to the Agent's services
hereunder.
Section 11.02. Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent may deem and treat each Bank as
the holder of the Loan made by it for all purposes hereof unless and until a
notice of the assignment or transfer thereof satisfactory to the Agent signed by
such Bank shall have been furnished to the Agent but the Agent shall not be
required to deal with any Person who has acquired a participation in any Loan
from a Bank. As to any matters not expressly provided for by this Agreement or
any other Facility Document, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Banks, and such instructions of the Required Banks and
any action taken or failure to act pursuant thereto shall be binding on all of
the Banks and any other holder of all or any portion of any Loan.
Section 11.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Banks) unless the Agent
has received notice from a Bank or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default." In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Banks (and shall give
each Bank prompt notice of each such non-payment). The Agent shall (subject to
Section 11.08) take such action with respect to such Default or Event of Default
which is continuing as shall be directed by the Required Banks; provided that,
unless and until the Agent shall have received such directions, the Agent may
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interest of
the Banks; and provided further that the Agent shall not be required to take any
such action which it determines to be contrary to law.
Section 11.04. Rights of Agent as a Bank. With respect to its
Commitment and the Loans made by it, the Agent in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its capacity as a Bank. The Agent and its affiliates may (without
having to account therefor to any Bank) accept deposits from, lend money to (on
a secured or unsecured basis), and generally engage in any kind of banking,
trust or other business with, the Borrower (and any of its affiliates) as if it
were not acting as the Agent, and the Agent may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Banks. Although the
Agent and its affiliates may in the course of such relationships and
relationships with other Persons acquire information about the Borrower, its
Affiliates and such other Persons, the Agent shall have no duty to disclose such
information to the Banks.
Section 11.05. Indemnification of Agent. The Banks agree to indemnify
the Agent (to the extent not reimbursed under Section 12.03 or under the
applicable provisions of any other Facility Document, but without limiting the
obligations of the Borrower under Section 12.03 or such provisions), ratably in
accordance with the aggregate unpaid principal amount of the Loans made by the
Banks (without giving effect to any participations, in all or any portion of
such Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitments), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses which the Borrower is obligated to pay under Section 12.03 or
under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Bank shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 11.06. Documents. The Agent will forward to each Bank, promptly
after the Agent's receipt thereof, a copy of each report, notice or other
document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Bank.
Section 11.07. Non-Reliance on Agent and Other Banks. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any other
Facility Document. The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or any other
Facility Document or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any Subsidiary.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any Subsidiary (or any of their Affiliates) which may come into the
possession of the Agent or any of its affiliates. The Agent shall not be
required to file this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, for record or give notice of this
Agreement, any other Facility Document or any document or instrument referred to
herein or therein, to anyone.
Section 11.08. Failure of Agent to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 11.09. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower, and the Agent may be removed at any time with or without cause by the
Required Banks; provided that the Borrower and the other Banks shall be promptly
notified thereof. Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent from among the Banks. If no
successor Agent shall have been so appointed by the Required Banks and shall
have accepted such appointment within 30 days after the retiring Agent's giving
of notice of resignation or the Required Banks' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Banks, appoint a successor Agent,
which shall be a bank with capital and surplus in excess of $750,000,000 and
which has an office in New York, New York. The Required Banks or the retiring
Agent, as the case may be, shall upon the appoint ment of a successor Agent
promptly so notify the Borrower and the other Banks. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 11
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
Section 11.10. Amendments Concerning Agency Function. The Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Facility Document which affects its duties hereunder or
thereunder unless it shall have given its prior consent thereto.
Section 11.11. Liability of Agent. The Agent shall not have any
liabilities or responsibilities to the Borrower on account of the failure of any
Bank to perform its obligations hereunder or to any Bank on account of the
failure of the Borrower to perform its obligations hereunder or under any other
Facility Document.
Section 11.12. Transfer of Agency Function. Without the consent of the
Borrower or any Bank, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify the Borrower and the Banks
thereof.
Section 11.13. Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Bank or the Borrower (either one as appropriate
being the "Payor") prior to the date on which such Bank is to make payment
hereunder to the Agent of the proceeds of a Loan or the Borrower is to make
payment to the Agent, as the case may be (either such payment being a "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment shall, on demand, repay to
the Agent the amount made available to it together with interest thereon for the
period from the date such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to the average
daily Federal Funds Rate for such period.
Section 11.14. Withholding Taxes. Each Bank represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Bank's exemption from the withholding of any tax imposed by any
jurisdic tion or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Bank is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrower is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Bank will furnish to the Agent (and
shall update as required), Form 4224 or Form 1001 of the Internal Revenue
Service, or such other forms, certifications, statements or documents, duly
executed and completed by such Bank as evidence of such Bank's exemption from
the withholding of U.S. tax with respect thereto. The Agent shall not be
obligated to make any payments hereunder to such Bank in respect of any Loan or
such Bank's Commitment until such Bank shall have furnished to the Agent the
requested form, certification, statement or document.
Section 11.15. Several Obligations and Rights of Banks. The failure of
any Bank to make any Loan to be made by it on the date specified therefor shall
not relieve any other Bank of its obligation to make its Loan on such date, but
no Bank shall be responsible for the failure of any other Bank to make a Loan to
be made by such other Bank. The amounts payable at any time hereunder to each
Bank shall be a separate and independent debt, and each Bank shall be entitled
to protect and enforce its rights arising out of this Agreement, and it shall
not be necessary for any other Bank to be joined as an additional party in any
proceeding for such purpose.
Section 11.16. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided: (a) each borrowing under Section 2.04 shall be made from the
Banks, pro rata according to the amounts of their respective Commitments; (b)
each conversion under Section 2.05 of Loans of a particular type (but not
conversions provided for by Section 3.04), shall be made pro rata among the
Banks holding Loans of such type according to the respective principal amounts
of such Loans by such Banks; and (c) each prepayment and payment of principal of
or interest on Loans of a particular type and a particular Interest Period shall
be made to the Agent for the account of the Banks holding Loans of such type and
Interest Period pro rata in accordance with the respective unpaid principal
amounts of such Loans of such Interest Period held by such Banks.
Section 11.17. Sharing of Payments Among Banks. If a Bank shall obtain
payment of any principal of or interest on any Loan made by it through the
exercise of any right of setoff, banker's lien, counterclaim, or by any other
means (including any sale, collection or liquidation of Collateral or any
payment obtained from or charged against any Guarantor), it shall promptly
purchase from the other Banks participations in (or, if and to the extent
specified by such Bank, direct interests in) the Loans made by the other Banks
in such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Banks shall share the benefit of such payment
(net of any expenses which may be incurred by such Bank in obtaining or
preserving such benefit) pro rata in accordance with the unpaid principal and
interest on the Loans, on the Term Loans, and on other Debt to any of the Banks
permitted under Section 8.01(b), held by each of them prior to such action. To
such end the Banks shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrower agrees that any Bank so purchasing a
participation (or direct interest) in the Loans made by other Banks may exercise
all rights of setoff, banker's lien, counterclaim or similar rights with respect
to such participation (or direct interest). Nothing contained herein shall
require any Bank to exercise any such right or shall affect the right of any
Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness of the Borrower.
Section 11.18. Hedge Agreements; Notices and Limitations. Any Bank that
enters into a Hedge Agreement with Borrower or a Subsidiary shall promptly
notify Agent to that effect, which notice shall also specify the dollar amount
of Hedge Exposure under the Hedge Agreement. Agent shall thereupon furnish a
copy of such notice to the other Banks. Notwithstanding anything to the contrary
contained in this Agreement or in any Facility Document, upon a liquidation of
collateral following an Event of Default, any Bank (or former Bank) that is
party to a Hedge Agreement shall, with respect to such Hedge Agreement, share in
Collateral only to the extent of the lesser of its actual loss under the Hedge
Agreement or the amount of Hedge Exposure specified in its notice to Agent under
this Section.
ARTICLE 12. MISCELLANEOUS.
Section 12.01. Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement or the Facility
Documents may be amended or modified only by an instrument in writing signed by
the Borrower, the Agent, and the Required Banks, or by the Borrower and the
Agent acting with the consent of the Required Banks and any provision of this
Agreement or the Facility Documents may be waived by only an instrument in
writing signed by the Agent and the Required Banks or by the Agent acting with
the consent of the Required Banks; provided that no amendment, modification or
waiver shall, unless by an instrument signed by all of the Banks or by the Agent
acting with the consent of all of the Banks: (a) increase or extend the term, or
extend the time or waive any requirement for the reduction or termination, of
the Commitments, (b) extend the date fixed for the payment of principal,
interest or fees on any Loan, (c) reduce the amount of any payment of principal
thereof or the rate at which interest is payable thereon or any fee payable
hereunder, (d) release any Guarantor from any of its obligations under its
Guaranty or, except as otherwise provided in the Credit Agreements or the
Facility Documents, release the rights of the Banks in any Collateral, (e) alter
the terms of this Section 12.01, (f) amend the definition of the term "Required
Banks" or (g) waive any of the conditions precedent set forth in Article 5
hereof and provided, further, that any amendment of Article 11 hereof or any
amendment which increases the obligations of the Agent hereunder shall require
the consent of the Agent. No failure on the part of the Agent or any Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 12.02. Usury. Anything herein to the contrary notwithstanding,
the obligations of the Borrower under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Bank limiting rates of interest which may be charged or collected by such
Bank.
Section 12.03. Expenses. The Borrower shall reimburse the Agent and the
Banks on demand for all costs, expenses, and charges (including, without
limitation, fees and charges of exter nal legal counsel for the Agent and each
Bank and costs allocated by their respective internal legal departments)
incurred by the Agent or the Banks in connection with the preparation,
performance, or enforcement of this Agreement or the Notes; provided, however,
that the Borrower shall only reimburse each Bank other than the Agent for a
maximum of $1,000.00 in fees, charges and/or costs of external or internal legal
counsel in connection with the preparation of this Agreement, the Facility
Documents hereunder, the Credit Agreement - Term Loan Facility, and the Facility
Documents thereunder. The Borrower agrees to indemnify the Agent and each Bank
and their affiliates, and their respective directors, officers, employees and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them arising out of
or by reason of any investigation or litigation or other proceedings (including
any threatened investigation or litigation or other proceedings) relating to any
actual or proposed use by the Borrower or any Subsidiary of the proceeds of the
Loans, including without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the negligence or willful misconduct of the
Person to be indemnified).
Section 12.04. Survival. The obligations of the Borrower under Sections
3.01, 3.05 and 12.03 shall survive the repayment of the Loans and the
termination of the Commitments.
Section 12.05. Assignment; Participations. (a) This Agreement shall be
binding upon, and shall inure to the benefit of, the Borrower, the Agent, the
Banks and their respective successors and assigns, except that the Borrower may
not assign or transfer its rights or obligations hereunder. Each Bank may
assign, or sell participations in, all or any part of the Loan to another bank
or other entity, in which event (i) in the case of an assignment, upon notice
thereof by the Bank to the Borrower with a copy to the Agent, the assignee shall
have, to the extent of such assignment (unless otherwise provided therein), the
same rights, benefits and obligations as it would have if it were a Bank
hereunder; and (ii) in the case of a participation, the participant shall have
no rights under the Facility Documents and all amounts payable by the Borrower
under Article 3 shall be determined as if such Bank had not sold such
participation. The agreement executed by such Bank in favor of the participant
shall not give the participant the right to require such Bank to take or omit to
take any action hereunder except action directly relating to (i) the extension
of a payment date with respect to any portion of the principal, interest or fees
on any amount outstanding hereunder allocated to such participant, (ii) the
reduction of the principal amount outstanding hereunder, (iii) the reduction of
the rate of interest payable on such amount or any amount of fees payable
hereunder to a rate or amount, as the case may be, below that which the
participant is entitled to receive under its agreement with such Bank, or (iv)
the extension of the Final Maturity Date. Such Bank may furnish any information
concerning the Borrower in the possession of such Bank from time to time to
assignees and participants (including prospective assignees and participants);
provided that such Bank shall require any such prospective assignee or such
participant (prospective or otherwise) to agree in writing to maintain the
confidentiality of such information. In connection with any assignment pursuant
to this paragraph (a), the assigning Bank shall pay the Agent an administrative
fee for processing such assignment in the amount of $2,500.
(b) In addition to the assignments and participations permitted under
paragraph (a) above, any Bank may assign and pledge all or any portion of its
Loans and Note to (i) any affiliate of such Bank or (ii) any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Bank from its
obligations hereunder.
Section 12.06. Notices. Except as otherwise provided in this Agreement,
notices may be given by telecopy, overnight courier, or by regular mail,
telecopied or addressed to the intended recipient at its telecopy number or
address listed on the signature page of this Agreement. Notices shall be
effective: (a) if given by mail, 72 hours after deposit in the mails with first
class postage prepaid, addressed as aforesaid; (b) if given by telecopy, when
the telecopy is transmitted to the applicable telecopy number; and (c) if sent
by overnight courier, upon delivery; provided, however, that notices to the
Agent and the Banks shall be effective upon receipt. A party may change its
telecopy number or address for receipt of notices by written notice given in
accordance with this paragraph.
Section 12.07. JURISDICTION; IMMUNITIES; WAIVER OF RIGHT TO JURY TRIAL.
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK
STATE OR UNITED STATES FEDERAL COURT SITTING IN ONONDAGA OR ONEIDA COUNTY OVER
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES, OR ANY OTHER FACILITY DOCUMENT, AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS ADDRESS
SPECIFIED IN SECTION 12.07 BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN
ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE
BORROWER AND THE BANKS FURTHER AGREE THAT ANY ACTION OR PROCEEDING BROUGHT
AGAINST THE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN ONONDAGA COUNTY. THE BORROWER WAIVES ANY RIGHT IT MAY
HAVE TO JURY TRIAL.
(b) Nothing in this Section 12.07 shall affect the right of the Agent
or any Bank to serve legal process in any other manner permitted by law or
affect the right of the Agent or any Bank to bring any action or proceeding
against the Borrower or its property in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement and the Notes.
Section 12.08. Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 12.09. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.10. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
Section 12.11. Integration. The Facility Documents set forth the entire
agreement among the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.
Section 12.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 12.13. Confidentiality. Each Bank and the Agent agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable pre cautions to keep confidential, in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement which is identified by
the Borrower as being confidential at the time the same is delivered to the
Banks or the Agent, provided that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Banks or the Agent, (iii) to
bank examiners, auditors or accountants, (iv) in connection with any litigation
to which any one or more of the Banks is a party or (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement in substantially the form of
Exhibit G hereto; provided, further, that, unless specifically prohibited by
applicable law or court order, each Bank shall, prior to disclosure thereof,
endeavor to notify the Borrower of any request for disclosure of any such
non-public information (x) by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or (y) pursuant to legal
process; and provided finally that in no event shall any Bank or the Agent be
obligated or required to return any materials furnished by the Borrower. The
obligations of each Bank under this Section 12.13 shall supersede and replace
the obligations of such Bank under the confidentiality letter in respect of this
financing signed and delivered by such Bank to the Borrower prior to the date
hereof.
Section 12.14. Treatment of Certain Information. The Borrower (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Bank or by one or more of their respective
subsidiaries or affiliates and (b) acknowledges that any information delivered
to each Bank or to its subsidiaries or affiliates regarding the Borrower may be
shared among the Bank and such subsidiaries and affiliates. This Section 12.14
shall survive the repayment of the loans and the termination of the Commitments.
Section 12.15. Incorporation By Reference; Conflicts. The rights and
remedies of Agent and the Banks under the other Facility Documents are
incorporated herein by reference and the rights and remedies of the Agent and
the Banks under this Agreement, and all of the terms of this Agreement, are
likewise incorporated in the other Facility Documents by reference. In the case
of any conflict between the terms of this Agreement and the terms of any other
Facility Document, the terms of this Agreement shall govern.
Section 12.16. Cooperation and Further Assurances. At all times until
the Loans are repaid in full, the Borrower shall, and shall cause its
Subsidiaries to, cooperate with the Agent and the Banks to effectuate the intent
and purposes of the Facility Documents. Without limiting the foregoing, Borrower
agrees to execute and deliver any financing statements or other instruments and
do such other acts and things, as Agent may reasonably deem necessary or
advisable to perfect all security interests under the Facility Documents and to
otherwise effectuate the intent and purposes of this Agreement, and shall cause
its Subsidiaries to do likewise.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CONMED CORPORATION
By:___________________________
Name:
Title:
Address for Notices:
CONMED CORPORATION
310 Broad Street
Utica, New York 13501
Attn: Eugene R. Corasanti,
President
Telecopy: (315) 797-0321
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name: Frederick K. Miller
Title: Vice President
Address for Notices:
THE CHASE MANHATTAN BANK, N.A.
P.O. Box 4911
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Telecopy: (315) 424-2933
<PAGE>
BANKS: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name: Frederick K. Miller
Title: Vice President
Lending Office and Address for
Notices:
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Telecopy: (315) 424-2933
FLEET BANK
By:___________________________
Name: Bruce W. Goodnough
Title: Vice President
Lending Office and Address for
Notices:
One Clinton Square
Syracuse, New York 13221
Attn: Bruce W. Goodnough
Telecopy: (315) 426-4375
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
By:___________________________
Name:
Title: Authorized Signature
Lending Office and Address for
Notices:
c/o Credit Lyonnais
1301 Avenue of The Americas
New York, New York 10019-6022
Telecopy: (212) 261-3440
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$[Commitment of Bank X] __________________, 1996
CONMED CORPORATION (the "Borrower"), a corporation organized under the
laws of New York, for value received, hereby promises to pay to the order of
[BANK X] (the "Bank") at the principal office of The Chase Manhattan Bank, N.A.,
at One Lincoln Center, Syracuse, New York 13202 (the "Agent"), for the account
of the appropriate Lending Office of the Bank, the principal sum of
($[Commitment amount of Bank X]), or, if less, the amount loaned by the Bank to
the Borrower pursuant to the Credit Agreement referred to below, in lawful money
of the United States of America and in immediately available funds, on the
date(s) and in the manner provided in the Credit Agreement. The Borrower also
promises to pay interest on the unpaid principal balance hereof, for the period
such balance is outstanding, at said principal office for the account of said
Lending Office, in like money, at the rates of interest as provided in the
Credit Agreement described below, on the date(s) and in the manner provided in
said Credit Agreement.
The date and amount of each type of Loan made by the Bank to the
Borrower under the Credit Agreement referred below, and each payment of
principal thereof, shall be recorded by the Bank on its books and, prior to any
transfer of this Note (or, at the discretion of the Bank, at any other time),
endorsed by the Bank on the schedule attached hereto or any continuation
thereof.
This is one of the Notes referred to in that certain Amended and
Restated Credit Agreement - Revolving Credit Facility (as amended from time to
time the "Credit Agreement") dated as of March 13, 1996 among the Borrower, the
Banks named therein (including the Bank) and the Agent and evidences the Loan
made by the Bank thereunder. All terms not defined herein shall have the
meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
<PAGE>
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York.
CONMED CORPORATION
By:___________________________
Name:
Title:
<PAGE>
Amount Amount of Balance Notation
Date of Loan Payment Outstanding By
<PAGE>
EXHIBIT B
__________________, 19__
The Chase Manhattan Bank, N.A.
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Re: Amended and Restated Credit Agreement - Revolving Credit
Facility dated as of March 13, 1996 (the "Credit Agreement")
among CONMED CORPORATION, the Banks named therein, and The
Chase Manhattan Bank, N.A., as Agent for said Banks
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, we hereby designate
any one of the following persons to give to you instructions, including notices
required pursuant to the Agreement, orally or by telephone or teleprocess:
NAME (Typewritten)
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
Instructions may be honored on the oral, telephonic or teleprocess
instructions of anyone purporting to be any one of the above designated persons
even if the instructions are for the benefit of the person delivering them. We
will furnish you with confirmation of each such instruction either by telex
(whether tested or untested) or in writing signed by any person designated above
(including any telecopy which appears to bear the signature of any person
designated above) on the same day that the instruction is provided to you but
your responsibility with respect to any instruction shall not be affected by
your failure to receive such confirmation or by its contents.
You shall be fully protected in, and shall incur no liability to us
for, acting upon any instructions which you in good faith believe to have been
given by any person designated above, and in no event shall you be liable for
special, consequential or punitive damages. In addition, we agree to hold you
and your agents harmless from any and all liability, loss and expense arising
directly or indirectly out of instructions that we provide to you in connection
with the Credit Agreement except for liability, loss or expense occasioned by
the gross negligence or willful misconduct of you or your agents.
Upon notice to us, you may, at your option, refuse to execute any
instruction, or part thereof, without incurring any responsibility for any loss,
liability or expense arising out of such refusal if you in good faith believe
that the person delivering the instruction is not one of the persons designated
above or if the instruction is not accompanied by an authentication method that
we have agreed to in writing.
<PAGE>
We will promptly notify you in writing of any change in the persons
designated above and, until you have actually received such written notice and
have had a reasonable opportunity to act upon it, you are authorized to act upon
instructions, even though the person delivering them may no longer be
authorized.
Very truly yours,
CONMED CORPORATION
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT C
GUARANTY
[Attached]
<PAGE>
EXHIBIT D
SECURITY AGREEMENTS
OF BORROWER and GUARANTORS
[Attached]
<PAGE>
EXHIBIT E
(Letterhead of counsel to the Borrower)
[Closing Date]
The Chase Manhattan Bank, N.A.
One Lincoln Center
Syracuse, New York 13202
Fleet Bank
One Clinton Square
Syracuse, New York 13221
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais
1301 Avenue of The Americas
New York, New York 10019-6022
Ladies and Gentlemen:
We have acted as counsel to CONMED CORPORATION (the "Borrower") in
connection with the execution and delivery of that certain Amended and Restated
Credit Agreement Revolving Credit Facility (the "Credit Agreement") dated as of
March 13, 1996 among the Borrower, the Banks signatory thereto and The Chase
Manhattan Bank, N.A. as Agent. Except as otherwise defined herein, all terms
used herein and defined in the Credit Agreement or any agreement delivered
thereunder shall have the meanings assigned to them therein.
In connection with this opinion, we have examined executed copies of
the Facility Documents and such other documents, records, agreements and
certificates as we have deemed appropriate. We have also reviewed such matters
of law as we have considered relevant for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its assets and to transact the business in which it is now engaged or proposed
to be engaged, and is duly qualified as a foreign corporation and in good
standing under the laws of each other jurisdiction in which such qualification
is required.
<PAGE>
2. The execution, delivery and performance by the Borrower of the
Facility Documents to which it is a party have been duly authorized by all
necessary corporate action and do not and will not: (a) require any additional
consent or approval of its stockholders; (b) contravene its charter or by-laws;
(c) violate any provision of, or require any filing (other than the filing of
financing statements referred to below), registration, consent or approval
under, any law, rule, regulation (including without limitation, Regulation U),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Borrower or any of its Subsidiaries or
affiliates; (d) result in a breach of or constitute a default or require any
consent under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien upon or with respect to any of the properties now owned
or hereafter acquired by the Borrower; or (f) cause the Borrower (or any
Subsidiary or affiliate, as the case may be) to be in default under any such
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award or any such indenture, agreement, lease or instrument.
3. Each Facility Document to which the Borrower is a party is, or when
delivered under the Credit Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
4. To the best of our knowledge (after due inquiry), there are no
pending or threatened actions, suits or proceedings against or affecting the
Borrower or any of its Subsidiaries before any court, governmental agency or
arbitrator, which may, in any one case or in the aggregate, materially adversely
affect the financial condition, operations, properties or business of the
Borrower or of any such Subsidiary or the ability of the Borrower to perform its
obligations under the Facility Documents to which it is a party.
Very truly yours,
<PAGE>
EXHIBIT F
[Opinion of Guarantor's Counsel]
[Closing Date]
The Chase Manhattan Bank, N.A.
One Lincoln Center
Syracuse, New York 13202
Fleet Bank
One Clinton Square
Syracuse, New York 13221
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais
1301 Avenue of The Americas
New York, New York 10019-6022
Ladies and Gentlemen:
We have acted as counsel to _____________ ("Guarantor") in connection
with the execution and delivery of that certain Amended and Restated Credit
Agreement - Revolving Credit Facility (the "Credit Agreement") dated as of March
13, 1996 among CONMED CORPORATION, the Banks signatory thereto and The Chase
Manhattan Bank, N.A. (the "Agent"). Except as otherwise defined herein, all
terms used herein and defined in the Credit Agreement or any agreement delivered
thereunder shall have the meanings assigned to them therein.
In connection with this opinion, we have examined executed copies of
the Facility Documents and such other documents, records, agreements and
certificates as we have deemed appropriate. We have also reviewed such matters
of law as we have considered relevant for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that:
1. Each Guarantor is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its assets and to transact the
business in which it is now engaged or proposed to be engaged, and is duly
qualified as a foreign corporation and in good standing under the laws of each
other jurisdiction in which such qualification is required.
<PAGE>
2. The execution, delivery and performance by each Guarantor of the
Facility documents to which it is a party has been duly authorized by all
necessary corporate action and do not and will not: (a) require any additional
consent or approval of its stockholders; (b) contravene its charter or by-laws;
(c) violate any provision of, or require any filing (other than the filing of
financing statements referred to below), registration, consent or approval
under, any law, rule, regulation (including without limitation, Regulation U),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to a Guarantor; (d) result in a breach of or
constitute a default or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which a
Guarantor is a party or by which it or its properties may be bound or affected;
(e) result in, or require, the creation or imposition of any Lien (other than in
favor of the Agent on behalf of the Banks, upon or with respect to any of the
properties now owned or hereafter acquired by a Guarantor; or (f) cause a
Guarantor to be in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument.
3. Each Facility Document to which a Guarantor is a party is, or when
delivered under the Credit Agreement will be, a legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor in accordance
with its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
4. To the best of our knowledge (after due inquiry), there are no
pending or threatened actions, suits or proceedings against or affecting any
Guarantor before any court, governmental agency or arbitrator, which may, in any
one case or in the aggregate, materially adversely affect the financial
condition, operations, properties or business of a Guarantor or the ability of
any Guarantor to perform its obligations under the Facility Documents to which
it is a party.
Very truly yours,
<PAGE>
EXHIBIT G
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Amended and Restated Credit Agreement - Revolving Credit
Facility dated as of March 13, 1996 between CONMED
Corporation, the banks party thereto, and The Chase Manhattan
Bank (National Association), as Agent.
Dear _______________:
As a Bank, party to the above-referenced Credit Agreement (the "Credit
Agreement"), we have agreed with CONMED Corporation (the "Borrower") pursuant to
Section 12.13 of the Credit Agreement to use reasonable precautions to keep
confidential, except as otherwise provided therein, all non-public information
identified by the Borrower as being confidential at the time the same is
delivered to us pursuant to the Credit Agreement.
As provided in said Section 12.13, we are permitted to provide you, as
a prospective [holder of a participation in the Loans (as defined in the Credit
Agreement)] [assignee Bank], with certain of such non-public information subject
to the execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf of
yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) such information will not be used by you except in
connection with the proposed [participation] [assignment] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Banks or the Agent, (iii) to bank
examiners, auditors or accountants, (iv) in connection with any litigation to
which you or any one or more of the Banks is a party; [provided, further, that,
unless specifically prohibited by applicable law or court order, you agree,
prior to disclosure thereof, to endeavor to notify the Borrower of any request
for disclosure of any such non-public information (x) by any governmental agency
or representative thereof (other than any such request in connection with an
examination of your financial condition by such governmental agency) or (y)
pursuant to legal process]; and provided finally that in no event shall you be
obligated to return any materials furnished to you pursuant to this
Confidentiality Agreement.
<PAGE>
Would you please indicate your agreement to the foregoing by signing at
the place provided below the enclosed copy of this Confidentiality Agreement.
Very truly yours,
[Insert Name of Bank]
By:___________________________
The foregoing is agreed to as of the date of this letter.
[Insert name of prospective
participant or assignee]
By: ______________________________
<PAGE>
EXHIBIT H
[CONMED Letterhead]
Borrowing Notice
Via Telecopier
The Chase Manhattan Bank, N.A., Agent
One Lincoln Center
Syracuse, New York 13202
Attention: __________________________
Operations
Re: _____ Term Loan
_____ Revolving Credit Loan
Dear _________________:
Reference is made to our Credit Agreement with you as Agent and the
Banks signatory thereto, dated March 13,1996. Unless otherwise defined herein or
the context otherwise requires, capitalized terms shall have the meaning
attributed to them in the Credit Agreement.
We hereby confirm our telephone notice to you: To borrow/renew
$_______________ on ________________, 199__ as a: ____ Variable Rate Loan ____
Fixed Rate Loan with an Interest Period of ___ month(s) at a rate of
- - ---------------------. We further confirm that after this advance (or payment)
we will have the following kinds of loans outstanding:
<PAGE>
Term Loans
----------
Kind of Loan Amount Rate of Interest Period
- - ------------ ------ ---- ------------------
Variable Rate
Fixed Rate
Fixed Rate
Fixed Rate ______
Total $
Revolving Credit Loans
----------------------
Last Date
Kind of Loan Amount Rate of Interest Period
Variable Rate
Fixed Rate
Fixed Rate
Fixed Rate ______
Total $
CONMED CORPORATION hereby certifies that both on the date of this
Notice and the date of the borrowing no Event of Default exists, all
representations and warranties contained in the Credit Agreement continue to be
true and correct, and all conditions precedent under the Credit Agreement are
satisfied. Very truly yours,
CONMED CORPORATION
By:___________________________
Its:___________________________
<PAGE>
SCHEDULE I
Subsidiaries of Borrower
<TABLE>
<CAPTION>
Jurisdiction Percentage
Name and Address of Incorporation of Ownership
- - ---------------- ---------------- ------------
<S> <C> <C>
Birtcher Medical Systems, Inc. California 100%
310 Broad Street
Utica, new York 13501
Consolidated Medical Equipment New York 100%
International, Inc.
310 Broad Street
Utica, New York 13501
Aspen Laboratories, Inc. Colorado 100%
14603 East Fremont Avenue
Englewood, Colorado 80112
CONMED Andover Medical, Inc. New York 100%
60 Newark Street
Haverhill, Massachusetts 01832
N D M, Inc. New York 100%
310 Broad Street,
Utica, New York 13501
</TABLE>
<PAGE>
SCHEDULE II
CREDIT ARRANGEMENTS
<TABLE>
<CAPTION>
Credit Amount
Arrangement Face Amount Outstanding
- - ----------- ----------- -----------
<S> <C> <C>
1. Letters of Credit:
Chase $ 100,000 $28,700
</TABLE>
<PAGE>
SCHEDULE III
HAZARDOUS MATERIALS
1. Asbestos: Encapsulated asbestos is present in the basement of CONMED's Utica,
New York facility.
2. Underground Storage Tanks: CONMED purchased a warehouse/manufacturing
facility on February 6, 1995 located at Success Drive, Rome, New York. On this
property there are two underground fuel oil tanks. The seller, Fay's Inc., is
obligated to remove both tanks under DEC supervision and shall indemnify and
hold CONMED harmless from all costs, damages or expenses relating to any
environmental or hazardous waste conditions resulting from the presence or use
of such tanks. The obligation of Fay's Inc., to remove the tanks is expressed in
a purchase and sale agreement executed by the parties on January 20, 1995.
3. Birtcher Medical Systems, Inc.: The California Regional Water Quality Control
Board, Los Angeles region ("CRWQCB") is investigating contamination in the soil
near an industrial waste clarifier located outdoors on a site in an industrial
area of El Monte, California. Between 1977 and 1990, Birtcher leased a portion
of a building also located at the site and adjacent to the clarifier. The
clarifier was used in connection with a plating operation which Birtcher sold to
another party in 1984. The CRWQCB has worked principally with this other party
to determine the extent and effect of the soil contamination and whether
remedial action will be required.
<PAGE>
Birtcher, and other Potentially Responsible Parties have conducted
subsurface soils investigations, including soil vapor studies, at the request of
the CRWQCB. The CRWQCB has not responded to the latest report, which was
submitted on May 27, 1994. These investigations have confirmed the presence of
volatile organic compounds ("VOC") in the subsurface below the former facility.
Some of the same type of VOC have been detected in ground water samples
collected by others in the vicinity of this facility. The quantities and sources
of the VOCs detected in soils below the facility have yet to be determined.
While Borrower does not currently anticipate any material adverse effect upon
its business or financial position resulting from the CRWQCB's investigation,
Birtcher may in the future become involved in further environmental assessment
and remediation at the site, the costs of which cannot be determined at this
time. The EPA has divided the San Gabriel Valley superfund site into five
operable units. The site is located in the El Monte operable unit of the San
Gabriel superfund site. The Environmental Protection Agency (the "EPA") has sent
"Potentially Responsible Party Notices" to current operators ("PRPs") of the
contaminated property in the El Monte operable unit. On November 23, 1994
Birtcher received a Section 104(e) request for information from the EPA
regarding the El Monte facility. The EPA has not identified Birtcher as a PRP.
However, it is likely that Birtcher will be named as a PRP and that it may be
required to participate in a remedial investigation, feasibility study, and
cleanup. The cost of such participation is unknown.
<PAGE>
SCHEDULE IV
EMPLOYEE BENEFIT PLANS
FUNDING STATUS
The attached correspondence dated March 8, 1995 from Benefits
Management, Inc., plan actuaries for Borrower and Aspen Laboratories, Inc.,
represents the most current information presently available. The actuary will
provide the Banks with comparable liability reports for both plans as of January
1, 1996 by no later than March 31, 1996.
EXHIBIT 11
Computation of weighted average number of shares of common stock
<TABLE>
<CAPTION>
For the three months ended March
--------------------------------
(in thousands)
1995 1996
------ ------
<S> <C> <C>
Shares outstanding at beginning of period ............ 9,059 11,000
Weighted average shares issued ....................... 284 396
Incremental shares of common stock
outstanding giving effect to stock
options and warrant ................................ 1,040 1,174
------ ------
10,383 12,570
====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> MAR-29-1996
<CASH> 11,549
<SECURITIES> 0
<RECEIVABLES> 23,933
<ALLOWANCES> 0
<INVENTORY> 24,243
<CURRENT-ASSETS> 62,916
<PP&E> 44,141
<DEPRECIATION> 15,014
<TOTAL-ASSETS> 162,573
<CURRENT-LIABILITIES> 11,225
<BONDS> 0
0
0
<COMMON> 149
<OTHER-SE> 145,147
<TOTAL-LIABILITY-AND-EQUITY> 162,573
<SALES> 29,200
<TOTAL-REVENUES> 29,200
<CGS> 15,167
<TOTAL-COSTS> 23,406
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 682
<INCOME-PRETAX> 5,112
<INCOME-TAX> 1,840
<INCOME-CONTINUING> 3,272
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,272
<EPS-PRIMARY> .26
<EPS-DILUTED> 0
</TABLE>
