<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 2-15299
RAYCHEM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-1369731
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
300 Constitution Drive, Menlo Park, CA 94025-1164
(Address of principal executive offices) (Zip code)
(415) 361-4180
(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 / /
As of October 28, 1994, the registrant had outstanding 43,397,368 shares of
Common Stock, $1.00 par value.
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RAYCHEM CORPORATION
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page Number
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1: Financial Information
Consolidated Condensed Statements of Operations -
Three Months Ended September 30, 1994 and 1993 1
Consolidated Condensed Balance Sheets -
September 30, 1994, and June 30, 1994 2
Consolidated Condensed Statements of Cash
Flows - Three Months Ended September 30, 1994 and 1993 3
Notes to Consolidated Condensed Financial
Statements 4-7
Item 2: Management's Discussion and Analysis 8-15
of Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1: Legal Proceedings 16
Item 5: Other Information 16
Item 6: Exhibits and Reports on Form 8-K 16
SIGNATURES 17
</TABLE>
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RAYCHEM CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands except share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
---------------------------
1994 1993
----------- -----------
<S> <C> <C>
Revenues $ 390,701 $ 355,432
Cost of goods sold 209,496 183,730
Research and development expense 40,421 33,614
Selling, distribution, and administrative expense 126,145 114,222
Provision for restructuring and divestitures 23,900 -
Loss on formation of Ericsson Raynet joint venture 28,130 -
Interest expense, net 4,701 2,703
Other expense, net 3,546 2,846
----------- -----------
(Loss) income before income taxes, extraordinary
item, and change in accounting principle (45,638) 18,317
Provision for income taxes 2,690 11,906
----------- -----------
(Loss) income before extraordinary item
and change in accounting principle (48,328) 6,411
Extraordinary item - loss from early retirement of
debt, net of $0 income taxes (7,074) -
Cumulative effect of change in accounting
principle, net of $0 income taxes (1,477) -
----------- -----------
Net (loss) income $ (56,879) $ 6,411
=========== ===========
Average number of common shares
and equivalents outstanding 43,241,149 42,962,634
=========== ==========
(Loss) earnings per common share:
(Loss) income before extraordinary item
and change in accounting principle $ (1.12) $ 0.15
Extraordinary item (0.16) -
Change in accounting principle (0.04) -
----------- -----------
Net (loss) income $ (1.32) $ 0.15
=========== ===========
Dividends per common share $ 0.08 $ 0.08
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
1
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RAYCHEM CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands except share data)
<TABLE>
<CAPTION>
(Unaudited)
September 30, 1994 June 30, 1994
------------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 68,746 $ 78,090
Accounts receivable, net 318,248 312,624
Inventories:
Raw materials 97,097 99,129
Work in process 54,386 55,406
Finished goods 89,925 93,254
---------- ----------
Total inventories 241,408 247,789
Prepaid taxes 42,219 40,014
Other current assets 57,958 57,425
---------- ----------
Total current assets 728,579 735,942
Property, plant, and equipment 1,142,567 1,110,695
Less accumulated depreciation and amortization 612,362 576,216
---------- ----------
Net property, plant, and equipment 530,205 534,479
Other assets 133,361 128,594
---------- ----------
TOTAL ASSETS $1,392,145 $1,399,015
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 31,196 $ 26,986
Accounts payable 75,094 83,136
Other accrued liabilities 216,380 184,573
Income taxes 27,775 25,515
Current maturities of long-term debt 2,448 3,881
---------- ----------
Total current liabilities 352,893 324,091
Long-term debt 244,675 244,681
Deferred income taxes 29,160 27,433
Other long-term liabilities 69,891 65,625
Minority interest 4,117 4,261
Stockholders' equity:
Preferred Stock, $1.00 par value
Authorized: 15,000,000 shares; Issued: none - -
Common Stock, $1.00 par value
Authorized: 72,150,000 shares
Issued: 43,378,264 and 43,005,786 shares, respectively 43,378 43,006
Additional contributed capital 364,850 354,660
Retained earnings 259,561 319,905
Currency translation 24,410 16,077
Notes receivable from sale of stock (790) (724)
---------- ----------
Total stockholders' equity 691,409 732,924
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,392,145 $1,399,015
========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
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RAYCHEM CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------
Three Months ended September 30 (in thousands) 1994 1993
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $(56,879) $ 6,411
Adjustments to reconcile net (loss) income to net cash
provided by (used in) operating activities:
Provision for restructuring and divestitures, net of payments 22,053 (2,230)
Loss on formation of Ericsson Raynet joint venture 28,130
Extraordinary loss from early retirement of debt 7,074
Change in accounting principle 1,477
Depreciation and amortization 22,398 20,968
Deferred income tax benefit 800 44
Changes in certain assets and liabilities, net of effects from
restructuring and divestitures, joint venture formation,
extraordinary item, and change in accounting principle:
Accounts receivable (3,769) (37,870)
Inventories 5,359 (15,190)
Accounts payable and accrued liabilities (28,321) 8,159
Income taxes 1,535 8,189
Other assets and liabilities 3,695 (1,071)
-------- --------
Net cash provided by (used in) operating activities 3,552 (12,590)
-------- --------
Cash flows from investing activities:
Investment in property, plant, and equipment (27,413) (22,996)
Disposition of property, plant, and equipment 2,385 3,874
Purchase of investment (1,000)
-------- --------
Net cash used in investing activities (26,028) (19,122)
-------- --------
Cash flows from financing activities:
Net proceeds from (payment of) short-term debt 5,686 (17,153)
Proceeds from long-term debt 358 961
Payments of long-term debt (872) (438)
Common Stock issued under employee
benefit plans 10,334 9,442
Proceeds from repayments of stockholder notes receivable 162 80
Cash dividends (3,465) (3,372)
-------- --------
Net cash provided by (used in) financing activities 12,203 (10,480)
-------- --------
Effect of exchange rate changes on cash
and cash equivalents 929 (874)
-------- --------
Decrease in cash and cash equivalents (9,344) (43,066)
Cash and cash equivalents at beginning
of period 78,090 133,946
-------- --------
Cash and cash equivalents at end of period $ 68,746 $ 90,880
======== ========
SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest (net of amounts capitalized) $ 4,088 $ 10,444
Income taxes (net of refunds) 72 1,899
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
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RAYCHEM CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
STATEMENT OF ACCOUNTING PRESENTATION
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements include all adjustments, including normal recurring
accruals, necessary to present fairly the results of operations for the three
months ended September 30, 1994 and 1993, the financial position as of
September 30, 1994, and the cash flows for the three months ended September 30,
1994 and 1993. The June 30, 1994, balance sheet included is derived from the
consolidated financial statements included in the company's Annual Report on
Form 10-K for the year ended June 30, 1994. Certain prior-period amounts have
been reclassified to conform with the fiscal 1995 financial statement
presentation.
BUSINESS SEGMENTS
Revenues and operating income (loss) by business segment are as follows:
<TABLE>
<CAPTION>
(In thousands)
Three months ended
September 30,
1994 1993
-------- --------
<S> <C> <C>
Revenues
Electronics $140,099 $126,604
Industrial 121,862 112,738
Telecommunications 106,184 115,334
Raynet 22,556 756
-------- --------
Total revenues $390,701 $355,432
======== ========
Operating income (loss) before
provision for restructuring and loss
on formation of JV
Electronics $ 22,502 $ 25,598
Industrial 23,429 21,665
Telecommunications 17,267 27,094
Raynet (28,225) (28,589)
Corporate (20,334) (21,902)
-------- --------
Total $ 14,639 $ 23,866
======== ========
Operating income (loss) including
provision for restructuring and loss
on formation of JV
Electronics $ 22,502 25,598
Industrial 23,429 21,665
Telecommunications (6,633) 27,094
Raynet (28,225) (28,589)
Corporate (48,464) (21,902)
-------- --------
Total operating (loss) income $(37,391) $ 23,866
======== ========
</TABLE>
4
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CHANGE IN ACCOUNTING PRINCIPLE
The company adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (FAS 112), effective July
1, 1994. This statement changes the method of accounting for certain
postemployment benefits from a cash basis to an accrual basis. Adoption of FAS
112 resulted in a one-time adjustment of $1.5 million, or a loss of $0.04 per
share, to reflect the cumulative amount that would have been accrued had the
statement been in effect in prior years.
EXTRAORDINARY ITEM - LOSS FROM EARLY RETIREMENT OF DEBT
On September 30, 1994, the company gave irrevocable notice to the holders of
its 9.55% privately placed senior notes of its intention to prepay this debt on
November 1, 1994. Accordingly, the company recorded in the first quarter of
1995 an extraordinary loss of $7.1 million ($0.16 per share) for the early
retirement of debt. The extraordinary loss is comprised of an estimated $8.1
million prepayment penalty and deferred debt issuance costs of $0.5 million,
net of a $1.5 million deferred gain resulting from the termination of a related
interest rate swap agreement.
RESTRUCTURING AND DIVESTITURES
On October 11, 1994, the company announced a major restructuring of its
telecommunications business segment. As a result, the company recorded a
pretax charge of $24 million for restructuring and divestitures in the first
quarter of 1995. The segment's restructuring charge included $13 million for
severance costs related to a net workforce reduction of 340 employees,
resulting from the closure of telecommunications' manufacturing operations in
Germany and the restructuring of its North American activities. The remaining
charge of $11 million related to plant consolidations and the shutdown of
unprofitable product lines.
RAYNET
On October 7, 1994, the company and its Raynet subsidiary entered into a
formation agreement with L M Ericsson (Ericsson), a Swedish telecommunications
company, to form a joint venture for the development, manufacture, and
marketing of fiber-optic communication systems for telephone access networks
worldwide. The joint venture, to be named Ericsson Raynet, will take over and
continue the operations of Raynet and will be headquartered in Menlo Park,
California. The joint venture will be formed as a general partnership
organized under Delaware law; Raychem's interest in the joint venture will be
held by its Raynet subsidiary. Ericsson representatives will constitute a
majority of the Board of Managers of the joint venture.
The joint venture transaction is expected to close in November 1994 pending
governmental approvals. At closing, the company will receive payment of $40
million in cash in exchange for certain specified assets of Raynet. Ericsson
will contribute the purchased assets to the joint venture, and Raynet will
contribute substantially all of its remaining assets and liabilities to the
joint venture. Funding of the joint venture will initially be provided by the
partners, generally 51% by Ericsson and 49% by Raynet.
During the first five to eight years of operation, subject to various
conditions, substantially all of the profits of the joint venture up to $156
million will be allocated to Raynet; thereafter profits of the joint venture
will be shared 51/49 by Ericsson and
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Raynet, respectively. Ericsson's share of the joint venture's losses will be
capped at $25 million for the fiscal year ending June 30, 1995. During the
fiscal year ending June 30, 1996, up to $19.6 million of losses will be
allocated to Ericsson and Raynet in a 51/49 ratio; additional losses, if any,
of up to $10 million will be allocated 100% to Raynet; and additional losses,
if any, will again be allocated to Ericsson and Raynet in a 51/49 ratio.
BellSouth Enterprises Inc. (BSE) had financed a portion of the software
development work at Raynet and holds a royalty interest in the software related
revenues of Raynet. With the creation of the joint venture, this royalty
payment will be reconfigured. Raychem has agreed to pay BSE a total of $30
million in three equal payments beginning at the closing of the joint venture
transaction and continuing with two subsequent annual payments. Raychem has
agreed to make other royalty payments to BSE contingent upon the revenues and
earnings performance of the joint venture. At such time as the joint venture
achieves profitability, these royalty payments could approximate 36% of
Raychem's distributions from the joint venture.
Ericsson has a right to purchase Raynet's interest in the joint venture at a
fixed price for a limited period beginning two years after commencement of the
joint venture; and Ericsson and Raynet have call and put rights, respectively,
on Raynet's interest in the joint venture exercisable at fair market value at
any time after July 1, 1999. If any of these options are exercised, Raychem
has agreed to pay BSE a portion of the purchase price received.
Reflected in the accompanying Statement of Operations is a pre-tax charge of
$28 million which is the company's estimate of the loss which will result from
these transactions, based upon Raynet's net assets as of September 30, 1994.
Adjustments, if necessary, will be recorded on execution of the joint venture
agreement. For purposes of estimating its loss, the company has recorded its
obligations to BSE at their present value using a 7.97% discount rate.
DEBT STRUCTURE
On September 29, 1994, the company entered into syndicated loan agreements
providing for a five-year partially amortizing term loan of $225 million, and a
renewable 364-day revolving credit facility of $200 million. Interest on the
term loan and revolving credit facility are at variable rates. The term loan
requires quarterly principal payments of $15 million beginning December 31,
1996, increasing to $17.5 million from December 31, 1997, and to $20 million
from December 31, 1998, with a final payment of $35 million due September 29,
1999. Proceeds from the term loan, when drawn, will be used to retire the
9.55% privately placed senior notes and for general corporate purposes, while
the revolving credit facility replaced existing committed credit facilities.
The new agreement includes covenants which, among other things, specify a
minimum net worth requirement, a maximum leverage limit, a minimum fixed charge
coverage ratio, a dividend restriction, and limits on further advances to fund
Raynet operations.
CONTINGENCIES
The company has been named, among others, as a potentially responsible party
(PRP) in administrative proceedings alleging that it may be liable for the
costs of correcting environmental conditions at certain hazardous waste sites.
At all of the sites, the
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company is alleged to be a de minimis generator of hazardous wastes,
and the company believes that it has limited or no liability for cleanup costs
at these sites. The company has also been notified by a state environmental
agency that it may be required to investigate the need for remedial work at one
of its manufacturing sites. The company currently is conducting such
investigations on a voluntary basis.
Additionally, the company and its subsidiaries have been named as defendants in
lawsuits arising from various commercial matters, including product liability
and private cost recovery for environmental cleanup expenses. The principal
product liability litigation involves a variety of claims arising from the
company's heat-tracing and freeze-protection products. The single
environmental cost recovery lawsuit in which Raychem has been named as a
defendant, along with sixteen other corporate and governmental codefendants,
involves the disposal of waste materials at the West Contra Costa County
Landfill in Richmond, California.
Legal proceedings tend to be unpredictable and costly. Based on currently
available information, however, management believes that the resolution of
pending claims, regulatory inquiries, and legal proceedings will not have a
material adverse effect on the company's operating results or financial
position.
SUBSEQUENT EVENTS
On October 14, 1994, the company's Board of Directors declared a quarterly cash
dividend of $0.08 per share of Common Stock, payable on December 14, 1994, to
stockholders of record as of November 9, 1994.
7
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RAYCHEM CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
The company reported a net loss of $57 million, or $1.32 per share, in the
first quarter of 1995 compared to earnings of $6 million, or $0.15 per share,
in the comparable period of the prior year. Revenues for the quarter increased
to $391 million from $355 million in the prior year, an 8% increase over the
year-ago quarter on a constant currency basis (which assumes that foreign
currency exchange rates had remained constant from the prior period).
Excluding the effect of Raynet Corporation (Raynet) and the items described
below, Raychem's "ongoing" pretax income decreased to $35 million from $48
million in the first quarter of 1994. Pretax income for the quarter included a
$24 million provision for restructuring of the telecommunications business
segment and a $28 million loss on formation of the Ericsson Raynet joint
venture. Raychem's results are summarized as follows:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------
PRETAX (LOSS) INCOME BEFORE EXTRAORDINARY ITEM AND CHANGE IN ACCOUNTING PRINCIPLE
THREE MONTHS ENDED SEPTEMBER 30 (in millions) 1994 1993
- - ------------------------------------------------------------------------------------------
<S> <C> <C>
Core business:
"Ongoing" pretax income $ 34.7 $47.7
Provision for restructuring and divestitures (23.9) -
Loss on formation of Ericsson Raynet joint venture (28.1) -
----------------------
Core business pretax (loss) income (17.3) 47.7
Raynet pretax loss (28.3) (29.4)
----------------------
Consolidated $(45.6) $18.3
======================
- - ------------------------------------------------------------------------------------------
</TABLE>
In the first quarter of 1995, the company recorded an extraordinary loss of
$7.1 million ($0.16 per share), for the early retirement of debt following
delivery by the company of irrevocable notice to the holders of its 9.55%
privately placed senior notes of its intention to prepay this debt. In
addition, the company adopted, effective July 1, 1994, Statement of Financial
Accounting Standards No. 112. The cumulative effect of this accounting change
(a charge of $1.5 million, or $.04 per share) has been reflected in the 1995
first quarter results.
The following discussion of the results of operations is based on the company's
business segments--electronics, industrial, and telecommunications (which,
along with the corporate groups, are referred to collectively as the "core
business")-- and on Raynet. The condensed consolidating financial statements
on pages 13 through 15 supplement the discussion.
CORE BUSINESS OPERATIONS
Core business revenues for the first quarter of 1995 increased to $368 million
from $355 million in the prior-year period. Revenue growth was 2% on a
constant currency basis.
Revenues in the electronics business segment were $140 million in the first
quarter of 1995 compared to $127 million in the prior year period, an 8%
constant currency increase over the prior year quarter. PolySwitch sales
increased in all geographic regions, while Elo
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TouchSystems experienced strong U.S. growth in touchscreens for retail systems.
The Thermofit division experienced particularly strong growth in the automotive
and commercial markets. Wire & Cable's sales declined from the first quarter
of 1994 when it had unusually high defense shipments in Europe and the U.S.
Operating income was $23 million compared to $26 million in the year ago
quarter primarily reflecting increased operating expenses in growth divisions.
Revenues in the industrial business segment for the three months ended
September 30, 1994, increased to $122 million from $113 million in the first
quarter of 1994. Revenues increased 5% in constant currency terms. The
segment's Electrical Products Division (EPD) experienced higher sales in Europe
and in the Americas which more than compensated for weakness in Asia. Chemelex
also had solid sales growth in the U.S. and Europe. Ultratec division sales
fell compared to the year-ago quarter because of decreased project business and
lower sales in Europe largely attributable to weak German district heating
demand. Operating income in the industrial business segment was $23 million in
the first quarter of 1995, up $2 million from year-ago levels reflecting the
strong revenues in EPD and Chemelex divisions.
Revenues in the telecommunications business segment for the three months ended
September 30, 1994, were $106 million, down from $115 million in last year's
first quarter. Revenues decreased 9% on a constant currency basis. The
decline results largely from lower sales versus year-ago levels in the People's
Republic of China, Germany, and Argentina. Excluding the previously described
restructuring charge, operating income decreased to $17 million versus $27
million in the year-ago first quarter. The decline in operating income results
primarily from lower sales and higher operating expenses.
During the first quarter of 1995, orders exceeded shipments in the company's
electronics and industrial segments, while shipments exceeded orders in the
telecommunications segment. Overall, incoming orders and shipments were
approximately equal.
Provision for Restructuring and Divestitures
On October 11, 1994, the company announced a major restructuring of its
telecommunications business segment. As a result, the core business incurred a
pretax charge of $24 million for restructuring and divestitures in the first
quarter of 1995. The segment's restructuring charge included $13 million for
severance costs related to a net workforce reduction of 340 employees,
resulting from the closure of telecommunications' manufacturing operations in
Germany and the restructuring of its North American activities. The remaining
charge of $11 million related to plant consolidations and the shutdown of
unprofitable product lines. The restructuring is expected to result in
approximately $24 million of annual savings, $15 million of which is
payroll-related.
Loss on Formation of Ericsson Raynet Joint Venture
In the first quarter of 1995, the company recorded a pre-tax charge of $28
million which is the company's estimate of the loss which will result from
transactions relating to the formation of the Ericsson Raynet joint venture.
For details, see "Raynet" in the notes to the consolidated condensed financial
statements.
Extraordinary Item - Loss From Early Retirement of Debt
On September 30, 1994, the company gave irrevocable notice to the holders of
its 9.55% privately placed senior notes of its intention to prepay this debt on
November 1, 1994. Accordingly, the company recorded in the first quarter of
1995 an extraordinary loss of $7.1 million ($0.16 per share) for the early
retirement of debt. The extraordinary loss is comprised of an estimated $8.1
million prepayment penalty and deferred debt issuance costs of $0.5 million,
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net of a $1.5 million deferred gain resulting from the termination of a related
interest rate swap agreement. The prepayment penalty was estimated based on
interest rates at the time of notice.
Change in Accounting Principle
The company adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (FAS 112), effective July
1, 1994. This statement changes the method of accounting for certain
postemployment benefits from a cash basis to an accrual basis. Adoption of FAS
112 resulted in a one-time adjustment of $1.5 million, or a loss of $0.04 per
share, to reflect the cumulative amount that would have been accrued had the
statement been in effect in prior years.
RAYNET OPERATIONS
Raynet recorded revenues of $23 million in the first quarter of 1995, compared
to $1 million in the year-ago period. The current quarter's revenues include
deliveries to NYNEX and the final acceptance of systems for the Deutsche
Bundespost Telekom's OPAL '93 project. Raynet's first quarter 1995 pretax loss
was $28 million, compared to $29 million in the year-ago period.
Research and development expense was $13 million for the three-month period
ended September 30, 1994, and $11 million for the comparable year-ago period.
The increase is due to costs for employee incentive programs in connection with
the joint venture formation and lower capitalization of software development
costs as compared to the prior period as certain of Raynet's products near
commercialization. Selling, distribution, and administrative expense increased
to $11 million for the three months ended September 30, 1994, from $9 million
in the first quarter of the prior year due to costs for employee incentive
programs in connection with the joint venture formation.
Orders were less than revenues for the three months ended September 30, 1994.
Raynet was recently selected to supply an additional 100,000 lines of its
system for the German OPAL '95 project.
OUTLOOK
With an economic recovery underway in Europe and the U.S., and despite sales
weakness in the People's Republic of China, the company expects that revenue
growth for the year will pick up from the modest growth shown in the first
quarter.
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LIQUIDITY AND CAPITAL RESOURCES
CONSOLIDATED
Debt exceeded cash by $210 million at September 30, 1994, compared to $197
million at June 30, 1994. Debt net of cash increased by $12 million in the
first quarter of 1995, compared to an increase in debt net of cash of $25
million in the first quarter of 1994. Improved cash flow from operations as
compared to the year-ago period accounted for this lower increase in debt net
of cash, and is primarily attributable to lower cash needs at Raynet.
On September 29, 1994, the company entered into syndicated loan agreements
providing for a five-year partially amortizing term loan of $225 million, and
a renewable 364-day revolving credit facility of $200 million. Interest on the
term loan and revolving credit facility are at variable rates. The term loan
requires quarterly principal payments of $15 million beginning December 31,
1996, increasing to $17.5 million from December 31, 1997, and to $20 million
from December 31, 1998, with a final payment of $35 million due September 29,
1999. Proceeds from the term loan were drawn on November 1, 1994, and used to
retire the 9.55% privately placed senior notes and for general corporate
purposes, while the revolving credit facility replaced existing committed
credit facilities. The new agreement includes covenants which, among other
things, specify a minimum net worth requirement, a maximum leverage limit, a
minimum fixed charge coverage ratio, a dividend restriction, and limits on
further advances to fund Raynet operations.
At September 30, 1994, the company had $69 million in cash and cash
equivalents, $240 million in committed credit facilities (of which $5 million
was utilized) and approximately $177 million in various uncommitted credit
facilities (of which $40 million was utilized).
The future cash requirements of Raynet will be determined as the terms
of the Ericsson joint venture agreement are finalized. The joint venture with
Ericsson should reduce the company's losses in 1995 resulting from Raynet's
operations, and lower its Raynet funding requirements. In addition, the joint
venture transaction, which is expected to close in the second quarter, will
result in a net positive cash flow of approximately $25 million, although
Raychem will be obligated to subsequently make two $10 million annual payments
to BellSouth Enterprises Inc.
The combination of cash and cash equivalents, available lines of credit, and
future cash flows from operations are expected to be sufficient to satisfy
substantially all the company's needs for working capital, normal capital
expenditures, and anticipated dividends.
CORE BUSINESS
Net cash provided by operating activities decreased to $16 million for the
first three months of 1995 from $25 million for the corresponding period of
1994. This decrease resulted primarily from lower operating income and
reductions in accounts payable and accrued liabilities. Inventory, as measured
by the number of days of inventory on hand, improved to 112 days for the first
quarter compared to 115 days for the year-ago period. Receivables, as measured
by the number of billing days outstanding, increased at September 30, 1994, to
65 days compared to 61 days at September 30, 1993. The increase in receivables
days outstanding resulted from changes in receivables mix and collection
patterns among certain countries where customary payment terms are protracted.
Capital expenditures of $26 million increased $6 million compared to the
prior-year period, in part due to spending for manufacturing facilities in
Japan, the People's Republic of China, and Mexico. In the first quarter of
1994 the company received $4 million for the sale of a building in the United
States.
RAYNET
Net cash used in operating activities and investments in property, plant, and
equipment at Raynet decreased to $14 million for the three months ended
September 30, 1994, from $41
11
<PAGE> 14
million in the corresponding prior-year period. The lower cash outflow
in this year's first quarter was primarily due to reductions of accounts
receivable and inventories, and lower capital spending, partially offset by
decreases in accounts payable and accrued liabilities.
12
<PAGE> 15
RAYCHEM CORPORATION
Condensed Consolidating Statements of Operations
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30 (UNAUDITED)
----------------------------------------------------------------------
CORE BUSINESS RAYNET CONSOLIDATED
-------------------- -------------------- --------------------
1994 1993 1994 1993 1994 1993
-------- -------- --------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues $368,145 $354,676 $ 22,556 $ 756 $390,701 $355,432
Cost of goods sold 182,859 174,318 26,637 9,412 209,496 183,730
Research and development expense 27,229 23,094 13,192 10,520 40,421 33,614
Selling, distribution, and administrative expense 115,193 104,809 10,952 9,413 126,145 114,222
Provision for restructuring and divestitures 23,900 -- -- -- 23,900 --
Loss on formation of Ericsson Raynet joint venture 28,130 -- -- -- 28,130 --
Interest expense, net 4,594 1,961 107 742 4,701 2,703
Other expense, net 3,609 2,770 (63) 76 3,546 2,846
-------- -------- -------- -------- -------- --------
(Loss) income before income taxes, extraordinary
item, and change in accounting principle (17,369) 47,724 (28,269) (29,407) (45,638) 18,317
Provision for income taxes 2,690 11,875 -- 31 2,690 11,906
-------- -------- -------- -------- -------- --------
(Loss) income before extraordinary item
and change in accounting principle (20,059) 35,849 (28,269) (29,438) (48,328) 6,411
Extraordinary item - loss from early retirement of
debt, net of $0 income taxes (7,074) -- -- -- (7,074) --
Cumulative effect of change in accounting
principle, net of $0 income taxes (1,477) -- -- -- (1,477) --
-------- -------- -------- -------- -------- --------
Net (loss) income $(28,610) $ 35,849 $(28,269) $(29,438) $(56,879) $ 6,411
======== ======== ======== ======= ======== ========
</TABLE>
13
<PAGE> 16
RAYCHEM CORPORATION
Condensed Consolidating Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
CORE BUSINESS RAYNET CONSOLIDATED*
-------------------------- -------------------------- --------------------------
(Unaudited) (Unaudited) (Unaudited)
9/30/94 6/30/94 9/30/94 6/30/94 9/30/94 6/30/94
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 64,276 $ 75,384 $ 4,470 $ 2,706 $ 68,746 $ 78,090
Accounts receivables, net 288,637 275,904 29,611 36,720 318,248 312,624
Inventories 218,309 220,116 23,099 27,673 241,408 247,789
Other current assets 98,515 94,418 1,662 3,021 100,177 97,439
---------- ---------- ------- -------- --------- ---------
Total current assets 669,737 665,822 58,842 70,120 728,579 735,942
---------- ---------- ------- -------- --------- ---------
Net property, plant and equipment 504,347 507,474 25,858 27,005 530,205 534,479
Investment in Raynet 25,799 54,012 -- -- -- --
Other assets 121,918 116,175 11,443 12,419 133,361 128,594
---------- ---------- ------- -------- --------- ---------
Total assets $1,321,801 $1,343,483 $96,143 $109,544 $1,392,145 $1,399,015
========== ========== ======= ======== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 28,870 $ 24,183 $ 2,326 $ 2,803 $ 31,196 $ 26,986
Intercompany accounts
payable (receivable) (32,268) (12,532) 32,268 12,532 -- --
Accounts payable 56,143 61,939 18,951 21,197 75,094 83,136
Other current liabilities 230,144 194,969 16,459 19,000 246,603 213,969
---------- ---------- ------- -------- ---------- ----------
Total current liabilities 282,889 268,559 70,004 55,532 352,893 324,091
---------- ---------- ------- -------- ---------- ----------
Long-term debt 244,675 244,681 -- -- 244,675 244,681
Other long-term liabilities 98,711 93,058 340 -- 99,051 93,058
Minority interest 4,117 4,261 -- -- 4,117 4,261
Stockholders' equity 691,409 732,924 25,799 54,012 691,409 732,924
---------- ---------- ------- -------- ---------- ----------
Total liabilities and
stockholders' equity $1,321,801 $1,343,483 $96,143 $109,544 $1,392,145 $1,399,015
========== ========== ======= ======== ========== ==========
* Consolidated balances reflect eliminations of intercompany transactions.
</TABLE>
14
<PAGE> 17
RAYCHEM CORPORATION
Condensed Consolidating Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30 (UNAUDITED)
----------------------------------------------------------------------
CORE BUSINESS RAYNET CONSOLIDATED
-------------------- -------------------- --------------------
1994 1993 1994 1993 1994 1993
-------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating activities $ 16,006 $ 24,534 $(12,454) $(37,124) $ 3,552 $(12,590)
-------- -------- -------- -------- -------- --------
Cash flows from investing activities:
Investment in property, plant and equipment (25,693) (19,403) (1,720) (3,593) (27,413) (22,996)
Disposition of property, plant and equipment 2,385 3,874 -- -- 2,385 3,874
Purchase of investment (1,000) -- -- -- (1,000) --
-------- -------- -------- -------- -------- --------
Net cash used in investing activities (24,308) (15,529) (1,720) (3,593) (26,028) (19,122)
-------- -------- -------- -------- -------- --------
Cash flows from financing activities:
Proceeds from (payment of) debt 5,172 (16,630) -- -- 5,172 (16,630)
Proceeds from (payment of) intercompany loans (15,693) (24,283) 15,693 24,283 -- --
Common Stock issued under employee benefit plans 10,334 9,442 -- -- 10,334 9,442
Proceeds from repayments of stockholder notes receivable 162 80 -- -- 162 80
Cash dividends (3,465) (3,372) -- -- (3,465) (3,372)
-------- -------- -------- -------- -------- --------
Net cash provided by (used in) financing activities (3,490) (34,763) 15,693 24,283 12,203 (10,480)
-------- -------- -------- -------- -------- --------
Effect of exchange rate changes on cash and cash equivalents 869 (968) 60 94 929 (874)
-------- -------- -------- -------- -------- --------
(Decrease) increase in cash and cash equivalents $(10,923) $(26,726) $ 1,579 $(16,340) $ (9,344) $(43,066)
======== ======== ======== ======== ======== ========
15
</TABLE>
<PAGE> 18
RAYCHEM CORPORATION
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
On October 12, 1994, PSI Telecommunications, Inc. served on the company an
amended answer and complaint which added inequitable conduct and patent misuse
defenses and an antitrust and unfair competition counterclaim. The company
disclosed information about this lawsuit in its annual report on Form 10-K for
the year ended June 30, 1994.
On October 1, 1994, the United States Environmental Protection Agency
revised its designation of the company to de minimus potentially responsible
party in administrative proceedings originally instituted on March 23, 1989.
The company disclosed information about these proceedings in its annual report
on Form 10-K for the year ended June 30, 1994.
ITEM 5: OTHER INFORMATION
On October 14, 1994, the company appointed Christiane L. Midgley, worldwide
general manager of the Wire and Cable Division; and Lars Larsen, corporate
treasurer, to the position of vice president.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Index to Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- ------------
<S> <C>
4(e) Credit Agreement dated as of September 29, 1994
4(f) Term Loan Agreement dated as of September 29, 1994
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
None.
16
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RAYCHEM CORPORATION
(Registrant)
Date: November 10, 1994 /s/ RAYMOND J. SIMS
------------------ -------------------------------------
Raymond J. Sims
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ DEIDRA D. BARSOTTI
-------------------------------------
Deidra D. Barsotti
Vice President and
Corporate Controller
(Principal Accounting Officer)
17
<PAGE> 1
EXHIBIT 4(e)
(CONFORMED COPY)
================================================================================
$200,000,000
CREDIT AGREEMENT
among
RAYCHEM CORPORATION,
VARIOUS BANKS,
THE CHASE MANHATTAN BANK, N.A.,
as CO-ARRANGER and SYNDICATION AGENT
and
SWISS BANK CORPORATION,
as CO-ARRANGER and ADMINISTRATIVE AGENT
______________________________
Dated as of September 29, 1994
______________________________
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. AMOUNT AND TERMS OF CREDIT . . . . . . . . . . . . . . . . . 1
1.01 The Loans . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Amount of Each Borrowing . . . . . . . . . . . . . . 2
1.03 Notice of Borrowing of Committed Loans . . . . . . . . . . . 2
1.0 Competitive Bid Borrowings . . . . . . . . . . . . . . . . . 3
1.05 Disbursement of Funds . . . . . . . . . . . . . . . . . . . 5
1.06 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.07 Conversions . . . . . . . . . . . . . . . . . . . . . . . . 7
1.08 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . 8
1.09 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.10 Interest Periods . . . . . . . . . . . . . . . . . . . . . . 9
1.11 Increased Costs, Illegality, etc. . . . . . . . . . . . . . 10
1.12 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 13
1.13 Change of Applicable Lending Office . . . . . . . . . . . . 14
1.14 Notice of Certain Costs . . . . . . . . . . . . . . . . . . 14
1.15 Extension of Commitment Expiration Date;
Replacement of Non-Continuing Bank . . . . . . . . . . . . 14
SECTION 2. FEES; TERMINATION OF COMMITMENTS . . . . . . . . . . . . . . 16
2.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.02 Voluntary Termination of Unutilized Total Commitment . . . . 16
2.03 Mandatory Termination of a Bank's
Commitment . . . . . . . . . . . . . . . . . . . . . . . . 16
2.04 Replacement of Bank; Voluntary
Termination of a Bank's Commitment . . . . . . . . . . . . 16
SECTION 3. PREPAYMENTS; PAYMENTS . . . . . . . . . . . . . . . . . . . . 17
3.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . 17
3.02 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . 18
3.03 Method and Place of Payment . . . . . . . . . . . . . . . . 19
3.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . 20
4.01 Conditions to Effectiveness . . . . . . . . . . . . . . . . 20
4.02 Conditions to Each Loan . . . . . . . . . . . . . . . . . . 22
SECTION 5. REPRESENTATIONS, WARRANTIES
AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . 23
5.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . 23
5.02 Corporate Power and Authority . . . . . . . . . . . . . . . 23
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
5.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . 23
5.04 Governmental Approvals . . . . . . . . . . . . . . . . . . . 24
5.05 Financial Statements; Financial
Condition; Undisclosed
Liabilities; etc. . . . . . . . . . . . . . . . . . . . . 24
5.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.07 True and Complete Disclosure . . . . . . . . . . . . . . . . 25
5.08 Use of Proceeds; Margin Regulations . . . . . . . . . . . . 26
5.09 Tax Returns and Payments . . . . . . . . . . . . . . . . . . 26
5.10 Compliance with ERISA . . . . . . . . . . . . . . . . . . . 26
5.11 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 27
5.12 Compliance with Statutes, etc. . . . . . . . . . . . . . . . 27
5.13 Investment Company Act . . . . . . . . . . . . . . . . . . . 28
5.14 Public Utility Holding Company Act . . . . . . . . . . . . . 28
5.15 Labor Relations . . . . . . . . . . . . . . . . . . . . . . 28
5.16 Patents, Licenses, Franchises and
Formulas . . . . . . . . . . . . . . . . . . . . . . 28
5.17 Compliance with Environmental Laws . . . . . . . . . . . . . 29
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . 31
6.01 Information Covenants . . . . . . . . . . . . . . . . . . . 31
6.02 Books, Records and Inspections . . . . . . . . . . . . . . . 34
6.03 Maintenance of Property, Insurance . . . . . . . . . . . . . 34
6.04 Corporate Franchises . . . . . . . . . . . . . . . . . . . . 35
6.05 Compliance with Statutes, etc. . . . . . . . . . . . . . . . 35
6.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.07 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . 36
6.08 Performance of Obligations . . . . . . . . . . . . . . . . . 37
6.09 Payment of Taxes and Claims . . . . . . . . . . . . . . . . 37
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 38
7.01 Changes in Business . . . . . . . . . . . . . . . . . . . . 38
7.02 Consolidation, Merger, Sale of
Assets, etc. . . . . . . . . . . . . . . . . . . . . . . 38
7.03 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.04 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 42
7.05 Advances, Investments and Loans . . . . . . . . . . . . . . 43
7.06 Restricted Payments . . . . . . . . . . . . . . . . . . . . 44
7.07 Transactions with Affiliates . . . . . . . . . . . . . . . . 45
7.08 Limitation on Modifications of
Certificate of Incorporation, By-Laws . . . . . . . . . . . 45
7.09 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . 45
7.10 Fixed Charges Coverage Ratio . . . . . . . . . . . . . . . . 45
7.11 Minimum Consolidated Tangible Net Worth . . . . . . . . . . 45
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
7.12 Limitation on Payments of Certain
Indebtedness; Modification of Certain
Indebtedness; Fixed Charge Coverage
Deficiency . . . . . . . . . . . . . . . . . . . . . . . . 45
7.13 Interest Rate Protection Agreements and
Other Hedging Agreements . . . . . . . . . . . . . . . . . 46
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 46
8.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.02 Representations, etc. . . . . . . . . . . . . . . . . . . . 46
8.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.04 Default Under Other Agreements . . . . . . . . . . . . . . . 47
8.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . 47
8.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.07 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.08 Change of Control . . . . . . . . . . . . . . . . . . . . . 49
8.09 Fixed Charge Coverage Deficiency . . . . . . . . . . . . . . 49
SECTION 9. DEFINITIONS AND PRINCIPLES OF
CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . 49
9.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 49
9.02 Principles of Construction . . . . . . . . . . . . . . . . . 68
SECTION 10. THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . 68
10.02 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . 69
10.03 Lack of Reliance on the Agents . . . . . . . . . . . . . . . 69
10.04 Certain Rights of the Agents . . . . . . . . . . . . . . . . 70
10.05 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . 70
10.07 The Agents in their Individual Capacity . . . . . . . . . . 71
10.08 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.09 Resignation by the Agents . . . . . . . . . . . . . . . . . 71
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 72
11.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . 72
11.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . 73
11.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 73
11.04 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . 74
11.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . 76
11.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . 76
11.07 Calculations; Computations . . . . . . . . . . . . . . . . . 77
11.08 Governing Law; Submission to
Jurisdiction; Venue . . . . . . . . . . . . . . . . . . . . 77
11.09 Obligation to Make Payments in Dollars . . . . . . . . . . . 78
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 79
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
11.11 Domicile of Loans . . . . . . . . . . . . . . . . . . . . . 79
11.12 Headings Descriptive . . . . . . . . . . . . . . . . . . . . 79
11.13 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . 79
11.14 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.15 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 80
11.16 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 80
SCHEDULE I Commitments
SCHEDULE II Applicable Lending Offices
SCHEDULE III Undisclosed Liabilities
SCHEDULE IV Litigation
SCHEDULE V Subsidiaries
SCHEDULE VI Environmental Matters
SCHEDULE VII Permitted Liens
EXHIBIT A-1 Notice of Committed Borrowing
EXHIBIT A-2 Notice of Competitive Bid Borrowing
EXHIBIT B Note
EXHIBIT C Opinion of Counsel to the Borrower
EXHIBIT D Officers' Certificate of the Borrower
EXHIBIT E Consent Letter
EXHIBIT F Assignment and Assumption Agreement
</TABLE>
(iv)
<PAGE> 6
CREDIT AGREEMENT, dated as of September 29, 1994, among
RAYCHEM CORPORATION (the "Borrower"), a corporation organized and existing
under the laws of the State of Delaware, the financial institutions listed from
time to time on Schedule I (each a "Bank" and, collectively, the "Banks"), THE
CHASE MANHATTAN BANK, N.A., as Co-Arranger and Syndication Agent (in such
capacity, "Syndication Agent") and SWISS BANK CORPORATION, acting through its
New York Branch, as Co-Arranger and Administrative Agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Banks are willing to make available to the Borrower the credit
facility provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 The Loans. (a) Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees, at any time and from
time to time prior to the Commitment Expiration Date of such Bank, to make
loans (each a "Committed Loan" and, collectively, the "Committed Loans") to the
Borrower, which Committed Loans (i) shall, at the option of the Borrower, be
Eurodollar Rate Loans or Base Rate Loans, provided that, except as otherwise
specifically provided in Section 1.11(b), all Committed Loans comprising the
same Borrowing shall at all times be of the same Type and (ii) may be prepaid
and reborrowed prior to the Commitment Expiration Date of such Bank in
accordance with the provisions hereof; provided, however, that (x) the
aggregate principal amount of Committed Loans outstanding from any Bank shall
at no time prior to the Commitment Expiration Date of such Bank exceed the
Commitment of such Bank at such time and (y) the sum of (I) the aggregate
principal amount of all Committed Loans outstanding at any time (other than
Committed Loans of any Bank outstanding after the Commitment Expiration Date of
such Bank) plus (II) the aggregate outstanding principal amount of all
Competitive Bid Loans at such time shall not exceed the Total Commitment at
such time. After the Commitment Expiration Date of any Bank, once repaid, no
Committed Loans of such Bank may be reborrowed. More than one Borrowing may
<PAGE> 7
occur on the same date, but Eurodollar Rate Loans comprising more than ten
Borrowings shall not be outstanding under this Agreement at any time, provided
that Eurodollar Rate Loans resulting from a conversion pursuant to Section
1.11(b) shall not be deemed to be a Borrowing for this purpose.
(b) Subject to and upon the terms and conditions herein set
forth, each Bank severally agrees that the Borrower may incur a loan or loans
(each a "Competitive Bid Loan" and collectively, the "Competitive Bid Loans")
from one or more Bidder Banks pursuant to a Competitive Bid Borrowing at any
time and from time to time on and after the Effective Date and prior to the
date which is the third Business Day preceding the date which is 14 days prior
to the Commitment Expiration Date of the respective Bank, provided that after
giving effect to any Competitive Bid Borrowing and the use of the proceeds
thereof, the aggregate outstanding principal amount of Competitive Bid Loans,
when combined with the then aggregate outstanding principal amount of all
Committed Loans (other than Committed Loans of any Bank outstanding after the
Commitment Expiration Date of such Bank), shall not exceed the Total Commitment
at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing hereunder shall be not less than (i)
$20,000,000, in the case of Committed Loans, and (ii) $10,000,000, in the case
of Competitive Bid Loans, and if larger shall be in an integral multiple of
$1,000,000, except as required by Section 1.11(b).
1.03 Notice of Borrowing of Committed Loans. Whenever the
Borrower desires to make a Borrowing of Committed Loans hereunder, it shall
give the Administrative Agent at its Notice Office (i) at least three Business
Days' prior notice of each Eurodollar Rate Loan to be made hereunder (which
notice shall be deemed to have been given on a certain day only if given before
12:00 Noon (New York time) on such day) and (ii) notice of each Base Rate Loan
to be made hereunder prior to 11:00 A.M. (New York time) on the day of such
Borrowing. Each such notice (each a "Notice of Committed Borrowing") shall be
in the form of Exhibit A-1, appropriately completed to specify the aggregate
principal amount of the Committed Loans to be made pursuant to such Borrowing,
the date of such Borrowing (which shall be a Business Day), whether the
Committed Loans being made pursuant to such Borrowing are to be maintained
initially as Eurodollar Rate Loans or Base Rate Loans and, if Eurodollar Rate
Loans, the initial Interest Period to be applicable thereto. The
Administrative Agent shall promptly give each
-2-
<PAGE> 8
Bank notice of such proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.
1.04 Competitive Bid Borrowings. (a) Whenever the Borrower
desires to incur a Competitive Bid Borrowing, it shall deliver to the
Administrative Agent, prior to 12:00 Noon (New York time) (x) at least five
Business Days prior to the date of such proposed Competitive Bid Borrowing, in
the case of a Spread Borrowing, and (y) at least two Business Days prior to the
date of such proposed Competitive Bid Borrowing, in the case of an Absolute
Rate Borrowing, a written notice substantially in the form of Exhibit A-2
hereto (a "Notice of Competitive Bid Borrowing"), which notice shall specify in
each case (i) the date (which shall be a Business Day) and the aggregate amount
of the proposed Competitive Bid Borrowing, (ii) the maturity date for repayment
of each and every Competitive Bid Loan to be made as part of such Competitive
Bid Borrowing (which maturity date may be (A) one, three or six months after
the date of such Competitive Bid Borrowing, in the case of a Spread Borrowing,
and (B) up to a maximum of 30 days after the date of such Competitive Bid
Borrowing, in the case of an Absolute Rate Borrowing provided that in no event
shall the maturity date of any Competitive Bid Borrowing be later than the
third Business Day preceding the Commitment Expiration Date of the Bidder Bank
or Bidder Banks participating in such Competitive Bid Borrowing), (iii) the
interest payment date or dates relating thereto, (iv) whether the proposed
Competitive Bid Borrowing is to be an Absolute Rate Borrowing or a Spread
Borrowing, and if a Spread Borrowing, the Interest Rate Basis, and (v) any
other terms to be applicable to such Competitive Bid Borrowing. The
Administrative Agent shall promptly notify each Bidder Bank by telephone or
facsimile of each such request for a Competitive Bid Borrowing received by it
from the Borrower and of the contents of the related Notice of Competitive Bid
Borrowing.
(b) Each Bidder Bank shall, if, in its sole discretion,
it elects to do so, irrevocably offer to make one or more Competitive Bid Loans
to the Borrower as part of such proposed Competitive Bid Borrowing at a rate or
rates of interest specified by such Bidder Bank in its sole discretion and
determined by such Bidder Bank independently of each other Bidder Bank, by
notifying the Administrative Agent (which shall give prompt notice thereof to
the Borrower by facsimile) before 11:00 A.M. (New York time) on the date (the
"Reply Date") which is (x) in the case of an Absolute Rate
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Borrowing, one Business Day before the date of such proposed Competitive Bid
Borrowing and (y) in the case of a Spread Borrowing, four Business Days before
the date of such proposed Competitive Bid Borrowing, of the minimum amount and
maximum amount of each Competitive Bid Loan which such Bidder Bank would be
willing to make as part of such proposed Competitive Bid Borrowing (which
amounts may, subject to the proviso to the first sentence of Section 1.01(b),
exceed such Bidder Bank's Commitment), the rate or rates of interest therefor
and such Bidder Bank's lending office with respect to such Competitive Bid
Loan; provided that if the Administrative Agent in its capacity as a Bidder
Bank shall, in its sole discretion, elect to make any such offer, it shall
notify the Borrower of such offer before 10:45 A.M. (New York time) on the
Reply Date. If any Bidder Bank shall elect not to make such an offer, such
Bidder Bank shall so notify the Administrative Agent, before 11:00 A.M. (New
York time) on the Reply Date, and such Bidder Bank shall not be obligated to,
and shall not, make any Competitive Bid Loan as part of such Competitive Bid
Borrowing; provided that the failure by any Bidder Bank to give such notice
shall not cause such Bidder Bank to be obligated to make any Competitive Bid
Loan as part of such proposed Competitive Bid Borrowing.
(c) The Borrower shall, in turn, (x) before 1:00 P.M.
(New York time) on the Reply Date in the case of a proposed Absolute Rate
Borrowing and (y) before 1:00 P.M. (New York time) on the Business Day
following the Reply Date in the case of a proposed Spread Borrowing, either:
(i) cancel such Competitive Bid Borrowing by giving the
Administrative Agent notice to such effect (it being understood and
agreed that if the Borrower gives no such notice of cancellation and
no notice of acceptance pursuant to clause (ii) below, then the
Borrower shall be deemed to have cancelled such Competitive Bid
Borrowing), or
(ii) accept one or more of the offers made by any Bidder
Bank or Bidder Banks pursuant to clause (b) above by giving notice (in
writing or by telephone confirmed in writing) to the Administrative
Agent of the amount of each Competitive Bid Loan (which amount shall
be equal to or greater than the minimum amount, and equal to or less
than the maximum amount, notified to the Borrower by the
Administrative Agent on behalf of such Bidder Bank for such
Competitive Bid Borrowing pursuant to clause (b) above) to be made by
each Bidder Bank as part of such Competitive Bid Borrowing, and reject
any
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remaining offers made by Bidder Banks pursuant to clause (b) above by
giving the Administrative Agent notice to that effect; provided that
the acceptance of offers may only be made on the basis of ascending
Absolute Rates (in the case of an Absolute Rate Borrowing) or Spreads
(in the case of a Spread Borrowing), in each case commencing with the
lowest rate so offered; provided further, however, if offers are made
by two or more Bidder Banks at the same rate and acceptance of all
such equal offers would result in a greater principal amount of
Competitive Bid Loans being accepted than the aggregate principal
amount requested by the Borrower, if the Borrower elects to accept any
of such offers the Borrower shall accept such offers pro rata from
such Bidder Banks (on the basis of the maximum amounts of such offers)
unless any such Bidder Bank's pro rata share would be less than the
minimum amount specified by such Bidder Bank in its offer, in which
case the Borrower shall have the right to accept one or more such
equal offers in their entirety and reject the other equal offer or
offers or to allocate acceptance among all such equal offers (but
giving effect to the minimum and maximum amounts specified for each
such offer pursuant to clause (b) above), as the Borrower may elect in
its sole discretion.
(d) If the Borrower notifies the Administrative Agent
that such Competitive Bid Borrowing is cancelled, or if such Competitive Bid
Borrowing is deemed cancelled, pursuant to clause (c)(i) above, the
Administrative Agent shall give prompt notice thereof to the Bidder Banks and
such Competitive Bid Borrowing shall not be made.
(e) If the Borrower accepts one or more of the offers
made by any Bidder Bank or Bidder Banks pursuant to clause (c)(ii) above, the
Administrative Agent shall in turn promptly notify (x) each Bidder Bank that
has made an offer as described in clause (b) above, of the date and aggregate
amount of such Competitive Bid Borrowing and whether or not any offer or offers
made by such Bidder Bank pursuant to clause (b) above have been accepted by the
Borrower and (y) each Bidder Bank that is to make a Competitive Bid Loan as
part of such Competitive Bid Borrowing, of the amount of each Competitive Bid
Loan to be made by such Bidder Bank as part of such Competitive Bid Borrowing.
1.05 Disbursement of Funds. No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Borrowing, each Bank will
make available, through such Bank's
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Applicable Lending Office, its pro rata portion, if any, of each Borrowing
requested to be made on such date, in Dollars and in immediately available
funds at the Payment Office of the Administrative Agent, and the Administrative
Agent will make available to the Borrower at its Payment Office the aggregate
of the amounts so made available by the Banks. Unless the Administrative Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to the Administrative Agent such Bank's
portion of any Borrowing to be made on such date, the Administrative Agent may
assume that such Bank has made such amount available to the Administrative
Agent on such date of Borrowing and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the
Administrative Agent by such Bank, the Administrative Agent shall be entitled
to recover such corresponding amount from such Bank on demand. If such Bank
does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent. The Administrative Agent shall also be entitled to
recover on demand from such Bank or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, the cost to the Administrative Agent of acquiring overnight Federal Funds
and (ii) if recovered from the Borrower, the then applicable rate of interest,
calculated in accordance with Section 1.09, for the respective Loans. Nothing
in this Section 1.05 shall be deemed to relieve any Bank from its obligation to
fulfill its commitments hereunder or to prejudice any rights which the Borrower
may have against any Bank as a result of any default by such Bank hereunder.
1.06 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, all the Committed Loans made by each Bank shall
be evidenced by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B with blanks appropriately completed in
conformity herewith (each a "Note" and, collectively, the "Notes"). The Note
issued to each Bank shall (i) be payable to the order of such Bank and be dated
the Effective Date, (ii) be in a stated principal amount equal to the
Commitment of such Bank and be payable in the principal amount of the
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<PAGE> 12
Committed Loans evidenced thereby, (iii) mature on the Maturity Date of such
Bank, (iv) bear interest as provided in the appropriate clause of Section 1.09
in respect of the Base Rate Loans and Eurodollar Rate Loans, as the case may
be, evidenced thereby and (v) be entitled to the benefits of this Agreement.
Each Bank will note on its internal records the amount of each Loan made by it
and each payment in respect thereof and will prior to any transfer of its Note
endorse on the reverse side thereof the outstanding principal amount of
Committed Loans evidenced thereby. Failure to make any such notation shall not
affect the Borrower's obligations in respect of such Committed Loans.
(b) The Administrative Agent shall maintain at its Payment
Office a register for the recordation of the names and addresses of the Banks,
the Commitments of the Banks from time to time, and the principal amount of the
Committed Loans and Competitive Bid Loans owing to each Bank from time to time
together with the maturity and interest rates applicable to each such
Competitive Bid Loan, and other terms applicable thereto (the "Register"). The
entries in the Register shall constitute prima facie evidence as to the
information set forth therein.
1.07 Conversions. The Borrower shall have the option to
convert on any Business Day all or a portion equal to $20,000,000 (and, if
larger, an integral multiple of $1,000,000) of the outstanding principal amount
of the Committed Loans made pursuant to one or more Borrowings of one Type of
Committed Loan into a Borrowing of another Type of Committed Loan, provided
that (i) except as otherwise provided in Section 1.11(b), Eurodollar Rate Loans
may be converted into Base Rate Loans only on the last day of an Interest
Period applicable to the Committed Loans being converted and no such partial
conversion of Eurodollar Rate Loans shall reduce the outstanding principal
amount of Eurodollar Rate Loans made pursuant to a single Borrowing to less
than $20,000,000, (ii) Base Rate Loans may only be converted into Eurodollar
Rate Loans if no Default or Event of Default is in existence on the date of the
conversion and (iii) no conversion pursuant to this Section 1.07 shall result
in a greater number of Borrowings than is permitted under Section 1.01. Each
such conversion shall be effected by the Borrower by giving the Administrative
Agent at its Notice Office prior to 12:00 Noon (New York time) at least three
Business Days' prior notice (each a "Notice of Conversion") specifying the
Committed Loans to be so converted and, if to be converted into Eurodollar Rate
Loans, the Interest Period to be initially applicable thereto. The
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<PAGE> 13
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion. Upon any such conversion the proceeds thereof will be applied
directly on the day of such conversion to prepay the outstanding principal
amount of the Committed Loans being converted. Notwithstanding the foregoing,
if a Default or an Event of Default is in existence at the time any Interest
Period in respect of any Eurodollar Rate Loans is to expire, such Eurodollar
Rate Loans may not be continued as Eurodollar Rate Loans but instead shall be
automatically converted on the last day of such Interest Period into Base Rate
Loans. If upon the expiration of any Interest Period applicable to a
Eurodollar Rate Loan, the Borrower has failed to elect a new Interest Period to
be applicable to such Eurodollar Rate Loan as provided in Section 1.10, the
Borrower shall be deemed to have elected to convert such Eurodollar Rate Loan
into a Base Rate Loan effective as of the expiration date of such current
Interest Period.
1.08 Pro Rata Borrowings. Each Borrowing of Committed
Loans under this Agreement shall be incurred from the Banks pro rata on the
basis of their Commitments at the time of such Borrowing. It is understood
that no Bank shall be responsible for any default by any other Bank of its
obligation to make Committed Loans hereunder and that each Bank shall be
obligated to make the Committed Loans provided to be made by it hereunder
regardless of the failure of any other Bank to make its Committed Loans
hereunder.
1.09 Interest. (a) The Borrower agrees to pay interest
in respect of the unpaid principal amount of each Base Rate Loan from the date
the proceeds thereof are made available to the Borrower until the maturity
thereof (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Applicable Base Rate Margin plus the Base Rate in effect
from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Rate Loan from the date the proceeds
thereof are made available to the Borrower until the maturity thereof (whether
by acceleration or otherwise) at a rate per annum which shall at all times be
the Applicable Eurodollar Rate Margin plus the relevant Quoted Rate.
(c) The unpaid principal amount of each Competitive Bid
Loan shall bear interest from the date the proceeds thereof are made available
to the Borrower until maturity (whether by acceleration or otherwise) at the
rate or rates
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<PAGE> 14
per annum specified by a Bidder Bank or Bidder Banks, as the case may be,
pursuant to Section 1.04(b) and accepted by the Borrower pursuant to Section
1.04(c).
(d) Overdue principal and, to the extent permitted by
law, overdue interest in respect of each Loan and any other overdue amount
payable by the Borrower hereunder shall bear interest at a rate per annum equal
to 2% per annum in excess of the Base Rate in effect from time to time;
provided that principal in respect of Eurodollar Rate Loans and Competitive Bid
Loans shall bear interest after the same becomes due (whether by acceleration
or otherwise) until the end of the applicable Interest Period for such
Eurodollar Rate Loans, or the original scheduled maturity of such Competitive
Bid Loans, as the case may be, at a per annum rate equal to 2% plus the rate of
interest applicable on the due date therefor.
(e) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December of each year, (ii) in
respect of each Competitive Bid Loan, at such times as specified in the Notice
of Competitive Bid Borrowing relating thereto, (iii) in respect of each
Eurodollar Rate Loan, on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period of six months, on the date
occurring three months after the first day of such Interest Period, (iv) in
respect of each Loan made by a Bank whose Commitment is terminated pursuant to
Section 1.15 or 2.04, on the date on which such Bank's Commitment is terminated
and (v) in respect of each Loan, on any prepayment (on the amount prepaid), at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(f) On each Interest Determination Date, the
Administrative Agent shall determine the interest rate for the Eurodollar Rate
Loans for which such determination is being made and shall promptly notify the
Borrower and the Banks thereof. Each such determination shall, absent manifest
error, be final and conclusive and binding on all parties hereto.
1.10 Interest Periods. Subject to the terms of Section
1.07, at the time it gives any Notice of Borrowing or Notice of Conversion in
respect of the making of, or conversion into, any Eurodollar Rate Loan (in the
case of the initial Interest Period applicable thereto) or on the third
Business Day prior to the expiration of an Interest
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<PAGE> 15
Period applicable to such Eurodollar Rate Loan (in the case of any subsequent
Interest Period), the Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the Interest Period applicable to such
Eurodollar Rate Loan, which Interest Period shall, at the option of the
Borrower, be a one, three or six month period, provided that: (i) all
Eurodollar Rate Loans comprising a Borrowing shall at all times have the same
Interest Period except as otherwise required by Section 1.11(b); (ii) the
initial Interest Period for any Eurodollar Rate Loan shall commence on the date
of Borrowing of such Loan (including the date of any conversion from a
Borrowing of Base Rate Loans) and each Interest Period occurring thereafter in
respect of such Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires; (iii) if any Interest Period
relating to a Eurodollar Rate Loan begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such
calendar month; (iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would otherwise
expire on a day which is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day; and (v) no Interest Period
applicable to the Committed Loans of any Bank shall extend beyond the Maturity
Date of such Bank.
1.11 Increased Costs, Illegality, etc. (a) In the event
that any Bank shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Quoted Rate; or
(ii) at any time, that such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Rate Loan or Competitive Bid Loan
because of (x) any change since the date of this Agreement (or, in the
case of any such cost or reduction with respect to any Competitive
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<PAGE> 16
Bid Loan, since the making of such Competitive Bid Loan) in any
applicable law or governmental rule, regulation, order or request
(whether or not having the force of law) (or in the interpretation or
administration thereof and including the introduction of any new law
or governmental rule, regulation, order or request), such as, for
example, but not limited to, (A) a change in the basis of taxation of
payments to any Bank or its Applicable Lending Office of the principal
of or interest on the Notes or any other amounts payable hereunder
(except for changes in the rate of tax on, or determined by reference
to, the net income or profits of such Bank or its Applicable Lending
Office imposed by the jurisdiction in which its principal office or
Applicable Lending Office is located) or (B) a change in official
reserve requirements, but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the
Quoted Rate, and/or (y) other circumstances affecting the interbank
Eurodollar market and arising after the Effective Date; or
(iii) at any time, that the making or continuance of any
Eurodollar Rate Loan or Competitive Bid Loan has been made (x)
unlawful by any law or governmental rule, regulation or order, (y)
impossible by compliance by such Bank with any governmental request
(whether or not having force of law) or (z) impracticable as a result
of a contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the
case of clause (i) above to the extent applicable to Committed Loans) shall
promptly give notice (by telephone confirmed in writing) to the Borrower and,
except in the case of clause (i) above, to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Rate Loans (or Competitive Bid Loans constituting a Spread Borrowing
priced by reference to the Quoted Rate) shall no longer be available until such
time as the Administrative Agent notifies the Borrower and the Banks that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Committed Borrowing, Notice of Competitive Bid
Borrowing or Notice of Conversion given by the Borrower with respect to
Eurodollar Rate Loans (or any affected Competitive Bid Loans) which have not
yet been incurred (including by way of conversion) shall be
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<PAGE> 17
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall pay to such Bank, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Bank, showing the basis for
the calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding on the Borrower and such
Bank) and (z) in the case of clause (iii) above, take one of the actions
specified in Section 1.11(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any Eurodollar Rate Loan or
Competitive Bid Loan is affected by the circumstances described in Section
1.11(a)(ii) or any Eurodollar Rate Loan or Competitive Bid Loan is affected by
the circumstances described in Section 1.11(a)(iii), the Borrower may (and in
the case of a Eurodollar Rate Loan or Competitive Bid Loan affected by the
circumstances described in Section 1.11(a)(iii) shall) either (i) if the
affected Eurodollar Rate Loan or Competitive Bid Loan is then being made
initially or pursuant to a conversion, cancel said Borrowing by giving the
Administrative Agent notice by telephone (confirmed in writing) of the
cancellation on the same date that the Borrower was notified by the Bank or the
Administrative Agent pursuant to Section 1.11(a)(ii) or (iii), (ii) if the
affected Eurodollar Rate Loan is then outstanding, upon at least three Business
Days' written notice to the Administrative Agent, require the affected Bank to
convert such Eurodollar Rate Loan into a Base Rate Loan or Loans or (iii) if
the affected Competitive Bid Loan is then outstanding, prepay such Competitive
Bid Loan in full (which prepayment may be made with the proceeds of a Committed
Loan), provided that, if more than one Bank is affected at any time and the
Borrower decides to require a conversion of any Eurodollar Rate Loans into Base
Rate Loans, then the Borrower must require all such affected Banks to convert
such affected Eurodollar Rate Loans into Base Rate Loans pursuant to this
Section 1.11(b).
(c) If any Bank determines at any time that compliance
with any applicable law or governmental rule, regulation, order or request
(whether or not having the force of law) as adopted, amended or modified after
the Effective Date concerning capital adequacy, or any change after the
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<PAGE> 18
Effective Date in interpretation or administration thereof by any governmental
authority, central bank or comparable agency, will have the effect of
increasing the amount of capital required or expected to be maintained by such
Bank or the parent corporation of such Bank based on the existence of such
Bank's Commitment hereunder or its obligations hereunder, then the Borrower
shall pay to such Bank, upon its written demand therefor, such additional
amounts as shall be required to compensate such Bank or such Bank's parent
corporation for the increased cost to such Bank or such Bank's parent
corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Bank's determination of compensation owing under this Section 1.11(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be
payable pursuant to this Section 1.11(c), will give prompt written notice
thereof to the Borrower, which notice shall show the basis for calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 1.11(c).
1.12 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth the basis for
requesting such compensation and shall, absent manifest error, be final and
conclusive and binding on all the parties hereto), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Bank to fund its Eurodollar Rate Loans or
Competitive Bid Loans) which such Bank may sustain: (i) if for any reason
(other than a default by such Bank or the Administrative Agent) a Borrowing of,
or conversion from or into, Eurodollar Rate Loans or Competitive Bid Loans
accepted in accordance with Section 1.04(c)(ii) does not occur on a date
specified therefor in a Notice of Committed Borrowing, Notice of Competitive
Bid Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower
or deemed rescinded pursuant to Section 1.11(a)); (ii) if any repayment or
conversion of any of its Eurodollar Rate Loans or any of its Competitive Bid
Loans occurs on a date which is not the last day of an Interest Period with
respect thereto (including without limitation any voluntary prepayment of
Eurodollar Rate Loans pursuant to Section 3.01 or any prepayment as a result of
the termination of a Bank's Commitment pursuant to Section 1.15
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or 2.04); (iii) if any prepayment of any of its Eurodollar Rate Loans or any of
its Competitive Bid Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Rate Loans or Competitive Bid
Loans when required by the terms of this Agreement or the Note of such Bank or
(y) any action taken pursuant to Section 1.11(b).
1.13 Change of Applicable Lending Office. Each Bank agrees
that, upon the occurrence of any event giving rise to the operation of Section
1.11(a)(ii) or (iii), 1.11(c) or 3.04 with respect to such Bank, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another Applicable Lending Office for
any Loans affected by such event, provided that such designation is made on
such terms that such Bank and its Applicable Lending Office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequence
of the event giving rise to the operation of any such Section. Nothing in this
Section 1.13 shall affect or postpone any of the obligations of the Borrower or
the right of any Bank provided in Section 1.11 or 3.04.
1.14 Notice of Certain Costs. Notwithstanding anything in
this Agreement to the contrary, to the extent any notice required by Section
1.11 or 3.04 is given by any Bank more than 180 days after the occurrence of
the event giving rise to the additional cost, reduction in amounts, Taxes or
other additional amounts of the type described in such Section, such Bank shall
not be entitled to compensation under Section 1.11 or 3.04, as the case may be,
for any such amounts incurred or accruing prior to the giving of such notice to
the Borrower.
1.15 Extension of Commitment Expiration Date; Replacement of
Non-Continuing Bank. The Borrower may, at any time prior to the date which is
thirty days prior to the then Commitment Expiration Date, by written notice to
the Administrative Agent (which notice the Administrative Agent shall promptly
transmit to each Bank), request that the Commitment Expiration Date be
extended. Each Bank shall respond to such request not earlier than the later
of the fifteenth day after the date of the Borrower's notice to the
Administrative Agent and the fifteenth day prior to the Commitment Expiration
Date then in effect (such later date, the "First Response Date") and not later
than two Business Days prior to the Commitment Expiration Date then in effect
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(the "Last Response Date"), with the failure of any Bank to respond being
deemed to be a negative response. If and only if the Required Committed Banks
respond affirmatively to such request on or before the Last Response Date, the
Administrative Agent shall so advise the Borrower, whereupon the Borrower shall
within one Business Day determine, and so advise the Administrative Agent,
either (a) not to have the Commitment Expiration Date extended or (b) to have
the Commitment Expiration Date extended. If the Borrower so elects to extend
the Commitment Expiration Date, and so long as no Default or Event of Default
is in existence at such time, then the Borrower and each Bank that has
responded affirmatively as set forth above (each such Bank, a "Continuing
Bank") shall enter into an amendment to this Agreement (such amendment, an
"Extension Amendment") pursuant to which the Commitment Expiration Date shall
be extended as to each Continuing Bank until the date which is 364 days after
the First Response Date. In the event that the Required Committed Banks agree
to extend the Commitment Expiration Date, but one or more Banks (each a "Non-
Continuing Bank") do not agree to such extension, the Borrower may, on or
before the original Commitment Expiration Date, either (i) provide, with the
consent of the Administrative Agent (which consent shall not be unreasonably
withheld), another financial institution to acquire the Commitment of such
Non-Continuing Bank and all amounts owing to such Non-Continuing Bank in
respect of Committed Loans under this Agreement, which acquisition of
Commitment and replacement of the Non-Continuing Bank shall be effected in the
Extension Amendment or (ii) prepay the outstanding Committed Loans of such
Non-Continuing Bank in full, (together with all other amounts owing to such
Non-Continuing Bank hereunder (other than Competitive Bid Loans of such
Non-Continuing Bank), including, without limitation, amounts payable pursuant
to subsection 1.12), and upon such prepayment, terminate the Commitment of such
Non- Continuing Bank. In the event that the Borrower shall elect not to
replace or terminate the Commitment of a Non-Continuing Bank pursuant to the
preceding sentence, such Non-Continuing Bank's Commitment shall terminate on
the original Commitment Expiration Date and such Non-Continuing Bank shall
remain a Bank hereunder until the Maturity Date of such Bank and the payment in
full of all amounts owing to such Non-Continuing Bank. The Commitment
Expiration Date may be extended for up to two successive periods pursuant to
this Section 1.15.
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<PAGE> 21
SECTION 2. FEES; TERMINATION OF COMMITMENTS.
2.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent a facility fee (the "Facility Fee") for the account
of the Banks pro rata on the basis of their respective Commitments for the
period from and including the Effective Date to but excluding the date the
Total Commitment has been terminated computed at a rate per annum equal to
the Applicable Facility Fee Percentage from time to time of the Total
Commitment as in effect from time to time. Accrued Facility Fees shall be due
and payable quarterly in arrears on the last Business Day of each March, June,
September and December, on each Commitment Expiration Date or upon such earlier
date as the Total Commitment shall be terminated and, with respect to any
Facility Fee owing to any Bank whose Commitment is terminated pursuant to
Section 1.15 or 2.04, on the date on which such Bank's Commitment is
terminated.
(b) The Borrower agrees to pay to the Administrative
Agent and the Syndication Agent, for the account of the Administrative Agent
and the Syndication Agent, when and as due, such fees as have been, or are from
time to time, separately agreed upon.
2.02 Voluntary Termination of Unutilized Total Commitment.
Upon at least ten days' prior notice to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each
of the Banks), the Borrower shall have the right, without premium or penalty,
to terminate the Unutilized Total Commitment in whole or in part, in a minimum
amount of $50,000,000 (and if larger in an integral multiple of $10,000,000),
provided that any such termination shall apply proportionately to reduce the
Commitment of each Bank.
2.03 Mandatory Termination of a Bank's Commitment. The
Commitment of each Bank shall terminate on the Commitment Expiration Date of
such Bank.
2.04 Replacement of Bank; Voluntary Termination of a
Bank's Commitment. If any Bank is owed increased costs under Section 1.11 or
3.04 which in the judgment of the Borrower are material in amount and which are
not otherwise requested generally by the other Banks, the Borrower shall have
the right, if no Event of Default then exists and such Bank has not withdrawn
its request for such compensation or changed its Applicable Lending Office with
the effect of eliminating such increased cost, within 30 days following the
delivery by such Bank to the Borrower of a request for
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<PAGE> 22
compensation pursuant to Section 1.11 or 3.04, to either (i) provide, with the
consent of the Administrative Agent (which consent shall not be unreasonably
withheld), another financial institution to acquire the Commitment of such Bank
and all amounts owing to such Bank in respect of Committed Loans under this
Agreement, which acquisition of Commitment and such other amounts and
replacement of such Bank shall be effected pursuant to an amendment to this
Agreement to be prepared by the Administrative Agent (which amendment each of
the Banks hereby agrees to execute) or (ii) upon five Business Days' prior
notice to the Administrative Agent and such Bank, prepay the outstanding
Committed Loans of such Bank in full, (together with all other amounts owing to
such Bank hereunder (other than Competitive Bid Loans of such Bank), including,
without limitation, amounts payable pursuant to subsection 1.12), and upon such
prepayment, terminate the Commitment (if any) of such Bank. The Borrower
agrees to notify each of the Banks of its determination to prepay any Bank's
Committed Loans and terminate any Bank's Commitment pursuant to clause (ii) of
the preceding sentence of this Section 2.04.
SECTION 3. PREPAYMENTS; PAYMENTS.
3.01 Voluntary Prepayments. The Borrower shall have the
right to prepay the Committed Loans, without premium or penalty, in whole or in
part from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent at its Notice Office at least three
Business Days', in the case of Eurodollar Rate Loans and two Business Days', in
the case of Base Rate Loans, prior notice of its intent to prepay the Committed
Loans, the amount of such prepayment and the Type or Types of Loans to be
prepaid and, in the case of Eurodollar Rate Loans, the specific Borrowing or
Borrowings pursuant to which such Committed Loans were made, which notice the
Administrative Agent shall promptly transmit to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least $10,000,000
(and, if larger, an integral multiple of $1,000,000), provided that any
prepayment of Eurodollar Rate Loans shall constitute a prepayment of one or
more entire Borrowings of Eurodollar Rate Loans; (iii) prepayments of
Eurodollar Rate Loans made pursuant to this Section 3.01 may only be made on
the last day of an Interest Period applicable thereto unless concurrently with
such prepayment any payments required to be made pursuant to Section 1.12 as a
result of such prepayment are made; and (iv) each prepayment in respect of any
Committed Loans made pursuant to a Borrowing shall be applied pro rata among
such Committed Loans (provided that
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<PAGE> 23
the Committed Loans of one or more Banks may be prepaid in full on a non-pro
rata basis in connection with a termination of the Commitment of such Bank
pursuant to Section 1.15 or 2.04). The Borrower shall have no right under this
Section 3.01 to prepay any principal amount of any Competitive Bid Loans.
3.02 Mandatory Prepayments. (a) The Borrower shall repay
all Committed Loans of a Bank on the Maturity Date of such Bank.
(b) The Borrower shall repay any Competitive Bid Loans made
by a Bidder Bank on the maturity date specified pursuant to Section 1.04(a)
with respect to such Competitive Bid Loan.
(c) On any day prior to the Commitment Expiration Date of any
Bank on which the aggregate outstanding principal amount of the Committed Loans
made by such Bank exceeds the Commitment of such Bank as then in effect
(including, without limitation, as a result of the termination of such Bank's
Commitment pursuant to Section 1.15 or 2.04), the Borrower shall prepay the
principal of the Committed Loans of such Bank in an amount equal to such
excess.
(d) If on any date prior to the Commitment Expiration Date
the sum of the outstanding principal amount of Committed Loans and Competitive
Bid Loans (all the foregoing, collectively, the "Aggregate Loan Outstandings")
exceeds the Total Commitment, the Borrower shall prepay on such date the
principal of the Committed Loans in an amount equal to such excess. If, after
giving effect to the prepayment of all outstanding Committed Loans as set
forth above, the remaining Aggregate Loan Outstandings exceed the Total
Commitment, the Borrower shall repay on such date the principal of Competitive
Bid Loans in an aggregate amount equal to such excess.
(e) With respect to each prepayment of Committed Loans
required by Section 3.02(c) or (d), the Borrower may designate the Types of
Committed Loans which are to be prepaid and the specific Borrowing(s) pursuant
to which made; provided, that each prepayment under Section 3.02(d) of any
Committed Loans made pursuant to a Borrowing shall be applied pro rata among
such Committed Loans. In the absence of a designation of Committed Loans by
the Borrower as described in this Section 3.02(e), the Administrative Agent
shall, subject to the above, make such designation in its sole discretion
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<PAGE> 24
with a view, but no obligation, to minimize breakage costs owing under Section
1.12.
3.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Bank or Banks
entitled thereto not later than 12:00 Noon (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office of the Administrative Agent. Whenever any payment to be made hereunder
or under any Note shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest shall be payable at the
applicable rate during such extension. Except in the case of mandatory
prepayments pursuant to Section 3.02(c) as a result of the termination of one
or more, but less than all, of the Banks' Commitments pursuant to Section 1.15
or 2.04, each prepayment of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans.
3.04 Net Payments. All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. All such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein (but excluding, except as provided below, any tax imposed on
or measured by the net income of a Bank pursuant to the laws of the
jurisdiction (or any political subdivision or taxing authority thereof or
therein) in which the principal office or Applicable Lending Office of such
Bank is located) and all interest, penalties or similar liabilities with
respect thereto (collectively, "Taxes"). The Borrower shall also reimburse
each Bank, upon the written request of such Bank, for taxes imposed on or
measured by the net income of such Bank pursuant to the laws of the
jurisdiction (or any political subdivision or taxing authority thereof or
therein) in which the principal office or Applicable Lending Office of such
Bank is located as such Bank shall determine are payable by such Bank in
respect of amounts paid to or on behalf of such Bank pursuant to the preceding
sentence. If any Taxes are so levied or imposed, the Borrower agrees to pay
the full amount of such Taxes and such additional amounts as may be necessary
so that every payment of all amounts due hereunder or under any Note, after
withholding or deduction for or on
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account of any Taxes, will not be less than the amount provided for herein or
in such Note. The Borrower will furnish to the Administrative Agent, within 45
days after the date the payment of any Taxes is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by the Borrower. The
Borrower will indemnify and hold harmless each Bank, and reimburse such Bank
upon its written request, for the amount of any Taxes so levied or imposed and
paid by such Bank. Each Bank which is not a U.S. person for Federal income tax
purposes agrees, to the extent such Bank is entitled at such time to a total or
partial exemption from withholding that is required to be evidenced by a United
States Internal Revenue Service Form 1001 or 4224, to deliver to the
Administrative Agent (with a copy to the Borrower), prior to the Initial
Borrowing Date and from time to time thereafter as requested by the
Administrative Agent or the Borrower, such Form 1001 or 4224 (as applicable) or
any successor thereto, completed in a manner reasonably satisfactory to the
Administrative Agent and the Borrower.
SECTION 4. CONDITIONS PRECEDENT.
4.01 Conditions to Effectiveness. This Agreement shall
become effective on the date (the "Effective Date") on which each of the
following conditions shall be satisfied:
(a) Execution of Agreement; Notes. (i) The Borrower and
each of the Banks shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Administrative Agent
at its Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephone (confirmed in writing), written or telex notice
(actually received) at such office that the same has been signed and mailed to
it and (ii) there shall have been delivered to the Administrative Agent for the
account of each of the Banks the appropriate Note executed by the Borrower in
the amount, maturity and as otherwise provided herein.
(b) No Default; Representations and Warranties. (i)
There shall exist no Default or Event of Default and (ii) all representations
and warranties contained herein or in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of such date.
(c) Opinion of Counsel. The Administrative Agent shall
have received from Heller, Ehrman, White & McAuliffe,
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counsel to the Borrower, an opinion addressed to each of the Banks and dated
the Effective Date covering the matters set forth in Exhibit C and such other
matters incident to the transactions contemplated herein as any Bank may
reasonably request.
(d) Corporate Documents; Proceedings. (i) On the
Effective Date, the Administrative Agent shall have received a certificate,
dated the Effective Date, signed by the President, the Treasurer or any Vice
President of the Borrower, and attested to by the Secretary or any Assistant
Secretary of the Borrower, in the form of Exhibit D with appropriate
insertions, together with copies of the Certificate of Incorporation and
By-Laws of the Borrower and the resolutions of the Borrower referred to in such
certificate.
(ii) All corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated in
this Agreement and the other Credit Documents shall be satisfactory in form and
substance to the Banks, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings and governmental approvals, if any, which any Bank
reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.
(e) Consent Letter. The Administrative Agent shall have
received a letter from CT Corporation System, presently located at 1633
Broadway, New York, New York 10019, substantially in the form of Exhibit E,
indicating its consent to its appointment by the Borrower as the Borrower's
agent to receive service of process as specified in Section 11.08.
(f) Payment of Fees. All costs, fees and expenses, and
all other compensation contemplated by this Agreement, due to the Agents
(including, without limitation, legal fees and expenses) and the Banks shall
have been paid to the extent due.
(g) Existing Credit Agreement. On or prior to the
Effective Date, all loans under the Existing Credit Agreement shall have been
repaid in full, together with interest thereon; all other amounts owing
pursuant to the Existing Credit Agreement shall have been repaid in full; all
commitments under the Existing Credit Agreement shall have
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been terminated; and the Administrative Agent shall have received evidence in
form, scope and substance satisfactory to it that the matters set forth in this
Section 4.01(g) have been satisfied.
The occurrence of the Effective Date shall constitute a representation and
warranty by the Borrower to each of the Banks that all the conditions specified
in Section 4.01(b) exist as of that time. All the Notes, certificates, legal
opinions and other documents and papers referred to in this Section 4.01,
unless otherwise specified, shall be delivered to the Administrative Agent at
the Administrative Agent's Notice Office for the account of each of the Banks
and, except for the Notes, in sufficient counterparts for each of the Banks and
shall be satisfactory in form and substance to the Banks.
4.02 Conditions to Each Loan. The obligation of each Bank
to make any Loan is subject, at the time of the making of each such Loan
(except as hereinafter indicated), to the satisfaction of the following
conditions:
(a) Notice of Borrowing. Prior to the making of each
Loan, the Administrative Agent shall have received a Notice of Committed
Borrowing with respect thereto meeting the requirements of Section 1.03 in the
case of a Borrowing of Committed Loans, or a Notice of Competitive Bid
Borrowing with respect thereto meeting the requirements of Section 1.04 in the
case of a Borrowing of Competitive Bid Loans.
(b) Subsequent Legal Opinions. If, at the time of the
making of any Loans, the Required Banks shall have requested same, the
Administrative Agent shall have received from counsel (who shall be reasonably
satisfactory to the Required Banks) for the Borrower an opinion in form and
substance satisfactory to the Required Banks, addressed to the Banks and dated
the date of such Loan, covering such of the matters set forth in the opinion of
counsel required to be delivered pursuant to Section 4.01(c) as the Required
Banks shall specify.
(c) No Default; Representations and Warranties. At the
time of the making of each Loan and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein (other than the representation and warranty
contained in the last sentence of Section 5.05(a)) or in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations
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and warranties had been made on and as of the date of the making of such Loans.
The acceptance of the benefits of each Loan shall constitute a representation
and warranty by the Borrower to each of the Banks that all the conditions
specified in Section 4.02(c) exist as of that time. All the legal opinions and
other documents and papers referred to in this Section 4.02, unless otherwise
specified, shall be delivered to the Administrative Agent at the Administrative
Agent's Notice Office for the account of each of the Banks and in sufficient
counterparts for each of the Banks and shall be satisfactory in form and
substance to the Banks.
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
In order to induce the Banks to enter into this Agreement and
to make the Loans, the Borrower makes the following representations, warranties
and agreements as of the Effective Date, which shall survive the execution and
delivery of this Agreement and the Notes and the making of the Loans:
5.01 Corporate Status. Each of the Borrower and its
Material Subsidiaries (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its incorporation, (ii)
has the power and authority to own its property and assets and to transact the
business in which it is engaged and (iii) is duly qualified as a foreign
corporation and in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualification.
5.02 Corporate Power and Authority. The Borrower has the
corporate power to execute, deliver and perform the terms and provisions of
each of the Credit Documents and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each of the Credit
Documents. The Borrower has, or in the case of the Notes, by the Initial
Borrowing Date will have, duly executed and delivered each of the Credit
Documents, and each such Credit Document constitutes or, in the case of the
Notes when executed and delivered will constitute, its legal, valid and binding
obligation enforceable in accordance with its terms.
5.03 No Violation. Neither the execution, delivery or
performance by the Borrower of the Credit Documents, nor
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compliance by it with the terms and provisions thereof, nor the use of the
proceeds of the Loans (i) will contravene any provision of any law, statute,
rule or regulation or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement, contract or instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws of the Borrower or any of its
Subsidiaries.
5.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made prior to the Effective Date), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Credit Document or (ii) the
legality, validity, binding effect or enforceability of any Credit Document.
5.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; etc. (a) The consolidated statements of financial
condition of the Borrower and its Consolidated Subsidiaries at June 30, 1994
and the related consolidated statements of income and retained earnings and
cash flows of the Borrower and its Consolidated Subsidiaries for the fiscal
year ended on such date and heretofore furnished to the Banks present fairly
the consolidated financial condition of the Borrower and its Consolidated
Subsidiaries at the date of such statements of financial condition and the
consolidated results of the operations of the Borrower and its Consolidated
Subsidiaries for such fiscal year. All such financial statements have been
prepared in accordance with GAAP consistently applied. Since June 30, 1994,
there has been no material adverse change in the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower or of the Borrower and its Subsidiaries taken as a whole.
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(b) The consolidated statements of financial condition of
Raynet and its Consolidated Subsidiaries at June 30, 1994 and the related
consolidated statements of income and retained earnings and cash flows of
Raynet and its Consolidated Subsidiaries for the fiscal year ended on such date
and heretofore furnished to the Banks present fairly the consolidated financial
condition of Raynet and its Consolidated Subsidiaries at the date of such
statements of financial condition and the consolidated results of the
operations of Raynet and its Consolidated Subsidiaries for such fiscal year.
All such financial statements have been prepared in accordance with GAAP
consistently applied.
(c) Except as fully reflected in the financial statements
referred to in Section 5.05(a) or (b) or in Schedule III, there were as of the
Effective Date no liabilities or obligations with respect to the Borrower or
any of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or
in aggregate, would be material to the Borrower or to the Borrower and its
Subsidiaries taken as a whole. Except as set forth in Schedule III, as of the
Effective Date the Borrower does not know of any basis for the assertion
against the Borrower or any of its Subsidiaries of any liability or obligation
of any nature whatsoever that is not fully reflected in the financial
statements referred to in Section 5.05(a) or (b) which, either individually or
in the aggregate, could be material to the Borrower or to the Borrower and its
Subsidiaries taken as a whole.
5.06 Litigation. Except as set forth on Schedule IV,
there are no actions, suits or proceedings pending or, to the best knowledge of
the Borrower, threatened (i) with respect to any Credit Document or (ii) that
are reasonably likely to materially and adversely affect the business,
operations, property, assets, condition (financial or otherwise) or prospects
of the Borrower or of the Borrower and its Subsidiaries taken as a whole.
5.07 True and Complete Disclosure. All factual
information (taken as a whole) heretofore or contemporaneously furnished by or
on behalf of the Borrower in writing to any Bank (including without limitation
all information contained in the Credit Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of the Borrower in writing to any Bank will be, true and accurate in
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all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided.
5.08 Use of Proceeds; Margin Regulations. All proceeds of
each Loan shall be used by the Borrower for general corporate purposes,
provided that no part of the proceeds of any Loan will be used by the Borrower
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Loan nor the use of the proceeds thereof will violate or be inconsistent with
the provisions of Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System.
5.09 Tax Returns and Payments. Each of the Borrower and
its Subsidiaries has filed all tax returns required to be filed by it and has
paid all income taxes payable by it which have become due pursuant to such tax
returns and all other taxes and assessments payable by it which have become
due, other than (x) those not yet delinquent and except for those contested in
good faith and for which adequate reserves have been established and (y) state,
local or foreign taxes the failure to pay which is not reasonably likely to
have a material adverse effect on the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower or of the
Borrower and its Subsidiaries taken as a whole. Each of the Borrower and its
Subsidiaries has paid, or has provided adequate reserves (in the good faith
judgment of the management of the Borrower) for the payment of, all federal and
state income taxes applicable for all prior fiscal years and for the current
fiscal year to the date hereof.
5.10 Compliance with ERISA. Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability, and no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Code; neither the Borrower or any Subsidiary or ERISA
Affiliate has incurred any material liability to or on account of a Plan
pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201 or
4204 of ERISA or based upon the actual knowledge of the Borrower, its
Subsidiaries
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<PAGE> 32
and ERISA Affiliates expects to incur any liability under any of the foregoing
Sections with respect to any such Plan; no proceedings have been instituted to
terminate any Plan; no condition exists which presents a material risk to the
Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no Lien imposed under the Code or ERISA on the assets of
the Borrower or any of its Subsidiaries or any ERISA Affiliate exists or in the
reasonable opinion of the Borrower is likely to arise on account of any Plan;
and the Borrower and its Subsidiaries do not maintain or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees (other than as required by Section 601
of ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA); except to the extent that in any such case the obligations with respect
to any of the foregoing, or the occurrence of one or more of the foregoing
events, could not reasonably be expected to have either a material adverse
effect on the ability of the Borrower to perform its obligations under this
Agreement or a material adverse effect on the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower or of
the Borrower and its Subsidiaries taken as a whole.
5.11 Subsidiaries. On the Effective Date, the corporations
listed on Schedule V are the only Subsidiaries of the Borrower. Schedule V
correctly sets forth, as of the Effective Date, the percentage ownership
(direct and indirect) of the Borrower in each class of capital stock of each of
its Subsidiaries and also identifies the direct owner thereof. Schedule V also
correctly sets forth, as of the Effective Date, the Material Subsidiaries of
the Borrower.
5.12 Compliance with Statutes, etc. Each of the Borrower and
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliances as would not, in the aggregate, have a material adverse effect
on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.
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<PAGE> 33
5.13 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5.14 Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5.15 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could have a material
adverse effect on the Borrower or on the Borrower and its Subsidiaries taken as
a whole. There is (i) no significant unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of
the Borrower, threatened against any of them, before the National Labor
Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Borrower or any
of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries and (iii) to the best knowledge
of the Borrower, no union representation question existing with respect to the
employees of the Borrower or any of its Subsidiaries and, to the best knowledge
of the Borrower, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not have a material adverse
effect on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.
5.16 Patents, Licenses, Franchises and Formulas. Each of the
Borrower and its Subsidiaries owns all the patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas, or
rights with respect to the foregoing, and has obtained assignments of all
leases and other rights of whatever nature, necessary for the present conduct
of its business, without any known conflict with the rights of others which, or
the failure to obtain which, as the case may be, would be reasonably likely to
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result in a material adverse effect on the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower or of
the Borrower and its Subsidiaries taken as a whole.
5.17 Compliance with Environmental Laws. (a) Each of the
Borrower and its Subsidiaries is, and will continue to be, in full compliance
with all applicable federal, state and local environmental laws, regulations
and ordinances governing its business, products, properties or assets with
respect to all discharges into the ground and surface water, emissions into the
ambient air and generation, accumulation, storage, treatment, transportation,
labeling or disposal of waste materials or process byproducts, except for
violations and failures to comply which, individually or in the aggregate do
not, and (so far as the Borrower can now foresee) in the future will not,
materially and adversely affect (i) except as set forth on Schedule VI hereto,
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole, or (ii) the ability of the Borrower to perform its obligations under
this Agreement or the Notes. Except as set forth on Schedule VI hereto,
neither the Borrower nor any of its Subsidiaries is a party in any proceeding
in which it may be held liable for any penalties, fines or forfeitures for the
failure to comply with any of the foregoing nor does the Borrower know of any
basis for the assertion of any such penalty, fine or forfeiture that, either
individually or in the aggregate, materially and adversely affects or could (so
far as the Borrower can now foresee) materially and adversely affect the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole or of any Material Subsidiary of the Borrower. All licenses, permits or
registrations required for the business of the Borrower and its Subsidiaries,
as presently conducted and proposed to be conducted, under any federal, state
or local environmental laws, regulations or ordinances have been obtained or
made, other than any such licenses, permits or registrations the failure to
obtain or make which, either individually or in the aggregate, does not
materially and adversely affect, and could not (so far as the Borrower can now
foresee) materially and adversely affect, (i) the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower or of the Borrower and its Subsidiaries taken as a whole, or (ii) the
ability of the Borrower to perform its obligations under this Agreement or the
Notes (and each of
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the Borrower and its Subsidiaries is in compliance with all such licenses,
permits and registrations).
(b) No release, emission or discharge into the
environment of hazardous substances, as defined under the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended, or
hazardous waste, as defined under the Resource Conservation and Recovery Act,
or air pollutants as defined under the Clean Water Act, has occurred or is
presently occurring on or from any property owned or leased by the Borrower or
its Subsidiaries in excess of federal, state or local permitted releases or
reportable quantities, or other concentrations, standards or limitations under
the foregoing laws or any state or local law governing the protection of health
and the environment or under any other federal, state or local laws or
regulations (then or now applicable, as the case may be) other than any such
release, emissions or discharges which, either individually or in the
aggregate, do not materially and adversely affect, or could not (so far as the
Borrower can now foresee) materially and adversely affect, (i) the business,
operations, property, assets, condition (financial or otherwise) or prospects
of the Borrower or of the Borrower and its Subsidiaries taken as a whole or of
any Material Subsidiary of the Borrower, or (ii) the ability of the Borrower to
perform its obligations under this Agreement or the Notes.
(c) Except as set forth on Schedule VI hereto, neither
the Borrower nor any of its Subsidiaries has ever caused or been held legally
responsible for any release or threatened release of any hazardous substance,
or received notification from any federal, state or other governmental
authority of any release or threatened release, or that it may be required to
pay any costs or expenses incurred or to be incurred in connection with any
efforts to mitigate the environmental impact of any release or threatened
release of any hazardous substance from any site or structure owned, occupied
or operated by the Borrower or any of its Subsidiaries that, either
individually or in the aggregate, materially and adversely affects or could (so
far as the Borrower can now foresee) materially and adversely affect, (i) the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole or of any Material Subsidiary of the Borrower or (ii) the ability of the
Borrower to perform its obligations under this Agreement or the Notes.
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SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the
Effective Date and until the Total Commitment has terminated and the Loans and
the Notes, together with interest, Fees and all other obligations incurred
hereunder are paid in full:
6.01 Information Covenants. The Borrower will furnish to
the Administrative Agent and each Bank:
(a) Quarterly Financial Statements. Within 45 days (or
90 days in the case of the fourth fiscal quarter) after the close of
each quarterly accounting period in each fiscal year of the Borrower,
the consolidated statements of financial condition of the Borrower and
its Consolidated Subsidiaries as at the end of such quarterly period
and the related consolidated statements of income and retained
earnings and statements of cash flows for such quarterly period and
for the elapsed portion of the fiscal year ended with the last day of
such quarterly period, in each case setting forth comparative figures
for the related periods in the prior fiscal year, all of which shall
be certified by the Treasurer, Controller or Chief Financial Officer
of the Borrower, subject to normal year-end audit adjustments;
provided, that so long as the Borrower shall be required to file
reports with the SEC pursuant to the Securities Exchange Act of 1934,
as amended from time to time, the delivery of its Quarterly Report on
Form 10-Q shall satisfy the requirements of this Section 6.01(a) with
respect to consolidated financial statements.
(b) Annual Financial Statements. Within 90 days after
the close of each fiscal year of the Borrower, the consolidated
statements of financial condition of the Borrower and its Consolidated
Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statements
of cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year and certified by
Price Waterhouse or other independent certified public accountants of
recognized national standing reasonably acceptable to the Required
Banks, in each case together with a report of such accounting firm
stating that in the course of its regular audit of the financial
statements of the Borrower, which audit was conducted in accordance
with generally accepted auditing standards, such accounting
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firm obtained no knowledge of any Default or Event of Default which
has occurred and is continuing or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof; provided, that so
long as the Borrower shall be required to file reports with the SEC
pursuant to the Securities Exchange Act of 1934, as amended from time
to time, the delivery of its Annual Report on Form 10-K shall satisfy
the requirements of this Section 6.01(b) to the extent that the
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries are audited and the opinion with respect thereto is
unqualified.
(c) Officer's Certificates. At the time of the delivery
of the financial statements provided for in Section 6.01(a) and (b), a
certificate of the Treasurer, Controller or Chief Financial Officer of
the Borrower to the effect that, to the best of his knowledge, no
Default or Event of Default has occurred and is continuing or, if any
Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof, which certificate shall set forth the
calculations required to establish (i) whether the Borrower was in
compliance with the provisions of Sections 7.09, 7.10 and 7.11, and
(ii) the Applicable Eurodollar Rate Margin and Applicable Facility Fee
Percentage, in each case at the end of such fiscal quarter or year, as
the case may be.
(d) Notice of Default or Litigation. Promptly, and in
any event within five Business Days after an officer of the Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or Event of Default, (ii) any litigation
or governmental proceeding pending (x) against the Borrower or any of
its Subsidiaries which could materially and adversely affect the
business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole or (y) with respect to any Credit
Document and (iii) any other event which is likely to materially and
adversely affect the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower or of the
Borrower and its Subsidiaries taken as a whole.
(e) Raynet Financial Statements. As long as the Borrower
owns at least 10% of the equity or voting
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interest in Raynet: (i) Within 45 days (or 90 days in the case of the
fourth fiscal quarter) after the close of each quarterly accounting
period in each fiscal year of Raynet, the consolidated statements of
financial condition of Raynet and its Subsidiaries as at the end of
such quarterly period and the related consolidated statements of
income and retained earnings and statements of cash flows for such
quarterly period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period, in each case setting forth
comparative figures for the related periods in the prior fiscal year;
and (ii) within 90 days after the close of each fiscal year of
Raynet, the consolidated statements of financial condition of Raynet
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statements
of cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year and certified by
independent certified public accountants of recognized international
standing (it being understood and agreed that the Banks shall maintain
as confidential in accordance with customary banking practices any
nonpublic information delivered to the Banks pursuant to this clause
(e)).
(f) Leases, Preferred Stock. Promptly, written notice of
any event of default (or any event which with notice or lapse of time
or both would constitute an event of default) under any lease with a
monthly rent (or effective monthly rent) of $50,000 or more or
preferred stock for or in respect of which the Borrower or any of its
Subsidiaries may be liable; provided, however, that with respect to
any such lease, notice pursuant to this Section 6.01(f) need not be
given with respect to any such event of default (or event which with
notice or lapse of time or both would constitute an event of default)
unless as a result thereof the lessor has taken any steps to terminate
such lease or unless as a consequence thereof it is reasonably likely
that such lease will be terminated or that there will be a material
impairment of the right of the Borrower or such Subsidiary, as the
case may be, to the use or enjoyment of the property subject to such
lease.
(g) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, which the Borrower shall file with the Securities and
Exchange Commission
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or any governmental agencies substituted therefor (the "SEC").
(h) Notice of Fixed Charge Coverage Deficiency. Until
such time as the Senior Notes shall have been redeemed in full,
promptly upon and in no event later than five Business Days after any
Executive Officer shall have knowledge of any Fixed Charge Coverage
Deficiency, notice of the occurrence of such Fixed Charge Coverage
Deficiency.
(i) Other Information. From time to time, such other
information or documents (financial or otherwise) as any Bank may
reasonably request.
6.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or any Bank to visit and inspect, under guidance of
officers of the Borrower or such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of record and account of
the Borrower or such Subsidiary and discuss the affairs, finances and accounts
of the Borrower or such Subsidiary with, and be advised as to the same by, its
and their officers, all at such reasonable times and intervals and to such
reasonable extent as the Administrative Agent or such Bank may request.
6.03 Maintenance of Property, Insurance. The Borrower will,
and will cause each of its Material Subsidiaries to, (i) keep all property
useful and necessary in its business in good working order and condition, (ii)
maintain with financially sound insurers of nationally recognized stature and
responsibility having at the date of any determination a rating of at least
"A-" according to A.M. Best Company's ("Best") rating of property/casualty
insurance companies (or, in jurisdictions where Best does not provide such
ratings, having an analogous rating by the entity in such jurisdiction
performing services similar to those provided by Best and having a reputation
in such jurisdiction comparable to that of Best, or if there is no such entity
in such jurisdiction, with insurers that, in the good faith judgment of
management, are of similar quality, stature and responsibility), insurance with
respect to its properties and
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business of such a nature, with such terms and in such amounts, as a prudent
person would maintain with respect to similar properties and a similar
business, and, in any event, will maintain insurance on all its property of a
character usually insured by corporations engaged in the same or a similar
business similarly situated against loss or damage of the kinds and in the
amounts customarily insured against (and with customary deductibles) and for
such corporations, and carry with such insurers in customary amounts and with
customary deductibles, such other insurance, including public liability
insurance, as is usually carried by corporations engaged in the same or a
similar business similarly situated; provided, however, that in the event that
the Borrower self insures through a captive insurer or other arrangement
intended to replace insurance satisfying the foregoing requirements of this
clause (ii), adequate insurance reserves will be maintained, and (iii) furnish
to each Bank, upon written request, full information as to the insurance
carried.
6.04 Corporate Franchises. The Borrower will, and will cause
each of its Material Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 6.04 shall prevent (i) any transactions permitted under
Section 7.02 or (ii) the withdrawal by the Borrower or any of its Material
Subsidiaries of its qualification as a foreign corporation in any jurisdiction
where such withdrawal is not reasonably likely to have a material adverse
effect on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.
6.05 Compliance with Statutes, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, in the aggregate, have a
material adverse effect on the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower or of the
Borrower and its Subsidiaries taken as a whole.
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6.06 ERISA. As soon as possible and, in any event, within 10
days after the Borrower or any of its Subsidiaries or ERISA Affiliates knows or
has reason to know any of the following, the Borrower will deliver to each of
the Banks a certificate of the Treasurer, Controller or Chief Financial Officer
of the Borrower setting forth details as to such occurrence and such action, if
any, which the Borrower, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by the Borrower, the Subsidiary, the ERISA Affiliate, the
PBGC, a Plan participant or the Plan Administrator with respect thereto: that
a Reportable Event has occurred; that an accumulated funding deficiency has
been incurred or an application may be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan; that
a Plan has been or may be terminated or declared insolvent under Title IV of
ERISA; that a multiemployer plan, as defined in Section 4001 of ERISA, has been
or may be reorganized or partitioned; that a Plan has an Unfunded Current
Liability giving rise to a Lien under ERISA; that proceedings may, in the
reasonable opinion of the Borrower, be or have been instituted to terminate a
Plan; that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; or that the Borrower, any of its
Subsidiaries or ERISA Affiliates will or may incur any liability (including any
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA or with respect to a Plan under Section 4971 or 4975 of the Code or
Sections 409 or 502(i) or 502(l) of ERISA. Upon request, the Borrower will
deliver to each of the Banks a complete copy of the annual report (Form 5500)
of each Plan required to be filed with the Internal Revenue Service. In
addition to any certificates or notices delivered to the Banks pursuant to the
first sentence hereof, copies of annual reports and any other notices received
by the Borrower or any of its Subsidiaries or any ERISA Affiliate required to
be delivered to the Banks hereunder shall be delivered to the Banks no later
than 10 days after the later of the date such report or notice has been filed
with the Internal Revenue Service or the PBGC, given to Plan participants or
received by the Borrower or such Subsidiary or such ERISA Affiliate.
6.07 End of Fiscal Years; Fiscal Quarters. The Borrower
shall cause (i) each of its, and each of its
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Material Subsidiaries', fiscal years to end on June 30 and (ii) each of its,
and each of its Material Subsidiaries', fiscal quarters to end on or about
March 31, June 30, September 30 and December 31.
6.08 Performance of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, perform all its obligations under the terms
of each mortgage, indenture, security agreement and other debt instrument by
which it is bound, except such nonperformances as could not in the aggregate
have a material adverse effect on the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower or of the
Borrower and its Subsidiaries taken as a whole.
6.09 Payment of Taxes and Claims. The Borrower will, and
will cause each of its Material Subsidiaries to, pay and discharge promptly
when due:
(a) all taxes, assessments and governmental charges and
levies imposed upon it, its income or profits or any of its
properties, before the same shall become delinquent; and
(b) all lawful claims of materialmen, mechanics,
carriers, warehousemen, landlords and other similar persons for labor,
materials, supplies and rentals that, if unpaid, might by law become a
Lien upon any of its property;
provided, however, that none of the foregoing need be paid while the same is
being contested in good faith by appropriate proceedings diligently conducted
so long as (i) adequate reserves shall have been established in accordance with
GAAP with respect thereto, (ii) title of the Borrower or its Material
Subsidiary, as the case may be, to the particular property shall not be
divested thereby and (iii) the right of the Borrower or its Material
Subsidiary, as the case may be, to use the particular property shall not be
materially and adversely affected thereby. Each of the Borrower and its
Material Subsidiaries will file all federal, state and local tax returns and
all other tax reports as required by law except, in the case of any such state,
local or foreign tax returns or other tax reports, the failure to file which is
not reasonably likely to have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects
of the Borrower or of the Borrower and its Subsidiaries taken as a whole.
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SECTION 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that on the Effective Date
and until the Total Commitment has terminated and the Loans and the Notes,
together with interest, Fees and all other obligations incurred hereunder are
paid in full:
7.01 Changes in Business. The Borrower and its Subsidiaries,
taken as a whole, will not materially alter the character of their business
from that conducted by the Borrower and its Subsidiaries taken as a whole on
the Effective Date.
7.02 Consolidation, Merger, Sale of Assets, etc. The
Borrower will not, and will not permit any Subsidiary to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (in one transaction or a series
of related transactions) all or any part of its property or assets, except that
the following shall be permitted:
(a) sales or dispositions of property or assets in the
ordinary course of business;
(b) so long as no Default or Event of Default exists or
would exist immediately after giving effect thereto, (i) the merger or
consolidation of any Wholly-Owned Subsidiary of the Borrower with or
into the Borrower or another Wholly- Owned Subsidiary of the Borrower
so long as in the case of any merger or consolidation involving the
Borrower, the Borrower is the surviving corporation and (ii) the
dissolution, liquidation or winding-up of any non-Material Subsidiary
of the Borrower;
(c) so long as no Default or Event of Default exists or would
exist immediately after giving effect thereto, the merger or
consolidation of any corporation with the Borrower or any Subsidiary
of the Borrower, provided that the Borrower or such Subsidiary is the
surviving corporation of such merger or consolidation and, in the case
of any merger of a Subsidiary, the ownership percentage of the
Borrower is not reduced as a result of such merger or consolidation;
(d) the Borrower may sell or otherwise dispose of all or any
part of Raynet; and
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(e) so long as no Default or Event of Default exists or would
exist immediately after giving effect thereto, sales and dispositions
by the Borrower and its Subsidiaries outside of the ordinary course of
business (including, without limitation, sales and dispositions by
means of a merger or consolidation of a Subsidiary of the Borrower in
which such Subsidiary is not the surviving entity), provided that the
(i) aggregate amount of assets sold or otherwise disposed of pursuant
to this Section 7.02(e) (determined based on book value at the time of
sale or disposition) after the Effective Date shall not exceed an
amount equal to 20% of the Borrower's Consolidated Net Worth at the
time of any such sale or disposition and (ii) the Borrower may not
sell or dispose of any Subsidiary or group of related Subsidiaries (in
a single sale or a series of related sales) if the portion of the
Borrower's Consolidated Net Income for the immediately preceding
fiscal year attributable to such Subsidiary or Subsidiaries is 20% or
more.
7.03 Liens. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets of any kind (real or personal,
tangible or intangible) of the Borrower or any such Subsidiary whether now
owned or hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to the Borrower or any of its Subsidiaries) or assign any right to
receive income, or file or permit the filing of any financing statement under
the UCC or any other similar notice of Lien under any similar recording or
notice statute, except:
(a) Liens existing on the Effective Date and set forth on
Schedule VII hereto;
(b) Liens securing current taxes, assessments, or other
governmental charges or levies or the claims of carriers,
warehousemen, landlords, materialmen, mechanics and other like
Persons; provided, however, that (i) any such Lien shall not be
created in connection with and shall not secure Indebtedness for Money
Borrowed; (ii) any obligation secured by any such Lien shall not be
overdue and shall be payable without penalty or, if overdue, is being
contested in good faith by appropriate actions or proceedings during
which there is no right to exercise remedies and adequate book
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<PAGE> 45
reserves have been established in accordance with GAAP; and (iii) all
such Liens, pledges and deposits shall not in the aggregate materially
impair the use or value of the properties of the Borrower or any
Subsidiary in the operation of the respective businesses of the
Borrower and its Subsidiaries; and provided, further, that this clause
(b) shall not be deemed to permit any Liens which may be imposed
pursuant to Section 4068 of ERISA;
(c) Liens incidental to the ordinary course of business
or the ownership of properties and assets, Liens, deposits or pledges
securing the performance of bids, tenders or trade contracts, and
Liens securing statutory obligations (including those arising under
workers' compensation, unemployment insurance and other social
security legislation) or surety or appeal bonds in connection with
proceedings in which the Borrower or any Subsidiary is a party;
provided, however , that (i) any such Lien shall not be created in
connection with and shall not secure Indebtedness for Money Borrowed;
(ii) any obligation secured by any such Lien shall not be overdue or,
if overdue, is being contested in good faith by appropriate actions or
proceedings during which there is no right to exercise remedies and
adequate book reserves have been established in accordance with GAAP;
and (iii) all such Liens, pledges and deposits shall not in the
aggregate materially impair the use or value of the properties of the
Borrower or any Subsidiary in the operation of the respective
businesses of the Borrower and its Subsidiaries; and, provided
further, that this clause (c) shall not be deemed to permit any Liens
which may be imposed pursuant to Section 4068 of ERISA;
(d) minor survey exceptions and minor encumbrances,
easements or reservations, or rights of others for rights- of-way,
utilities and other similar purposes, or zoning or other restrictions
as to the use of real properties, which are necessary for the conduct
of the activities of the Borrower and its Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair the use of any such properties in the operation of
the business of the Borrower or any of its Subsidiaries;
(e) Liens originally created to secure payment of a
portion of the purchase price relating to any real property or
improvements thereon or equipment or any interest therein, which the
Borrower or any Subsidiary
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shall acquire after the date hereof, but, with respect to any such
Lien, which property, improvements, equipment or interest shall not be
acquired more than 180 days prior to the date of the creation of such
Lien; provided, however, that (i) no such Lien shall attach to any
other asset at the time owned by the Borrower or any Subsidiary,
(ii) the outstanding principal amount of Indebtedness secured by any
such Lien shall not exceed the lesser of (x) the cost and (y) the fair
market value of property, improvements, equipment or interest to which
such Lien attaches, and (iii) to the extent any such Indebtedness is
of a Subsidiary, such Indebtedness secured by any such Lien shall have
been incurred in compliance with the provisions of Section 7.04;
(f) Liens of or resulting from any judgments or decrees
so long as no Event of Default exists under Section 8.07;
(g) Liens granted by a Subsidiary in favor of the
Borrower or another Subsidiary;
(h) Liens securing Indebtedness of a corporation
outstanding on the date such corporation (i) first becomes a
Subsidiary of the Borrower, (ii) merges into or consolidates with the
Borrower or any Subsidiary pursuant to the provisions of Section 7.02
hereof, or (iii) is acquired by the purchase of all or substantially
all of such corporation's assets (the "acquired assets") and the
assumption of such Indebtedness of such corporation by the Borrower or
any Subsidiary; provided, however , that such Liens are not applicable
to the Borrower or any other Subsidiary or the assets (other than the
acquired assets) of the Borrower or any Subsidiary; and provided
further, that none of such Liens is created prior to and in
anticipation of such designation, merger, consolidation or
acquisition;
(i) Liens in favor of banks which have issued documentary
letters of credit for the account of the Borrower or any of its
Subsidiaries, so long as such Liens attach only to the goods subject
to such letters of credit and the documents under which such goods are
shipped;
(j) Liens in connection with Capital Leases, so long as
(i) such Liens attach only to the assets subject to such Capital Leases
and (ii) such Capital Leases are permitted to exist under the terms of
this Agreement;
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<PAGE> 47
(k) the extension, renewal or replacement of any Lien
specified in the foregoing clauses (a) through (j) provided, however,
that (i) no property shall become subject to such extended, renewed or
replacement Lien that was not subject to the Lien extended; renewed or
replaced, (ii) the aggregate principal amount of Indebtedness secured
by any such extended, renewed or replacement Lien shall not be
increased by such extension, renewal or replacement, (iii) the
Indebtedness secured by such Lien could be incurred in compliance with
this Agreement at the time of such extension, renewal or replacement
and (iv) after giving effect thereto no Default or Event of Default
shall exist; and
(l) Liens not permitted by the foregoing clauses (a) through
(k) of this Section 7.03 securing any Indebtedness or other
obligations of the Borrower or any of its Subsidiaries; provided,
however, that after giving effect to such Indebtedness or other
obligations, the aggregate outstanding amount of such Indebtedness and
other obligations plus, without duplication, the aggregate amount of
Indebtedness for Money Borrowed of Subsidiaries of the Borrower
outstanding pursuant to Section 7.04(b), shall not exceed an amount
equal to the greater of (x) $75,000,000 and (y) 10% of Consolidated
Tangible Net Worth at any time;
provided, that in no event shall the Borrower and/or its Subsidiaries create,
incur, assume or suffer to exist at any time Liens in respect of their accounts
receivable in excess of 10% of the aggregate face amount of the accounts
receivable of the Borrower and its Subsidiaries on a consolidated basis at such
time.
7.04 Indebtedness. The Borrower will not permit any of its
Subsidiaries to contract, create, incur, assume or suffer to exist any
Indebtedness for Money Borrowed, except:
(a) Indebtedness for Money Borrowed of any Subsidiary of
the Borrower owing to the Borrower or to any other Subsidiary of the
Borrower; and
(b) other Indebtedness for Money Borrowed of Subsidiaries
of the Borrower, so long as the sum of the aggregate outstanding
principal amount of such Indebtedness for Money Borrowed for all such
Subsidiaries plus (without duplication) the aggregate outstanding
principal amount of all Indebtedness and
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<PAGE> 48
other obligations secured by Liens permitted under Section 7.03(l),
does not exceed an amount equal to the greater of (x) $75,000,000 and
(y) 10% of Consolidated Tangible Net Worth at any time.
7.05 Advances, Investments and Loans. The Borrower will not,
and will not permit any of its Subsidiaries to, lend money or make advances to
any Person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any Person, except:
(a) travel advances to employees made in the ordinary course
of business;
(b) loans to employees in connection with the purchase by any
such employee of shares of the Borrower's or any Subsidiary's capital
stock pursuant to an employee stock purchase plan or employee stock
option plan;
(c) loans in connection with employee relocation expenses,
loans to foreign service employees and other loans to employees made
in the ordinary course of business, so long as the aggregate
outstanding principal amount of all such loans (without giving effect
to any write-downs or write-offs thereof) shall not exceed
$20,000,000;
(d) so long as no Default or Event of Default exists or
would exist immediately after giving effect thereto, investments by
the Borrower or any Subsidiary in, to, or in favor of the Borrower or
any other Subsidiary of the Borrower (but in any event excluding
investments in Raynet);
(e) any investment by the Borrower or any of its Subsidiaries
permitted pursuant to the Borrower's Guidelines for Short Term
Investments (in the form delivered to the Banks prior to the Effective
Date and as thereafter modified or amended from time to time by action
of the Board of Directors of the Borrower or by a Committee of the
Board of Directors of the Borrower);
(f) so long as no Default or Event of Default exists or would
exist immediately after giving effect thereto, cash investments and
advances by the Borrower and/or any of its Subsidiaries (other than
Raynet) in, to, or in favor of Raynet, provided that the aggregate
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<PAGE> 49
amount of such investments and advances made in any period set forth
below shall not exceed the amount set forth opposite such period
below:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
Effective Date to
and including June 30, 1995 $75,000,000
Fiscal year ending June 30, 1996 $75,000,000
Fiscal year ending June 30, 1997 $50,000,000
Fiscal year ending June 30, 1998 $25,000,000
Fiscal years ending thereafter 0
</TABLE>
; provided that in the event that Raynet ceases to be a Wholly-Owned
Subsidiary of the Borrower, each of the permitted investment amounts
set forth above for the period in which such ownership is first
reduced and each period thereafter shall be multiplied by a fraction
equal to the then percentage ownership of the Borrower in Raynet; and
(g) so long as no Default or Event of Default exists or would
exist immediately after giving effect thereto, additional investments,
advances and loans (other than in, to, or in favor of Raynet), so long
as the aggregate outstanding amount of such investments, advances and
loans at any time (without giving effect to any write-downs or
write-offs thereof) shall not exceed an amount equal to 5% of
Consolidated Tangible Net Worth at such time.
7.06 Restricted Payments. Until such time as the Borrower
ceases to own at least a majority of the equity or voting interest of Raynet,
the Borrower will not declare or pay any dividends (other than dividends
payable solely in common stock of the Borrower), or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery
of property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock, now or hereafter outstanding (or any warrants
for or options or stock appreciation rights in respect of any of such shares),
or set aside any funds for
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<PAGE> 50
any of the foregoing purposes, and the Borrower will not permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of the Borrower now or hereafter outstanding (or
any options or warrants or stock appreciation rights issued by the Borrower
with respect to its capital stock) (all of the foregoing "Restricted
Payments"), except that the Borrower and its Subsidiaries may make Restricted
Payments in any fiscal year in an aggregate amount not to exceed the greater of
(x) $25,000,000 and (y) 20% of the Borrower's Consolidated Net Income for the
immediately preceding fiscal year.
7.07 Transactions with Affiliates. The Borrower will not,
and will not permit any Subsidiary to, enter into any transaction or series of
transactions with any Affiliate (other than the Borrower or any other
Subsidiary), other than on terms and conditions substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm's-length transaction with a Person
other than an Affiliate.
7.08 Limitation on Modifications of Certificate of
Incorporation, By-Laws. The Borrower will not, and will not permit any of its
Subsidiaries to, amend, modify or change in any way adverse to the interests of
the Banks, its Certificate of Incorporation (including, without limitation, by
the filing or modification of any certificate of designation) or By-Laws.
7.09 Leverage Ratio. The Borrower will not permit the ratio
of (i) Consolidated Funded Indebtedness to (ii) Total Capitalization at any
time to exceed 0.5 to 1.0.
7.10 Fixed Charges Coverage Ratio. The Borrower will not
permit the Fixed Charges Coverage Ratio for any period of four consecutive
fiscal quarters (taken as one accounting period), commencing with the period
ending September 30, 1994, to be less than 1.75:1.
7.11 Minimum Consolidated Tangible Net Worth. The Borrower
will not permit its Consolidated Tangible Net Worth at any time to be less than
the Minimum Consolidated Tangible Net Worth at such time.
7.12 Limitation on Payments of Certain Indebtedness;
Modification of Certain Indebtedness; Fixed Charge Coverage Deficiency.
(a) The Borrower will not, and
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<PAGE> 51
will not permit any of its Subsidiaries to, (i) make (or give any notice in
respect of) any voluntary or optional payment or prepayment on or redemption or
acquisition for value of, or any prepayment or redemption as a result of any
change of control, asset sale or similar event of any Senior Notes (other than
prepayments on the principal, interest and any applicable prepayment premium or
make-whole owing under the Senior Notes prior to the date which is four months
after the Effective Date) or (ii) amend or modify, or permit the amendment or
modification of, any provision of any documentation entered into in connection
with the Senior Notes.
(b) In the event that any holder of Senior Notes
exercises its option pursuant to Section 7.4 of the Senior Note Purchase
Agreement to require the Borrower to prepay such Senior Notes as a result of
the occurrence of a Fixed Charge Coverage Deficiency, the Borrower will not,
and will not permit any of its Subsidiaries to, prepay such Senior Notes until
the 90th day following the date on which the Borrower gave notice to the Senior
Noteholders of such Fixed Charge Coverage Deficiency pursuant to Section 10.3
of the Senior Note Purchase Agreement (or shall have been deemed to have given
such notice pursuant to Section 7.4 of the Senior Note Purchase Agreement).
7.13 Interest Rate Protection Agreements and Other Hedging
Agreements. The Borrower will not, and will not permit any of its Subsidiaries
to, enter into any Interest Rate Protection Agreements or Other Hedging
Agreements other than in the ordinary course of business and in respect of the
assets or obligations of the Borrower or such Subsidiary for bona fide hedging
purposes and not for purposes of speculation.
SECTION 8. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events
(each an "Event of Default"):
8.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or (ii) default, and such
default shall continue unremedied for five or more days, in the payment when
due of any interest on any Loan or any Note or any Fees or any other amounts
owing hereunder or under any Note; or
8.02 Representations, etc. Any representation, warranty or
statement made by or on behalf of the Borrower
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<PAGE> 52
herein or in any other Credit Document or in any certificate delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
8.03 Covenants. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.01(d)(i), 6.07 or 7 or (ii) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Sections 8.01 and 8.02 and clause (i) of this Section 8.03) contained in
this Agreement and such default shall continue unremedied for a period of 30
days after written notice to the Borrower by either the Administrative Agent or
any Bank; or
8.04 Default Under Other Agreements. The Borrower or any of
its Subsidiaries shall (i) default in any payment of any Indebtedness
(excluding the Notes or other obligations hereunder but including the Senior
Notes until the payment thereof in full together with all interest and premium
thereon) in excess of $10,000,000 individually or in the aggregate, for the
Borrower and its Subsidiaries, beyond the period of grace (not to exceed 30
days), if any, provided in the instrument or agreement under which such
Indebtedness was created or (ii) default in the observance or performance of
any agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause (determined without regard to whether any notice is required), any
such Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of the Borrower or any of its Subsidiaries 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; or
8.05 Bankruptcy, etc. The Borrower or any of its
Subsidiaries shall commence a voluntary case concerning itself under Title 11
of the United States Code entitled "Bankruptcy", as now or hereafter in effect,
or any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Subsidiaries, and the petition is
not controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
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<PAGE> 53
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries, or the Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries, or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days, or the Borrower or any of
its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such case or proceeding is entered; or the
Borrower or any of its Subsidiaries suffers any appointment of any custodian or
the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or the Borrower or any of its
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrower or any of its Subsidiaries for the
purpose of effecting any of the foregoing; or
8.06 ERISA. Any Plan shall fail to maintain the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code; any Plan is, shall have been or is reasonably likely
to be terminated or the subject of a termination proceeding under ERISA; any
Plan shall have an Unfunded Current Liability; or the Borrower or any of its
Subsidiaries or ERISA Affiliates has incurred or is reasonably likely to incur
a liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the
Code, or the Borrower or any Subsidiary has incurred or is reasonably likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) which provide benefits to retired employees
(other than as required by Section 601 of ERISA); and there shall result from
any such event or events described above in this Section 8.06 the imposition of
a Lien upon the assets of the Borrower or any of its Subsidiaries, the granting
of a security interest, or a liability or a material risk of incurring a
liability, which Lien, security interest or liability, in the reasonable
opinion of the Required Banks, will have a material adverse effect upon the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole; or
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<PAGE> 54
8.07 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving in the
aggregate for the Borrower and its Subsidiaries a liability (to the extent not
paid or covered by insurance) of $10,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 60 days after the entry thereof; or
8.08 Change of Control. A Change of Control shall occur; or
8.09 Fixed Charge Coverage Deficiency. At any time prior to
the redemption in full of the Senior Notes, a Fixed Charge Coverage Deficiency
shall occur;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent may and, upon the
written request of the Required Banks, shall by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights of
the Administrative Agent, any Bank or the holder of any Note to enforce its
claims against the Borrower (provided that, if an Event of Default specified in
Section 8.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent to the
Borrower as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment or the
unutilized portion thereof terminated, whereupon the Commitment of each Bank or
the unutilized portion thereof, as the case may be, shall forthwith terminate
immediately and any accrued but unpaid Facility Fees shall forthwith become due
and payable without any other notice of any kind; and (ii) declare the
principal of and any accrued interest in respect of all Loans and the Notes and
all obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
SECTION 9. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
9.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
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<PAGE> 55
"Absolute Rate" shall mean an interest rate (rounded to the
nearest .0001) expressed as a decimal.
"Absolute Rate Borrowing" shall mean a Competitive Bid
Borrowing with respect to which the Borrower has requested that the Bidder
Banks offer to make Competitive Bid Loans at Absolute Rates.
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 10.09.
"Affiliate" shall mean, with respect to any Person, any other
Person (other than an individual) directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such Person;
provided, however, that for purposes of Section 7.07 an Affiliate of the
Borrower shall include any Person that directly or indirectly owns more than 5%
of the Borrower, and any officer or director of the Borrower or any such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" shall mean the Administrative Agent and the
Syndication Agent.
"Aggregate Loan Outstandings" shall have the meaning provided
in Section 3.02(d).
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Applicable Base Rate Margin" shall mean zero, provided that
the Applicable Base Rate Margin as it applies to the Base Rate Loans of any
Bank after the Commitment Expiration Date of such Bank shall mean the
Applicable Facility Fee Percentage in effect from time to time.
"Applicable Eurodollar Rate Margin" shall mean, at any time,
the margin set forth below opposite the Fixed Charges Coverage Ratio for the
period of four consecutive fiscal quarters (taken as one accounting period)
ending on the last day of the most recent fiscal year or fiscal quarter in
respect of which the Banks shall have received Section 6.01 Financials (it
being understood that each Applicable
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<PAGE> 56
Eurodollar Rate Margin shall be determined based on the officer's certificate
delivered pursuant to Section 6.01(c) in respect of the respective Section 6.01
Financials and shall be in effect from the date the respective Section 6.01
Financials (together with the corresponding Section 6.01(c) officer's
certificate) are delivered to the Banks until the date the next such Section
6.01 Financials (together with the corresponding Section 6.01(c) officer's
certificate) are delivered to the Banks at which time the Applicable Eurodollar
Rate Margin shall be reset in accordance with the foregoing provisions of this
definition):
<TABLE>
<CAPTION>
Applicable
Eurodollar
Fixed Charges Coverage Ratio Rate Margin
- - ---------------------------- -----------
<S> <C>
Greater than or equal to
4.00:1.00 0.2500%
Less than 4.00:1.00 but equal
to or greater than 2.75:1.00 0.3250%
Less than 2.75:1.00 but equal
to or greater than 2.50:1.00 0.3875%
Less than 2.50:1.00 0.5250%
</TABLE>
; provided that (A) if at any time prior to the Commitment Expiration Date, and
for so long as, the aggregate outstanding principal amount of Loans exceeds 50%
of the Total Commitment at such time, then each of the percentages set forth
above shall be increased by 0.10%, (B) the Applicable Eurodollar Rate Margin as
it applies to the Eurodollar Rate Loans of any Bank after the Commitment
Expiration Date of such Bank shall be the applicable percentage set forth above
at such time plus the Applicable Facility Fee Percentage in effect at such
time, (C) if the Section 6.01 Financials (together with the corresponding
Section 6.01(c) officer's certificate) are not delivered when required, the
applicable Fixed Charges Coverage Ratio shall be deemed to be less than
2.50:1.00 for the purposes of this definition until the date on which such
Section 6.01 Financials (together with the corresponding Section 6.01(c)
officer's certificate) are delivered to the Banks, and (D) at all times prior
to the later of the first anniversary of the Effective Date and the date on
which the Borrower shall have sold at least 50% of its interest in Raynet, for
purposes of this definition the
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<PAGE> 57
Fixed Charges Coverage Ratio shall be deemed to be less than 4.00:1.00 even if
it actually is 4.00:1.00 or greater.
"Applicable Facility Fee Percentage" shall mean, at any time,
the percentage set forth below opposite the Fixed Charges Coverage Ratio for
the period of four consecutive fiscal quarters (taken as one accounting period)
ending on the last day of the most recent fiscal year or fiscal quarter in
respect of which the Banks shall have received Section 6.01 Financials (it
being understood that each Applicable Facility Fee Percentage shall be
determined based on the officer's certificate delivered pursuant to Section
6.01(c) in respect of the respective Section 6.01 Financials and shall be in
effect from the date the respective Section 6.01 Financials (together with the
corresponding Section 6.01(c) officer's certificate) are delivered to the Banks
until the date the next such Section 6.01 Financials (together with the
corresponding Section 6.01(c) officer's certificate) are delivered to the Banks
at which time the Applicable Facility Fee Percentage shall be reset in
accordance with the foregoing provisions of this definition):
<TABLE>
<CAPTION>
Applicable
Facility Fee
Fixed Charges Coverage Ratio Percentage
- - ---------------------------- ------------
<S> <C>
Greater than or equal to
4.00:1.00 0.1000%
Less than 4.00:1.00 but equal
to or greater than 2.75:1.00 0.1250%
Less than 2.75:1.00 but equal
to or greater than 2.50:1.00 0.1875%
Less than 2.50:1.00 0.2500%
</TABLE>
; provided that (A) if the Section 6.01 Financials (together with the
corresponding Section 6.01(c) officer's certificate) are not delivered when
required, the applicable Fixed Charges Coverage Ratio shall be deemed to be
less than 2.50:1.00 for the purposes of this definition until the date on which
such Section 6.01 Financials (together with the corresponding Section 6.01(c)
officer's certificate) are delivered to the Banks, and (B) at all times prior
to the later of the first anniversary of the Effective Date and the date on
which the Borrower shall have sold at least 50% of its interest in
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<PAGE> 58
Raynet, for purposes of this definition the Fixed Charges Coverage Ratio shall
be deemed to be less than 4.00:1.00 even if it actually is 4.00:1.00 or
greater.
"Applicable Lending Office" shall mean, with respect to each
Bank, (i) such Bank's Base Rate Lending Office in the case of a Base Rate Loan,
(ii) such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate
Loan and (iii) the office specified by such Bank in an offer to make a
Competitive Bid Loan pursuant to Section 1.04(b), in the case of such
Competitive Bid Loan.
"Assignment and Assumption Agreement" shall have the meaning
provided in Section 11.04(b).
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
"Bankruptcy Code" shall have the meaning provided in
Section 8.05.
"Base Rate" shall mean on any day the higher of (x) the Prime
Lending Rate and (y) 1/2 of 1% in excess of the Federal Funds Effective Rate.
"Base Rate Lending Office" shall mean, with respect to each
Bank, the office of such Bank specified as its "Base Rate Lending Office"
opposite its name on Schedule II or such other office, Subsidiary or Affiliate
of such Bank as such Bank may from time to time specify as such to the Borrower
and the Administrative Agent.
"Base Rate Loan" shall mean any Committed Loan designated or
deemed designated as such by the Borrower at the time of the incurrence thereof
or conversion thereto.
"Best" shall have the meaning provided in Section 6.03.
"Bidder Bank" shall mean each Bank that has notified in
writing (and has not withdrawn such notice) the Administrative Agent that it
desires to participate generally in the bidding arrangements relating to
Competitive Bid Borrowings, provided that no Bank may be a Bidder Bank after
the Commitment Expiration Date of such Bank has occurred, or after the Last
Response Date relating to any extension request made by the Borrower pursuant
to Section 1.15 to the extent that the Commitment Expiration Date of such Bank
is not extended as a result of such request.
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<PAGE> 59
"Borrower" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean (i) the incurrence of one Type of
Committed Loan by the Borrower from all of the Banks on a pro rata basis on a
given date (or resulting from conversions on a given date), having in the case
of Eurodollar Rate Loans the same Interest Period, provided that Base Rate
Loans incurred pursuant to Section 1.11(b) shall be considered part of any
related Borrowing of Eurodollar Rate Loans or (ii) a Competitive Bid Borrowing.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Rate Loans or
Competitive Bid Loans priced by reference to the Quoted Rate, any day which is
a Business Day described in clause (i) above and which is also a day for
trading by and between banks in the New York interbank Eurodollar market.
"Capital Lease" shall mean any lease or other agreement for
the use of property which is required to be capitalized on a balance sheet of
the lessee or other user of property in accordance with GAAP.
"Change of Control" shall mean (i) the direct or indirect
acquisition by any Person or group (as such term is defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
beneficial ownership (as such term is defined in Rule 13d-3 promulgated under
the Exchange Act) of, or power to vote, more than 30% of the outstanding shares
of voting stock of the Borrower, or (ii) at any time during any twelve-month
period, 50% or more of the members of the full Board of Directors of the
Borrower shall have resigned or been removed or replaced; provided that a
director who has resigned or is replaced during any period shall not be
included in any determination of whether a Change of Control has occurred
pursuant to this clause (ii) to the extent such director is replaced by a
successor director elected by a majority of those directors who were directors
at the commencement of such twelve-month period.
"Co-Arranger" shall mean the Administrative Agent and the
Syndication Agent.
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<PAGE> 60
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Commitment" shall mean for each Bank, at any time, the amount
set forth opposite such Bank's name on Schedule I, as the same may be reduced
from time to time pursuant to Sections 1.15, 2.02, 2.03, 2.04 and 8.
"Commitment Expiration Date" shall mean, for any Bank, the
date occurring 364 days after the Effective Date, as such date may be extended
for such Bank pursuant to Section 1.15.
"Committed Loans" shall have the meaning provided in
Section 1.01(a).
"Competitive Bid Borrowing" shall mean a Borrowing of
Competitive Bid Loans pursuant to Section 1.04.
"Competitive Bid Loan" shall have the meaning provided in
Section 1.01(b).
"Consolidated EBIT" shall mean, for any period, the
Consolidated Net Income of the Borrower and its Subsidiaries for such period,
before deductions for (a) Interest Expense on, and all amortization of debt
discount and expense with respect to, Indebtedness of the Borrower or any
Subsidiary for such period, (b) fixed rentals accruing and payable under
Operating Leases of the Borrower and its Subsidiaries for such period, (c)
provision for taxes imposed on or measured by income or excess profits for such
period and (d) any portion of such Consolidated Net Income for such period
attributable to the net income (or net loss) of Raynet and its Subsidiaries.
"Consolidated Fixed Charges" shall mean, for any period, with
respect to the Borrower and its Subsidiaries, on a consolidated basis in
accordance with GAAP, the aggregate amount of (a) fixed rentals accruing and
payable under all Operating Leases of the Borrower and its Subsidiaries for
such period and (b) Interest Expense on, and all amortization of debt discount
and expense with respect to, Indebtedness of the Borrower and its Subsidiaries
for such period.
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"Consolidated Funded Indebtedness" shall mean, as of the date
of any determination thereof, Indebtedness for Money Borrowed of the Borrower
and its Subsidiaries, determined on a consolidated basis, after eliminating all
offsetting debits and credits among the Borrower and its Subsidiaries and all
other items required to be eliminated in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, the
consolidated net income (or net loss) of the Borrower and its Subsidiaries for
such period, determined in accordance with GAAP applied on a consistent basis,
after eliminating all offsetting debits and credits among the Borrower and its
Subsidiaries and all other items required to be eliminated in accordance with
GAAP, but, in any event, excluding, without duplication:
(a) for purposes only of the definition of Consolidated
EBIT, any non-cash gains or losses on unusual or extraordinary items,
but including any cash payments made in the relevant period which are
associated with any non-cash losses on unusual or extraordinary items
excluded in a prior period pursuant to this clause (a);
(b) for all purposes other than the definition of
Consolidated EBIT (including without limitation for the purposes of
Section 7.02(e) and the definition of Minimum Consolidated Tangible
Net Worth), any gains or losses on the sale or other disposition of
investments or fixed or capital assets, and any tax deductions or
credits on account of any such excluded losses, and all items properly
classified as extraordinary in accordance with GAAP;
(c) net earnings and losses of any Subsidiary accrued
prior to the date it became a Subsidiary;
(d) net earnings and losses of any Person (other than a
Subsidiary), substantially all the assets of which have been acquired
by the Borrower or any Subsidiary in any manner, realized by such
other Person prior to the date of such acquisition;
(e) net earnings and losses of any Person (other than a
Subsidiary) which shall have been merged into or consolidated with the
Borrower or any Subsidiary prior to the date of such merger or
consolidation;
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(f) net earnings of any Person (other than a Subsidiary)
in which the Borrower or any Subsidiary has an ownership interest,
except to the extent such net earnings shall have actually been
received by the Borrower or such Subsidiary in the form of cash
distributions;
(g) any portion of the net earnings of any Subsidiary
which is legally, contractually or, in the good faith judgment of
management, otherwise unavailable for payment of dividends to the
Borrower;
(h) earnings resulting from any reappraisal, revaluation
or write-up of assets subsequent to June 30, 1994;
(i) any income resulting from any excess of the equity in
any Person at the date of acquisition thereof over the amount invested
in such Person;
(j) any gain arising from the acquisition of any capital
stock or other securities of the Borrower or any Subsidiary; and
(k) earnings resulting from the reversal of any reserve
established prior to June 30, 1994.
"Consolidated Net Worth" shall mean, at any time, the Net
Worth of the Borrower and its Subsidiaries determined on a consolidated basis
in accordance with GAAP after appropriate deduction for any minority interests
in Subsidiaries.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, as of the date
of any determination thereof, Consolidated Net Worth at such time less the
amount of all intangible items, including, without limitation, goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks, brand names, write-ups of assets and any unallocated excess costs of
investments in Subsidiaries over equity in underlying net assets at dates of
acquisition.
"Contingent Obligations" shall mean, as to any Person, without
duplication, any obligation of such Person
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guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include (x) endorsements of
instruments for deposit or collection in the ordinary course of business and
(y) indemnities granted in the ordinary course of business. The amount of any
Contingent Obligation shall, subject to any contractual limitation stated in
such Contingent Obligation, be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Bank" shall have the meaning provided in
Section 1.15.
"Credit Documents" shall mean this Agreement and each Note.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Effective Date" shall have the meaning provided in
Section 4.01.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Sec-
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tion references to ERISA are to ERISA, as in effect at the date of this
Agreement, and to any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any person (as defined in Section
3(9) of ERISA) which together with the Borrower or any of its Subsidiaries
would be deemed to be a "single employer" within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
"Eurodollar Lending Office" shall mean, with respect to each
Bank, the office of such Bank specified as its "Eurodollar Lending Office"
opposite its name on Schedule II or such other office, Subsidiary or Affiliate
of such Bank as such Bank may from time to time specify as such to the Borrower
and the Administrative Agent.
"Eurodollar Rate Loan" shall mean any Committed Loan
designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
"Event of Default" shall have the meaning provided in Section
8.
"Executive Officer" shall mean any of the following officers
of the Borrower: the Chief Executive Officer, the Chief Financial Officer, the
Vice President of Finance, the Treasurer, the General Counsel, the Controller
or the Secretary.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of January 1, 1992, among the Borrower, Swiss Bank Corporation, as
agent, and the lending institutions party thereto, as amended, modified and
supplemented prior to the Effective Date.
"Extension Amendment" shall have the meaning provided in
Section 1.15.
"Facility Fee" shall have the meaning provided in
Section 2.01(a).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business
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Day, for the next preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal Funds brokers of recognized standing
selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 2.01.
"First Response Date" shall have the meaning provided in
Section 1.15.
"Fixed Charge Coverage Deficiency" shall have the meaning
provided in the Senior Note Purchase Agreement.
"Fixed Charges Coverage Ratio" for any period shall mean the
ratio of (i) Consolidated EBIT for such period to (ii) Consolidated Fixed
Charges for such period; provided that, in determining the Fixed Charges
Coverage Ratio for any period during which the Borrower redeems its Senior
Notes, there shall be excluded from both Consolidated EBIT and Consolidated
Fixed Charges the effect of the redemption premium or make-whole paid in
connection with the redemption of the Senior Notes, but not to exceed for
purposes of this definition $9,000,000.
"GAAP" shall mean generally accepted accounting principles in
the United States of America; it being understood and agreed that
determinations in accordance with GAAP for purposes of Section 7, including
defined terms as used therein, are subject (to the extent provided therein) to
Section 11.07(a).
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for money borrowed, (ii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed, provided that if such
Indebtedness is not assumed, the amount of such Indebtedness shall be deemed
for purposes hereof to be the lesser of the principal amount of such
Indebtedness and the fair market value of the property securing such
Indebtedness, (v) all Capital Lease obligations of such Person, (vi) all
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obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take- or-pay and similar
obligations, (vii) for purposes of Section 8.04 only, all obligations of such
Person under Interest Rate Protection Agreements or Other Hedging Agreements,
(viii) all Contingent Obligations of such Person and (ix) any obligation of the
type referred to in any of clauses (i)-(viii) above of any general partnership
of which such Person is the or a general partner; provided that Indebtedness
shall not include trade payables or accrued expenses, in each case arising in
the ordinary course of business.
"Indebtedness for Money Borrowed," with respect to any Person,
shall mean and include all Indebtedness of such Person (a) in respect of money
borrowed or evidenced by a promissory note, debenture or other like written
obligation to pay money, (b) in respect of obligations under any Capital Lease
or (c) representing all or part of the deferred purchase price of any assets
acquired by such Person; provided, however, that any Contingent Obligation of
such Person in respect of Indebtedness of another person of the type described
in the preceding clause (a), (b) or (c) shall constitute "Indebtedness for
Money Borrowed" of such Person.
"Initial Borrowing Date" shall mean the date on which the
initial Borrowing of Committed Loans or Competitive Bid Loans occurs.
"Interest Determination Date" shall mean (i) with respect to
any Eurodollar Rate Loan, the second Business Day prior to the commencement of
any Interest Period relating to such Eurodollar Rate Loan and (ii) with respect
to any Spread Borrowing priced by reference to the Quoted Rate, the second
Business Day prior to the incurrence of such Spread Borrowing.
"Interest Expense" shall mean, for any period, without
duplication, the aggregate of all interest paid or accrued by the Borrower and
its Subsidiaries during such period for Indebtedness of the Borrower or its
Subsidiaries owed to any Person other than the Borrower or any Subsidiary, on a
consolidated basis, excluding (a) any imputed interest with respect to Capital
Leases, and (b) any accrued interest that is compounded or capitalized, all as
determined in accordance with GAAP.
"Interest Period" shall mean (x) with respect to any
Eurodollar Rate Loan, the interest period applicable
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thereto, as determined pursuant to Section 1.10 and (y) with respect to any
Competitive Bid Loan, the period beginning on the date of incurrence thereof
and ending on the stated maturity thereof.
"Interest Rate Basis" shall mean the Quoted Rate and/or such
other basis for determining an interest rate as the Borrower and the
Administrative Agent may agree upon from time to time.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Last Response Date" shall have the meaning provided in
Section 1.15.
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, any Person other than the owner of the
property, whether such interest shall be based on the common law, statute or
contract, whether or not such interest shall be recorded or perfected and
whether or not such interest shall be contingent upon the occurrence of some
future event or events or the existence of some future circumstance or
circumstances, and including the lien or security interest arising from a
mortgage, encumbrance, pledge, adverse claim or charge, conditional sale or
trust receipt, or from a lease, consignment or bailment for security purposes.
The term "Lien" shall also include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting property. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any property that such
Person shall have acquired or shall hold subject to a conditional sale
agreement or other arrangement (including a leasing arrangement) pursuant to
which title to the property shall have been retained by or vested in some other
Person for security purposes.
"Loan" shall mean any Committed Loan or Competitive Bid Loan.
"Margin Stock" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System.
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"Material Subsidiary" shall mean, at any time, any Subsidiary
of the Borrower to the extent that (i) the book value of the assets of such
Subsidiary at such time equals or exceeds 5% of book value of the assets of the
Borrower and its Subsidiaries on a consolidated basis at such time or (ii) the
revenues of such Subsidiary during any of its three then most recently ended
fiscal years were equal to or more than 5% of the revenues of the Borrower and
its Subsidiaries taken as a whole for such corresponding fiscal year
(determined on a consolidated basis in accordance with generally accepted
accounting principles and, in the event that such Subsidiary was not a
Subsidiary of the Borrower at all times during such three fiscal year period,
determined on a pro forma basis as if such Subsidiary had been a Subsidiary of
the Borrower at all times during such period).
"Maturity Date" shall mean, for any Bank, the date occurring
one year after the date immediately preceding the Commitment Expiration Date of
such Bank.
"Minimum Consolidated Tangible Net Worth" shall mean an amount
which initially shall equal $565,000,000 and which amount shall be increased on
the last day of each fiscal year of the Borrower (commencing with the fiscal
year ending June 30, 1995) by an amount, if positive, equal to 50% of the
Borrower's Consolidated Net Income for such fiscal year (it being understood
and agreed that if the Borrower's Consolidated Net Income for any fiscal year
is not positive, then no adjustment shall be made to the Minimum Consolidated
Tangible Net Worth on the last day of such fiscal year).
"Net Worth" shall mean, as to any Person, the sum of its
capital stock, capital in excess of par or stated value of shares of its
capital stock, retained earnings and any other account which, in accordance
with GAAP, constitutes stockholders equity, but excluding any treasury stock
and any foreign currency translation adjustments.
"Non-Continuing Bank" shall have the meaning provided in
Section 1.15.
"Note" shall have the meaning provided in Section 1.06.
"Notice of Borrowing" shall mean a Notice of Committed
Borrowing or a Notice of Competitive Bid Borrowing.
"Notice of Committed Borrowing" shall have the meaning
provided in Section 1.03.
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"Notice of Competitive Bid Borrowing" shall have the meaning
provided in Section 1.04.
"Notice of Conversion" shall have the meaning provided in
Section 1.07.
"Notice Office" shall mean the office of the Administrative
Agent located at 222 Broadway, New York, New York 10038, or such other office
as the Administrative Agent may hereafter designate in writing as such to the
other parties hereto.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Syndication Agent or any Bank pursuant to the terms
of this Agreement or any other Credit Document.
"Operating Lease" shall mean any lease that is not a Capital
Lease.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against the fluctuations in currency values.
"Payment Office" shall mean the office of the Administrative
Agent located at 222 Broadway, New York, New York 10038, or such other office
as the Administrative Agent may hereafter designate in writing as such to the
other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA or any successor thereto.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer plan or single-employer
plan as defined in Section 4001 of ERISA, which is maintained or contributed to
by (or to which there is an obligation to contribute of), or at any time during
the five calendar years preceding the date of this Agreement was maintained or
contributed to by (or to which there was an obligation to contribute of), the
Borrower or by a Subsidiary of the Borrower or an ERISA Affiliate.
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"Prime Lending Rate" shall mean the rate which the
Administrative Agent announces from time to time as its prime lending rate, the
Prime Lending Rate to change when and as such prime lending rate changes. The
Prime Lending Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. The Administrative Agent
may make commercial loans or other loans at rates of interest at, above or
below the Prime Lending Rate.
"Quoted Rate" shall mean, with respect to each Interest Period
for a Eurodollar Rate Loan, (i) the average of the offered quotation to
first-class banks in the New York interbank Eurodollar market by each of the
Reference Banks for Dollar deposits of amounts comparable to the outstanding
principal amount of the Eurodollar Rate Loan of such Reference Bank for which
an interest rate is then being determined (or in the case of a Competitive Bid
Loan that is a Spread Borrowing priced by reference to the Quoted Rate, the
arithmetic average (rounded to the nearest 1/100 of 1%) of the offered rates
for deposits in U.S. dollars for the applicable Interest Period (or the period
closest to such applicable Interest Period) which appear on the Reuters Screen
LIBO Page) with maturities comparable to the Interest Period, determined as of
10:00 A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period, provided that, if any Reference Bank
fails to provide the Administrative Agent with its aforesaid quotation, the
Quoted Rate shall be based on the quotation or quotations provided to the
Administrative Agent by the other Reference Bank or Reference Banks, divided
(and rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D.
"Raynet" shall mean Raynet Corporation, a California
corporation and any successor to all or any substantial part of the business
conducted by Raynet Corporation as of the Effective Date.
"Reference Banks" shall mean Swiss Bank Corporation, The Chase
Manhattan Bank, N.A. and Bank of America NT&SA.
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"Register" shall have the meaning provided in Section 1.06(b).
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Reply Date" shall have the meaning provided in
Section 1.04(b).
"Reportable Event" shall mean an event described in Section
4043(b) of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC.
"Required Banks" shall mean, at any time, Banks whose
Commitments (or, in the case of any Bank after the Commitment Expiration Date
of such Bank, whose outstanding Committed Loans) equal or exceed 66-2/3% of the
sum of the Total Commitment at such time plus the aggregate outstanding
Committed Loans of all Banks the Commitment Expiration Date of which has
occurred; provided that if the Total Commitment has been terminated, then the
Required Banks shall mean Banks whose outstanding Loans equal or exceed 66-
2/3% of the aggregate outstanding Loans at such time.
"Required Committed Banks" shall mean, at any time, Banks
whose Commitments equal or exceed 66-2/3% of the Total Commitment at such time.
"Restricted Payment" shall have the meaning provided in
Section 7.06.
"Reuters Screen" shall mean, when used in connection with any
designated page in determining the applicable Quoted Rate for an Interest
Period for a Competitive Bid Borrowing that is a Spread Borrowing priced by
reference to the Quoted Rate, the display page so designated on the Reuters
Monitor Money Rates Service (or such other page as may replace that page on
that service for the purpose of displaying comparable rates).
"SEC" shall have the meaning provided in Section 6.01(g).
"Section 6.01 Financials" shall mean the financial statements
delivered, or to be delivered, pursuant to Section 6.01(a) or (b).
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"Senior Note Purchase Agreement" shall mean the Note Purchase
Agreement, dated as of February 15, 1991, among the Borrower and various
financial institutions, as same may be amended, modified or supplemented from
time to time.
"Senior Notes" shall mean the Borrower's $210,000,000
aggregate principal amount 9.55% Senior Notes due March 1, 1996 issued pursuant
to the Senior Note Purchase Agreement.
"Spread" shall mean a percentage per annum in excess of, or
less than, an Interest Rate Basis.
"Spread Borrowing" shall mean a Competitive Bid Borrowing with
respect to which the Borrower has requested the Bidder Banks to make
Competitive Bid Loans at a Spread over or under a specified Interest Rate
Basis.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person and (ii) any partnership, association,
joint venture or other entity in which such Person and/or one or more
Subsidiaries of such Person has more than a 50% equity interest at the time.
"Syndication Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Taxes" shall have the meaning provided in Section 3.04.
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Funded Indebtedness plus Consolidated Net Worth at such time.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks at such time.
"Type" shall mean any type of Committed Loan determined with
respect to the interest option applicable thereto, i.e., a Base Rate Loan or a
Eurodollar Rate Loan.
"UCC" shall mean the Uniform Commercial Code.
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"Unfunded Current Liability" of any Plan means the amount, if
any, by which the present value of the accrued benefits under the Plan as of
the close of its most recent plan year, determined in accordance with Statement
of Financial Accounting Standards No. 35, based upon the actuarial assumptions
used by the Plan's actuary in the most recent annual valuation of the Plan,
exceeds the fair market value of the assets allocable thereto, determined in
accordance with Section 412 of the Code.
"United States" and "U.S." shall each mean the United States
of America.
"Unutilized Total Commitment" shall mean, at any time, the
Total Commitment at such time less the sum of (i) the aggregate principal
amount of all Committed Loans then outstanding (other than Committed Loans made
by Banks whose Commitment Expiration Date has occurred) plus (ii) the aggregate
principal amount of all Competitive Bid Loans then outstanding.
"Wholly-Owned Subsidiary" of any Person shall mean any
Subsidiary of such Person to the extent all of the capital stock or other
ownership interests in such Subsidiary, other than directors' or nominees'
qualifying shares, is owned directly or indirectly by such Person.
9.02 Principles of Construction. (a) All references to
sections, schedules and exhibits are to sections, schedules and exhibits in or
to this Agreement unless otherwise specified. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.
(b) All accounting terms not specifically defined herein
shall be construed in accordance with GAAP in the United States in conformity
with those used in the preparation of the financial statements referred to in
Section 5.05(a).
SECTION 10. THE AGENTS.
10.01 Appointment. The Banks hereby designate Swiss Bank
Corporation, New York Branch, as Administrative Agent and The Chase Manhattan
Bank, N.A., as Syndication Agent, in each case to act as specified herein and
in the other Credit Documents. References in this Agreement to "Agents" shall
include both the Administrative Agent and the
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Syndication Agent. Each Bank hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Agents to take such action on its behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to
or required of such Agent by the terms hereof and thereof and such other powers
as are reasonably incidental thereto. Each Agent may perform any of its duties
hereunder by or through its officers, directors, agents or employees.
10.02 Nature of Duties. No Agent shall have duties or
responsibilities except those expressly set forth in this Agreement. Neither
Agent nor any of their respective officers, directors, agents or employees
shall be liable for any action taken or omitted by it or them hereunder or
under any other Credit Document or in connection herewith or therewith, unless
caused by its or their gross negligence or willful misconduct. The duties of
the Agents shall be mechanical and administrative in nature; no Agent shall
have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Bank or the holder of any Note; and nothing in
this Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon any Agent any obligations in
respect of this Agreement or any other Credit Document except as expressly set
forth herein.
10.03 Lack of Reliance on the Agents. Independently and
without reliance upon the Agents, each Bank and the holder of each Note, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the
Borrower in connection with the making and the continuance of the Loans and the
taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrower and, except as expressly
provided in this Agreement, no Agent shall have a duty or responsibility,
either initially or on a continuing basis, to provide any Bank or the holder of
any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. No Agent shall be responsible to any Bank or the holder of
any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness,
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genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the financial condition of the
Borrower or the existence or possible existence of any Default or Event of
Default.
10.04 Certain Rights of the Agents. If any Agent shall
request instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, such Agent shall be entitled to refrain from such act or
taking such action unless and until such Agent shall have received instructions
from the Required Banks; and no Agent shall incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Bank or the holder
of any Note shall have any right of action whatsoever against any Agent as a
result of such Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Banks.
10.05 Reliance. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that such Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by it.
10.06 Indemnification. To the extent any Agent is not
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify such Agent, in proportion to their respective initial Commitments,
for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by such Agent in performing its duties hereunder or under any other
Credit Document, or in any way relating to or arising out of this Agreement or
any other Credit Document; provided, however, that no Bank shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions,
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judgments, suits, costs, expenses or disbursements resulting from any Agent's
gross negligence or willful misconduct.
10.07 The Agents in their Individual Capacity. With respect
to its obligation to make Loans under this Agreement, each Agent shall have the
rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the duties specified herein;
and the term "Banks," "Required Banks," "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include each Agent in
its individual capacity. Each Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Borrower or any Affiliate of the Borrower as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
10.08 Holders. Each Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with such Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
10.09 Resignation by the Agents. (a) Each Agent may resign
from the performance of all its functions and duties hereunder and/or under the
other Credit Documents at any time by giving 15 Business Days' prior written
notice to the Borrower and the Banks. Such resignation shall take effect
immediately in the case of the Syndication Agent and upon the appointment of a
successor Administrative Agent pursuant to clauses (b) and (c) below in the
case of the Administrative Agent.
(b) Upon any such notice of resignation of the
Administrative Agent, the Required Banks shall appoint a successor
Administrative Agent hereunder who shall be a commercial bank or trust company
reasonably acceptable to the Borrower.
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(c) If a successor Administrative Agent shall not have
been so appointed within such 15 Business Day period, the Administrative Agent,
with the consent of the Borrower, may then appoint a successor Administrative
Agent who shall serve as Administrative Agent hereunder or thereunder until
such time, if any, as the Required Banks appoint a successor Administrative
Agent as provided above.
SECTION 11. MISCELLANEOUS.
11.01 Payment of Expenses, etc. The Borrower shall: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses (x) of the Agents (including,
without limitation, the reasonable fees and disbursements of White & Case) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto and
(y) of the Agents and each of the Banks in connection with the enforcement of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel, including allocated costs of in-house
counsel, for the Agents and for each of the Banks); (ii) pay and hold each of
the Banks harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (iii) indemnify the Agents and each Bank, its
officers, directors, employees, representatives and agents from and hold each
of them harmless against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or other proceeding
(whether or not any Agent or any Bank is a party thereto) related to the
entering into and/or performance of this Agreement or any other Credit Document
or the use of the proceeds of any Loans hereunder or the consummation of any
transactions contemplated herein or in any other Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel, including
allocated costs of in-house counsel, incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such
liabilities, obligations, losses, etc., to the
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extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified).
11.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Bank (including without
limitation by branches and agencies of such Bank wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Bank under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 11.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or
not such Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
11.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, facsimile or cable communication) and mailed,
telegraphed, telecopied, cabled or delivered: if to the Borrower, at its
address specified opposite its signature below; if to any Bank, at its Base
Rate Lending Office specified opposite its name on Schedule II; and if to the
Administrative Agent, at its Notice Office; or, as to the Borrower or the
Administrative Agent, at such other address as shall be designated by such
party in a written notice to the other parties hereto and, as to each other
party, at such other address as shall be designated by such party in a written
notice to the Borrower and the Administrative Agent. All such notices and
communications shall, when mailed, telegraphed, telecopied, or cabled or sent
by overnight courier, be effective when deposited in the mails, delivered to
the telegraph company, cable company or overnight courier, as the case may be,
or sent by telecopier, except that notices and communications to the
Administrative Agent shall not be effective until received by the
Administrative Agent.
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11.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that the Borrower may
not assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Banks. Each Bank may at any time grant
participations in any of its rights hereunder or under its Note to another
financial institution; provided that in the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation, except that the participant shall be entitled to receive the
additional amounts under Sections 1.11, 1.12 and 3.04 of this Agreement to, and
only to, the extent that such Bank would be entitled to such benefits if the
participation had not been entered into or sold; and provided further, that no
Bank shall transfer, grant or assign any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would extend the final scheduled maturity of any Loan or Note in which
such participant is participating, or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any postdefault increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment shall not constitute a change in the terms of any
Commitment and that an increase in any Commitment shall be permitted without
the consent of any participant if such participant's participation is not
increased as a result thereof).
(b) Notwithstanding the foregoing, with the consent of
the Borrower (which consent shall not be unreasonably withheld), any Bank may
assign all or a portion of its rights and obligations hereunder to one or more
commercial banks or other financial institutions (including one or more Banks).
No assignment pursuant to the immediately preceding sentence shall (x) be in an
aggregate amount less than $10,000,000 or (y) reduce the Commitment of the
assigning Bank to an amount less than $10,000,000 unless such
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assigning Bank's Commitment is reduced to $0. If any Bank so sells or assigns
all or a part of its rights hereunder or under the Notes, any reference in this
Agreement or the Notes to such assigning Bank shall thereafter refer to such
Bank and to the respective assignee to the extent of their respective interests
and the respective assignee shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights and benefits as it would
if it were such assigning Bank. Each assignment pursuant to this Section
11.04(b) shall be effected by the assigning Bank and the assignee Bank
executing an Assignment and Assumption Agreement substantially in the form of
Exhibit F (appropriately completed), which Assignment and Assumption Agreement
shall be executed by the Borrower (evidencing its consent to such assignment)
and acknowledged by the Administrative Agent. At the time of any such
assignment, (i) Schedule I shall be deemed to be amended to reflect the
Commitment of the respective assignee (which shall result in a direct reduction
to the Commitment of the assigning Bank) and of the other Banks, (ii) the
Borrower will issue new Notes to the respective assignee and to the assigning
Bank in conformity with the requirements of Section 1.06 and (iii) the
Administrative Agent shall receive from the assigning Bank at the time of each
assignment, the payment of a nonrefundable assignment fee of $2,500. Each Bank
and the Borrower agrees to execute such documents (including without limitation
amendments to this Agreement and the other Credit Documents) as shall be
necessary to effect the foregoing. Nothing in this Section 11.04(b) shall
prevent or prohibit any Bank from pledging its Loans or Note hereunder to a
Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section
11.04, no transfer or assignment of the interests or obligations of any Bank
hereunder or any grant of participations therein shall be permitted if such
transfer, assignment or grant would require the Borrower to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any
State.
(d) Each Bank initially party to this Agreement hereby
represents, and each Person that becomes a Bank pursuant to an assignment
permitted by this Section 11.04 will, upon its becoming party to this
Agreement, represent that it is a commercial lender, other financial
institution or other "accredited" investor (as defined in SEC Regulation D)
which makes loans in the ordinary course of its business and that it will make
or acquire Loans for its own account in
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the ordinary course of such business; provided that subject to the preceding
clauses (a) and (b), the disposition of any promissory notes or other evidences
of or interests in Indebtedness held by such Bank shall at all times be within
its exclusive control.
11.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank or the holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower and the Administrative
Agent or any Bank or the holder of any Note shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any
other Credit Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which the Administrative Agent or any Bank or
the holder of any Note would otherwise have. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or any Bank or the holder of any Note to any
other or further action in any circumstances without notice or demand.
11.06 Payments Pro Rata. (a) The Administrative Agent
agrees that promptly after its receipt of each payment from or on behalf of the
Borrower in respect of any Obligations of the Borrower hereunder, except as
expressly provided herein it shall distribute such payment to the Banks pro
rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive
any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Credit
Documents, or otherwise), which is applicable to the payment of the principal
of, or interest on, the Loans or Facility Fees, of a sum which with respect to
the related sum or sums received by other Banks is in a greater proportion than
the total amount of such Obligation then owed and due to such Bank bears to the
total amount of such Obligation then owed and due to all the Banks immediately
prior to such receipt, then such Bank receiving such excess payment shall
purchase for
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cash without recourse or warranty from the other Banks an interest in such
Obligations of the Borrower to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; provided, however,
that if all or any portion of such excess amount is thereafter recovered from
such Bank, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
11.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with GAAP in the United States consistently applied
throughout the periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by the Borrower to the Banks); provided,
however, that, except as otherwise specifically provided herein, all
computations determining compliance with Section 7 shall utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements delivered to the Banks pursuant to Section 5.05(a).
(b) All computations of interest, Facility Fees and other
Fees hereunder shall be made on the basis of a year of 360 days (365 or 366
days, as the case may be, in the case of interest on Base Rate Loans to the
extent determined by reference to the Prime Lending Rate) for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest, Facility Fees or other Fees are payable.
11.08 Governing Law; Submission to Jurisdiction; Venue. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding against the Borrower with respect to this Agreement or any other
Credit Document may be brought in the courts of the State of New York or of the
United States for the Southern District of New York, and, by execution and
delivery of this Agreement, the Borrower hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The Borrower hereby irrevocably designates, appoints
and empowers CT Corporation System, with offices on the date hereof at 1633
Broadway, New York, New York 10019, as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons,
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notices and documents which may be served in any such action or proceeding. If
for any reason such designee, appointee and agent shall cease to be available
to act as such, the Borrower agrees to designate a new designee, appointee and
agent in New York City on the terms and for the purposes of this provision
satisfactory to the Administrative Agent. The Borrower further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Borrower at its address set forth
opposite its signature below, such service to become effective 30 days after
such mailing. Nothing herein shall affect the right of the Administrative
Agent, any Bank or the holder of any Note to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
11.09 Obligation to Make Payments in Dollars. The obligation
of the Borrower to make payment in Dollars of the principal of and interest on
the Notes and any other amounts due hereunder or under any other Credit
Document to the Payment Office of the Administrative Agent as provided in
Section 3.03 shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment, which is expressed in or converted into any
currency other than Dollars, except to the extent such tender or recovery shall
result in the actual receipt by the Administrative Agent at its Payment Office
on behalf of the Banks or holders of the Notes of the full amount of Dollars
expressed to be payable in respect of the principal of and interest on the
Notes and all other amounts due hereunder or under any other Credit Document.
The obligation of the Borrower to make payments in Dollars as aforesaid shall
be enforceable as an alternative or additional cause of action for the purpose
of recovery in Dollars of the amount, if any, by which such actual receipt
shall fall short of the full amount of Dollars expressed to be payable in
respect of the principal of and interest on the Notes and any other amounts due
under any other Credit
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<PAGE> 84
Document, and shall not be affected by judgment being obtained for any other
sums due under this Agreement or under any other Credit Document.
11.10 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Administrative Agent.
11.11 Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Bank.
11.12 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
11.13 Amendment or Waiver. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the Required Banks; provided, however, that no such
change, waiver, discharge or termination shall, without the consent of each
Bank, (i) extend the final maturity of any Loan or Note, or reduce the rate or
extend the time of payment of interest or Fees thereon, or waive or modify any
mandatory reduction of the Total Commitment, or reduce the principal amount
thereof, or increase the Commitment of any Bank over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of any Commitment of any Bank), (ii)
amend, modify or waive any provision of this Section 11.13 or Section 10.06,
11.01, 11.02, 11.04, 11.06 or 11.07(b), (iii) reduce the percentage specified
in the definition of Required Banks or Required Committed Banks or (iv) consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement.
11.14 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.11, 1.12, 3.04, 10.06 and 11.01 shall survive
the execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.
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11.15 Entire Agreement. This Agreement, taken together with
all of the other Credit Documents and all certificates and other documents
delivered to the Banks hereunder and thereunder, embody the entire agreement
and supersede all prior agreements, written and oral, relating to the subject
matter hereof, except as to certain fees payable by the Borrower in connection
with this Agreement to the extent not expressly set forth herein.
11.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
- - -------
300 Constitution Drive RAYCHEM CORPORATION
Menlo Park, CA 94025-1164
Attention: Treasurer
By /s/ Lars Larsen
----------------------------------
With a copy to: Title: Treasurer
300 Constitution Drive
Menlo Park, CA 94025-1164
Attention: Legal Department
SWISS BANK CORPORATION,
New York Branch,
as Administrative Agent
By /s/ Wendy P. Field
----------------------------------
Title: Director
Merchant Banking
By /s/ George W.
Lambertson III
----------------------------------
Title: Director
Merchant Banking
SWISS BANK CORPORATION,
San Francisco Branch
By /s/ Jamie Dillon
----------------------------------
Title: Director
Merchant Banking
By /s/ Hans-Ueli Surber
----------------------------------
Title: Exec. Director
Merchant Banking
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<PAGE> 87
THE CHASE MANHATTAN BANK,
N.A., individually and
as Syndication Agent
By /s/Lawrence C. Shields
----------------------------------
Title: Managing Director
BANK OF AMERICA NT&SA
By /s/ Peter A. Tomei
----------------------------------
Title: Vice President
UNION BANK
By /s/ Patrick M. Cassidy
----------------------------------
Title: Vice President
By
-----------------------------------
Title:
DEUTSCHE BANK AG
LOS ANGELES BRANCH
a/o CAYMAN ISLANDS BRANCH
By /s/ David Wagstaff
----------------------------------
Title: Vice President
By /s/ Christine Lane
----------------------------------
Title: Assistant
Vice President
BANK OF MONTREAL
By /s/ Michael P. Joyce
----------------------------------
Title: Senior Manager,
Credit
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<PAGE> 88
ROYAL BANK OF CANADA
By /s/ Stephen S. Hughes
----------------------------------
Title: Manager
COMMERZBANK AG
LOS ANGELES BRANCH
By /s/ Robert Hochhalper
----------------------------------
Title: SVP and Manager
By /s/ Werner Schmidbauer
----------------------------------
Title: Vice President
CREDIT LYONNAIS LOS
ANGELES BRANCH
By /s/ Steven Yoon
----------------------------------
Title: Vice President
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
By /s/ Steven Yoon
----------------------------------
Title: Authorized
Signatory
BARCLAYS BANK PLC
By /s/ Douglas A. Butler
----------------------------------
Title: Associate
Director
By
----------------------------------
Title:
THE BANK OF CALIFORNIA,
N.A.
By /s/ J. William Bloore
----------------------------------
Title: Assistant Vice
President
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<PAGE> 89
KREDIETBANK, N.V.
By /s/ Diane M. Grimmig
----------------------------------
Title: Vice President
By /s/ Robert Snauffer
----------------------------------
Title: Vice President
GULF INTERNATIONAL BANK,
B.S.C.
By /s/ Haytham F. Khalil
----------------------------------
Title: Assistant Vice
President
By /s/Abdel-Fattah Tahoun
----------------------------------
Title: Senior Vice
President
BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
By /s/ Eric Hollanders
----------------------------------
Title: Senior Vice
President
By /s/ Gerrit Verlodt
----------------------------------
Title: Senior Vice
President
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<PAGE> 90
SCHEDULE I
SCHEDULE OF COMMITMENTS
<TABLE>
<CAPTION>
Name of Bank Commitment
- - ------------ ----------
<S> <C>
Swiss Bank Corporation 18,823,529.42
Bank Corporation 18,823,529.42
Royal Bank of Canada 17,647,058.82
Credit Lyonnais 17,647,058.82
Bank of America NT&SA 16,470,588.24
Commerzbank AG 16,470,588.24
Bank of Montreal 11,764,705.88
Gulf International Bank B.S.C. 11,764,705.88
Barclays Bank PLC 11,764,705.88
The Bank of California, N.A. 11,764,705.88
Bank Brussels Lambert 11,764,705.88
Deutsche Bank AG 11,764,705.88
Kredietbank N.V. 11,764,705.88
Union Bank 11,764,705.88
Total Commitment $200,000,000.00
===============
</TABLE>
<PAGE> 91
SCHEDULE II
<TABLE>
<CAPTION>
Base Rate Eurodollar
Name of Bank Lending Office Lending Office
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Credit Lyonnais Credit Lyonnais Credit Lyonnais
Los Angeles Branch Cayman Island Branch
c/o Credit Lyonnais 515 South Flower Street
Los Angeles Branch 22nd Floor
515 South Flower Street, Los Angeles, CA 90071
22nd Floor
Los Angeles, CA 90071 Tel: (213) 362-5953
Fax: (213) 623-3437
Tel: (213) 362-5953
Fax: (213) 623-3437
- - -----------------------------------------------------------------------------------------------------------------------------------
Barclays Bank PLC Barclays Bank PLC Barclays Bank PLC
Bahamas Branch Bahamas Branch
c/o 75 Wall Street c/o 75 Wall Street
New York, NY 10265 New York, NY 10265
Tel: (212) 412-5037 Tel: (212) 412-5037
Fax: (212) 412-5002 Fax: (212) 412-5002
- - -----------------------------------------------------------------------------------------------------------------------------------
Bank of Montreal Bank of Montreal Bank of Montreal
115 South LaSalle Street 115 South LaSalle Street
12th Floor 12th Floor
Chicago, Illinois 60603 Chicago, Illinois 60603
Tel: (213) 239-0608 Tel: (213) 239-0608
Fax: (312) 750-6061 Fax: (312) 750-6061
- - -----------------------------------------------------------------------------------------------------------------------------------
The Bank of The Bank of California, The Bank of California,
California, N.A. N.A. N.A.
400 California Street 400 California Street
San Francisco, CA 94104 San Francisco, CA 94104
Tel: (415) 765-3641 Tel: (415) 765-3641
Fax: (415) 765-3146 Fax: (415) 765-3146
- - -----------------------------------------------------------------------------------------------------------------------------------
Bank Brussels Lambert, Bank Brussels Lambert Bank Brussels Lambert
New York Branch New York Branch New York Branch
630 Fifth Avenue 630 Fifth Avenue
New York, NY 10111 New York, NY 10111
Tel: (212) 632-5300 Tel: (212) 632-5300
Fax: (212) 632-5429 Fax: (212) 632-5429
(212) 632-5308 (212) 632-5308
- - -----------------------------------------------------------------------------------------------------------------------------------
Commerzbank AG, Commerzbank AG, Commerzbank AG,
Los Angeles Branch Los Angeles Branch Los Angeles Branch
660 So. Figueroa St. 660 So. Figueroa St.
Suite 1450 Suite 1450
Los Angeles, CA 90017 Los Angeles, CA 90017
Tel: (213) 623-8223 Tel: (213) 623-8223
Fax: (213) 623-0039 Fax: (213) 623-0039
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 92
<TABLE>
Base Rate Eurodollar
Name of Bank Lending Office Lending Office
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Swiss Bank Corporation, Swiss Bank Corporation Swiss Bank Corporation
San Francisco Branch 222 Broadway (222-02-E) 222 Broadway (222-02-E)
New York, NY 10038 New York, NY 10038
Tel: (212) 574-3164 Tel: (212) 574-3164
Fax: (212) 574-3180 Fax: (212) 574-3180
- - -----------------------------------------------------------------------------------------------------------------------------------
Bank of America NT&SA Bank of America NT&SA Bank of America NT&SA
1850 Gateway Blvd. 1850 Gateway Blvd.
#5693 #5693
Concord, CA 94520 Concord, CA 94520
Tel: (510) 675-7329 Tel: (510) 675-7329
Fax: (510) 675-7531 Fax: (510) 675-7531
- - -----------------------------------------------------------------------------------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada Royal Bank of Canada
Pierrepont Plaza Pierrepont Plaza
300 Cadman Plaza West 300 Cadman Plaza West
Brooklyn, NY 11201-2701 Brooklyn, NY 11201-2701
Tel: (212) 858-7576 Tel: (212) 858-7176
Fax: (212) 522-6292 Fax: (212) 522-6292
- - -----------------------------------------------------------------------------------------------------------------------------------
The Chase Manhattan The Chase Manhattan The Chase Manhattan
Bank, N.A. Bank, N.A. Bank, N.A.
2 Chase Plaza, 2 Chase Plaza,
5th Floor 5th Floor
New York, NY 10081 New York, NY 10081
Tel: (212) 552-7529 Tel: (212) 552-7529
Fax: (212) 552-1477 Fax: (212) 552-1477
- - -----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG Deutsche Bank AG Deutsche Bank AG
Los Angeles Branch Cayman Islands
550 S. Hope Street, Branch
Ste. 1850 c/o Los Angeles
Los Angeles, CA Branch
90071 550 S. Hope Street
Ste. 1850
Tel: (213) 627-8200 Los Angeles, CA
Fax: (213) 627-9779 90071
Tel: (213) 627-8200
Fax: (213) 627-9779
- - -----------------------------------------------------------------------------------------------------------------------------------
Gulf International Gulf International Gulf International
Bank B.S.C. Bank B.S.C. Bank B.S.C., Cayman Branch,
380 Madison Avenue c/o Gulf International Bank B.S.C.
New York, NY 10017 380 Madison Avenue
New York, NY 10017
Tel: (212) 922-2368
Fax: (212) 922-3209 Tel: (212) 922-2368
Fax: (212) 922-3209
- - -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 93
<TABLE>
<CAPTION>
Base Rate Eurodollar
Name of Bank Lending Office Lending Office
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Kredietbank N.V. Kredietbank N.V. Kredietbank N.V.
Grand Cayman Branch 125 West 55th St., 125 We+st 55th St.,
10th Floor 10th Floor
New York, NY 10019 New York, NY 10019
Tel: (212) 541-0600 Tel: (212) 541-0600
Fax: (212) 956-5580 Fax: (212) 956-5580
- - -----------------------------------------------------------------------------------------------------------------------------------
Union Bank Union Bank Union Bank
350 California Street 350 California Street
11th Floor 11th Floor
San Francisco, CA 94104 San Francisco, CA 94104
Tel: (415) 705-7057 Tel: (415) 705-7057
Fax: (415) 705-7046 Fax: (415) 705-7046
</TABLE>
<PAGE> 94
SCHEDULES AND EXHIBITS
NOTE: The following SCHEDULES and EXHIBITS to the CREDIT AGREEMENT
dated as of September 29, 1994, have not been included in this filing:
SCHEDULE III Undisclosed Liabilities
SCHEDULE IV Litigation
SCHEDULE V Subsidiaries
SCHEDULE VI Environmental Matters
SCHEDULE VII Permitted Liens
EXHIBIT A-1 Notice of Committed Borrowing
EXHIBIT A-2 Notice of Competitive Bid Borrowing
EXHIBIT B Note
EXHIBIT C Opinion of Counsel to the Borrower
EXHIBIT D Officers' Certificate of the Borrower
EXHIBIT E Consent Letter
EXHIBIT F Assignment and Assumption Agreement
A copy of the omitted SCHEDULES and EXHIBITS above will be furnished
supplementally to the United States Securities and Exchange Commission upon
request.
<PAGE> 1
EXHIBIT 4(f)
(CONFORMED COPY)
================================================================================
$225,000,000
TERM LOAN AGREEMENT
among
RAYCHEM CORPORATION,
VARIOUS BANKS,
THE CHASE MANHATTAN BANK, N.A.,
as CO-ARRANGER and SYNDICATION AGENT
and
SWISS BANK CORPORATION,
as CO-ARRANGER and ADMINISTRATIVE AGENT
______________________________
Dated as of September 29, 1994
______________________________
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
----
SECTION 1. AMOUNT AND TERMS OF CREDIT . . . . . . . . . . . . . 1
1.01 The Loans . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Amount of Each Borrowing . . . . . . . . . . 1
1.03 Notice of Borrowing of Loans . . . . . . . . . . . . 2
1.04 Disbursement of Funds . . . . . . . . . . . . . . . 2
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . 3
1.06 Conversions . . . . . . . . . . . . . . . . . . . . 3
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . 4
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . 5
1.09 Interest Periods . . . . . . . . . . . . . . . . . . 6
1.10 Increased Costs, Illegality, etc. . . . . . . . . . 6
1.11 Compensation . . . . . . . . . . . . . . . . . . . . 9
1.12 Change of Applicable Lending Office . . . . . . . . 10
1.13 Notice of Certain Costs . . . . . . . . . . . . . . 10
SECTION 2. FEES; TERMINATION OF COMMITMENTS . . . . . . . . . . 10
2.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . 10
2.02 Voluntary Termination of Total
Commitment . . . . . . . . . . . . . . . . . . . . 11
2.03 Mandatory Termination of Commitment . . . . . . . . 11
2.04 Replacement of Bank; Voluntary
Prepayment of a Bank's Loans . . . . . . . . . . 11
SECTION 3. PREPAYMENTS; PAYMENTS . . . . . . . . . . . . . . . 12
3.01 Voluntary Prepayments . . . . . . . . . . . . . . . 12
3.02 Mandatory Prepayments . . . . . . . . . . . . . . . 12
3.03 Method and Place of Payment . . . . . . . . . . . . 13
3.04 Net Payments . . . . . . . . . . . . . . . . . . . . 13
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . 14
4.01 Conditions to Effectiveness . . . . . . . . . . . . 14
4.02 Conditions to Incurrence of Loans . . . . . . . . . 14
SECTION 5. REPRESENTATIONS, WARRANTIES AND
AGREEMENTS . . . . . . . . . . . . . . . . . . . 17
5.01 Corporate Status . . . . . . . . . . . . . . . . . . 17
5.02 Corporate Power and Authority . . . . . . . . . . . 17
5.03 No Violation . . . . . . . . . . . . . . . . . . . . 17
5.04 Governmental Approvals . . . . . . . . . . . . . . . 18
5.05 Financial Statements; Financial
Condition; Undisclosed Liabilities; etc. . . . . 18
(i)
<PAGE> 3
Page
----
5.06 Litigation . . . . . . . . . . . . . . . . . . . . . 19
5.07 True and Complete Disclosure . . . . . . . . . . . . 19
5.08 Use of Proceeds; Margin Regulations . . . . . . . . 19
5.09 Tax Returns and Payments . . . . . . . . . . . . . . 20
5.10 Compliance with ERISA . . . . . . . . . . . . . . . 20
5.11 Subsidiaries . . . . . . . . . . . . . . . . . . . . 21
5.12 Compliance with Statutes, etc. . . . . . . . . . . . 21
5.13 Investment Company Act . . . . . . . . . . . . . . . 21
5.14 Public Utility Holding Company Act . . . . . . . . . 22
5.15 Labor Relations . . . . . . . . . . . . . . . . . . 22
5.16 Patents, Licenses, Franchises and
Formulas . . . . . . . . . . . . . . . . . . . . 22
5.17 Compliance with Environmental Laws . . . . . . . . . 23
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . 24
6.01 Information Covenants . . . . . . . . . . . . . . . 25
6.02 Books, Records and Inspections . . . . . . . . . . . 28
6.03 Maintenance of Property, Insurance . . . . . . . . . 28
6.04 Corporate Franchises . . . . . . . . . . . . . . . . 29
6.05 Compliance with Statutes, etc. . . . . . . . . . . . 29
6.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . 29
6.07 End of Fiscal Years; Fiscal Quarters . . . . . . . . 30
6.08 Performance of Obligations . . . . . . . . . . . . . 31
6.09 Payment of Taxes and Claims . . . . . . . . . . . . 31
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 31
7.01 Changes in Business . . . . . . . . . . . . . . . . 32
7.02 Consolidation, Merger, Sale of Assets,
etc. . . . . . . . . . . . . . . . . . . . . . . 32
7.03 Liens . . . . . . . . . . . . . . . . . . . . . . . 33
7.04 Indebtedness . . . . . . . . . . . . . . . . . . . . 36
7.05 Advances, Investments and Loans . . . . . . . . . . 37
7.06 Restricted Payments . . . . . . . . . . . . . . . . 38
7.07 Transactions with Affiliates . . . . . . . . . . . . 39
7.08 Limitation on Modifications of
Certificate of Incorporation, By-Laws . . . . . . 39
7.09 Leverage Ratio . . . . . . . . . . . . . . . . . . . 39
7.10 Fixed Charges Coverage Ratio . . . . . . . . . . . . 39
7.11 Minimum Consolidated Tangible Net Worth . . . . . . 39
7.12 Fixed Charge Coverage Deficiency . . . . . . . . . . 39
7.13 Interest Rate Protection Agreements and
Other Hedging Agreements . . . . . . . . . . . . 40
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . 40
8.01 Payments . . . . . . . . . . . . . . . . . . . . . . 40
8.02 Representations, etc. . . . . . . . . . . . . . . . 40
(ii)
<PAGE> 4
Page
----
8.03 Covenants . . . . . . . . . . . . . . . . . . . . . 40
8.04 Default Under Other Agreements . . . . . . . . . . . 40
8.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . 41
8.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . 42
8.07 Judgments . . . . . . . . . . . . . . . . . . . . . 42
8.08 Change of Control . . . . . . . . . . . . . . . . . 42
8.09 Fixed Charge Coverage Deficiency . . . . . . . . . . 42
SECTION 9. DEFINITIONS AND PRINCIPLES OF
CONSTRUCTION . . . . . . . . . . . . . . . . . . 43
9.01 Defined Terms . . . . . . . . . . . . . . . . . . . 43
9.02 Principles of Construction . . . . . . . . . . . . . 58
SECTION 10. THE AGENTS . . . . . . . . . . . . . . . . . . . . . 59
10.01 Appointment . . . . . . . . . . . . . . . . . . . . 59
10.02 Nature of Duties . . . . . . . . . . . . . . . . . . 59
10.03 Lack of Reliance on the Agents . . . . . . . . . . . 59
10.04 Certain Rights of the Agents . . . . . . . . . . . . 60
10.05 Reliance . . . . . . . . . . . . . . . . . . . . . . 60
10.06 Indemnification . . . . . . . . . . . . . . . . . . 60
10.07 The Agents in their Individual Capacity . . . . . . 61
10.08 Holders . . . . . . . . . . . . . . . . . . . . . . 61
10.09 Resignation by the Agents . . . . . . . . . . . . . 61
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 62
11.01 Payment of Expenses, etc. . . . . . . . . . . . . . 62
11.02 Right of Setoff . . . . . . . . . . . . . . . . . . 63
11.03 Notices . . . . . . . . . . . . . . . . . . . . . . 63
11.04 Benefit of Agreement . . . . . . . . . . . . . . . . 64
11.05 No Waiver; Remedies Cumulative . . . . . . . . . . . 66
11.06 Payments Pro Rata . . . . . . . . . . . . . . . . . 66
11.07 Calculations; Computations . . . . . . . . . . . . . 67
11.08 Governing Law; Submission to
Jurisdiction; Venue . . . . . . . . . . . . . . . 67
11.09 Obligation to Make Payments in Dollars . . . . . . . 68
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . 69
11.11 Domicile of Loans . . . . . . . . . . . . . . . . . 69
11.12 Headings Descriptive . . . . . . . . . . . . . . . . 69
11.13 Amendment or Waiver . . . . . . . . . . . . . . . . 69
11.14 Survival . . . . . . . . . . . . . . . . . . . . . . 70
11.15 Entire Agreement . . . . . . . . . . . . . . . . . . 70
11.16 Waiver of Jury Trial . . . . . . . . . . . . . . . . 70
(iii)
<PAGE> 5
SCHEDULE I Commitments
SCHEDULE II Applicable Lending Offices
SCHEDULE III Undisclosed Liabilities
SCHEDULE IV Litigation
SCHEDULE V Subsidiaries
SCHEDULE VI Environmental Matters
SCHEDULE VII Permitted Liens
EXHIBIT A Notice of Borrowing
EXHIBIT B Note
EXHIBIT C Opinion of Counsel to the Borrower
EXHIBIT D Officers' Certificate of the Borrower
EXHIBIT E Consent Letter
EXHIBIT F Assignment and Assumption Agreement
(iv)
<PAGE> 6
TERM LOAN AGREEMENT, dated as of September 29, 1994, among
RAYCHEM CORPORATION (the "Borrower"), a corporation organized and existing
under the laws of the State of Delaware, the financial institutions listed from
time to time on Schedule I (each a "Bank" and, collectively, the "Banks"), THE
CHASE MANHATTAN BANK, N.A., as Co-Arranger and Syndication Agent (in such
capacity, "Syndication Agent") and SWISS BANK CORPORATION, acting through its
New York Branch, as Co-Arranger and Administrative Agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Banks are willing to make available to the Borrower the credit
facility provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 The Loans. Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees, on any single date on
or prior to the Commitment Expiration Date, to make a loan (each a "Loan" and,
collectively, the "Loans") to the Borrower, which Loans shall, at the option of
the Borrower, be Eurodollar Rate Loans or Base Rate Loans, provided that,
except as otherwise specifically provided in Section 1.10(b), all Loans
comprising the same Borrowing shall at all times be of the same Type; provided,
however, that the aggregate principal amount of the Loan made by any Bank shall
not exceed the Commitment of such Bank at such time. Once repaid, no Loans may
be reborrowed. More than one Borrowing may occur on the same date, but
Eurodollar Rate Loans comprising more than five Borrowings shall not be
outstanding under this Agreement at any time, provided that Eurodollar Rate
Loans resulting from a conversion pursuant to Section 1.10(b) shall not be
deemed to be a Borrowing for this purpose.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing hereunder shall be not less than
$20,000,000, and if larger shall be in an integral multiple of $1,000,000,
except as required by Section 1.10(b).
<PAGE> 7
1.03 Notice of Borrowing of Loans. When the Borrower
desires to make a Borrowing hereunder, it shall give the Administrative Agent
at its Notice Office (i) at least three Business Days' prior notice of each
Eurodollar Rate Loan to be made hereunder (which notice shall be deemed to have
been given on a certain day only if given before 12:00 Noon (New York time) on
such day) and (ii) notice of each Base Rate Loan to be made hereunder prior to
11:00 A.M. (New York time) on the day of such Borrowing. Such notice (the
"Notice of Borrowing") shall be in the form of Exhibit A, appropriately
completed to specify the aggregate principal amount of the Loans to be made
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day), whether the Loans being made pursuant to such Borrowing are to
be maintained initially as Eurodollar Rate Loans or Base Rate Loans and, if
Eurodollar Rate Loans, the initial Interest Period to be applicable thereto.
The Administrative Agent shall promptly give each Bank notice of such proposed
Borrowing, of such Bank's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
1.04 Disbursement of Funds. No later than 1:00 P.M. (New
York time) on the date specified in the Notice of Borrowing, each Bank will
make available, through such Bank's Applicable Lending Office, its pro rata
portion, of each Borrowing requested to be made on such date, in Dollars and in
immediately available funds at the Payment Office of the Administrative Agent,
and the Administrative Agent will make available to the Borrower at its Payment
Office the aggregate of the amounts so made available by the Banks. Unless the
Administrative Agent shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Bank, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Bank on demand. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover on demand from such Bank or the
Borrower,
-2-
<PAGE> 8
as the case may be, interest on such corresponding amount in respect of each
day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower until the date such corresponding amount
is recovered by the Administrative Agent, at a rate per annum equal to (i) if
recovered from such Bank, the cost to the Administrative Agent of acquiring
overnight Federal Funds and (ii) if recovered from the Borrower, the then
applicable rate of interest, calculated in accordance with Section 1.08, for
the respective Loans. Nothing in this Section 1.04 shall be deemed to relieve
any Bank from its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result
of any default by such Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, all the Loans made by each Bank shall be
evidenced by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B with blanks appropriately completed in
conformity herewith (each a "Note" and, collectively, the "Notes"). The Note
issued to each Bank shall (i) be payable to the order of such Bank and be dated
the Closing Date, (ii) be in a stated principal amount equal to the principal
amount of the Loans made by such Bank on the Closing Date and be payable in the
principal amount of the Loans evidenced thereby, (iii) mature on the Maturity
Date, (iv) bear interest as provided in the appropriate clause of Section 1.08
in respect of the Base Rate Loans and Eurodollar Rate Loans, as the case may
be, evidenced thereby and (v) be entitled to the benefits of this Agreement.
Each Bank will note on its internal records the amount of each Loan made by it
and each payment in respect thereof and will prior to any transfer of its Note
endorse on the reverse side thereof the outstanding principal amount of Loans
evidenced thereby. Failure to make any such notation shall not affect the
Borrower's obligations in respect of such Loans.
(b) The Administrative Agent shall maintain at its Payment
Office a register for the recordation of the names and addresses of the Banks,
the Commitments of the Banks from time to time, and the principal amount of the
Loans owing to each Bank from time to time (the "Register"). The entries in
the Register shall constitute prima facie evidence as to the information set
forth therein.
1.06 Conversions. The Borrower shall have the option to
convert on any Business Day all or a portion equal to $20,000,000 (and, if
larger, an integral multiple of
-3-
<PAGE> 9
$1,000,000) of the outstanding principal amount of the Loans made pursuant to
one or more Borrowings of one Type of Loan into a Borrowing of another Type of
Loan, provided that (i) except as otherwise provided in Section 1.10(b),
Eurodollar Rate Loans may be converted into Base Rate Loans only on the last
day of an Interest Period applicable to the Loans being converted and no such
partial conversion of Eurodollar Rate Loans shall reduce the outstanding
principal amount of Eurodollar Rate Loans made pursuant to a single Borrowing
to less than $20,000,000, (ii) Base Rate Loans may only be converted into
Eurodollar Rate Loans if no Default or Event of Default is in existence on the
date of the conversion and (iii) no conversion pursuant to this Section 1.06
shall result in a greater number of Borrowings than is permitted under Section
1.01. Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at its Notice Office prior to 12:00 Noon (New York time)
at least three Business Days' prior notice (each a "Notice of Conversion")
specifying the Loans to be so converted and, if to be converted into Eurodollar
Rate Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion. Upon any such conversion the proceeds thereof will be applied
directly on the day of such conversion to prepay the outstanding principal
amount of the Loans being converted. Notwithstanding the foregoing, if a
Default or an Event of Default is in existence at the time any Interest Period
in respect of any Eurodollar Rate Loans is to expire, such Eurodollar Rate
Loans may not be continued as Eurodollar Rate Loans but instead shall be
automatically converted on the last day of such Interest Period into Base Rate
Loans. If upon the expiration of any Interest Period applicable to a
Eurodollar Rate Loan, the Borrower has failed to elect a new Interest Period to
be applicable to such Eurodollar Rate Loan as provided in Section 1.09, the
Borrower shall be deemed to have elected to convert such Eurodollar Rate Loan
into a Base Rate Loan effective as of the expiration date of such current
Interest Period.
1.07 Pro Rata Borrowings. Each Borrowing of Loans under
this Agreement shall be incurred from the Banks pro rata on the basis of their
Commitments at the time of such Borrowing or, in the case of a Borrowing
resulting from a conversion pursuant to Section 1.06 after the Total Commitment
has been terminated, on the basis of their Commitments as in effect immediately
prior to such termination. It is understood that no Bank shall be responsible
for any default by any other Bank of its obligation to make Loans hereunder and
that each Bank shall
-4-
<PAGE> 10
be obligated to make the Loans provided to be made by it hereunder regardless
of the failure of any other Bank to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest
in respect of the unpaid principal amount of each Base Rate Loan from the date
the proceeds thereof are made available to the Borrower until the maturity
thereof (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Applicable Base Rate Margin plus the Base Rate in effect
from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Rate Loan from the date the proceeds
thereof are made available to the Borrower until the maturity thereof (whether
by acceleration or otherwise) at a rate per annum which shall at all times be
the Applicable Eurodollar Rate Margin plus the relevant Quoted Rate.
(c) Overdue principal and, to the extent permitted by
law, overdue interest in respect of each Loan and any other overdue amount
payable by the Borrower hereunder shall bear interest at a rate per annum equal
to 2% per annum in excess of the Base Rate in effect from time to time;
provided that principal in respect of Eurodollar Rate Loans shall bear interest
after the same becomes due (whether by acceleration or otherwise) until the end
of the applicable Interest Period for such Eurodollar Rate Loans at a per annum
rate equal to 2% plus the rate of interest applicable on the due date therefor.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December of each year, (ii) in
respect of each Eurodollar Rate Loan, on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period of six months, on the
date occurring three months after the first day of such Interest Period, (iii)
in respect of each Loan made by a Bank all of whose Loans are being prepaid
pursuant to Section 2.04, on the date of such prepayment and (iv) in respect of
each Loan, on any prepayment (on the amount prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) On each Interest Determination Date, the
Administrative Agent shall determine the interest rate for
-5-
<PAGE> 11
the Eurodollar Rate Loans for which such determination is being made and shall
promptly notify the Borrower and the Banks thereof. Each such determination
shall, absent manifest error, be final and conclusive and binding on all
parties hereto.
1.09 Interest Periods. Subject to the terms of Section
1.06, at the time it gives the Notice of Borrowing or any Notice of Conversion
in respect of the making of, or conversion into, any Eurodollar Rate Loan (in
the case of the initial Interest Period applicable thereto) or on the third
Business Day prior to the expiration of an Interest Period applicable to such
Eurodollar Rate Loan (in the case of any subsequent Interest Period), the
Borrower shall have the right to elect, by giving the Administrative Agent
notice thereof, the Interest Period applicable to such Eurodollar Rate Loan,
which Interest Period shall, at the option of the Borrower, be a one, three or
six month period, provided that: (i) all Eurodollar Rate Loans comprising a
Borrowing shall at all times have the same Interest Period except as otherwise
required by Section 1.10(b); (ii) the initial Interest Period for any
Eurodollar Rate Loan shall commence on the date of Borrowing of such Loan
(including the date of any conversion from a Borrowing of Base Rate Loans) and
each Interest Period occurring thereafter in respect of such Loan shall
commence on the day on which the next preceding Interest Period applicable
thereto expires; (iii) if any Interest Period relating to a Eurodollar Rate
Loan begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period shall
end on the last Business Day of such calendar month; (iv) if any Interest
Period would otherwise expire on a day which is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day, provided that
if any Interest Period would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding Business
Day; (v) no Interest Period shall extend beyond the Maturity Date; and (vi) no
Interest Period shall extend beyond the date on which a prepayment of Loans is
required to be made under Section 3.02(b) if after giving effect to the
selection of such Interest Period the aggregate principal amount of Eurodollar
Rate Loans having Interest Periods ending after such date would exceed the
aggregate principal amount of Loans permitted to remain outstanding after such
date.
1.10 Increased Costs, Illegality, etc. (a) In the event
that any Bank shall have determined (which determina-
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<PAGE> 12
tion shall, absent manifest error, be final and conclusive and binding upon all
parties hereto but, with respect to clause (i) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Quoted Rate; or
(ii) at any time, that such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Rate Loan because of (x) any change
since the date of this Agreement in any applicable law or governmental
rule, regulation, order or request (whether or not having the force of
law) (or in the interpretation or administration thereof and including
the introduction of any new law or governmental rule, regulation,
order or request), such as, for example, but not limited to, (A) a
change in the basis of taxation of payments to any Bank or its
Applicable Lending Office of the principal of or interest on the Notes
or any other amounts payable hereunder (except for changes in the rate
of tax on, or determined by reference to, the net income or profits of
such Bank or its Applicable Lending Office imposed by the jurisdiction
in which its principal office or Applicable Lending Office is located)
or (B) a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included
in the computation of the Quoted Rate, and/or (y) other circumstances
affecting the interbank Eurodollar market and arising after the
Effective Date; or
(iii) at any time, that the making or continuance of any
Eurodollar Rate Loan has been made (x) unlawful by any law or
governmental rule, regulation or order, (y) impossible by compliance
by such Bank with any governmental request (whether or not having
force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower
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<PAGE> 13
and, except in the case of clause (i) above, to the Administrative Agent of
such determination (which notice the Administrative Agent shall promptly
transmit to each of the other Banks). Thereafter (x) in the case of clause (i)
above, Eurodollar Rate Loans shall no longer be available until such time as
the Administrative Agent notifies the Borrower and the Banks that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and the Notice of Borrowing or any Notice of Conversion given by the
Borrower with respect to Eurodollar Rate Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower shall pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to
such Bank, showing the basis for the calculation thereof, submitted to the
Borrower by such Bank shall, absent manifest error, be final and conclusive and
binding on the Borrower and such Bank) and (z) in the case of clause (iii)
above, take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Rate Loan is affected
by the circumstances described in Section 1.10(a)(ii) or Section 1.10(a)(iii),
the Borrower may (and in the case of a Eurodollar Rate Loan affected by the
circumstances described in Section 1.10(a)(iii) shall) either (i) if the
affected Eurodollar Rate Loan is then being made initially or pursuant to a
conversion, cancel said Borrowing by giving the Administrative Agent notice by
telephone (confirmed in writing) of the cancellation on the same date that the
Borrower was notified by the Bank or the Administrative Agent pursuant to
Section 1.10(a)(ii) or (iii), or (ii) if the affected Eurodollar Rate Loan is
then outstanding, upon at least three Business Days' written notice to the
Administrative Agent, require the affected Bank to convert such Eurodollar Rate
Loan into a Base Rate Loan or Loans, provided that, if more than one Bank is
affected at any time and the Borrower decides to require a conversion of any
Eurodollar Rate Loans into Base Rate Loans, then the Borrower must require all
such affected Banks to convert such affected Eurodollar Rate Loans into Base
Rate Loans pursuant to this Section 1.10(b).
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<PAGE> 14
(c) If any Bank determines at any time that compliance
with any applicable law or governmental rule, regulation, order or request
(whether or not having the force of law) as adopted, amended or modified after
the Effective Date concerning capital adequacy, or any change after the
Effective Date in interpretation or administration thereof by any governmental
authority, central bank or comparable agency, will have the effect of
increasing the amount of capital required or expected to be maintained by such
Bank or the parent corporation of such Bank based on the existence of such
Bank's Commitment hereunder or its obligations hereunder, then the Borrower
shall pay to such Bank, upon its written demand therefor, such additional
amounts as shall be required to compensate such Bank or such Bank's parent
corporation for the increased cost to such Bank or such Bank's parent
corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Bank's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower, which notice shall show the basis for calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c).
1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth the basis for
requesting such compensation and shall, absent manifest error, be final and
conclusive and binding on all the parties hereto), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Bank to fund its Eurodollar Rate Loans) which such
Bank may sustain: (i) if for any reason (other than a default by such Bank or
the Administrative Agent) a Borrowing of, or conversion from or into,
Eurodollar Rate Loans does not occur on a date specified therefor in a Notice
of Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower
or deemed rescinded pursuant to Section 1.10(a)); (ii) if any repayment or
conversion of any of its Eurodollar Rate Loans occurs on a date which is not
the last day of an Interest Period with respect thereto (including without
limitation any voluntary prepayment of Eurodollar Rate Loans
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<PAGE> 15
pursuant to Section 3.01 or any prepayment of a Bank's Eurodollar Rate Loans
pursuant to Section 2.04); (iii) if any prepayment of any of its Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
the Borrower; or (iv) as a consequence of (x) any other default by the Borrower
to repay its Eurodollar Rate Loans when required by the terms of this Agreement
or the Note of such Bank or (y) any action taken pursuant to Section 1.10(b).
1.12 Change of Applicable Lending Office. Each Bank agrees
that, upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), 1.10(c) or 3.04 with respect to such Bank, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another Applicable Lending Office for
any Loans affected by such event, provided that such designation is made on
such terms that such Bank and its Applicable Lending Office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequence
of the event giving rise to the operation of any such Section. Nothing in this
Section 1.12 shall affect or postpone any of the obligations of the Borrower or
the right of any Bank provided in Section 1.10 or 3.04.
1.13 Notice of Certain Costs. Notwithstanding anything in
this Agreement to the contrary, to the extent any notice required by Section
1.10 or 3.04 is given by any Bank more than 180 days after the occurrence of
the event giving rise to the additional cost, reduction in amounts, Taxes or
other additional amounts of the type described in such Section, such Bank shall
not be entitled to compensation under Section 1.10 or 3.04, as the case may be,
for any such amounts incurred or accruing prior to the giving of such notice to
the Borrower.
SECTION 2. FEES; TERMINATION OF COMMITMENTS.
2.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent a commitment fee (the "Commitment Fee") for the account of
the Banks pro rata on the basis of their respective Commitments for the period
from and including the Effective Date to but excluding the Commitment
Expiration Date computed at a rate per annum equal to 0.15% of the Total
Commitment as in effect from time to time. Accrued Commitment Fees shall be
due and payable quarterly in arrears on the last Business Day of each March,
June, September and December, and on the Commitment Expiration Date.
-10-
<PAGE> 16
(b) The Borrower agrees to pay to the Administrative
Agent and the Syndication Agent, for the account of the Administrative Agent
and the Syndication Agent, when and as due, such fees as have been, or are from
time to time, separately agreed upon.
2.02 Voluntary Termination of Total Commitment. Upon at
least ten days' prior notice to the Administrative Agent at its Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Banks), the Borrower shall have the right, without premium or penalty, to
terminate the Total Commitment in whole or in part, in a minimum amount of
$50,000,000 (and if larger in an integral multiple of $10,000,000), provided
that any such termination shall apply proportionately to reduce the Commitment
of each Bank.
2.03 Mandatory Termination of Commitments. The Commitment
of each Bank shall terminate on the Commitment Expiration Date after giving
effect to any incurrence of Loans on such date.
2.04 Replacement of Bank; Voluntary Prepayment of a Bank's
Loans. If any Bank is owed increased costs under Section 1.10 or 3.04 which in
the judgment of the Borrower are material in amount and which are not otherwise
requested generally by the other Banks, the Borrower shall have the right, if
no Event of Default then exists and such Bank has not withdrawn its request for
such compensation or changed its Applicable Lending Office with the effect of
eliminating such increased cost, within 30 days following the delivery by such
Bank to the Borrower of a request for compensation pursuant to Section 1.10 or
3.04, to either (i) provide, with the consent of the Administrative Agent
(which consent shall not be unreasonably withheld), another financial
institution to acquire the Loans of such Bank and all amounts owing to such
Bank under this Agreement, which acquisition of Loans and such other amounts
and replacement of such Bank shall be effected pursuant to an amendment to this
Agreement to be prepared by the Administrative Agent (which amendment each of
the Banks hereby agrees to execute) or (ii) upon five Business Days' prior
notice to the Administrative Agent and such Bank, prepay the outstanding Loans
of such Bank in full, (together with all other amounts owing to such Bank
hereunder including, without limitation, amounts payable pursuant to subsection
1.11). The Borrower agrees to notify each of the Banks of its determination to
prepay any Bank's Loans pursuant to clause (ii) of the preceding sentence of
this Section 2.04.
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<PAGE> 17
SECTION 3. PREPAYMENTS; PAYMENTS.
3.01 Voluntary Prepayments. The Borrower shall have the
right to prepay the Loans, without premium or penalty, in whole or in part from
time to time on the following terms and conditions: (i) the Borrower shall give
the Administrative Agent at its Notice Office at least three Business Days', in
the case of Eurodollar Rate Loans and two Business Days', in the case of Base
Rate Loans, prior notice of its intent to prepay the Loans, the amount of such
prepayment and the Type or Types of Loans to be prepaid and, in the case of
Eurodollar Rate Loans, the specific Borrowing or Borrowings pursuant to which
such Loans were made, which notice the Administrative Agent shall promptly
transmit to each of the Banks; (ii) each prepayment shall be in an aggregate
principal amount of at least $10,000,000 (and, if larger, an integral multiple
of $1,000,000), provided that any prepayment of Eurodollar Rate Loans shall
constitute a prepayment of one or more entire Borrowings of Eurodollar Rate
Loans; (iii) prepayments of Eurodollar Rate Loans made pursuant to this Section
3.01 may only be made on the last day of an Interest Period applicable thereto
unless concurrently with such prepayment any payments required to be made
pursuant to Section 1.11 as a result of such prepayment are made; and (iv) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans (provided that the Loans of one or more Banks
may be prepaid in full on a non-pro rata basis in connection with a prepayment
of the Loans of such Bank pursuant to Section 2.04). Prepayments pursuant to
this Section 3.01 shall be applied to reduce remaining scheduled prepayments of
the Loans pursuant to Section 3.02(b) in inverse order of maturity.
3.02 Mandatory Prepayments. (a) The Borrower shall repay
all Loans on the Maturity Date.
(b) The Borrower shall prepay the Loans on each date set
forth below by an aggregate amount equal to the amount set forth below opposite
each such date:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
December 31, 1996 $15,000,000
March 31, 1997 15,000,000
June 30, 1997 15,000,000
September 30, 1997 15,000,000
December 31, 1997 17,500,000
March 31, 1998 17,500,000
</TABLE>
-12-
<PAGE> 18
<TABLE>
<S> <C>
June 30, 1998 17,500,000
September 30, 1998 17,500,000
December 31, 1998 20,000,000
March 31, 1999 20,000,000
June 30, 1999 20,000,000
Maturity Date 35,000,000
</TABLE>
(c) With respect to each prepayment of Loans required by
Section 3.02(b), the Borrower may designate the Types of Loans which are to be
prepaid and the specific Borrowing(s) pursuant to which made; provided, that
each prepayment under Section 3.02(b) of any Loans made pursuant to a Borrowing
shall be applied pro rata among such Loans. In the absence of a designation of
Loans by the Borrower as described in this Section 3.02(c), the Administrative
Agent shall, subject to the above, make such designation in its sole discretion
with a view, but no obligation, to minimize breakage costs owing under Section
1.11.
3.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Bank or Banks
entitled thereto not later than 12:00 Noon (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office of the Administrative Agent. Whenever any payment to be made hereunder
or under any Note shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest shall be payable at the
applicable rate during such extension. Except in the case of prepayments
pursuant to Section 2.04, each prepayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans.
3.04 Net Payments. All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. All such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein (but excluding, except as provided below, any tax imposed on
or measured by the net income of a Bank pursuant to the laws of the
jurisdiction (or any political subdivision or taxing authority thereof or
therein) in which the principal office or Applicable Lending Office of such
Bank is
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<PAGE> 19
located) and all interest, penalties or similar liabilities with respect
thereto (collectively, "Taxes"). The Borrower shall also reimburse each Bank,
upon the written request of such Bank, for taxes imposed on or measured by the
net income of such Bank pursuant to the laws of the jurisdiction (or any
political subdivision or taxing authority thereof or therein) in which the
principal office or Applicable Lending Office of such Bank is located as such
Bank shall determine are payable by such Bank in respect of amounts paid to or
on behalf of such Bank pursuant to the preceding sentence. If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes and
such additional amounts as may be necessary so that every payment of all
amounts due hereunder or under any Note, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein
or in such Note. The Borrower will furnish to the Administrative Agent, within
45 days after the date the payment of any Taxes is due pursuant to applicable
law, certified copies of tax receipts evidencing such payment by the Borrower.
The Borrower will indemnify and hold harmless each Bank, and reimburse such
Bank upon its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank. Each Bank which is not a U.S. person for Federal income
tax purposes agrees, to the extent such Bank is entitled at such time to a
total or partial exemption from withholding that is required to be evidenced by
a United States Internal Revenue Service Form 1001 or 4224, to deliver to the
Administrative Agent (with a copy to the Borrower), prior to the Closing Date
and from time to time thereafter as requested by the Administrative Agent or
the Borrower, such Form 1001 or 4224 (as applicable) or any successor thereto,
completed in a manner reasonably satisfactory to the Administrative Agent and
the Borrower.
SECTION 4. CONDITIONS PRECEDENT.
4.01 Conditions to Effectiveness. This Agreement shall
become effective on the date (the "Effective Date") on which the Borrower and
each of the Banks shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Administrative Agent
at its Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephone (confirmed in writing), written or telex notice
(actually received) at such office that the same has been signed and mailed to
it.
4.02 Conditions to Incurrence of Loans. The obligation of
each Bank to make its Loan on the Closing Date
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<PAGE> 20
is subject, at the time of the making of each such Loan, to the satisfaction of
the following conditions:
(a) Notes. There shall have been delivered to the
Administrative Agent for the account of each of the Banks the appropriate Note
executed by the Borrower in the amount, maturity and as otherwise provided
herein.
(b) No Default; Representations and Warranties. On the
Closing Date and after giving effect to the Loans to be incurred on such date,
(i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
such date.
(c) Opinion of Counsel. The Administrative Agent shall
have received from Heller, Ehrman, White & McAuliffe, counsel to the Borrower,
an opinion addressed to each of the Banks and dated the Closing Date covering
the matters set forth in Exhibit C and such other matters incident to the
transactions contemplated herein as any Bank may reasonably request.
(d) Corporate Documents; Proceedings. (i) On the
Closing Date, the Administrative Agent shall have received a certificate, dated
the Closing Date, signed by the President, the Treasurer, or any Vice President
of the Borrower, and attested to by the Secretary or any Assistant Secretary of
the Borrower, in the form of Exhibit D with appropriate insertions, together
with copies of the Certificate of Incorporation and By-Laws of the Borrower and
the resolutions of the Borrower referred to in such certificate.
(ii) All corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated in
this Agreement and the other Credit Documents shall be satisfactory in form and
substance to the Banks, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings and governmental approvals, if any, which any Bank
reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.
(e) Consent Letter. The Administrative Agent shall have
received a letter from CT Corporation System,
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<PAGE> 21
presently located at 1633 Broadway, New York, New York 10019, substantially in
the form of Exhibit E, indicating its consent to its appointment by the
Borrower as the Borrower's agent to receive service of process as specified in
Section 11.08.
(f) Payment of Fees. All costs, fees and expenses, and
all other compensation contemplated by this Agreement, due to the Agents
(including, without limitation, legal fees and expenses) and the Banks shall
have been paid to the extent due.
(g) Existing Credit Agreement; Replacement Credit
Facility. On or prior to the Effective Date, (i) all loans under the Existing
Credit Agreement shall have been repaid in full, together with interest
thereon, all other amounts owing pursuant to the Existing Credit Agreement
shall have been repaid in full, and all commitments under the Existing Credit
Agreement shall have been terminated; and (ii) the Borrower shall have entered
into a new revolving credit facility in replacement of the Existing Credit
Agreement, which new revolving credit facility shall have aggregate commitments
of at least $100,000,000 and a maturity not earlier than 364 days following the
Effective Date; and the Administrative Agent shall have received evidence in
form, scope and substance satisfactory to it that the matters set forth in this
Section 4.02(g) have been satisfied.
(h) Senior Notes. On or prior to the Closing Date, the
Senior Notes shall have been redeemed, or concurrently with the incurrence of
Loans on the Closing Date shall be redeemed, in full in accordance with the
terms thereof, and all accrued but unpaid interest thereon and all redemption
premium or make-whole payable in connection with such redemption shall have
been or shall be paid in full; and the Administrative Agent shall have received
evidence in form, scope and substance satisfactory to it that the matters set
forth in this Section 4.02(h) have been satisfied.
(i) Notice of Borrowing. Prior to the making of each
Loan, the Administrative Agent shall have received a Notice of Borrowing with
respect thereto meeting the requirements of Section 1.03.
The acceptance of the benefits of each Loan shall constitute a representation
and warranty by the Borrower to each of the Banks that all the conditions
specified in Section 4.02(b) exist as of that time. All the legal opinions and
other documents and papers referred to in this Section 4.02, unless
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<PAGE> 22
otherwise specified, shall be delivered to the Administrative Agent at the
Administrative Agent's Notice Office for the account of each of the Banks and,
except for the Notes, in sufficient counterparts for each of the Banks and
shall be satisfactory in form and substance to the Banks.
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
In order to induce the Banks to enter into this Agreement and
to make the Loans, the Borrower makes the following representations, warranties
and agreements as of the Effective Date, which shall survive the execution and
delivery of this Agreement and the Notes and the making of the Loans:
5.01 Corporate Status. Each of the Borrower and its
Material Subsidiaries (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its incorporation, (ii)
has the power and authority to own its property and assets and to transact the
business in which it is engaged and (iii) is duly qualified as a foreign
corporation and in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualification.
5.02 Corporate Power and Authority. The Borrower has the
corporate power to execute, deliver and perform the terms and provisions of
each of the Credit Documents and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each of the Credit
Documents. The Borrower has, or in the case of the Notes, by the Closing Date
will have, duly executed and delivered each of the Credit Documents, and each
such Credit Document constitutes or, in the case of the Notes when executed and
delivered will constitute, its legal, valid and binding obligation enforceable
in accordance with its terms.
5.03 No Violation. Neither the execution, delivery or
performance by the Borrower of the Credit Documents, nor compliance by it with
the terms and provisions thereof, nor the use of the proceeds of the Loans (i)
will contravene any provision of any law, statute, rule or regulation or any
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict or be inconsistent with or result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation
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<PAGE> 23
to create or impose) any Lien upon any of the property or assets of the
Borrower or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement, loan agreement or any other
agreement, contract or instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws of the Borrower or any of its
Subsidiaries.
5.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made prior to the Effective Date), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Credit Document or (ii) the
legality, validity, binding effect or enforceability of any Credit Document.
5.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; etc. (a) The consolidated statements of financial
condition of the Borrower and its Consolidated Subsidiaries at June 30, 1994
and the related consolidated statements of income and retained earnings and
cash flows of the Borrower and its Consolidated Subsidiaries for the fiscal
year ended on such date and heretofore furnished to the Banks present fairly
the consolidated financial condition of the Borrower and its Consolidated
Subsidiaries at the date of such statements of financial condition and the
consolidated results of the operations of the Borrower and its Consolidated
Subsidiaries for such fiscal year. All such financial statements have been
prepared in accordance with GAAP consistently applied. Since June 30, 1994,
there has been no material adverse change in the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower or of the Borrower and its Subsidiaries taken as a whole.
(b) The consolidated statements of financial condition of
Raynet and its Consolidated Subsidiaries at June 30, 1994 and the related
consolidated statements of income and retained earnings and cash flows of
Raynet and its Consolidated Subsidiaries for the fiscal year ended on such date
and heretofore furnished to the Banks present fairly the consolidated financial
condition of Raynet and its Consolidated Subsidiaries at the date of such
statements of financial condition and the consolidated results of the
operations of Raynet and its Consolidated Subsidiaries for
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<PAGE> 24
such fiscal year. All such financial statements have been prepared in
accordance with GAAP consistently applied.
(c) Except as fully reflected in the financial statements
referred to in Section 5.05(a) or (b) or in Schedule III, there were as of the
Effective Date no liabilities or obligations with respect to the Borrower or
any of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or
in aggregate, would be material to the Borrower or to the Borrower and its
Subsidiaries taken as a whole. Except as set forth in Schedule III, as of the
Effective Date the Borrower does not know of any basis for the assertion
against the Borrower or any of its Subsidiaries of any liability or obligation
of any nature whatsoever that is not fully reflected in the financial
statements referred to in Section 5.05(a) or (b) which, either individually or
in the aggregate, could be material to the Borrower or to the Borrower and its
Subsidiaries taken as a whole.
5.06 Litigation. Except as set forth on Schedule IV,
there are no actions, suits or proceedings pending or, to the best knowledge of
the Borrower, threatened (i) with respect to any Credit Document or (ii) that
are reasonably likely to materially and adversely affect the business,
operations, property, assets, condition (financial or otherwise) or prospects
of the Borrower or of the Borrower and its Subsidiaries taken as a whole.
5.07 True and Complete Disclosure. All factual
information (taken as a whole) heretofore or contemporaneously furnished by or
on behalf of the Borrower in writing to any Bank (including without limitation
all information contained in the Credit Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of the Borrower in writing to any Bank will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided.
5.08 Use of Proceeds; Margin Regulations. At least 95% of
the proceeds of the Loans shall be used by the Borrower to redeem its Senior
Notes and to pay accrued but unpaid interest thereon, the premium or make-whole
payable to
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the holders of the Senior Notes in connection with such redemption and to pay
other fees and expenses related to the foregoing. Any proceeds of Loans not
used for the purposes set forth in the preceding sentence shall be used by the
Borrower for general corporate purposes, provided that no part of the proceeds
of any Loan will be used by the Borrower to purchase or carry any Margin Stock
or to extend credit to others for the purpose of purchasing or carrying any
Margin Stock. Neither the making of any Loan nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of Regulations G,
T, U or X of the Board of Governors of the Federal Reserve System.
5.09 Tax Returns and Payments. Each of the Borrower and
its Subsidiaries has filed all tax returns required to be filed by it and has
paid all income taxes payable by it which have become due pursuant to such tax
returns and all other taxes and assessments payable by it which have become
due, other than (x) those not yet delinquent and except for those contested in
good faith and for which adequate reserves have been established and (y) state,
local or foreign taxes the failure to pay which is not reasonably likely to
have a material adverse effect on the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower or of the
Borrower and its Subsidiaries taken as a whole. Each of the Borrower and its
Subsidiaries has paid, or has provided adequate reserves (in the good faith
judgment of the management of the Borrower) for the payment of, all federal and
state income taxes applicable for all prior fiscal years and for the current
fiscal year to the date hereof.
5.10 Compliance with ERISA. Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability, and no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Code; neither the Borrower or any Subsidiary or ERISA
Affiliate has incurred any material liability to or on account of a Plan
pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201 or
4204 of ERISA or based upon the actual knowledge of the Borrower, its
Subsidiaries and ERISA Affiliates expects to incur any liability under any of
the foregoing Sections with respect to any such Plan; no proceedings have been
instituted to terminate any Plan; no condition exists which presents a material
risk to the
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<PAGE> 26
Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no Lien imposed under the Code or ERISA on the assets of
the Borrower or any of its Subsidiaries or any ERISA Affiliate exists or in the
reasonable opinion of the Borrower is likely to arise on account of any Plan;
and the Borrower and its Subsidiaries do not maintain or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees (other than as required by Section 601
of ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA); except to the extent that in any such case the obligations with respect
to any of the foregoing, or the occurrence of one or more of the foregoing
events, could not reasonably be expected to have either a material adverse
effect on the ability of the Borrower to perform its obligations under this
Agreement or a material adverse effect on the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower or of
the Borrower and its Subsidiaries taken as a whole.
5.11 Subsidiaries. On the Effective Date, the corporations
listed on Schedule V are the only Subsidiaries of the Borrower. Schedule V
correctly sets forth, as of the Effective Date, the percentage ownership
(direct and indirect) of the Borrower in each class of capital stock of each of
its Subsidiaries and also identifies the direct owner thereof. Schedule V also
correctly sets forth, as of the Effective Date, the Material Subsidiaries of
the Borrower.
5.12 Compliance with Statutes, etc. Each of the Borrower and
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliances as would not, in the aggregate, have a material adverse effect
on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.
5.13 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
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<PAGE> 27
5.14 Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5.15 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could have a material
adverse effect on the Borrower or on the Borrower and its Subsidiaries taken as
a whole. There is (i) no significant unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of
the Borrower, threatened against any of them, before the National Labor
Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Borrower or any
of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries and (iii) to the best knowledge
of the Borrower, no union representation question existing with respect to the
employees of the Borrower or any of its Subsidiaries and, to the best knowledge
of the Borrower, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not have a material adverse
effect on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.
5.16 Patents, Licenses, Franchises and Formulas. Each of the
Borrower and its Subsidiaries owns all the patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas, or
rights with respect to the foregoing, and has obtained assignments of all
leases and other rights of whatever nature, necessary for the present conduct
of its business, without any known conflict with the rights of others which, or
the failure to obtain which, as the case may be, would be reasonably likely to
result in a material adverse effect on the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower or of
the Borrower and its Subsidiaries taken as a whole.
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<PAGE> 28
5.17 Compliance with Environmental Laws. (a) Each of the
Borrower and its Subsidiaries is, and will continue to be, in full compliance
with all applicable federal, state and local environmental laws, regulations
and ordinances governing its business, products, properties or assets with
respect to all discharges into the ground and surface water, emissions into the
ambient air and generation, accumulation, storage, treatment, transportation,
labeling or disposal of waste materials or process byproducts, except for
violations and failures to comply which, individually or in the aggregate do
not, and (so far as the Borrower can now foresee) in the future will not,
materially and adversely affect (i) except as set forth on Schedule VI hereto,
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole, or (ii) the ability of the Borrower to perform its obligations under
this Agreement or the Notes. Except as set forth on Schedule VI hereto,
neither the Borrower nor any of its Subsidiaries is a party in any proceeding
in which it may be held liable for any penalties, fines or forfeitures for the
failure to comply with any of the foregoing nor does the Borrower know of any
basis for the assertion of any such penalty, fine or forfeiture that, either
individually or in the aggregate, materially and adversely affects or could (so
far as the Borrower can now foresee) materially and adversely affect the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole or of any Material Subsidiary of the Borrower. All licenses, permits or
registrations required for the business of the Borrower and its Subsidiaries,
as presently conducted and proposed to be conducted, under any federal, state
or local environmental laws, regulations or ordinances have been obtained or
made, other than any such licenses, permits or registrations the failure to
obtain or make which, either individually or in the aggregate, does not
materially and adversely affect, and could not (so far as the Borrower can now
foresee) materially and adversely affect, (i) the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower or of the Borrower and its Subsidiaries taken as a whole, or (ii) the
ability of the Borrower to perform its obligations under this Agreement or the
Notes (and each of the Borrower and its Subsidiaries is in compliance with all
such licenses, permits and registrations).
(b) No release, emission or discharge into the
environment of hazardous substances, as defined under the Comprehensive
Environmental Response, Compensation, and
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<PAGE> 29
Liability Act, as amended, or hazardous waste, as defined under the Resource
Conservation and Recovery Act, or air pollutants as defined under the Clean
Water Act, has occurred or is presently occurring on or from any property owned
or leased by the Borrower or its Subsidiaries in excess of federal, state or
local permitted releases or reportable quantities, or other concentrations,
standards or limitations under the foregoing laws or any state or local law
governing the protection of health and the environment or under any other
federal, state or local laws or regulations (then or now applicable, as the
case may be) other than any such release, emissions or discharges which, either
individually or in the aggregate, do not materially and adversely affect, or
could not (so far as the Borrower can now foresee) materially and adversely
affect, (i) the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole or of any Material Subsidiary of the Borrower, or (ii) the
ability of the Borrower to perform its obligations under this Agreement or the
Notes.
(c) Except as set forth on Schedule VI hereto, neither
the Borrower nor any of its Subsidiaries has ever caused or been held legally
responsible for any release or threatened release of any hazardous substance,
or received notification from any federal, state or other governmental
authority of any release or threatened release, or that it may be required to
pay any costs or expenses incurred or to be incurred in connection with any
efforts to mitigate the environmental impact of any release or threatened
release of any hazardous substance from any site or structure owned, occupied
or operated by the Borrower or any of its Subsidiaries that, either
individually or in the aggregate, materially and adversely affects or could (so
far as the Borrower can now foresee) materially and adversely affect, (i) the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole or of any Material Subsidiary of the Borrower or (ii) the ability of the
Borrower to perform its obligations under this Agreement or the Notes.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the
Effective Date and until the Total Commitment has terminated and the Loans and
the Notes, together with
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interest, Fees and all other obligations incurred hereunder are paid in full:
6.01 Information Covenants. The Borrower will furnish to
the Administrative Agent and each Bank:
(a) Quarterly Financial Statements. Within 45 days (or
90 days in the case of the fourth fiscal quarter) after the close of
each quarterly accounting period in each fiscal year of the Borrower,
the consolidated statements of financial condition of the Borrower and
its Consolidated Subsidiaries as at the end of such quarterly period
and the related consolidated statements of income and retained
earnings and statements of cash flows for such quarterly period and
for the elapsed portion of the fiscal year ended with the last day of
such quarterly period, in each case setting forth comparative figures
for the related periods in the prior fiscal year, all of which shall
be certified by the Treasurer, Controller or Chief Financial Officer
of the Borrower, subject to normal year-end audit adjustments;
provided, that so long as the Borrower shall be required to file
reports with the SEC pursuant to the Securities Exchange Act of 1934,
as amended from time to time, the delivery of its Quarterly Report on
Form 10-Q shall satisfy the requirements of this Section 6.01(a) with
respect to consolidated financial statements.
(b) Annual Financial Statements. Within 90 days after
the close of each fiscal year of the Borrower, the consolidated
statements of financial condition of the Borrower and its Consolidated
Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statements
of cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year and certified by
Price Waterhouse or other independent certified public accountants of
recognized national standing reasonably acceptable to the Required
Banks, in each case together with a report of such accounting firm
stating that in the course of its regular audit of the financial
statements of the Borrower, which audit was conducted in accordance
with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has
occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof; provided, that so
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<PAGE> 31
long as the Borrower shall be required to file reports with the SEC
pursuant to the Securities Exchange Act of 1934, as amended from time
to time, the delivery of its Annual Report on Form 10-K shall satisfy
the requirements of this Section 6.01(b) to the extent that the
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries are audited and the opinion with respect thereto is
unqualified.
(c) Officer's Certificates. At the time of the delivery
of the financial statements provided for in Section 6.01(a) and (b), a
certificate of the Treasurer, Controller or Chief Financial Officer of
the Borrower to the effect that, to the best of his knowledge, no
Default or Event of Default has occurred and is continuing or, if any
Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof, which certificate shall set forth the
calculations required to establish (i) whether the Borrower was in
compliance with the provisions of Sections 7.09, 7.10 and 7.11, and
(ii) the Applicable Eurodollar Rate Margin at the end of such fiscal
quarter or year, as the case may be.
(d) Notice of Default or Litigation. Promptly, and in
any event within five Business Days after an officer of the Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or Event of Default, (ii) any litigation
or governmental proceeding pending (x) against the Borrower or any of
its Subsidiaries which could materially and adversely affect the
business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole or (y) with respect to any Credit
Document and (iii) any other event which is likely to materially and
adversely affect the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower or of the
Borrower and its Subsidiaries taken as a whole.
(e) Raynet Financial Statements. As long as the Borrower
owns at least 10% of the equity or voting interest in Raynet: (i)
Within 45 days (or 90 days in the case of the fourth fiscal quarter)
after the close of each quarterly accounting period in each fiscal
year of Raynet, the consolidated statements of financial condition of
Raynet and its Subsidiaries as at the end of such quarterly period and
the related consolidated
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<PAGE> 32
statements of income and retained earnings and statements of cash
flows for such quarterly period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period, in each
case setting forth comparative figures for the related periods in the
prior fiscal year; and (ii) within 90 days after the close of each
fiscal year of Raynet, the consolidated statements of financial
condition of Raynet and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained
earnings and statements of cash flows for such fiscal year, in each
case setting forth comparative figures for the preceding fiscal year
and certified by independent certified public accountants of
recognized international standing (it being understood and agreed that
the Banks shall maintain as confidential in accordance with customary
banking practices any nonpublic information delivered to the Banks
pursuant to this clause (e)).
(f) Leases, Preferred Stock. Promptly, written notice of
any event of default (or any event which with notice or lapse of time
or both would constitute an event of default) under any lease with a
monthly rent (or effective monthly rent) of $50,000 or more or
preferred stock for or in respect of which the Borrower or any of its
Subsidiaries may be liable; provided, however, that with respect to
any such lease, notice pursuant to this Section 6.01(f) need not be
given with respect to any such event of default (or event which with
notice or lapse of time or both would constitute an event of default)
unless as a result thereof the lessor has taken any steps to terminate
such lease or unless as a consequence thereof it is reasonably likely
that such lease will be terminated or that there will be a material
impairment of the right of the Borrower or such Subsidiary, as the
case may be, to the use or enjoyment of the property subject to such
lease.
(g) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, which the Borrower shall file with the Securities and
Exchange Commission or any governmental agencies substituted therefor
(the "SEC").
(h) Notice of Fixed Charge Coverage Deficiency. Until
such time as the Senior Notes shall have been redeemed in full,
promptly upon and in no event later
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<PAGE> 33
than five Business Days after any Executive Officer shall have
knowledge of any Fixed Charge Coverage Deficiency, notice of the
occurrence of such Fixed Charge Coverage Deficiency.
(i) Other Information. From time to time, such other
information or documents (financial or otherwise) as any Bank may
reasonably request.
6.02 Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or any Bank to visit and inspect, under guidance of
officers of the Borrower or such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of record and account of
the Borrower or such Subsidiary and discuss the affairs, finances and accounts
of the Borrower or such Subsidiary with, and be advised as to the same by, its
and their officers, all at such reasonable times and intervals and to such
reasonable extent as the Administrative Agent or such Bank may request.
6.03 Maintenance of Property, Insurance. The Borrower will, and
will cause each of its Material Subsidiaries to, (i) keep all property useful
and necessary in its business in good working order and condition, (ii)
maintain with financially sound insurers of nationally recognized stature and
responsibility having at the date of any determination a rating of at least
"A-" according to A.M. Best Company's ("Best") rating of property/casualty
insurance companies (or, in jurisdictions where Best does not provide such
ratings, having an analogous rating by the entity in such jurisdiction
performing services similar to those provided by Best and having a reputation
in such jurisdiction comparable to that of Best, or if there is no such entity
in such jurisdiction, with insurers that, in the good faith judgment of
management, are of similar quality, stature and responsibility), insurance with
respect to its properties and business of such a nature, with such terms and in
such amounts, as a prudent person would maintain with respect to similar
properties and a similar business, and, in any event, will maintain insurance
on all its property of a character usually insured by corporations engaged in
the same or a similar business similarly situated against loss or damage of
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<PAGE> 34
the kinds and in the amounts customarily insured against (and with customary
deductibles) and for such corporations, and carry with such insurers in
customary amounts and with customary deductibles, such other insurance,
including public liability insurance, as is usually carried by corporations
engaged in the same or a similar business similarly situated; provided,
however, that in the event that the Borrower self insures through a captive
insurer or other arrangement intended to replace insurance satisfying the
foregoing requirements of this clause (ii), adequate insurance reserves will be
maintained, and (iii) furnish to each Bank, upon written request, full
information as to the insurance carried.
6.04 Corporate Franchises. The Borrower will, and will cause
each of its Material Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 6.04 shall prevent (i) any transaction permitted under
Section 7.02 or (ii) the withdrawal by the Borrower or any of its Material
Subsidiaries of its qualification as a foreign corporation in any jurisdiction
where such withdrawal is not reasonably likely to have a material adverse
effect on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole.
6.05 Compliance with Statutes, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, in the aggregate, have a
material adverse effect on the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower or of the
Borrower and its Subsidiaries taken as a whole.
6.06 ERISA. As soon as possible and, in any event, within 10
days after the Borrower or any of its Subsidiaries or ERISA Affiliates knows or
has reason to know any of the following, the Borrower will deliver to each of
the Banks a certificate of the Treasurer, Controller or Chief Financial Officer
of the Borrower setting forth details as to
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<PAGE> 35
such occurrence and such action, if any, which the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
Administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency has been incurred or an application may be or
has been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan; that a Plan has been or may be terminated or declared
insolvent under Title IV of ERISA; that a multiemployer plan, as defined in
Section 4001 of ERISA, has been or may be reorganized or partitioned; that a
Plan has an Unfunded Current Liability giving rise to a Lien under ERISA; that
proceedings may, in the reasonable opinion of the Borrower, be or have been
instituted to terminate a Plan; that a proceeding has been instituted pursuant
to Section 515 of ERISA to collect a delinquent contribution to a Plan; or that
the Borrower, any of its Subsidiaries or ERISA Affiliates will or may incur any
liability (including any contingent or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201 or 4204 of ERISA or with respect to a Plan under Section 4971 or
4975 of the Code or Sections 409 or 502(i) or 502(l) of ERISA. Upon request,
the Borrower will deliver to each of the Banks a complete copy of the annual
report (Form 5500) of each Plan required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, copies of annual reports and any other
notices received by the Borrower or any of its Subsidiaries or any ERISA
Affiliate required to be delivered to the Banks hereunder shall be delivered to
the Banks no later than 10 days after the later of the date such report or
notice has been filed with the Internal Revenue Service or the PBGC, given to
Plan participants or received by the Borrower or such Subsidiary or such ERISA
Affiliate.
6.07 End of Fiscal Years; Fiscal Quarters. The Borrower
shall cause (i) each of its, and each of its Material Subsidiaries', fiscal
years to end on June 30 and (ii) each of its, and each of its Material
Subsidiaries', fiscal quarters to end on or about March 31, June 30, September
30 and December 31.
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<PAGE> 36
6.08 Performance of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, perform all its obligations under the terms
of each mortgage, indenture, security agreement and other debt instrument by
which it is bound, except such nonperformances as could not in the aggregate
have a material adverse effect on the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower or of the
Borrower and its Subsidiaries taken as a whole.
6.09 Payment of Taxes and Claims. The Borrower will, and
will cause each of its Material Subsidiaries to, pay and discharge promptly
when due:
(a) all taxes, assessments and governmental charges and
levies imposed upon it, its income or profits or any of its
properties, before the same shall become delinquent; and
(b) all lawful claims of materialmen, mechanics,
carriers, warehousemen, landlords and other similar persons for labor,
materials, supplies and rentals that, if unpaid, might by law become a
Lien upon any of its property;
provided, however, that none of the foregoing need be paid while the same is
being contested in good faith by appropriate proceedings diligently conducted
so long as (i) adequate reserves shall have been established in accordance with
GAAP with respect thereto, (ii) title of the Borrower or its Material
Subsidiary, as the case may be, to the particular property shall not be
divested thereby and (iii) the right of the Borrower or its Material
Subsidiary, as the case may be, to use the particular property shall not be
materially and adversely affected thereby. Each of the Borrower and its
Material Subsidiaries will file all federal, state and local tax returns and
all other tax reports as required by law except, in the case of any such state,
local or foreign tax returns or other tax reports, the failure to file which is
not reasonably likely to have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects
of the Borrower or of the Borrower and its Subsidiaries taken as a whole.
SECTION 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that on the Effective Date
and until the Total Commitment has terminated
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<PAGE> 37
and the Loans and the Notes, together with interest, Fees and all other
obligations incurred hereunder are paid in full:
7.01 Changes in Business. The Borrower and its
Subsidiaries, taken as a whole, will not materially alter the character of
their business from that conducted by the Borrower and its Subsidiaries taken
as a whole on the Effective Date.
7.02 Consolidation, Merger, Sale of Assets, etc. The
Borrower will not, and will not permit any Subsidiary to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (in one transaction or a series
of related transactions) all or any part of its property or assets, except that
the following shall be permitted:
(a) sales or dispositions of property or assets in the
ordinary course of business;
(b) so long as no Default or Event of Default exists or
would exist immediately after giving effect thereto, (i) the merger or
consolidation of any Wholly-Owned Subsidiary of the Borrower with or
into the Borrower or another Wholly- Owned Subsidiary of the Borrower
so long as in the case of any merger or consolidation involving the
Borrower, the Borrower is the surviving corporation and (ii) the
dissolution, liquidation or winding-up of any non-Material Subsidiary
of the Borrower;
(c) so long as no Default or Event of Default exists or
would exist immediately after giving effect thereto, the merger or
consolidation of any corporation with the Borrower or any Subsidiary
of the Borrower, provided that the Borrower or such Subsidiary is the
surviving corporation of such merger or consolidation and, in the case
of any merger of a Subsidiary, the ownership percentage of the
Borrower is not reduced as a result of such merger or consolidation;
(d) the Borrower may sell or otherwise dispose of all or
any part of Raynet; and
(e) so long as no Default or Event of Default exists or
would exist immediately after giving effect thereto, sales and
dispositions by the Borrower and its Subsidiaries outside of the
ordinary course of business (including, without limitation, sales and
dispositions
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<PAGE> 38
by means of a merger or consolidation of a Subsidiary of the Borrower
in which such Subsidiary is not the surviving entity), provided that
the (i) aggregate amount of assets sold or otherwise disposed of
pursuant to this Section 7.02(e) (determined based on book value at
the time of sale or disposition) after the Effective Date shall not
exceed an amount equal to 20% of the Borrower's Consolidated Net Worth
at the time of any such sale or disposition and (ii) the Borrower may
not sell or dispose of any Subsidiary or group of related Subsidiaries
(in a single sale or a series of related sales) if the portion of the
Borrower's Consolidated Net Income for the immediately preceding
fiscal year attributable to such Subsidiary or Subsidiaries is 20% or
more.
7.03 Liens. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets of any kind (real or personal,
tangible or intangible) of the Borrower or any such Subsidiary whether now
owned or hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to the Borrower or any of its Subsidiaries) or assign any right to
receive income, or file or permit the filing of any financing statement under
the UCC or any other similar notice of Lien under any similar recording or
notice statute, except:
(a) Liens existing on the Effective Date and set forth on
Schedule VII hereto;
(b) Liens securing current taxes, assessments, or other
governmental charges or levies or the claims of carriers,
warehousemen, landlords, materialmen, mechanics and other like
Persons; provided, however, that (i) any such Lien shall not be
created in connection with and shall not secure Indebtedness for Money
Borrowed; (ii) any obligation secured by any such Lien shall not be
overdue and shall be payable without penalty or, if overdue, is being
contested in good faith by appropriate actions or proceedings during
which there is no right to exercise remedies and adequate book
reserves have been established in accordance with GAAP; and (iii) all
such Liens, pledges and deposits shall not in the aggregate materially
impair the use or value of the properties of the Borrower or any
Subsidiary in the operation of the respective businesses of the
Borrower
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<PAGE> 39
and its Subsidiaries; and provided, further, that this clause (b)
shall not be deemed to permit any Liens which may be imposed pursuant
to Section 4068 of ERISA;
(c) Liens incidental to the ordinary course of business
or the ownership of properties and assets, Liens, deposits or pledges
securing the performance of bids, tenders or trade contracts, and
Liens securing statutory obligations (including those arising under
workers' compensation, unemployment insurance and other social
security legislation) or surety or appeal bonds in connection with
proceedings in which the Borrower or any Subsidiary is a party;
provided, however , that (i) any such Lien shall not be created in
connection with and shall not secure Indebtedness for Money Borrowed;
(ii) any obligation secured by any such Lien shall not be overdue or,
if overdue, is being contested in good faith by appropriate actions or
proceedings during which there is no right to exercise remedies and
adequate book reserves have been established in accordance with GAAP;
and (iii) all such Liens, pledges and deposits shall not in the
aggregate materially impair the use or value of the properties of the
Borrower or any Subsidiary in the operation of the respective
businesses of the Borrower and its Subsidiaries; and, provided
further, that this clause (c) shall not be deemed to permit any Liens
which may be imposed pursuant to Section 4068 of ERISA;
(d) minor survey exceptions and minor encumbrances,
easements or reservations, or rights of others for rights- of-way,
utilities and other similar purposes, or zoning or other restrictions
as to the use of real properties, which are necessary for the conduct
of the activities of the Borrower and its Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair the use of any such properties in the operation of
the business of the Borrower or any of its Subsidiaries;
(e) Liens originally created to secure payment of a
portion of the purchase price relating to any real property or
improvements thereon or equipment or any interest therein, which the
Borrower or any Subsidiary shall acquire after the date hereof, but,
with respect to any such Lien, which property, improvements, equipment
or interest shall not be acquired more than 180 days prior to the date
of the creation of such Lien; provided, however, that (i) no such Lien
shall attach to
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<PAGE> 40
any other asset at the time owned by the Borrower or any Subsidiary,
(ii) the outstanding principal amount of Indebtedness secured by any
such Lien shall not exceed the lesser of (x) the cost and (y) the fair
market value of property, improvements, equipment or interest to which
such Lien attaches, and (iii) to the extent any such Indebtedness is
of a Subsidiary, such Indebtedness secured by any such Lien shall have
been incurred in compliance with the provisions of Section 7.04;
(f) Liens of or resulting from any judgments or decrees
so long as no Event of Default exists under Section 8.07;
(g) Liens granted by a Subsidiary in favor of the
Borrower or another Subsidiary;
(h) Liens securing Indebtedness of a corporation
outstanding on the date such corporation (i) first becomes a
Subsidiary of the Borrower, (ii) merges into or consolidates with the
Borrower or any Subsidiary pursuant to the provisions of Section 7.02
hereof, or (iii) is acquired by the purchase of all or substantially
all of such corporation's assets (the "acquired assets") and the
assumption of such Indebtedness of such corporation by the Borrower or
any Subsidiary; provided, however , that such Liens are not applicable
to the Borrower or any other Subsidiary or the assets (other than the
acquired assets) of the Borrower or any Subsidiary; and provided
further, that none of such Liens is created prior to and in
anticipation of such designation, merger, consolidation or
acquisition;
(i) Liens in favor of banks which have issued documentary
letters of credit for the account of the Borrower or any of its
Subsidiaries, so long as such Liens attach only to the goods subject
to such letters of credit and the documents under which such goods are
shipped;
(j) Liens in connection with Capital Leases, so long as (i)
such Liens attach only to the assets subject to such Capital Leases
and (ii) such Capital Leases are permitted to exist under the terms of
this Agreement;
(k) the extension, renewal or replacement of any Lien
specified in the foregoing clauses (a) through (j) provided, however,
that (i) no property shall become subject to such extended, renewed or
replacement Lien
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<PAGE> 41
that was not subject to the Lien extended; renewed or replaced, (ii)
the aggregate principal amount of Indebtedness secured by any such
extended, renewed or replacement Lien shall not be increased by such
extension, renewal or replacement, (iii) the Indebtedness secured by
such Lien could be incurred in compliance with this Agreement at the
time of such extension, renewal or replacement and (iv) after giving
effect thereto no Default or Event of Default shall exist; and
(l) Liens not permitted by the foregoing clauses (a)
through (k) of this Section 7.03 securing any Indebtedness or other
obligations of the Borrower or any of its Subsidiaries; provided,
however, that after giving effect to such Indebtedness or other
obligations, the aggregate outstanding amount of such Indebtedness and
other obligations plus, without duplication, the aggregate amount of
Indebtedness for Money Borrowed of Subsidiaries of the Borrower
outstanding pursuant to Section 7.04(b), shall not exceed an amount
equal to the greater of (x) $75,000,000 and (y) 10% of Consolidated
Tangible Net Worth at any time;
provided, that in no event shall the Borrower and/or its Subsidiaries create,
incur, assume or suffer to exist at any time Liens in respect of their accounts
receivable in excess of 10% of the aggregate face amount of the accounts
receivable of the Borrower and its Subsidiaries on a consolidated basis at such
time.
7.04 Indebtedness. The Borrower will not permit any of its
Subsidiaries to contract, create, incur, assume or suffer to exist any
Indebtedness for Money Borrowed, except:
(a) Indebtedness for Money Borrowed of any Subsidiary of
the Borrower owing to the Borrower or to any other Subsidiary of the
Borrower; and
(b) other Indebtedness for Money Borrowed of Subsidiaries
of the Borrower, so long as the sum of the aggregate outstanding
principal amount of such Indebtedness for Money Borrowed for all such
Subsidiaries plus (without duplication) the aggregate outstanding
principal amount of all Indebtedness and other obligations secured by
Liens permitted under Section 7.03(l), does not exceed an amount equal
to the greater of (x) $75,000,000 and (y) 10% of Consolidated Tangible
Net Worth at any time.
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<PAGE> 42
7.05 Advances, Investments and Loans. The Borrower will not,
and will not permit any of its Subsidiaries to, lend money or make advances to
any Person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any Person, except:
(a) travel advances to employees made in the ordinary
course of business;
(b) loans to employees in connection with the purchase by any
such employee of shares of the Borrower's or any Subsidiary's capital
stock pursuant to an employee stock purchase plan or employee stock
option plan;
(c) loans in connection with employee relocation expenses,
loans to foreign service employees and other loans to employees made
in the ordinary course of business, so long as the aggregate
outstanding principal amount of all such loans (without giving effect
to any write-downs or write-offs thereof) shall not exceed
$20,000,000;
(d) so long as no Default or Event of Default exists or
would exist immediately after giving effect thereto, investments by
the Borrower or any Subsidiary in, to, or in favor of the Borrower or
any other Subsidiary of the Borrower (but in any event excluding
investments in Raynet);
(e) any investment by the Borrower or any of its Subsidiaries
permitted pursuant to the Borrower's Guidelines for Short Term
Investments (in the form delivered to the Banks prior to the Effective
Date and as thereafter modified or amended from time to time by action
of the Board of Directors of the Borrower or by a Committee of the
Board of Directors of the Borrower);
(f) so long as no Default or Event of Default exists or would
exist immediately after giving effect thereto, cash investments and
advances by the Borrower and/or any of its Subsidiaries (other than
Raynet) in, to, or in favor of Raynet, provided that the aggregate
amount of such investments and advances made in any period set forth
below shall not exceed the amount set forth opposite such period
below:
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<PAGE> 43
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
Effective Date to
and including June 30, 1995 $75,000,000
Fiscal year ending June 30, 1996 $75,000,000
Fiscal year ending June 30, 1997 $50,000,000
Fiscal year ending June 30, 1998 $25,000,000
Fiscal years ending thereafter 0
</TABLE>
; provided that in the event that Raynet ceases to be a Wholly-Owned
Subsidiary of the Borrower, each of the permitted investment amounts
set forth above for the period in which such ownership is first
reduced and each period thereafter shall be multiplied by a fraction
equal to the then percentage ownership of the Borrower in Raynet; and
(g) so long as no Default or Event of Default exists or would
exist immediately after giving effect thereto, additional investments,
advances and loans (other than in, to, or in favor of Raynet), so long
as the aggregate outstanding amount of such investments, advances and
loans at any time (without giving effect to any write-downs or
write-offs thereof) shall not exceed an amount equal to 5% of
Consolidated Tangible Net Worth at such time.
7.06 Restricted Payments. Until such time as the Borrower
ceases to own at least a majority of the equity or voting interest of Raynet,
the Borrower will not declare or pay any dividends (other than dividends
payable solely in common stock of the Borrower), or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery
of property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock, now or hereafter outstanding (or any warrants
for or options or stock appreciation rights in respect of any of such shares),
or set aside any funds for any of the foregoing purposes, and the Borrower will
not permit any of its Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock of the Borrower now
or hereafter outstanding (or any options or warrants or stock appreciation
rights
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<PAGE> 44
issued by the Borrower with respect to its capital stock) (all of the foregoing
"Restricted Payments"), except that the Borrower and its Subsidiaries may make
Restricted Payments in any fiscal year in an aggregate amount not to exceed the
greater of (x) $25,000,000 and (y) 20% of the Borrower's Consolidated Net
Income for the immediately preceding fiscal year.
7.07 Transactions with Affiliates. The Borrower will not,
and will not permit any Subsidiary to, enter into any transaction or series of
transactions with any Affiliate (other than the Borrower or any other
Subsidiary), other than on terms and conditions substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm's-length transaction with a Person
other than an Affiliate.
7.08 Limitation on Modifications of Certificate of
Incorporation, By-Laws. The Borrower will not, and will not permit any of its
Subsidiaries to, amend, modify or change in any way adverse to the interests of
the Banks, its Certificate of Incorporation (including, without limitation, by
the filing or modification of any certificate of designation) or By-Laws.
7.09 Leverage Ratio. The Borrower will not permit the ratio
of (i) Consolidated Funded Indebtedness to (ii) Total Capitalization at any
time to exceed 0.5 to 1.0.
7.10 Fixed Charges Coverage Ratio. The Borrower will not
permit the Fixed Charges Coverage Ratio for any period of four consecutive
fiscal quarters (taken as one accounting period), commencing with the period
ending September 30, 1994, to be less than 1.75:1.
7.11 Minimum Consolidated Tangible Net Worth. The Borrower
will not permit its Consolidated Tangible Net Worth at any time to be less than
the Minimum Consolidated Tangible Net Worth at such time.
7.12 Fixed Charge Coverage Deficiency. In the event that any
holder of Senior Notes exercises its option pursuant to Section 7.4 of the
Senior Note Purchase Agreement to require the Borrower to prepay such Senior
Notes as a result of the occurrence of a Fixed Charge Coverage Deficiency, the
Borrower will not, and will not permit any of its Subsidiaries to, prepay such
Senior Notes until the 90th day following the date on which the Borrower gave
notice to
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<PAGE> 45
the Senior Noteholders of such Fixed Charge Coverage Deficiency pursuant to
Section 10.3 of the Senior Note Purchase Agreement (or shall have been deemed
to have given such notice pursuant to Section 7.4 of the Senior Note Purchase
Agreement).
7.13 Interest Rate Protection Agreements and Other Hedging
Agreements. The Borrower will not, and will not permit any of its Subsidiaries
to, enter into any Interest Rate Protection Agreements or Other Hedging
Agreements other than in the ordinary course of business and in respect of the
assets or obligations of the Borrower or such Subsidiary for bona fide hedging
purposes and not for purposes of speculation.
SECTION 8. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events
(each an "Event of Default"):
8.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or (ii) default, and such
default shall continue unremedied for five or more days, in the payment when
due of any interest on any Loan or any Note or any Fees or any other amounts
owing hereunder or under any Note; or
8.02 Representations, etc. Any representation, warranty or
statement made by or on behalf of the Borrower herein or in any other Credit
Document or in any certificate delivered pursuant hereto or thereto shall prove
to be untrue in any material respect on the date as of which made or deemed
made; or
8.03 Covenants. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.01(d)(i), 6.07 or 7 or (ii) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Sections 8.01 and 8.02 and clause (i) of this Section 8.03) contained in
this Agreement and such default shall continue unremedied for a period of 30
days after written notice to the Borrower by either the Administrative Agent or
any Bank; or
8.04 Default Under Other Agreements. The Borrower or any of
its Subsidiaries shall (i) default in any payment of any Indebtedness
(excluding the Notes or other obligations hereunder but including the Senior
Notes until the payment
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<PAGE> 46
thereof in full together with all interest and premium thereon) in excess of
$10,000,000 individually or in the aggregate, for the Borrower and its
Subsidiaries, beyond the period of grace (not to exceed 30 days), if any,
provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause
(determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of the Borrower or any of its Subsidiaries 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; or
8.05 Bankruptcy, etc. The Borrower or any of its
Subsidiaries shall commence a voluntary case concerning itself under Title 11
of the United States Code entitled "Bankruptcy", as now or hereafter in effect,
or any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Subsidiaries, and the petition is
not controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries, or the Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries, or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days, or the Borrower or any of
its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such case or proceeding is entered; or the
Borrower or any of its Subsidiaries suffers any appointment of any custodian or
the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or the Borrower or any of its
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrower or any of its Subsidiaries for the
purpose of effecting any of the foregoing; or
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<PAGE> 47
8.06 ERISA. Any Plan shall fail to maintain the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code; any Plan is, shall have been or is reasonably likely
to be terminated or the subject of a termination proceeding under ERISA; any
Plan shall have an Unfunded Current Liability; or the Borrower or any of its
Subsidiaries or ERISA Affiliates has incurred or is reasonably likely to incur
a liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the
Code, or the Borrower or any Subsidiary has incurred or is reasonably likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) which provide benefits to retired employees
(other than as required by Section 601 of ERISA); and there shall result from
any such event or events described above in this Section 8.06 the imposition of
a Lien upon the assets of the Borrower or any of its Subsidiaries, the granting
of a security interest, or a liability or a material risk of incurring a
liability, which Lien, security interest or liability, in the reasonable
opinion of the Required Banks, will have a material adverse effect upon the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole; or
8.07 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving in the
aggregate for the Borrower and its Subsidiaries a liability (to the extent not
paid or covered by insurance) of $10,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 60 days after the entry thereof; or
8.08 Change of Control. A Change of Control shall occur; or
8.09 Fixed Charge Coverage Deficiency. At any time prior to
the redemption in full of the Senior Notes, a Fixed Charge Coverage Deficiency
shall occur;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent may and, upon the
written request of the Required Banks, shall by written notice to the Borrower,
take any or all of the following actions, without prejudice to the
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<PAGE> 48
rights of the Administrative Agent, any Bank or the holder of any Note to
enforce its claims against the Borrower (provided that, if an Event of Default
specified in Section 8.05 shall occur with respect to the Borrower, the result
which would occur upon the giving of written notice by the Administrative Agent
to the Borrower as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment or the unutilized portion thereof terminated, whereupon the
Commitment of each Bank or the unutilized portion thereof, as the case may be,
shall forthwith terminate immediately and any accrued but unpaid Commitment
Fees shall forthwith become due and payable without any other notice of any
kind; and (ii) declare the principal of and any accrued interest in respect of
all Loans and the Notes and all obligations owing hereunder and thereunder to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
SECTION 9. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
9.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 10.09.
"Affiliate" shall mean, with respect to any Person, any other
Person (other than an individual) directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such Person;
provided, however, that for purposes of Section 7.07 an Affiliate of the
Borrower shall include any Person that directly or indirectly owns more than 5%
of the Borrower, and any officer or director of the Borrower or any such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" shall mean the Administrative Agent and the
Syndication Agent.
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<PAGE> 49
"Agreement" shall mean this Term Loan Agreement, as modified,
supplemented or amended from time to time.
"Applicable Base Rate Margin" shall mean zero.
"Applicable Eurodollar Rate Margin" shall mean, at any time,
the margin set forth below opposite the Fixed Charges Coverage Ratio for the
period of four consecutive fiscal quarters (taken as one accounting period)
ending on the last day of the most recent fiscal year or fiscal quarter in
respect of which the Banks shall have received Section 6.01 Financials (it
being understood that each Applicable Eurodollar Rate Margin shall be
determined based on the officer's certificate delivered pursuant to Section
6.01(c) in respect of the respective Section 6.01 Financials and shall be in
effect from the date the respective Section 6.01 Financials (together with the
corresponding Section 6.01(c) officer's certificate) are delivered to the Banks
until the date the next such Section 6.01 Financials (together with the
corresponding Section 6.01(c) officer's certificate) are delivered to the Banks
at which time the Applicable Eurodollar Rate Margin shall be reset in
accordance with the foregoing provisions of this definition):
<TABLE>
<CAPTION>
Applicable
Eurodollar
Fixed Charges Coverage Ratio Rate Margin
- - ---------------------------- -----------
<S> <C>
Greater than or equal to
4.00:1.00 0.400%
Less than 4.00:1.00 but equal
to or greater than 2.75:1.00 0.500%
Less than 2.75:1.00 but equal
to or greater than 2.50:1.00 0.675%
Less than 2.50:1.00 0.875%
</TABLE>
; provided that (A) on and after the third anniversary of the Effective Date,
each of the percentages set forth above shall be increased by 0.10%, (B) if the
Section 6.01 Financials (together with the corresponding Section 6.01(c)
officer's certificate) are not delivered when required, the applicable Fixed
Charges Coverage Ratio shall be deemed to be less than 2.50:1.00 for the
purposes of this definition until the date on which such Section 6.01
Financials (together with the
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<PAGE> 50
corresponding Section 6.01(c) officer's certificate) are delivered to the
Banks, and (C) at all times prior to the later of the first anniversary of the
Effective Date and the date on which the Borrower shall have sold at least 50%
of its interest in Raynet, for purposes of this definition the Fixed Charges
Coverage Ratio shall be deemed to be less than 4.00:1.00 even if it actually is
4.00:1.00 or greater.
"Applicable Lending Office" shall mean, with respect to each
Bank, (i) such Bank's Base Rate Lending Office in the case of a Base Rate Loan
and (ii) such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate
Loan.
"Assignment and Assumption Agreement" shall have the meaning
provided in Section 11.04(b).
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
"Bankruptcy Code" shall have the meaning provided in Section
8.05.
"Base Rate" shall mean on any day the higher of (x) the Prime
Lending Rate and (y) 1/2 of 1% in excess of the Federal Funds Effective Rate.
"Base Rate Lending Office" shall mean, with respect to each
Bank, the office of such Bank specified as its "Base Rate Lending Office"
opposite its name on Schedule II or such other office, Subsidiary or Affiliate
of such Bank as such Bank may from time to time specify as such to the Borrower
and the Administrative Agent.
"Base Rate Loan" shall mean any Loan designated or deemed
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Best" shall have the meaning provided in Section 6.03.
"Borrower" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan by
the Borrower from all of the Banks on a pro rata basis on a given date (or
resulting from conversions on a given date), having in the case of Eurodollar
Rate Loans the same Interest Period, provided that Base Rate Loans incurred
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<PAGE> 51
pursuant to Section 1.10(b) shall be considered part of any related Borrowing
of Eurodollar Rate Loans.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Rate Loans, any day
which is a Business Day described in clause (i) above and which is also a day
for trading by and between banks in the New York interbank Eurodollar market.
"Capital Lease" shall mean any lease or other agreement for
the use of property which is required to be capitalized on a balance sheet of
the lessee or other user of property in accordance with GAAP.
"Change of Control" shall mean (i) the direct or indirect
acquisition by any Person or group (as such term is defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
beneficial ownership (as such term is defined in Rule 13d-3 promulgated under
the Exchange Act) of, or power to vote, more than 30% of the outstanding shares
of voting stock of the Borrower, or (ii) at any time during any twelve-month
period, 50% or more of the members of the full Board of Directors of the
Borrower shall have resigned or been removed or replaced; provided that a
director who has resigned or is replaced during any period shall not be
included in any determination of whether a Change of Control has occurred
pursuant to this clause (ii) to the extent such director is replaced by a
successor director elected by a majority of those directors who were directors
at the commencement of such twelve-month period.
"Closing Date" shall mean the date of the incurrence of Loans
under this Agreement.
"Co-Arranger" shall mean the Administrative Agent and the
Syndication Agent.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement and any subsequent provisions of the Code,
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amendatory thereof, supplemental thereto or substituted therefor.
"Commitment" shall mean for each Bank, at any time, the amount
set forth opposite such Bank's name on Schedule I, as the same may be reduced
from time to time pursuant to Sections 2.02, 2.03, 2.04 and 8.
"Commitment Expiration Date" shall mean the earlier of (i) the
Closing Date and (ii) the date occurring 120 days after the Effective Date.
"Commitment Fee" shall have the meaning provided in Section
2.01(a).
"Consolidated EBIT" shall mean, for any period, the
Consolidated Net Income of the Borrower and its Subsidiaries for such period,
before deductions for (a) Interest Expense on, and all amortization of debt
discount and expense with respect to, Indebtedness of the Borrower or any
Subsidiary for such period, (b) fixed rentals accruing and payable under
Operating Leases of the Borrower and its Subsidiaries for such period, (c)
provision for taxes imposed on or measured by income or excess profits for such
period and (d) any portion of such Consolidated Net Income for such period
attributable to the net income (or net loss) of Raynet and its Subsidiaries.
"Consolidated Fixed Charges" shall mean, for any period, with
respect to the Borrower and its Subsidiaries, on a consolidated basis in
accordance with GAAP, the aggregate amount of (a) fixed rentals accruing and
payable under all Operating Leases of the Borrower and its Subsidiaries for
such period and (b) Interest Expense on, and all amortization of debt discount
and expense with respect to, Indebtedness of the Borrower and its Subsidiaries
for such period.
"Consolidated Funded Indebtedness" shall mean, as of the date
of any determination thereof, Indebtedness for Money Borrowed of the Borrower
and its Subsidiaries, determined on a consolidated basis, after eliminating all
offsetting debits and credits among the Borrower and its Subsidiaries and all
other items required to be eliminated in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, the
consolidated net income (or net loss) of the Borrower and its Subsidiaries for
such period, determined in accordance with GAAP applied on a consistent basis,
after
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eliminating all offsetting debits and credits among the Borrower and its
Subsidiaries and all other items required to be eliminated in accordance with
GAAP, but, in any event, excluding, without duplication:
(a) for purposes only of the definition of Consolidated
EBIT, any non-cash gains or losses on unusual or extraordinary items,
but including any cash payments made in the relevant period which are
associated with any non-cash losses on unusual or extraordinary items
excluded in a prior period pursuant to this clause (a);
(b) for all purposes other than the definition of
Consolidated EBIT (including without limitation for the purposes of
Section 7.02(e) and the definition of Minimum Consolidated Tangible
Net Worth), any gains or losses on the sale or other disposition of
investments or fixed or capital assets, and any tax deductions or
credits on account of any such excluded losses, and all items properly
classified as extraordinary in accordance with GAAP;
(c) net earnings and losses of any Subsidiary accrued
prior to the date it became a Subsidiary;
(d) net earnings and losses of any Person (other than a
Subsidiary), substantially all the assets of which have been acquired
by the Borrower or any Subsidiary in any manner, realized by such
other Person prior to the date of such acquisition;
(e) net earnings and losses of any Person (other than a
Subsidiary) which shall have been merged into or consolidated with the
Borrower or any Subsidiary prior to the date of such merger or
consolidation;
(f) net earnings of any Person (other than a Subsidiary)
in which the Borrower or any Subsidiary has an ownership interest,
except to the extent such net earnings shall have actually been
received by the Borrower or such Subsidiary in the form of cash
distributions;
(g) any portion of the net earnings of any Subsidiary
which is legally, contractually or, in the good faith judgment of
management, otherwise unavailable for payment of dividends to the
Borrower;
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(h) earnings resulting from any reappraisal, revaluation
or write-up of assets subsequent to June 30, 1994;
(i) any income resulting from any excess of the equity in
any Person at the date of acquisition thereof over the amount invested
in such Person;
(j) any gain arising from the acquisition of any capital
stock or other securities of the Borrower or any Subsidiary; and
(k) earnings resulting from the reversal of any reserve
established prior to June 30, 1994.
"Consolidated Net Worth" shall mean, at any time, the Net
Worth of the Borrower and its Subsidiaries determined on a consolidated basis
in accordance with GAAP after appropriate deduction for any minority interests
in Subsidiaries.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, as of the date
of any determination thereof, Consolidated Net Worth at such time less the
amount of all intangible items, including, without limitation, goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks, brand names, write-ups of assets and any unallocated excess costs of
investments in Subsidiaries over equity in underlying net assets at dates of
acquisition.
"Contingent Obligations" shall mean, as to any Person, without
duplication, any obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any obligation
of such Person, whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(b) to advance or supply funds (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or
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services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include (x) endorsements of
instruments for deposit or collection in the ordinary course of business and
(y) indemnities granted in the ordinary course of business. The amount of any
Contingent Obligation shall, subject to any contractual limitation stated in
such Contingent Obligation, be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement and each Note.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Effective Date" shall have the meaning provided in Section
4.01.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any person (as defined in Section
3(9) of ERISA) which together with the Borrower or any of its Subsidiaries
would be deemed to be a "single employer" within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
"Eurodollar Lending Office" shall mean, with respect to each
Bank, the office of such Bank specified as its "Eurodollar Lending Office"
opposite its name on Schedule II or such other office, Subsidiary or Affiliate
of such Bank
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as such Bank may from time to time specify as such to the Borrower and the
Administrative Agent.
"Eurodollar Rate Loan" shall mean any Loan designated or
deemed designated as such by the Borrower at the time of the incurrence thereof
or conversion thereto.
"Event of Default" shall have the meaning provided in
Section 8.
"Executive Officer" shall mean any of the following officers
of the Borrower: the Chief Executive Officer, the Chief Financial Officer, the
Vice President of Finance, the Treasurer, the General Counsel, the Controller
or the Secretary.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of January 1, 1992, among the Borrower, Swiss Bank Corporation, as
agent, and the lending institutions party thereto, as amended, modified and
supplemented prior to the Effective Date.
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal Funds brokers of recognized standing selected by the
Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 2.01.
"Fixed Charge Coverage Deficiency" shall have the meaning
provided in the Senior Note Purchase Agreement.
"Fixed Charges Coverage Ratio" for any period shall mean the
ratio of (i) Consolidated EBIT for such period to (ii) Consolidated Fixed
Charges for such period; provided that, in determining the Fixed Charges
Coverage Ratio for any period during which the Borrower redeems its Senior
Notes, there shall be excluded from both Consolidated EBIT and Consolidated
Fixed Charges the effect of the redemption premium or make-whole paid in
connection with the redemption
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of the Senior Notes, but not to exceed for purposes of this definition
$9,000,000.
"GAAP" shall mean generally accepted accounting principles in
the United States of America; it being understood and agreed that
determinations in accordance with GAAP for purposes of Section 7, including
defined terms as used therein, are subject (to the extent provided therein) to
Section 11.07(a).
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for money borrowed, (ii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed, provided that if such
Indebtedness is not assumed, the amount of such Indebtedness shall be deemed
for purposes hereof to be the lesser of the principal amount of such
Indebtedness and the fair market value of the property securing such
Indebtedness, (v) all Capital Lease obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take- or-pay and similar
obligations, (vii) for purposes of Section 8.04 only, all obligations of such
Person under Interest Rate Protection Agreements or Other Hedging Agreements,
(viii) all Contingent Obligations of such Person and (ix) any obligation of the
type referred to in any of clauses (i)-(viii) above of any general partnership
of which such Person is the or a general partner; provided that Indebtedness
shall not include trade payables or accrued expenses, in each case arising in
the ordinary course of business.
"Indebtedness for Money Borrowed," with respect to any Person,
shall mean and include all Indebtedness of such Person (a) in respect of money
borrowed or evidenced by a promissory note, debenture or other like written
obligation to pay money, (b) in respect of obligations under any Capital Lease
or (c) representing all or part of the deferred purchase price of any assets
acquired by such Person; provided, however, that any Contingent Obligation of
such Person in respect of Indebtedness of another person of the type described
in the preceding clause (a), (b) or (c) shall constitute "Indebtedness for
Money Borrowed" of such Person.
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"Interest Determination Date" shall mean, with respect to any
Eurodollar Rate Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Rate Loan.
"Interest Expense" shall mean, for any period, without
duplication, the aggregate of all interest paid or accrued by the Borrower and
its Subsidiaries during such period for Indebtedness of the Borrower or its
Subsidiaries owed to any Person other than the Borrower or any Subsidiary, on a
consolidated basis, excluding (a) any imputed interest with respect to Capital
Leases, and (b) any accrued interest that is compounded or capitalized, all as
determined in accordance with GAAP.
"Interest Period" shall mean, with respect to any Eurodollar
Rate Loan, the interest period applicable thereto, as determined pursuant to
Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, any Person other than the owner of the
property, whether such interest shall be based on the common law, statute or
contract, whether or not such interest shall be recorded or perfected and
whether or not such interest shall be contingent upon the occurrence of some
future event or events or the existence of some future circumstance or
circumstances, and including the lien or security interest arising from a
mortgage, encumbrance, pledge, adverse claim or charge, conditional sale or
trust receipt, or from a lease, consignment or bailment for security purposes.
The term "Lien" shall also include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting property. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any property that such
Person shall have acquired or shall hold subject to a conditional sale
agreement or other arrangement (including a leasing arrangement) pursuant to
which title to the property shall have been retained by or vested in some other
Person for security purposes.
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"Loan" shall have the meaning provided in Section 1.01.
"Margin Stock" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System.
"Material Subsidiary" shall mean, at any time, any Subsidiary
of the Borrower to the extent that (i) the book value of the assets of such
Subsidiary at such time equals or exceeds 5% of book value of the assets of the
Borrower and its Subsidiaries on a consolidated basis at such time or (ii) the
revenues of such Subsidiary during any of its three then most recently ended
fiscal years were equal to or more than 5% of the revenues of the Borrower and
its Subsidiaries taken as a whole for such corresponding fiscal year
(determined on a consolidated basis in accordance with generally accepted
accounting principles and, in the event that such Subsidiary was not a
Subsidiary of the Borrower at all times during such three fiscal year period,
determined on a pro forma basis as if such Subsidiary had been a Subsidiary of
the Borrower at all times during such period).
"Maturity Date" shall mean the date occurring five years after
the Effective Date.
"Minimum Consolidated Tangible Net Worth" shall mean an amount
which initially shall equal $565,000,000 and which amount shall be increased on
the last day of each fiscal year of the Borrower (commencing with the fiscal
year ending June 30, 1995) by an amount, if positive, equal to 50% of the
Borrower's Consolidated Net Income for such fiscal year (it being understood
and agreed that if the Borrower's Consolidated Net Income for any fiscal year
is not positive, then no adjustment shall be made to the Minimum Consolidated
Tangible Net Worth on the last day of such fiscal year).
"Net Worth" shall mean, as to any Person, the sum of its
capital stock, capital in excess of par or stated value of shares of its
capital stock, retained earnings and any other account which, in accordance
with GAAP, constitutes stockholders equity, but excluding any treasury stock
and any foreign currency translation adjustments.
"Note" shall have the meaning provided in Section 1.05.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
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"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at 222 Broadway, New York, New York 10038, or such other office
as the Administrative Agent may hereafter designate in writing as such to the
other parties hereto.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Syndication Agent or any Bank pursuant to the terms
of this Agreement or any other Credit Document.
"Operating Lease" shall mean any lease that is not a Capital
Lease.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against the fluctuations in currency values.
"Payment Office" shall mean the office of the Administrative
Agent located at 222 Broadway, New York, New York 10038, or such other office
as the Administrative Agent may hereafter designate in writing as such to the
other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA or any successor thereto.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer plan or single-employer
plan as defined in Section 4001 of ERISA, which is maintained or contributed to
by (or to which there is an obligation to contribute of), or at any time during
the five calendar years preceding the date of this Agreement was maintained or
contributed to by (or to which there was an obligation to contribute of), the
Borrower or by a Subsidiary of the Borrower or an ERISA Affiliate.
"Prime Lending Rate" shall mean the rate which the
Administrative Agent announces from time to time as its prime
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lending rate, the Prime Lending Rate to change when and as such prime lending
rate changes. The Prime Lending Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
The Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Quoted Rate" shall mean, with respect to each Interest Period
for a Eurodollar Rate Loan, (i) the average of the offered quotation to
first-class banks in the New York interbank Eurodollar market by each of the
Reference Banks for Dollar deposits of amounts comparable to the outstanding
principal amount of the Eurodollar Rate Loan of such Reference Bank for which
an interest rate is then being determined with maturities comparable to the
Interest Period, determined as of 10:00 A.M. (New York time) on the date which
is two Business Days prior to the commencement of such Interest Period,
provided that, if any Reference Bank fails to provide the Administrative Agent
with its aforesaid quotation, the Quoted Rate shall be based on the quotation
or quotations provided to the Administrative Agent by the other Reference Bank
or Reference Banks, divided (and rounded upward to the next whole multiple of
1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to any member
bank of the Federal Reserve System in respect of Eurocurrency liabilities as
defined in Regulation D.
"Raynet" shall mean Raynet Corporation, a California
corporation and any successor to all or any substantial part of the business
conducted by Raynet Corporation as of the Effective Date.
"Reference Banks" shall mean Swiss Bank Corporation, The Chase
Manhattan Bank, N.A. and Bank of America NT&SA.
"Register" shall have the meaning provided in Section 1.05(b).
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
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"Reportable Event" shall mean an event described in Section
4043(b) of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC.
"Required Banks" shall mean, at any time, Banks whose
Commitments equal or exceed 66-2/3% of the sum of the Total Commitment at such
time; provided that if the Total Commitment has been terminated, then the
Required Banks shall mean Banks whose outstanding Loans equal or exceed 66-2/3%
of the aggregate outstanding Loans at such time.
"Restricted Payment" shall have the meaning provided in
Section 7.06.
"SEC" shall have the meaning provided in Section 6.01(g).
"Section 6.01 Financials" shall mean the financial statements
delivered, or to be delivered, pursuant to Section 6.01(a) or (b).
"Senior Note Purchase Agreement" shall mean the Note Purchase
Agreement, dated as of February 15, 1991, among the Borrower and various
financial institutions, as same may be amended, modified or supplemented from
time to time.
"Senior Notes" shall mean the Borrower's $210,000,000
aggregate principal amount 9.55% Senior Notes due March 1, 1996 issued pursuant
to the Senior Note Purchase Agreement.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person and (ii) any partnership, association,
joint venture or other entity in which such Person and/or one or more
Subsidiaries of such Person has more than a 50% equity interest at the time.
"Syndication Agent" shall have the meaning provided in the
first paragraph of this Agreement.
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"Taxes" shall have the meaning provided in Section 3.04.
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Funded Indebtedness plus Consolidated Net Worth at such time.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks at such time.
"Type" shall mean any type of Loan determined with respect to
the interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar
Rate Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the present value of the accrued benefits under the Plan as of
the close of its most recent plan year, determined in accordance with Statement
of Financial Accounting Standards No. 35, based upon the actuarial assumptions
used by the Plan's actuary in the most recent annual valuation of the Plan,
exceeds the fair market value of the assets allocable thereto, determined in
accordance with Section 412 of the Code.
"United States" and "U.S." shall each mean the United States of America.
"Wholly-Owned Subsidiary" of any Person shall mean any
Subsidiary of such Person to the extent all of the capital stock or other
ownership interests in such Subsidiary, other than directors' or nominees'
qualifying shares, is owned directly or indirectly by such Person.
9.02 Principles of Construction. (a) All references to
sections, schedules and exhibits are to sections, schedules and exhibits in or
to this Agreement unless otherwise specified. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.
(b) All accounting terms not specifically defined herein
shall be construed in accordance with GAAP in the United States in conformity
with those used in the preparation of the financial statements referred to in
Section 5.05(a).
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SECTION 10. THE AGENTS.
10.01 Appointment. The Banks hereby designate Swiss Bank
Corporation, New York Branch, as Administrative Agent and The Chase Manhattan
Bank, N.A., as Syndication Agent, in each case to act as specified herein and
in the other Credit Documents. References in this Agreement to "Agents" shall
include both the Administrative Agent and the Syndication Agent. Each Bank
hereby irrevocably authorizes, and each holder of any Note by the acceptance of
such Note shall be deemed irrevocably to authorize, the Agents to take such
action on its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. Each Agent may perform any of its duties hereunder by or through its
officers, directors, agents or employees.
10.02 Nature of Duties. No Agent shall have duties or
responsibilities except those expressly set forth in this Agreement. Neither
Agent nor any of their respective officers, directors, agents or employees
shall be liable for any action taken or omitted by it or them hereunder or
under any other Credit Document or in connection herewith or therewith, unless
caused by its or their gross negligence or willful misconduct. The duties of
the Agents shall be mechanical and administrative in nature; no Agent shall
have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Bank or the holder of any Note; and nothing in
this Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon any Agent any obligations in
respect of this Agreement or any other Credit Document except as expressly set
forth herein.
10.03 Lack of Reliance on the Agents. Independently and
without reliance upon the Agents, each Bank and the holder of each Note, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the
Borrower in connection with the making and the continuance of the Loans and the
taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrower and, except as expressly
provided in this Agreement, no Agent shall have a duty or responsibility,
either initially or on a continuing basis, to
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provide any Bank or the holder of any Note with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans or at any time or times thereafter. No Agent shall be responsible to
any Bank or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the financial condition of the
Borrower or the existence or possible existence of any Default or Event of
Default.
10.04 Certain Rights of the Agents. If any Agent shall
request instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, such Agent shall be entitled to refrain from such act or
taking such action unless and until such Agent shall have received instructions
from the Required Banks; and no Agent shall incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Bank or the holder
of any Note shall have any right of action whatsoever against any Agent as a
result of such Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Banks.
10.05 Reliance. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that such Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by it.
10.06 Indemnification. To the extent any Agent is not
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify such Agent, in proportion to their respective initial Commitments,
for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or
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disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Agent in performing its duties hereunder or under
any other Credit Document, or in any way relating to or arising out of this
Agreement or any other Credit Document; provided, however, that no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from any Agent's gross negligence or willful misconduct.
10.07 The Agents in their Individual Capacity. With respect
to its obligation to make Loans under this Agreement, each Agent shall have the
rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the duties specified herein;
and the term "Banks," "Required Banks," "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include each Agent in
its individual capacity. Each Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Borrower or any Affiliate of the Borrower as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
10.08 Holders. Each Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with such Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
10.09 Resignation by the Agents. (a) Each Agent may resign
from the performance of all its functions and duties hereunder and/or under the
other Credit Documents at any time by giving 15 Business Days' prior written
notice to the Borrower and the Banks. Such resignation shall take effect
immediately in the case of the Syndication Agent and upon the appointment of a
successor Administrative Agent pursuant to clauses (b) and (c) below in the
case of the Administrative Agent.
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(b) Upon any such notice of resignation of the
Administrative Agent, the Required Banks shall appoint a successor
Administrative Agent hereunder who shall be a commercial bank or trust company
reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have
been so appointed within such 15 Business Day period, the Administrative Agent,
with the consent of the Borrower, may then appoint a successor Administrative
Agent who shall serve as Administrative Agent hereunder or thereunder until
such time, if any, as the Required Banks appoint a successor Administrative
Agent as provided above.
SECTION 11. MISCELLANEOUS.
11.01 Payment of Expenses, etc. The Borrower shall: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses (x) of the Agents (including,
without limitation, the reasonable fees and disbursements of White & Case) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto and
(y) of the Agents and each of the Banks in connection with the enforcement of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel, including allocated costs of in-house
counsel, for the Agents and for each of the Banks); (ii) pay and hold each of
the Banks harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (iii) indemnify the Agents and each Bank, its
officers, directors, employees, representatives and agents from and hold each
of them harmless against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or other proceeding
(whether or not any Agent or any Bank is a party thereto) related to the
entering into and/or performance of this Agreement or any other Credit Document
or the use of the proceeds of any Loans hereunder or the consummation of any
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transactions contemplated herein or in any other Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel, including
allocated costs of in-house counsel, incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such
liabilities, obligations, losses, etc., to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified).
11.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Bank (including without
limitation by branches and agencies of such Bank wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Bank under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 11.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or
not such Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
11.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, facsimile or cable communication) and mailed,
telegraphed, telecopied, cabled or delivered: if to the Borrower, at its
address specified opposite its signature below; if to any Bank, at its Base
Rate Lending Office specified opposite its name on Schedule II; and if to the
Administrative Agent, at its Notice Office; or, as to the Borrower or the
Administrative Agent, at such other address as shall be designated by such
party in a written notice to the other parties hereto and, as to each other
party, at such other address as shall be designated by such party in a written
notice to the Borrower and the Administrative Agent. All such notices and
communications shall, when mailed, telegraphed, telecopied, or cabled or sent
by overnight courier, be effective when deposited in the mails, delivered
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to the telegraph company, cable company or overnight courier, as the case may
be, or sent by telecopier, except that notices and communications to the
Administrative Agent shall not be effective until received by the
Administrative Agent.
11.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that the Borrower may
not assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Banks. Each Bank may at any time grant
participations in any of its rights hereunder or under its Note to another
financial institution; provided that in the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation, except that the participant shall be entitled to receive the
additional amounts under Sections 1.10, 1.11 and 3.04 of this Agreement to, and
only to, the extent that such Bank would be entitled to such benefits if the
participation had not been entered into or sold; and provided further, that no
Bank shall transfer, grant or assign any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would extend the final scheduled maturity of any Loan or Note in which
such participant is participating, or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any postdefault increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment shall not constitute a change in the terms of any
Commitment and that an increase in any Commitment shall be permitted without
the consent of any participant if such participant's participation is not
increased as a result thereof).
(b) Notwithstanding the foregoing, with the consent of
the Borrower (which consent shall not be unreasonably withheld), any Bank may
assign all or a portion of its rights and obligations hereunder to one or more
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commercial banks or other financial institutions (including one or more Banks).
No assignment pursuant to the immediately preceding sentence shall (x) be in an
aggregate amount less than $10,000,000 or (y) reduce the Commitment (if any) or
outstanding Loans of the assigning Bank to an amount less than $10,000,000
unless such assigning Bank's Commitment (if any) or outstanding Loans are
reduced to $0. If any Bank so sells or assigns all or a part of its rights
hereunder or under the Notes, any reference in this Agreement or the Notes to
such assigning Bank shall thereafter refer to such Bank and to the respective
assignee to the extent of their respective interests and the respective
assignee shall have, to the extent of such assignment (unless otherwise
provided therein), the same rights and benefits as it would if it were such
assigning Bank. Each assignment pursuant to this Section 11.04(b) shall be
effected by the assigning Bank and the assignee Bank executing an Assignment
and Assumption Agreement substantially in the form of Exhibit F (appropriately
completed), which Assignment and Assumption Agreement shall be executed by the
Borrower (evidencing its consent to such assignment) and acknowledged by the
Administrative Agent. At the time of any such assignment, (i) Schedule I shall
be deemed to be amended to reflect the Commitment of the respective assignee
(which shall result in a direct reduction to the Commitment of the assigning
Bank) and of the other Banks, (ii) the Borrower will issue new Notes to the
respective assignee and to the assigning Bank in conformity with the
requirements of Section 1.05 and (iii) the Administrative Agent shall receive
from the assigning Bank at the time of each assignment, the payment of a
nonrefundable assignment fee of $2,500. Each Bank and the Borrower agrees to
execute such documents (including without limitation amendments to this
Agreement and the other Credit Documents) as shall be necessary to effect the
foregoing. Nothing in this Section 11.04(b) shall prevent or prohibit any Bank
from pledging its Loans or Note hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section
11.04, no transfer or assignment of the interests or obligations of any Bank
hereunder or any grant of participations therein shall be permitted if such
transfer, assignment or grant would require the Borrower to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any
State.
(d) Each Bank initially party to this Agreement hereby
represents, and each Person that becomes a Bank
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<PAGE> 71
pursuant to an assignment permitted by this Section 11.04 will, upon its
becoming party to this Agreement, represent that it is a commercial lender,
other financial institution or other "accredited" investor (as defined in SEC
Regulation D) which makes loans in the ordinary course of its business and that
it will make or acquire Loans for its own account in the ordinary course of
such business; provided that subject to the preceding clauses (a) and (b), the
disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Bank shall at all times be within its exclusive
control.
11.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank or the holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower and the Administrative
Agent or any Bank or the holder of any Note shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any
other Credit Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which the Administrative Agent or any Bank or
the holder of any Note would otherwise have. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or any Bank or the holder of any Note to any
other or further action in any circumstances without notice or demand.
11.06 Payments Pro Rata. (a) The Administrative Agent
agrees that promptly after its receipt of each payment from or on behalf of the
Borrower in respect of any Obligations of the Borrower hereunder, except as
expressly provided herein it shall distribute such payment to the Banks pro
rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive
any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Credit
Documents, or otherwise), which is applicable to the payment of the principal
of, or interest on, the Loans or Commitment Fees,
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of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total amount of such Obligation then owed
and due to such Bank bears to the total amount of such Obligation then owed and
due to all the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in such Obligations of the Borrower
to such Banks in such amount as shall result in a proportional participation
by all the Banks in such amount; provided, however, that if all or any portion
of such excess amount is thereafter recovered from such Bank, such purchase
shall be rescinded and the purchase price restored to the extent of such
recovery, but without interest.
11.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with GAAP in the United States consistently applied
throughout the periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by the Borrower to the Banks); provided,
however, that, except as otherwise specifically provided herein, all
computations determining compliance with Section 7 shall utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements delivered to the Banks pursuant to Section 5.05(a).
(b) All computations of interest, Commitment Fees and
other Fees hereunder shall be made on the basis of a year of 360 days (365 or
366 days, as the case may be, in the case of interest on Base Rate Loans to the
extent determined by reference to the Prime Lending Rate) for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest, Commitment Fees or other Fees are payable.
11.08 Governing Law; Submission to Jurisdiction; Venue. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding against the Borrower with respect to this Agreement or any other
Credit Document may be brought in the courts of the State of New York or of the
United States for the Southern District of New York, and, by execution and
delivery of this Agreement, the Borrower hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid
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courts. The Borrower hereby irrevocably designates, appoints and empowers CT
Corporation System, with offices on the date hereof at 1633 Broadway, New York,
New York 10019, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents which may be served
in any such action or proceeding. If for any reason such designee, appointee
and agent shall cease to be available to act as such, the Borrower agrees to
designate a new designee, appointee and agent in New York City on the terms and
for the purposes of this provision satisfactory to the Administrative Agent.
The Borrower further irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the
Borrower at its address set forth opposite its signature below, such service to
become effective 30 days after such mailing. Nothing herein shall affect the
right of the Administrative Agent, any Bank or the holder of any Note to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
11.09 Obligation to Make Payments in Dollars. The obligation
of the Borrower to make payment in Dollars of the principal of and interest on
the Notes and any other amounts due hereunder or under any other Credit
Document to the Payment Office of the Administrative Agent as provided in
Section 3.03 shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment, which is expressed in or converted into any
currency other than Dollars, except to the extent such tender or recovery shall
result in the actual receipt by the Administrative Agent at its Payment Office
on behalf of the Banks or holders of the Notes of the full amount of Dollars
expressed to be payable in respect of the principal of and interest on the
Notes and all other amounts due hereunder or under any other Credit Document.
The obligation of the Borrower to make payments in
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Dollars as aforesaid shall be enforceable as an alternative or additional cause
of action for the purpose of recovery in Dollars of the amount, if any, by
which such actual receipt shall fall short of the full amount of Dollars
expressed to be payable in respect of the principal of and interest on the
Notes and any other amounts due under any other Credit Document, and shall not
be affected by judgment being obtained for any other sums due under this
Agreement or under any other Credit Document.
11.10 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Administrative Agent.
11.11 Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Bank.
11.12 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
11.13 Amendment or Waiver. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the Required Banks; provided, however, that no such
change, waiver, discharge or termination shall, without the consent of each
Bank, (i) extend the final maturity of any Loan or Note, or reduce the rate or
extend the time of payment of interest or Fees thereon, or waive or modify any
mandatory reduction of the Total Commitment or any mandatory prepayments of the
Loans, or reduce the principal amount thereof, or increase the Commitment of
any Bank over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default shall not constitute a change in the
terms of any Commitment of any Bank), (ii) amend, modify or waive any provision
of this Section 11.13 or Section 10.06, 11.01, 11.02, 11.04, 11.06 or 11.07(b),
(iii) reduce the percentage specified in the definition of Required Banks or
(iv) consent to the
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assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.
11.14 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 3.04, 10.06 and 11.01 shall survive
the execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.
11.15 Entire Agreement. This Agreement, taken together with
all of the other Credit Documents and all certificates and other documents
delivered to the Banks hereunder and thereunder, embody the entire agreement
and supersede all prior agreements, written and oral, relating to the subject
matter hereof, except as to certain fees payable by the Borrower in connection
with this Agreement to the extent not expressly set forth herein.
11.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
- - -------
300 Constitution Drive RAYCHEM CORPORATION
Menlo Park, CA 94025-1164
Attention: Treasurer
By /s/ Lars Larsen
-----------------------------------
With a copy to: Title: Treasurer
300 Constitution Drive
Menlo Park, CA 94025-1164
Attention: Legal Department
SWISS BANK CORPORATION,
New York Branch,
as Administrative Agent
By /s/ Wendy P. Field
-----------------------------------
Title: Director
Merchant Banking
By /s/ George W. Lambertson III
-----------------------------------
Title: Director
Merchant Banking
SWISS BANK CORPORATION,
San Francisco Branch
By /s/ Jamie Dillon
-----------------------------------
Title: Director
Merchant Banking
By /s/ Hans-Ueli Surber
-----------------------------------
Title: Exec. Director
Merchant Banking
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<PAGE> 77
THE CHASE MANHATTAN BANK,
N.A., individually and
as Syndication Agent
By /s/Lawrence C. Shields
----------------------------------
Title: Managing Director
BANK OF AMERICA NT&SA
By /s/ Peter A. Tomei
----------------------------------
Title: Vice President
UNION BANK
By /s/ Patrick M. Cassidy
----------------------------------
Title: Vice President
By
-----------------------------------
Title:
DEUTSCHE BANK AG
LOS ANGELES BRANCH
a/o CAYMAN ISLANDS BRANCH
By /s/ David Wagstaff
-----------------------------------
Title: Vice President
By /s/ Christine Lane
----------------------------------
Title: Assistant
Vice President
BANK OF MONTREAL
By /s/ Michael P. Joyce
----------------------------------
Title: Senior Manager,
Credit
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<PAGE> 78
ROYAL BANK OF CANADA
By /s/ Stephen S. Hughes
------------------------------
Title: Manager
COMMERZBANK AG
LOS ANGELES BRANCH
By /s/ Robert Hochhalper
------------------------------
Title: SVP and Manager
By /s/ Werner Schmidbauer
------------------------------
Title: Vice President
CREDIT LYONNAIS LOS
ANGELES BRANCH
By /s/ Steven Yoon
-----------------------------
Title: Vice President
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
By /s/ Steven Yoon
------------------------------
Title: Authorized
Signatory
BARCLAYS BANK PLC
By /s/ Douglas A. Butler
------------------------------
Title: Associate
Director
By
-------------------------------
Title:
THE BANK OF CALIFORNIA,
N.A.
By /s/ William R. Wiley
------------------------------
Title: Senior Vice
President and
Manager
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<PAGE> 79
KREDIETBANK, N.V.
By /s/ Diane M. Grimmig
------------------------------
Title: Vice President
By /s/ Robert Snauffer
------------------------------
Title: Vice President
GULF INTERNATIONAL BANK,
B.S.C.
By /s/ Haytham F. Khalil
------------------------------
Title: Assistant Vice
President
By /s/Abdel-Fattah Tahoun
------------------------------
Title: Senior Vice
President
BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
By /s/ Eric Hollanders
------------------------------
Title: Senior Vice
President
By /s/ Gerrit Verlodt
------------------------------
Title: Senior Vice
President
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<PAGE> 80
SCHEDULE I
SCHEDULE OF COMMITMENTS
<TABLE>
<CAPTION>
Name of Bank Commitment
- - ----------------------------- ---------------
<S> <C>
Swiss Bank Corporation 21,176,470.58
The Chase Manhattan Bank, N.A. 21,176,470.58
Royal Bank of Canada 19,852,941.18
Credit Lyonnais 19,852,941.18
Bank of America NT&SA 18,529,411.76
Commerzbank AG 18,529,411.76
Bank of Montreal 13,235,294.12
Gulf International Bank B.S.C. 13,235,294.12
Barclays Bank PLC 13,235,294.12
The Bank of California, N.A. 13,235,294.12
Bank Brussels Lambert 13,235,294.12
Deutsche Bank AG 13,235,294.12
Kredietbank N.V. 13,235,294.12
Union Bank 13,235,294.12
Total Commitment $225,000,000.00
===============
</TABLE>
<PAGE> 81
SCHEDULE II
<TABLE>
<CAPTION>
Base Rate Eurodollar
Name of Bank Lending Office Lending Office
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Credit Lyonnais Credit Lyonnais Credit Lyonnais
Los Angeles Branch Cayman Island Branch
c/o Credit Lyonnais 515 South Flower Street
Los Angeles Branch 22nd Floor
515 South Flower Street, Los Angeles, CA 90071
22nd Floor
Los Angeles, CA 90071 Tel: (213) 362-5953
Fax: (213) 623-3437
Tel: (213) 362-5953
Fax: (213) 623-3437
- - ------------------------------------------------------------------------------------------------------------------------------------
Barclays Bank PLC Barclays Bank PLC Barclays Bank PLC
Bahamas Branch Bahamas Branch
c/o 75 Wall Street c/o 75 Wall Street
New York, NY 10265 New York, NY 10265
Tel: (212) 412-5037 Tel: (212) 412-5037
Fax: (212) 412-5002 Fax: (212) 412-5002
- - ------------------------------------------------------------------------------------------------------------------------------------
Bank of Montreal Bank of Montreal Bank of Montreal
115 South LaSalle Street 115 South LaSalle Street
12th Floor 12th Floor
Chicago, Illinois 60603 Chicago, Illinois 60603
Tel: (213) 239-0608 Tel: (213) 239-0608
Fax: (312) 750-6061 Fax: (312) 750-6061
- - ------------------------------------------------------------------------------------------------------------------------------------
The Bank of The Bank of California, The Bank of California,
California, N.A. N.A. N.A.
400 California Street 400 California Street
San Francisco, CA 94104 San Francisco, CA 94104
Tel: (415) 765-3641 Tel: (415) 765-3641
Fax: (415) 765-3146 Fax: (415) 765-3146
- - ------------------------------------------------------------------------------------------------------------------------------------
Bank Brussels Lambert, Bank Brussels Lambert Bank Brussels Lambert
New York Branch New York Branch New York Branch
630 Fifth Avenue 630 Fifth Avenue
New York, NY 10111 New York, NY 10111
Tel: (212) 632-5300 Tel: (212) 632-5300
Fax: (212) 632-5429 Fax: (212) 632-5429
(212) 632-5308 (212) 632-5308
- - ------------------------------------------------------------------------------------------------------------------------------------
Commerzbank AG, Commerzbank AG, Commerzbank AG,
Los Angeles Branch Los Angeles Branch Los Angeles Branch
660 So. Figueroa St. 660 So. Figueroa St.
Suite 1450 Suite 1450
Los Angeles, CA 90017 Los Angeles, CA 90017
Tel: (213) 623-8223 Tel: (213) 623-8223
Fax: (213) 623-0039 Fax: (213) 623-0039
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 82
<TABLE>
<CAPTION>
Base Rate Eurodollar
Name of Bank Lending Office Lending Office
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Swiss Bank Corporation, Swiss Bank Corporation Swiss Bank Corporation
San Francisco Branch 222 Broadway (222-02-E) 222 Broadway (222-02-E)
New York, NY 10038 New York, NY 10038
Tel: (212) 574-3164 Tel: (212) 574-3164
Fax: (212) 574-3180 Fax: (212) 574-3180
- - ------------------------------------------------------------------------------------------------------------------------------------
Bank of America NT&SA Bank of America NT&SA Bank of America NT&SA
1850 Gateway Blvd. 1850 Gateway Blvd.
#5693 #5693
Concord, CA 94520 Concord, CA 94520
Tel: (510) 675-7329 Tel: (510) 675-7329
Fax: (510) 675-7531 Fax: (510) 675-7531
- - ------------------------------------------------------------------------------------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada Royal Bank of Canada
Pierrepont Plaza Pierrepont Plaza
300 Cadman Plaza West 300 Cadman Plaza West
Brooklyn, NY 11201-2701 Brooklyn, NY 11201-2701
Tel: (212) 858-7576 Tel: (212) 858-7176
Fax: (212) 522-6292 Fax: (212) 522-6292
- - ------------------------------------------------------------------------------------------------------------------------------------
The Chase Manhattan The Chase Manhattan The Chase Manhattan
Bank, N.A. Bank, N.A. Bank, N.A.
2 Chase Plaza, 2 Chase Plaza,
5th Floor 5th Floor
New York, NY 10081 New York, NY 10081
Tel: (212) 552-7529 Tel: (212) 552-7529
Fax: (212) 552-1477 Fax: (212) 552-1477
- - ------------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG Deutsche Bank AG Deutsche Bank AG
Los Angeles Branch Cayman Islands
550 S. Hope Street, Branch
Ste. 1850 c/o Los Angeles
Los Angeles, CA Branch
90071 550 S. Hope Street
Ste. 1850
Tel: (213) 627-8200 Los Angeles, CA
Fax: (213) 627-9779 90071
Tel: (213) 627-8200
Fax: (213) 627-9779
- - ------------------------------------------------------------------------------------------------------------------------------------
Gulf International Gulf International Gulf International
Bank B.S.C. Bank B.S.C. Bank B.S.C., Cayman Branch,
380 Madison Avenue c/o Gulf International Bank B.S.C.
New York, NY 10017 380 Madison Avenue
New York, NY 10017
Tel: (212) 922-2368
Fax: (212) 922-3209 Tel: (212) 922-2368
Fax: (212) 922-3209
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 83
<TABLE>
<CAPTION>
Base Rate Eurodollar
Name of Bank Lending Office Lending Office
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Kredietbank N.V. Kredietbank N.V. Kredietbank N.V.
Grand Cayman Branch 125 West 55th St., 125 West 55th St.,
10th Floor 10th Floor
New York, NY 10019 New York, NY 10019
Tel: (212) 541-0600 Tel: (212) 541-0600
Fax: (212) 956-5580 Fax: (212) 956-5580
- - ------------------------------------------------------------------------------------------------------------------------------------
Union Bank Union Bank Union Bank
350 California Street 350 California Street
11th Floor 11th Floor
San Francisco, CA 94104 San Francisco, CA 94104
Tel: (415) 705-7057 Tel: (415) 705-7057
Fax: (415) 705-7046 Fax: (415) 705-7046
</TABLE>
<PAGE> 84
SCHEDULES AND EXHIBITS
NOTE: The following SCHEDULES and EXHIBITS to the TERM LOAN AGREEMENT dated as
of September 29, 1994, have not been included in this filing:
SCHEDULE III Undisclosed Liabilities
SCHEDULE IV Litigation
SCHEDULE V Subsidiaries
SCHEDULE VI Environmental Matters
SCHEDULE VII Permitted Liens
EXHIBIT A Notice of Borrowing
EXHIBIT B Note
EXHIBIT C Opinion of Counsel to the Borrower
EXHIBIT D Officers' Certificate of the Borrower
EXHIBIT E Consent Letter
EXHIBIT F Assignment and Assumption Agreement
A copy of the omitted SCHEDULES and EXHIBITS above will be furnished
supplementally to the United States Securities and Exchange Commission upon
request.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE
PERIOD ENDED SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000082206
<NAME> RAYCHEM CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> SEP-30-1994
<EXCHANGE-RATE> 1
<CASH> 68,746
<SECURITIES> 0
<RECEIVABLES> 329,971
<ALLOWANCES> 11,723
<INVENTORY> 241,408
<CURRENT-ASSETS> 728,579
<PP&E> 1,142,567
<DEPRECIATION> 612,362
<TOTAL-ASSETS> 1,392,145
<CURRENT-LIABILITIES> 352,893
<BONDS> 314,566
<COMMON> 43,378
0
0
<OTHER-SE> 648,031
<TOTAL-LIABILITY-AND-EQUITY> 1,392,145
<SALES> 390,017
<TOTAL-REVENUES> 390,701
<CGS> 209,496
<TOTAL-COSTS> 166,566
<OTHER-EXPENSES> 64,127
<LOSS-PROVISION> 886
<INTEREST-EXPENSE> 4,701
<INCOME-PRETAX> (45,638)
<INCOME-TAX> 2,690
<INCOME-CONTINUING> (48,328)
<DISCONTINUED> 0
<EXTRAORDINARY> (7,074)
<CHANGES> (1,477)
<NET-INCOME> (56,879)
<EPS-PRIMARY> ($1.32)
<EPS-DILUTED> 0
</TABLE>
