<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, 1996
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) 361-3333
(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 25, 1996, the registrant had outstanding 44,716,954 shares of
Common Stock, $1.00 par value.
<PAGE> 2
RAYCHEM CORPORATION
INDEX TO FORM 10-Q
Page Number
-----------
PART I. FINANCIAL INFORMATION
Item 1: Financial Information
Consolidated Condensed Statements of Income -
Three Months Ended September 30, 1996 and 1995 1
Consolidated Condensed Balance Sheets -
September 30, 1996, and June 30, 1996 2
Consolidated Condensed Statements of Cash
Flows - Three Months Ended September 30, 1996 and 1995 3
Notes to Consolidated Condensed Financial
Statements 4-6
Item 2: Management's Discussion and Analysis
of Financial Condition and Results of Operations 7-14
PART II. OTHER INFORMATION
Item 1: Legal Proceedings 15
Item 5: Other Information 15
Item 6: Exhibits and Reports on Form 8-K 16
SIGNATURES 17
<PAGE> 3
RAYCHEM CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
----------------------------
1996 1995
------------ -----------
<S> <C> <C>
Revenues $ 430,311 $ 410,515
Cost of goods sold 209,076 194,914
Research and development expense 30,086 30,044
Selling, general, and administrative expense 119,575 122,460
Equity in net losses of affiliated companies -- 10,626
Interest expense, net 1,929 3,300
Other (income) expense, net (19,038) 3,731
------------ -----------
Income before income taxes 88,683 45,440
Provision for income taxes 15,963 13,010
------------ -----------
Net income $ 72,720 $ 32,430
============ ===========
Average number of common shares
and equivalents outstanding 46,094,081 44,905,775
============ ===========
Earnings per common share $ 1.58 $ 0.72
============ ===========
Dividends per common share $ 0.10 $ 0.08
============ ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
1
<PAGE> 4
RAYCHEM CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(UNAUDITED)
SEPTEMBER 30, June 30,
1996 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 115,603 $ 224,115
Accounts receivable, net 336,260 308,341
Inventories:
Raw materials 83,423 86,562
Work in process 56,163 50,965
Finished goods 92,915 91,796
----------- -----------
Total inventories 232,501 229,323
Prepaid taxes 49,657 50,312
Other current assets 104,505 95,765
----------- -----------
Total current assets 838,526 907,856
Property, plant, and equipment 1,113,432 1,104,646
Less accumulated depreciation and amortization 626,260 613,207
----------- -----------
Net property, plant, and equipment 487,172 491,439
Other assets 153,573 151,321
----------- -----------
TOTAL ASSETS $ 1,479,271 $ 1,550,616
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 40,531 $ 35,011
Accounts payable 77,308 69,230
Other accrued liabilities 171,961 199,172
Income taxes 29,601 27,721
Current maturities of long-term debt 2,086 119,618
----------- -----------
Total current liabilities 321,487 450,752
Long-term debt 158,435 148,352
Deferred income taxes 22,843 23,722
Other long-term liabilities 80,752 80,422
Minority interests 7,196 6,162
Commitments and contingencies (See notes)
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: 44,902,552 and 44,890,881 shares, respectively 44,903 44,891
Additional contributed capital 409,226 408,866
Retained earnings 422,851 361,876
Currency translation 25,584 25,137
Treasury Stock, at cost (237,585 and 115,753 shares,
respectively) (16,576) (8,630)
Other 2,570 9,066
----------- -----------
Total stockholders' equity 888,558 841,206
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,479,271 $ 1,550,616
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE> 5
RAYCHEM CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30 (in thousands) 1996 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 72,720 $ 32,430
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for restructuring and divestitures, net of payments (4,918) (717)
Equity in net losses of affiliated companies -- 10,626
Net (gain) loss on sale of business / assets (23,512) 214
Depreciation and amortization 19,303 21,983
Deferred income tax provision 618 474
Changes in certain assets and liabilities, net of effects from
restructuring and divestitures:
Accounts receivable (21,607) (17,584)
Inventories (77) 1,892
Accounts payable and accrued liabilities (21,590) (13,172)
Income taxes 613 6,310
Other assets and liabilities 10,316 9,127
--------- ---------
Net cash provided by operating activities 31,866 51,583
--------- ---------
Cash flows from investing activities:
Investment in property, plant, and equipment (15,108) (20,002)
Disposition of property, plant, and equipment 11,622 850
Advances to affiliated companies -- (13,669)
Proceeds from sale of investments 958 --
Purchase of investment (7,500) --
--------- ---------
Net cash used in investing activities (10,028) (32,821)
--------- ---------
Cash flows from financing activities:
Net (payment of) proceeds from short-term debt (3,811) 5,601
Proceeds from long-term debt 10,451 --
Payments of long-term debt (117,582) (568)
Common Stock issued under employee
benefit plans 11,589 14,941
Common Stock repurchased (27,173) (4,411)
Proceeds from repayments of stockholder notes receivable 26 260
Cash dividends (4,480) (3,518)
--------- ---------
Net cash (used in) provided by financing activities (130,980) 12,305
--------- ---------
Effect of exchange rate changes on cash
and cash equivalents 630 (2,156)
--------- ---------
(Decrease) increase in cash and cash equivalents (108,512) 28,911
Cash and cash equivalents at beginning
of period 224,115 118,067
--------- ---------
Cash and cash equivalents at end of period $ 115,603 $ 146,978
========= =========
SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest (net of amounts capitalized) $ 4,097 $ 5,590
Income taxes (net of refunds) 9,155 686
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 6
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, 1996 and 1995, the financial position as of September
30, 1996, and the cash flows for the three months ended September 30, 1996 and
1995. The June 30, 1996 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, 1996. The results of operations for the three months
ended September 30, 1996, are not necessarily indicative of the results to be
expected for the full year. Certain prior-period amounts have been reclassified
to conform with the fiscal 1997 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,
-----------------------
1996 1995
--------- ---------
<S> <C> <C>
Revenues
Electronics $ 176,921 $ 157,855
Industrial 135,179 139,819
Telecommunications 118,211 112,841
--------- ---------
Total revenues $ 430,311 $ 410,515
========= =========
Operating income (loss)
Electronics $ 36,065 $ 31,166
Industrial 30,581 30,937
Telecommunications 26,473 23,585
Corporate (21,545) (22,591)
--------- ---------
Total operating income $ 71,574 $ 63,097
========= =========
</TABLE>
RECENT ACCOUNTING STANDARDS
In the first quarter of 1997, the company adopted the Financial Accounting
Standards Board Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." The statement requires that
long-lived assets and certain identifiable intangibles to be held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The
statement also requires that long-lived assets and certain identifiable
intangibles to be disposed of be reported at the lower of carrying amount or
fair value less cost to sell, except for assets that are covered by APB Opinion
No. 30. There was no impact on the company's results of operations or financial
condition upon adoption of Statement No. 121.
4
<PAGE> 7
FINANCIAL INSTRUMENTS
Gains and losses from forward exchange contracts used to hedge receivables and
payables and anticipated transactions totaled $0.4 million loss and $2.7 million
gain for the three months ended September 30, 1996 and 1995, respectively. The
company incurred total foreign exchange transaction and translation losses of
$0.5 million and $1.1 million for the three months ended September 30, 1996 and
1995, respectively. These realized and unrealized gains and losses are included
in "Other (income) expense, net." The total amount of foreign exchange exposure
hedged was $124 million at September 30, 1996. The company hedges exposures that
arise from trade and intercompany receivables and payables (including
anticipated transactions), loans in non-functional currencies, and net monetary
assets in certain foreign countries with the US dollar as functional currency.
The company has unhedged non-functional currency translation and transaction
exposures in countries whose currencies do not have a liquid, cost-effective
forward market available for hedging. Such exposures at September 30, 1996,
included $9 million in net intercompany payables in non-functional currencies
and $4 million in net monetary assets in foreign countries with the US dollar as
functional currency.
RESTRUCTURING AND DIVESTITURES
The company incurred a pretax restructuring charge of $44 million in the third
quarter of 1996 as the company moved to simplify and lower the costs of its
operations. All of the charges, with the exception of net $4 million in asset
writedowns, are cash in nature and are expected to be substantially incurred in
1997 and funded through operating cash flows. Approximately 700 positions will
be eliminated, some portion of which may be replaced elsewhere. As of September
30, 1996, 410 employees have separated from the company as a result of the
restructuring.
The following table sets forth the company's restructuring reserves as of
September 30, 1996:
<TABLE>
<CAPTION>
Restructuring Reserves
----------------------
Employee Asset
Severance Writedowns Leases Other Total
--------- ---------- ------ ----- --------
(in thousands)
<S> <C> <C> <C> <C> <C>
Reserve Balances,
June 30, 1996 (Audited): $ 23,733 $ 1,046 $ 827 $ 700 $ 26,306
Adjustment to reserve -- (246) (21) 267 --
Cash payments (4,722) -- (45) (151) (4,918)
Non-cash items (86) (79) -- -- (165)
-------- ------- ----- ----- --------
RESERVE BALANCES,
SEPTEMBER 30, 1996: $ 18,925 $ 721 $ 761 $ 816 $ 21,223
======== ======= ===== ===== ========
</TABLE>
MARKETABLE SECURITIES
Marketable securities are classified as available-for-sale and carried at fair
value as determined by quoted market prices. The aggregate fair value of the
marketable securities held at September 30, 1996 was $6 million. Gross
unrealized holding gains were $4 million and are included in the "Other"
component of stockholder's equity.
5
<PAGE> 8
REPURCHASE OF COMMON STOCK
In April 1996, as part of the company's continuing plan to purchase its shares
to meet employee benefit plan commitments, the Board of Directors authorized the
company's management, at its discretion, to repurchase up to 2.0 million shares
of the company's stock during any one fiscal year, effective July 1, 1996. In
unusual circumstances, management may elect to repurchase an additional 0.5
million shares in a fiscal year. During the three months ended September 30,
1996, the company repurchased 400,000 shares and subsequently reissued 278,168
shares, leaving 237,585 shares in treasury stock at September 30, 1996.
GAIN ON SALE OF ASSETS
In the first quarter of 1997, the company recorded a $23 million pretax gain
from the sale of a portfolio of patents and intellectual property, which gain is
included in "Other (income) expense, net."
CONTINGENCIES
The company has been named, among others, as a potentially responsible party 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 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 and its subsidiaries have also been named as a
defendant, along with sixteen other corporate and governmental codefendants, in
a private cost recovery for environmental cleanup expenses at the West Contra
Costa County Landfill in Richmond, California. On August 4, 1995, the company's
and other defendants' motion for judgment on the pleadings was granted by the
District Court striking the plaintiff's claim that the company and the other
defendants were jointly and severally liable for response costs at the site. As
a result, the company's potential liability, if any, for response costs at the
site would be based on the company's disposal of wastes at the site. The company
believes its wastes constitute less than 2% of the total amount of wastes
disposed of at the site.
Additionally, the company and its subsidiaries are parties to lawsuits involving
various types of commercial claims, including, but not limited to, product
liability, unfair competition, breach of contract, and intellectual property
matters. The principal product liability litigation involves a variety of claims
arising from the company's heat-tracing and freeze-protection products. The
company intends to defend itself vigorously in these matters. The company's
experience to date is that losses, if any, from such claims have not had a
material effect on the company's financial position or results of operations.
The company maintains insurance to cover product liability and certain other
claims in excess of deductibles.
Legal proceedings tend to be unpredictable and costly and may be affected by
events outside the control of the company. There is no assurance that litigation
will not have an adverse effect on the company's financial position or results
of operations. The company vigorously defends against pending claims and legal
proceedings.
SUBSEQUENT EVENTS
On October 16, 1996, the company's Board of Directors declared a quarterly cash
dividend of $0.10 per share of Common Stock, payable on December 11, 1996, to
stockholders of record as of November 6, 1996.
6
<PAGE> 9
RAYCHEM CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
OVERVIEW
- --------------------------------------------------------------------------------
Three months ended
September 30,
(in millions, except per share data) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Revenues $ 430 $ 411
- --------------------------------------------------------------------------------
Constant currency revenue growth 7% 7%
- --------------------------------------------------------------------------------
Gross profit as a percent of revenues 51% 53%
- --------------------------------------------------------------------------------
Selling, general, and administrative (SG&A)
expense as a percent of revenues 28% 30%
- --------------------------------------------------------------------------------
Net income $ 73 $ 32
- --------------------------------------------------------------------------------
Net income per common share $1.58 $0.72
- --------------------------------------------------------------------------------
</TABLE>
Revenues for the quarter were $430 million, up 5% from the first quarter of the
prior year. Revenues increased 7% from the year-ago quarter on a constant
currency basis (which assumes that foreign currency exchange rates had remained
constant from the prior period).
Gross profit, as a percent of reported revenues declined 2% to 51% in the
quarter ended September 30, 1996, as compared to the prior year. This is
principally due to the favorable currency impact on gross profit that occurred
in the year-ago period. SG&A expense as a percent of revenues declined to 28% in
the first quarter of 1997. The reduction in SG&A costs was largely the result of
restructuring and other actions taken in the prior year to reduce operating
costs. Management is focused on further reductions of SG&A costs as a percent of
revenues.
Net income increased from the year-ago quarter due to improved profitability, a
non-recurring gain in the current quarter, and the absence of Raynet losses.
Raychem's "ongoing" pretax income for the first quarter of 1997 increased to $65
million from $57 million in the comparable prior-year period. Raychem's results
are summarized as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Three months ended
September 30,
(in millions) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Core business:
"Ongoing" pretax income $65 $ 57
Gain on sale of assets 23 --
- --------------------------------------------------------------------------------
Core business pretax income 88 57
Income taxes 15 14
- --------------------------------------------------------------------------------
Core net income 73 43
Equity in net loss of Ericsson Raynet -- (11)
- --------------------------------------------------------------------------------
Net income $73 $ 32
- --------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 10
In the first quarter of 1997, the company recorded a $23 million pretax gain
(included in Other (income) expense, net) arising from the sale to Medtronic,
Inc. for $25 million of a portfolio of patents and intellectual property
relating to the use of nickel titanium for medical applications.
The estimated effective annual income tax rate was 18% for the three months
ended September 30, 1996, down from 23% for the year-ago period. The decrease
results primarily from anticipated improvement in fiscal 1997 U.S. profitability
enabling the utilization of prior years' U.S. deferred deductions.
Through December 31, 1995, the company accounted for the Ericsson Raynet joint
venture under the equity method of accounting. Effective January 1, 1996, the
joint venture agreement was amended. As a result, the company's interest in the
joint venture is now accounted for using the cost basis of accounting and the
company no longer shares in the ongoing operating losses of the joint venture.
SEGMENT OPERATIONS
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").
Certain amounts previously reported as corporate segment costs, notably certain
legal and patents and information technology costs, are now being allocated to
the business segments. Accordingly, previously reported operating income for the
segments has been restated to conform to the fiscal 1997 presentation.
<TABLE>
<CAPTION>
Electronics
- --------------------------------------------------------------------------------
Three months ended
September 30,
(dollars in millions) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Revenues $177 $158
- --------------------------------------------------------------------------------
Constant currency revenue growth 15% 9%
- --------------------------------------------------------------------------------
Operating income $ 36 $ 31
- --------------------------------------------------------------------------------
</TABLE>
The electronics business segment, including the Electronics and PolySwitch
divisions and the Elo TouchSystems business, experienced strong revenue growth
in the first quarter of 1997. The Electronics Division's sales grew in all
market segments paced by strong growth in sales to commercial and defense
customers. The PolySwitch Division experienced a 30% increase in unit volumes
and growth in the automotive applications business. Revenues increased only 10%
on a constant currency basis, however, due to price reductions and a continuing
mix shift to physically smaller and lower average sales price products. Elo
TouchSystems' revenues now include TouchPanel Systems, a Japanese joint venture,
previously accounted for under the equity method. Elo TouchSystems' revenues on
a comparable basis increased 16% in constant currency terms. Electronics
business segment operating income increased $5 million to $36 million in the
first quarter of 1997 from the year-ago quarter. This increase in operating
income was due to higher revenues and relatively lower costs.
8
<PAGE> 11
<TABLE>
<CAPTION>
Industrial
- --------------------------------------------------------------------------------
Three months ended
September 30,
(dollars in millions) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Revenues $135 $140
- --------------------------------------------------------------------------------
Constant currency revenue growth -1% 8%
- --------------------------------------------------------------------------------
Operating income $ 31 $ 31
- --------------------------------------------------------------------------------
</TABLE>
Revenues in the industrial business segment, including the Chemelex and
Electrical Products divisions, declined $5 million in the first quarter of 1997
compared to the year-ago quarter. Chemelex Division sales were essentially
unchanged with growth in heat tracing sales offset by declines in the corrosion
protection product business. Higher shipment rates are expected for the Chemelex
Division in the seasonally strong second quarter. The segment's decline in
revenues was due to the Electrical Products Division's lower surge arrester
sales. The Electrical Products Division anticipates a return to modest constant
currency revenue growth for the remainder of the fiscal year. Industrial
business segment operating income remained unchanged from the comparable
prior-year quarter. While Chemelex Division's profitability improved in the
current quarter, the effect was offset by Electrical Products Division's decline
in revenues and a $2 million charge related to the closure of Electrical
Products' business center in Delaware.
<TABLE>
<CAPTION>
Telecommunications
- --------------------------------------------------------------------------------
Three months ended
September 30,
(dollars in millions) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Revenues $118 $113
- --------------------------------------------------------------------------------
Constant currency revenue growth 6% 2%
- --------------------------------------------------------------------------------
Operating income $ 26 $ 24
- --------------------------------------------------------------------------------
</TABLE>
Telecommunications business segment revenues increased $5 million from the
prior-year first quarter, primarily from the strong sales of Miniplex
multiplexer systems. Strong revenue growth in the U.S. and Asia was partially
offset by declines in Latin America. Sales of copper closures continued a
moderate decline. Operating income for the quarter increased to $26 million,
reflecting sales growth along with stable operating margins.
RECENT ACCOUNTING STANDARDS
In the first quarter of 1997, the company adopted the Financial Accounting
Standards Board Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." The statement requires that
long-lived assets and certain identifiable intangibles to be held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The
statement also requires that long-lived assets and certain identifiable
intangibles to be disposed of be reported at the lower of carrying amount or
fair value less cost to sell, except for assets that are covered by APB
9
<PAGE> 12
Opinion No. 30. There was no impact on the company's results of operations or
financial condition upon adoption of Statement No. 121.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the company had $116 million in cash and cash
equivalents, $456 million in committed credit facilities (of which $15 million
were utilized), and $172 million in various uncommitted credit facilities (of
which $53 million were utilized). The combination of cash and cash equivalents,
available lines of credit, and future cash flows from operations are expected to
be sufficient to satisfy the company's needs for working capital, normal capital
expenditures, and anticipated dividends.
The following table presents certain measures of liquidity and capital
resources:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SEPTEMBER 30, June 30,
(dollars in millions) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Debt net of cash $ 85 $ 79
- --------------------------------------------------------------------------------
Debt net of cash as a percent of stockholders' equity 10% 9%
- --------------------------------------------------------------------------------
Days of sales outstanding 64 60
- --------------------------------------------------------------------------------
Days of inventory on hand 101 104
- --------------------------------------------------------------------------------
</TABLE>
Receivables as measured by the number of days of sales outstanding increased
slightly, but is within an acceptable range given the geographic mix of
countries involved.
Inventory as measured by the number of days of inventory on hand improved in the
first quarter of 1997, reflecting ongoing efforts by the company to reduce the
number of locations holding inventory and the levels of inventory being held.
The table below summarizes the company's cash flows from operating, investing,
and financing activities:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30 (dollars in millions) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash provided by (used in):
Operating activities $ 32 $ 52
Investing activities (10) (33)
Financing activities (131) 12
Effect of exchange rate changes on
cash and cash equivalents 1 (2)
- --------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents $(109) $ 29
- --------------------------------------------------------------------------------
</TABLE>
OPERATING ACTIVITIES
The decrease in cash flows from operating activities in the first quarter of
1997, as compared to the first quarter of the prior year, resulted primarily
from improved profits, offset by cash payments made for accrued bonus and
severance liability, and increases in accounts receivable.
10
<PAGE> 13
INVESTING ACTIVITIES
Cash used in investing activities decreased $23 million in the first three
months of 1997 compared to the year-ago period. Investments in property, plant,
and equipment totaled $15 million and $20 million in the three months ended
September 30, 1996 and 1995, respectively. Although capital expenditures were
down in the first quarter, spending for 1997 is expected to be approximately $90
million. Dispositions of property, plant, and equipment increased in the current
quarter due to the collection of proceeds from the sale of the former Walter
Rose land and buildings in Germany and the sale of the plastic pipe coupling
business assets.
The company had made advances to Ericsson Raynet of approximately $14 million in
the first quarter of the prior year. The Ericsson Raynet joint venture was
reconfigured effective January 1, 1996. As a result of the reorganization, the
company is no longer required to make advances for ongoing operating losses to
Ericsson Raynet.
The company invested approximately $7.5 million in Superconducting Core
Technologies, Inc. (SCT) in the first quarter of 1997. The company will be the
exclusive distributor of SCT's cryoelectronic receiver front-end products for
wireless base stations.
In early October 1996, the company received $25 million from the sale of a
portfolio of patents and related intellectual property.
Bell South Enterprises Inc. (BSE) had financed a portion of the software
development work at Raynet, when Raynet was a wholly-owned subsidiary of
Raychem. In conjunction with the creation of the Ericsson Raynet joint venture,
the company is required to make a final payment to BSE of $10 million in
November 1996. In addition, BSE is entitled to receive a portion of any
distribution that Raychem receives as a result of the Ericsson Raynet joint
venture agreement.
FINANCING ACTIVITIES
In the first quarter of 1997, the company prepaid the balance of the syndicated
term loan agreement, amounting to $118 million, which was classified as "Current
maturities of long-term debt" at June 30,1996. In addition, the company replaced
its $250 million four-year revolving credit facility with a new $400 million
five-year revolving credit facility. The new credit facility has more favorable
pricing and covenants than the previous facility.
The company continued to repurchase shares of the company's stock as previously
authorized by the Board of Directors. During the three months ended September
30,1996, the company repurchased 400,000 shares at a cost of $27 million. In
addition, the company received $12 million from the issuance of Common Stock to
employees participating under various employee benefit plans.
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
Several statements made in this management's discussion and analysis or
elsewhere in this report, such as those relating to higher shipment rates for
Chemelex, revenue growth for Chemelex, anticipated reductions in SG&A rates,
anticipated capital spending
11
<PAGE> 14
rates, sufficiency of the company's cash and cash flows to meet expected needs,
and litigation matters, are forward-looking statements and are subject to a
number of risks and uncertainties that could cause actual results to differ
materially from the statements made, including those discussed below.
The 1996 restructuring charges, excluding net asset writedowns of $4 million,
are cash in nature and are expected to be substantially incurred in fiscal 1997
and funded through operating cash flow. The company expects that the
restructuring charges will be recovered within 18 to 24 months through lower
operating costs. When fully implemented, the annual run-rate savings is expected
to be in the $35-$40 million range; substantially all of the savings are cash
related. These restructuring actions reflect complex changes that will affect
the company's worldwide operations. Timelines could be longer than anticipated
and implementation difficulties or market factors could alter the estimated
benefits.
The company continues to work to improve operational efficiency and implement
organizational changes in many areas of the company and to reduce SG&A costs.
For example, the company is redesigning worldwide logistics operations and is
examining manufacturing operations to achieve efficiencies through sharing of
"back-end" resources. In addition, the company plans to merge certain aspects of
the Electronics and PolySwitch divisions to achieve operational efficiencies and
to enhance the company's approach to the marketplace. Reviews continue and
further actions may yet be identified that could result in additional charges in
the future. The company's operating results and financial condition could be
adversely affected by its ability to effectively manage the transition to the
new organizational and operating structures and to the outsourcing of some
activities. There can be no assurance that the company will be successful in
achieving its goals or that it will be able to do so without unintended adverse
consequences.
The company has historically achieved part of its revenue growth by developing
or acquiring new and innovative materials science technologies and products.
Commitment to continued research and development and the acquisition of new or
compatible technologies and businesses continue to be an important part of the
company's strategy. In addition, the company may enter into arrangements with
other companies to expand product offerings and to enhance its own manufacturing
capabilities. The success of the research and development efforts, acquisitions
of new technologies and products, or arrangements with third parties is not
always predictable and there is no assurance that the company will be successful
in realizing its objectives, or that realization may not take longer than
anticipated, or that there will not be unintended adverse consequences from
these actions.
As a result of the Ericsson Raynet reorganization, effective January 1, 1996,
Raychem no longer shares in the ongoing operating losses of the joint venture.
While there is the potential for some future charges related to warranty claims,
the company believes that Ericsson Raynet's existing warranty reserves are
adequate.
The income tax provision is determined by the level of profitability and the tax
jurisdiction in which profits are generated. The geographic distribution and
level of profitability is difficult to predict and may vary from forecasts which
could result in changes in the estimated annual effective tax rate during the
fiscal year. In addition, the company has
12
<PAGE> 15
a deferred tax asset valuation allowance that is primarily attributable to U.S.
federal and state deferred tax assets. Realization of the deferred tax assets is
dependent on generating sufficient future U.S. taxable income to utilize
deductions and credits prior to their expiration. Management believes sufficient
uncertainty exists regarding the realization of these deferred tax assets that a
valuation allowance is required. The amount of the valuation allowance will be
reassessed in future periods and may be reduced further dependent on U.S.
taxable income. Any such adjustment would also impact the income tax provision.
The company has manufacturing facilities in many countries and is subject to
environmental regulations. These regulations, and any changes in them, can
affect the company's manufacturing processes as well as the cost, availability,
and use of raw materials. Although compliance with such environmental
regulations has not had a material effect on capital expenditures or operating
results in the past, there is no assurance that any such regulations, or changes
in regulations, will not have a material adverse effect on future capital
expenditures or operating results.
In the past, supplies of certain raw materials the company uses have become
limited, and it is possible that this may occur again in the future. Should it
occur, it could result in increased prices, rationing, and shortages. In
response, the company tries to identify alternative materials and technologies
for such raw materials or other sources of supply. Although the effect in the
past has not been material, such situations could adversely affect financial
results.
From time to time, the company and/or its subsidiaries become involved in
lawsuits arising from various types of commercial claims, including, but not
limited to, product liability, unfair competition, breach of contract, and
intellectual property matters. Currently, the principal product liability
litigation involves a variety of claims arising from the company's heat-tracing
and freeze-protection products. Litigation tends to be unpredictable and costly.
There is no assurance that litigation will not have an adverse effect on the
company's financial position or results of operations.
Approximately two-thirds of the company's revenues result from sales outside the
United States and the company also has several production facilities located
outside the United States. The company's financial results can be adversely
affected by changes in foreign currency rates, changes in worldwide economic
conditions, changes in trade policies or tariffs, changes in interest rates, and
political unrest overseas. These effects may be mitigated by the global nature
of both the company's sales and production activities.
The company has a substantial investment in intellectual properties-consisting
of patents, trademarks, copyrights, and trade secrets-and relies significantly
on the protection these intellectual property rights provide. Accordingly, the
company aggressively protects these rights and may become involved in issues of
infringement or theft by third parties from time to time and related
counterclaims by such third parties. The company has become involved as a
defendant in an intellectual property lawsuit and could become involved in
others. Litigation can be unpredictable and costly. It is possible that an
unfavorable outcome in a suit related to intellectual property could be material
to the company's financial position or results of operations.
13
<PAGE> 16
The company maintains property, cargo, auto, product, general liability, and
directors and officers liability insurance to protect itself against potential
loss exposures. To the extent that losses occur, there could be an adverse
effect on the company's financial results depending on the nature of the loss,
and the level of insurance coverage maintained by the company. From time to
time, the company may reevaluate and change the types and levels of insurance
coverage that it purchases.
A portion of the company's research and development activities, its corporate
headquarters, and other critical business operations are located near major
earthquake faults. In the event of a major earthquake, the ultimate impact on
the company, significant suppliers, and the general infrastructure is unknown,
but operating results could be materially affected. The company is predominantly
not insured for losses and interruptions caused by earthquakes.
Many of the company's products are sold in competition with other products or
technologies. Actions of competitors could affect the company's operating
results. For example, several companies have begun marketing PPTC circuit
protection devices similar to some of the PolySwitch Division's products. In
addition, operating results are subject to fluctuations in demand and the
seasonal activity of certain product lines. A shortfall in revenue could also
result from a number of other factors, including but not necessarily limited to,
overall economic conditions, lower than expected demand, or supply constraints.
In addition, changes in geographic or product mix may impact gross profits. A
substantial amount of the company's revenues are realized through orders and
shipments booked within a quarter, and the backlog at the end of any quarter may
not be predictive of the financial results for the following quarter.
The company from time to time identifies expectations such as growth,
profitability, cash flow, capital spending, or inventory levels. In addition,
the company periodically identifies financial targets for the company, for
specific divisions of the company, and, within divisions, for heartland and
growth platform businesses. These expectations and targets constitute goals, not
projections or assured results. The ability to achieve such targets is subject
to a variety of factors, including, but not necessarily limited to, those
identified above.
Because of the foregoing factors, in addition to other factors that affect the
company's operating results and financial position, past financial performance
or management's expectations should not be considered to be a reliable indicator
of future performance. Investors should not use historical trends to anticipate
results or trends in future periods. Further, the company's stock price is
subject to volatility. Any of the factors discussed above could have an adverse
impact on the company's stock price. In addition, failure of revenues or
earnings in any quarter to meet the investment community's expectations, as well
as broader market trends, could have an adverse impact on the company's stock
price.
The company does not undertake an obligation to update its forward-looking
statements or risk factors to reflect future events or circumstances.
14
<PAGE> 17
RAYCHEM CORPORATION
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
On September 26, 1996, the Ninth Circuit Court of Appeals affirmed the dismissal
by the United States District, Northern District of California, of related
lawsuits filed against the company on August 19, 1993, Creole Engineering Co. v.
Raychem Corporation, Tri-Systems, and Tracer Construction Company, and on June
29, 1993, Unit Process Company; Brock Easley, Inc.; Bylin Heating Systems, Inc.;
and Fluid Flow Control Contractors v. Raychem Corporation; Debenham Electrical
Supply Company, Inc.; and K.V.A. Electrical Supply Corp. Four similar state
actions brought by the plaintiffs which have been consolidated in the Superior
Court of San Mateo County, California, and the District Court of Jefferson
County, Colorado, had been stayed pending resolution of the Ninth Circuit
appeal. Information about this lawsuit was disclosed in the company's annual
report on Form 10-K for the year ended June 30, 1996.
On August 27, 1993, Elo TouchSystems, Inc. sued The Graphics Technology Company
in the U.S. District Court, Eastern District of Tennessee, Civil Action No.
3-93-CV-508, Elo TouchSystems, Inc. (f/k/a/ Elographics, Inc.) v. The Graphics
Technology Company, Inc., a/k/a Touch Technology, Inc., alleging infringement of
certain Elo TouchSystems' United States patents. In December 1995, MicroTouch
Systems, Inc. and MicroTouch Resistive Products, Inc. were added as party
defendants. On March 19, 1996, Civil Action No. 3-96-CV-419, Peptek, Inc. and
MicroTouch Systems, Inc. v. Elo TouchSystems, Inc., originally filed in the
United States District Court for Massachusetts, was transferred and consolidated
with the District Court action in Tennessee. The complaint in the Massachusetts
action seeks unspecified damages and injunctive relief based on allegations that
Elo TouchSystems, Inc. is infringing certain patents of the plaintiffs.
ITEM 5: OTHER INFORMATION
On August 19, 1996, the company appointed Timothy J. Burch to the position of
Vice President of Human Resources, effective October 1, 1996. He will be
responsible for managing Raychem's worldwide human resource network and will
report directly to Richard A. Kashnow, President and CEO.
Joseph G. Wirth, Senior Vice President and Chief Technical Officer, announced
his intention to retire from Raychem in December 1996. A search is underway to
fill this position. Separately, Michael T. Everett, Senior Vice President,
announced his intention to leave the company in December 1996.
15
<PAGE> 18
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Index to Exhibits
EXHIBIT NO. DESCRIPTION
----------- -----------
4(d) Credit Agreement dated as of September 12, 1996
10(z) Consulting Agreement dated as of August 16, 1996, between
the company and Isaac Stein and Waverley Associates, Inc.
27 Financial Data Schedule
(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 7, 1996 /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
Controller
(Principal Accounting Officer)
17
<PAGE> 1
Exhibit 4(d)
[EXECUTION COPY]
$400,000,000
CREDIT AGREEMENT
among
RAYCHEM CORPORATION,
VARIOUS BANKS,
THE CHASE MANHATTAN BANK,
as SYNDICATION AGENT
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as ADMINISTRATIVE AGENT
------------------------------
Dated as of September 12, 1996
------------------------------
Co-Arranged By
BA SECURITIES, INC. and CHASE SECURITIES INC.
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION ............................ 1
1.01 Defined Terms ......................................................... 1
1.02 Principles of Construction ............................................ 21
SECTION 2. AMOUNT AND TERMS OF CREDIT ............................................ 22
2.01 The Loans ............................................................. 22
2.02 Minimum Amount of Each Borrowing ...................................... 23
2.03 Notice of Borrowing of Committed Loans ................................ 23
2.04 Competitive Bid Borrowings ............................................ 24
2.05 Disbursement of Funds ................................................. 30
2.06 Notes ................................................................. 31
2.07 Conversions and Continuations ......................................... 32
2.08 Pro Rata Borrowings ................................................... 33
2.09 Interest .............................................................. 33
2.10 Interest Periods ...................................................... 35
2.11 Increased Costs, Illegality, etc ...................................... 35
2.12 Compensation .......................................................... 39
2.13 Change of Applicable Lending Office ................................... 39
2.14 Notice of Certain Costs ............................................... 40
2.15 Facility Increases .................................................... 40
SECTION 3. FEES; TERMINATION OF COMMITMENTS ...................................... 44
3.01 Fees .................................................................. 44
3.02 Voluntary Termination of Unutilized Total Commitment .................. 44
3.03 Mandatory Termination of a Bank's Commitment .......................... 44
3.04 Replacement of Bank; Voluntary Termination of a Bank's Commitment ..... 44
SECTION 4. PREPAYMENTS; PAYMENTS ................................................. 46
4.01 Voluntary Prepayments ................................................. 46
4.02 Principal Repayments and Mandatory Prepayments ........................ 47
4.03 Method and Place of Payment ........................................... 47
4.04 Net Payments .......................................................... 48
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5. CONDITIONS PRECEDENT .................................................. 49
5.01 Conditions to Initial Loan ............................................ 49
5.02 Conditions to Each Loan ............................................... 51
5.03 Conditions to Facility Increase ....................................... 52
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREE-
MENTS ................................................................. 53
6.01 Corporate Status ...................................................... 53
6.02 Corporate Power and Authority ......................................... 54
6.03 No Violation .......................................................... 54
6.04 Governmental Approvals ................................................ 54
6.05 Financial Statements; Financial Condition; Undisclosed Liabilities; etc 55
6.06 Litigation ............................................................ 56
6.07 True and Complete Disclosure .......................................... 56
6.08 Use of Proceeds; Margin Regulations ................................... 56
6.09 Tax Returns and Payments .............................................. 56
6.10 Compliance with ERISA ................................................. 57
6.11 Subsidiaries .......................................................... 58
6.12 Compliance with Statutes, etc ......................................... 58
6.13 Investment Company Act ................................................ 58
6.14 Public Utility Holding Company Act .................................... 58
6.15 Labor Relations ....................................................... 59
6.16 Patents, Licenses, Franchises and Formulas ............................ 59
6.17 Compliance with Environmental Laws .................................... 59
SECTION 7. AFFIRMATIVE COVENANTS ................................................. 62
7.01 Information Covenants ................................................. 62
7.02 Books, Records and Inspections ........................................ 65
7.03 Maintenance of Property, Insurance .................................... 65
7.04 Corporate Franchises .................................................. 66
7.05 Compliance with Statutes, etc ......................................... 66
7.06 ERISA ................................................................. 66
7.07 End of Fiscal Years; Fiscal Quarters .................................. 68
7.08 Performance of Obligations ............................................ 68
7.09 Payment of Taxes and Claims ........................................... 68
SECTION 8. NEGATIVE COVENANTS .................................................... 69
8.01 Changes in Business ................................................... 69
8.02 Consolidation, Merger, Sale of Assets, etc ............................ 69
8.03 Liens ................................................................. 70
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
8.04 Leverage Ratio ........................................................ 74
8.05 Fixed Charges Coverage Ratio .......................................... 74
SECTION 9. EVENTS OF DEFAULT ..................................................... 74
9.01 Payments .............................................................. 74
9.02 Representations, etc .................................................. 75
9.03 Covenants ............................................................. 75
9.04 Default Under Other Agreements ........................................ 75
9.05 Bankruptcy, etc ....................................................... 75
9.06 ERISA ................................................................. 76
9.07 Judgments ............................................................. 77
9.08 Change of Control ..................................................... 77
SECTION 10. THE AGENTS............................................................. 78
10.01 Appointment............................................................ 78
10.02 Delegation of Duties................................................... 78
10.03 Liability of the Agents................................................ 79
10.04 Reliance by the Agents................................................. 79
10.05 Notice of Default...................................................... 80
10.06 Credit Decision........................................................ 80
10.07 Indemnification of the Agents.......................................... 81
10.08 The Agents in their Individual Capacity................................ 82
10.09 Resignation by the Agents.............................................. 82
10.10 Withholding Tax Matters................................................ 83
10.11 Holders................................................................ 86
SECTION 11. MISCELLANEOUS.......................................................... 86
11.01 Payment of Expenses, etc............................................... 87
11.02 Right of Setoff........................................................ 88
11.04 Benefit of Agreement................................................... 89
11.05 Assignments, Participations, Etc....................................... 89
11.06 No Waiver; Remedies Cumulative......................................... 91
11.07 Payments Pro Rata...................................................... 92
11.08 Calculations; Computations............................................. 92
11.09 Governing Law; Submission to Jurisdiction; Venue....................... 93
11.10 Effectiveness.......................................................... 94
11.11 Counterparts........................................................... 94
11.12 Domicile of Loans...................................................... 94
11.13 Headings Descriptive................................................... 94
11.14 Amendment or Waiver.................................................... 94
11.15 Survival............................................................... 95
11.16 Entire Agreement....................................................... 95
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
11.17 Waiver of Jury Trial................................................... 95
11.18 Payments Set Aside..................................................... 95
11.19 Severability........................................................... 96
</TABLE>
(iv)
<PAGE> 6
SCHEDULE I Commitments
SCHEDULE II Applicable Lending Offices
SCHEDULE III Undisclosed Liabilities
SCHEDULE IV Litigation
SCHEDULE V Subsidiaries
SCHEDULE VI Material Subsidiaries
SCHEDULE VII Environmental Matters
SCHEDULE VIII Permitted Liens
EXHIBIT A-1 Notice of Committed Borrowing
EXHIBIT A-2 Notice of Competitive Bid Borrowing
EXHIBIT B Invitation for Competitive Bids
EXHIBIT C Competitive Bid
EXHIBIT D Note
EXHIBIT E Notice of Conversion/Continuation
EXHIBIT F New Bank Acceptance
EXHIBIT G Original Bank Acknowledgment
EXHIBIT H Opinion of Counsel to the Borrower
EXHIBIT I Officers' Certificate of the Borrower
EXHIBIT J Assignment and Acceptance Agreement
<PAGE> 7
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, as Syndication Agent (in such capacity, "Syndication
Agent") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
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. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
1.01 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):
"Absolute Rate" shall have the meaning provided in Section
2.04(c).
"Absolute Rate Auction" means a solicitation of Competitive
Bids setting forth Absolute Rates pursuant to Section 2.04.
"Absolute Rate Bid Loan" means a Competitive Bid Loan that
bears interest at a rate determined with reference to the Absolute Rate.
"Additional Commitment" shall have the meaning provided in
Section 2.15(a).
<PAGE> 8
"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. 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.
"Agents" shall mean the Administrative Agent and the
Syndication Agent.
"Agent-Related Persons" shall mean (i) BofA and any successor
agent arising under Section 10.09 and (ii) the Syndication Agent, in each case
together with their respective Affiliates (including the respective
Co-Arrangers), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Aggregate Loan Outstandings" shall have the meaning provided
in Section 4.02(d).
"Agreement" shall mean this Credit 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 (except as set forth in clause (b) of
the proviso to Section 8.05), 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 7.01 Financials (it being understood that each
Applicable Eurodollar Rate Margin shall be determined based on the officer's
certificate delivered pursuant to Section 7.01(c) in respect of the respective
Section 7.01 Financials and shall be in effect from the date the
-2-
<PAGE> 9
respective Section 7.01 Financials (together with the corresponding Section
7.01(c) officer's certificate) are delivered to the Banks until the date the
next such Section 7.01 Financials (together with the corresponding Section
7.01(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
6.00:1.00 0.1500%
Less than 6.00:1.00 but equal
to or greater than 5.00:1.00 0.1700%
Less than 5.00:1.00 but equal
to or greater than 4.00:1.00 0.1850%
Less than 4.00:1.00 but equal
to or greater than 3.25:1.00 0.2400%
Less than 3.25:1.00 but equal
to or greater than 2.50:1.00 0.3000%
Less than 2.50:1.00 0.4250%
</TABLE>
; provided that (A) if the Section 7.01 Financials (together with the
corresponding Section 7.01(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 7.01 Financials (together with the corresponding Section 7.01(c)
officer's certificate) are received by the Administrative Agent, and (B) subject
to the immediately preceding clause (A), from the Effective Date until the
Section 7.01 Financials (together with the corresponding Section 7.01(c)
officer's certificate) for the fiscal quarter ended September 30, 1996 are
received by the
-3-
<PAGE> 10
Administrative Agent, for purposes of this definition the Applicable Eurodollar
Rate Margin shall be 0.1850%.
"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 (except as set forth in clause (b) of
the proviso to Section 8.05), 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 7.01 Financials (it being understood that each
Applicable Facility Fee Percentage shall be determined based on the officer's
certificate delivered pursuant to Section 7.01(c) in respect of the respective
Section 7.01 Financials and shall be in effect from the date the respective
Section 7.01 Financials (together with the corresponding Section 7.01(c)
officer's certificate) are delivered to the Banks until the date the next such
Section 7.01 Financials (together with the corresponding Section 7.01(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
6.00:1.00 0.0700%
Less than 6.00:1.00 but equal
to or greater than 5.00:1.00 0.0800%
Less than 5.00:1.00 but equal
to or greater than 4.00:1.00 0.0900%
Less than 4.00:1.00 but equal
to or greater than 3.25:1.00 0.1100%
Less than 3.25:1.00 but equal
to or greater than 2.50:1.00 0.1500%
Less than 2.50:1.00 0.2000%
</TABLE>
-4-
<PAGE> 11
; provided that (A) if the Section 7.01 Financials (together with the
corresponding Section 7.01(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 7.01 Financials (together with the corresponding Section 7.01(c)
officer's certificate) are received by the Administrative Agent, and (B) subject
to the immediately preceding clause (A), from the Effective Date until the
Section 7.01 Financials (together with the corresponding Section 7.01(c)
officer's certificate) for the fiscal quarter ended September 30, 1996 are
received by the Administrative Agent, for purposes of this definition the
Applicable Facility Fee Percentage shall be 0.0900%.
"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 2.04(c), in the case of such Competitive Bid Loan.
"Assignee" shall have the meaning provided in Section
11.05(a).
"Assignment and Acceptance" shall have the meaning provided in
Section 11.05(a).
"Bank" shall have the meaning provided in the first paragraph
of this Agreement and shall include any New Bank becoming party to this
Agreement in connection with any Facility Increase.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" shall mean on any day the higher of (x) the
Reference 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
-5-
<PAGE> 12
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 7.03.
"BofA" shall mean Bank of America National Trust and Savings
Association, a national banking association.
"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 2.11(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 San Francisco or in New York 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 applicable 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.
-6-
<PAGE> 13
"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-Arrangers" shall mean BA Securities, Inc. and Chase
Securities Inc.
"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 3.02, 3.03, 3.04 and 9 or increased from
time to time pursuant to Section 2.15.
"Commitment Expiration Date" shall mean September 12, 2001.
"Committed Loans" shall have the meaning provided in Section
2.01(a).
"Competitive Bid" shall mean an offer by a Bank to make a
Competitive Bid Loan in accordance with Section 2.04.
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<PAGE> 14
"Competitive Bid Borrowing" shall mean a Borrowing of
Competitive Bid Loans pursuant to Section 2.04.
"Competitive Bid Loan" shall have the meaning provided in
Section 2.01(b).
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income 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, and (c) provision for taxes imposed on or measured by income or excess
profits for such period.
"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 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;
provided that for purposes only of the definition of Consolidated EBIT,
"Consolidated Net Income" shall exclude any non-cash gains or losses on unusual
or extraordinary items, but include 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 proviso.
"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.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consol-
-8-
<PAGE> 15
idated 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.
"Consolidated Total Debt" 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.
"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 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,
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<PAGE> 16
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
11.10.
"Eligible Assignee" shall mean (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; and (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of
a Person of which a Bank is a Subsidiary, or (iii) a Person of which a Bank is a
Subsidiary.
"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.
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<PAGE> 17
"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
9.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of September 29, 1994, among the Borrower, Swiss Bank Corporation, as
agent, and the lending institutions party thereto, as amended, modified and
supplemented prior to the Effective Date.
"Facility Fee" shall have the meaning provided in Section
3.01(a).
"Facility Increase" shall have the meaning provided in Section
2.15(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 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.
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<PAGE> 18
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"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.
"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 8, including defined terms as
used therein, are subject (to the extent provided therein) to Section 11.07(a).
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"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 9.04 only, the marked-to-market value of all obligations of such Person
under Interest Rate Protection Agreements or Other
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<PAGE> 19
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 Bid Loan priced by reference to the Quoted Rate, the second
Business Day prior to the incurrence of such Spread Bid 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 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 thereto, as determined
pursuant to Section 2.10 and (y) with
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<PAGE> 20
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.
"Invitation for Competitive Bids" shall mean a solicitation
for Competitive Bids, substantially in the form of Exhibit B.
"IRS" shall mean the Internal Revenue Service, and any
Governmental Authority succeeding to any of its principal functions under the
Code.
"Lease Financing" means those certain lease financing
transactions involving certain of the Borrower's production equipment in the
United States consummated pursuant to (i) that certain Participation Agreement
dated as of April 11, 1996 among the Borrower as Lessee, Metlife Capital,
Limited Partnership as Owner Participant, Fleet National Bank as Owner Trustee,
First Security Bank of Utah, National Association as Indenture Trustee, and
certain financial institutions as Loan Participants and other related
documentation and (ii) that certain Participation Agreement dated as of April
11, 1996 among the Borrower as Lessee, U.S. Bancorp Leasing & Financial as Owner
Participant, Fleet National Bank as Owner Trustee, First Security Bank of Utah,
National Association as Indenture Trustee, and certain financial institutions as
Loan Participants and other related documentation, in each case as such
documents may be amended from time to time; provided that no such amendment
shall increase the aggregate principal amount of Indebtedness of the Borrower
under such documents without the prior written consent of the Required Banks.
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<PAGE> 21
"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.
"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
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<PAGE> 22
Subsidiary had been a Subsidiary of the Borrower at all times during such
period).
"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 foreign currency translation
adjustments.
"New Bank" shall have the meaning provided in Section 2.15(b).
"New Bank Acceptance" shall have the meaning provided in
Section 2.15(c).
"New Commitment" shall have the meaning provided in Section
2.15(b).
"Note" shall have the meaning provided in Section 2.06.
"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 2.03.
"Notice of Competitive Bid Borrowing" shall have the meaning
provided in Section 2.04.
"Notice of Conversion/Continuation" shall have the meaning
provided in Section 2.07.
"Notice Office" shall mean the office of the Administrative
Agent specified as its "Notice Office" opposite its name on Schedule II 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.
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<PAGE> 23
"Operating Lease" shall mean any lease that is not a Capital
Lease.
"Original Bank" shall have the meaning provided in Section
2.15(a).
"Original Bank Acknowledgment" shall have the meaning provided
in Section 2.15(c).
"Originator" shall have the meaning provided in Section
11.05(d).
"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.
"Participant" shall have the meaning provided in Section
11.05(d).
"Payment Office" shall mean the office of the Administrative
Agent specified as its "Payment Office" opposite its name on Schedule II or such
other office in the United States 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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<PAGE> 24
"Quoted Rate" shall mean, with respect to each Interest
Period:
(A)(i) for a Eurodollar Rate Loan, the average (rounded upward to the
next whole multiple of 1/16 of 1%) of the offered quotation to
first-class banks in the 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 11:00
a.m. (New York City 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
provided to the Administrative Agent by the other Reference Bank, or
(ii) in the case of a Competitive Bid Loan that is a Spread Bid Loan
priced by reference to the Quoted Rate, the arithmetic average (rounded
upward to the nearest 1/16 of 1%) of the offered rates for deposits in
Dollars for the applicable Interest Period (or the period closest to
such applicable Interest Period) which appear on the Reuters Screen
LIBO Page, determined as of 11:00 a.m. (London time) on the date which
is two Business Days prior to the commencement of such Interest Period;
in each case, divided by
(B) a percentage equal to 100% minus the Eurodollar Reserve Percentage
(as hereinafter defined). As used herein, "Eurodollar Reserve
Percentage" means for any day for any Interest Period the maximum
reserve percentage (expressed as a decimal, rounded upward to the next
1/100th of 1%) in effect on such day (whether or not applicable to any
Bank) under regulations issued from time to time by the Federal Reserve
Bank for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities" under Regulation D).
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<PAGE> 25
"Reference Banks" shall mean BofA and The Chase Manhattan
Bank.
"Reference Rate" shall mean the rate which the Administrative
Agent announces from time to time as its reference rate, the Reference Rate to
change when and as such reference rate changes. The Reference Rate 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 Reference Rate.
"Register" shall have the meaning provided in Section 2.06(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.
"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.
"Reuters Screen" shall mean, when used in connection with any
designated page in determining the applicable Quoted Rate for an Interest Period
for Spread Bid Loans 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 7.01(g).
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<PAGE> 26
"Section 7.01 Financials" shall mean the financial statements
delivered, or to be delivered, pursuant to Section 7.01(a) or (b).
"Spread" shall mean a percentage per annum in excess of, or
less than, an Interest Rate Basis.
"Spread Auction" shall mean a solicitation of Competitive Bids
setting forth a Spread Bid Margin pursuant to Section 2.04.
"Spread Bid Loan" shall mean any Competitive Bid Loan that
bears interest based upon a Spread over or under a specified Interest Rate
Basis.
"Spread Bid Margin" shall have the meaning provided in Section
2.04(c).
"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, (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 and (iii) any
corporation, partnership, association, joint venture or other entity in which
such Person and/or one or more Subsidiaries of such Person has an equity
interest at the time and that is consolidated with such Person for financial
reporting purposes in accordance with GAAP.
"Syndication Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Taxes" shall have the meaning provided in Section 4.04.
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Total Debt plus Consolidated Net Worth at such time.
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<PAGE> 27
"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.
"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 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 all of whose capital stock or other ownership
interests in such Subsidiary, other than directors' or nominees' qualifying
shares, is owned directly or indirectly by such Person.
1.02 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. The term "including" is not limiting and means "including without
limitation."
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<PAGE> 28
(a) 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
7.01.
(b) This Agreement and the other Credit Documents are the
result of negotiations among and have been reviewed by counsel to the Agents,
the Borrower and the other parties and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Agents merely
because of the Agents' or Banks' involvement in their preparation.
2. AMOUNT AND TERMS OF CREDIT.
2.01 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 on or after the Effective Date and prior to the Commitment
Expiration Date, 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 2.11(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 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 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
plus (II) the aggregate outstanding principal amount of all Competitive Bid
Loans at such time shall not exceed the Total Commitment at such time.
(b) Subject to and upon the terms and conditions herein set
forth, each Bank severally agrees (i) that the Borrower may, as set forth in
Section 2.04, at any time and from time to time on or after the Effective Date
request the Banks to submit offers to make a loan or loans (each a "Competitive
Bid Loan" and collectively, the "Competitive Bid Loans") to the Borrower;
provided, however, that the
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<PAGE> 29
Banks may, but shall have no obligation to, submit such offers and the Borrower
may, but shall have no obligation to, accept any such offers, and (ii) if such
offers are accepted by the Borrower, to make such Competitive Bid Loans; and
provided, further, that at no time shall (A) the outstanding aggregate principal
amount of all Competitive Bid Loans made by all Banks, plus the outstanding
aggregate principal amount of all Committed Loans made by all Banks exceed the
Total Commitment at such time or (B) the number of Borrowings outstanding under
this Agreement at any time exceed ten unless the Administrative Agent shall
otherwise consent, provided that Eurodollar Rate Loans resulting from a
conversion pursuant to Section 2.11(b) shall not be deemed to be a Borrowing for
this purpose.
2.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing hereunder shall be not less than (i) $10,000,000, 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 2.11(b).
2.03 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 (A) before
9:00 a.m. (San Francisco time) on such day if a twelve month Interest Period is
requested and (B) before 10:00 a.m. (San Francisco time) on such day in all
other cases) and (ii) notice of each Base Rate Loan to be made hereunder prior
to 8:00 a.m. (San Francisco 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 Bank notice of such proposed Borrowing, of such Bank's
proportionate share
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thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing. More than one Borrowing may occur on
the same date.
2.04 Competitive Bid Borrowings. (a) When the Borrower wishes
to request the Banks to submit offers to make Competitive Bid Loans hereunder,
it shall transmit to the Administrative Agent by telephone call followed
promptly by facsimile transmission a notice in substantially the form of Exhibit
A-2 (a "Notice of Competitive Bid Borrowing") so as to be received no later than
8:00 a.m. (San Francisco time) (x) four Business Days prior to the date of a
proposed Competitive Bid Borrowing in the case of a Spread Auction, or (y) one
Business Day prior to the date of a proposed Competitive Bid Borrowing in the
case of an Absolute Rate Auction, specifying:
(i) the date of such Competitive Bid Borrowing,
which shall be a Business Day;
(ii) the aggregate amount of such Competitive Bid
Borrowing;
(iii) whether the proposed Competitive Bid Borrowing
is to be for Spread Bid Loans or Absolute Rate Bid Loans or both; and
(iv) 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, two, three, six or twelve months after the
date of such Competitive Bid Borrowing, in the case of a Spread Bid Loan, and
(B) between 7 and 180 days, inclusive, after the date of such Competitive Bid
Borrowing, in the case of an Absolute Rate Bid Loan), provided that in no event
shall the maturity date of any Competitive Bid Borrowing be later than the
Commitment Expiration Date.
Subject to subsection 2.04(c), the Borrower may not request Competitive Bid
Loans for more than three Interest Periods in a single Notice of Competitive Bid
Borrowing and may not
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request Competitive Bid Borrowings more than once in any period of five Business
Days.
(b) Upon receipt of a Notice of Competitive Bid Borrowing, the
Administrative Agent will promptly send to the Banks by facsimile transmission
an Invitation for Competitive Bids, which shall constitute an invitation by the
Borrower to each Bank to submit Competitive Bids offering to make the
Competitive Bid Loans to which such Notice of Competitive Bid Borrowing relates
in accordance with this Section 2.04.
(c) (i) Each Bank may at its discretion submit a Competitive
Bid containing an offer or offers to make Competitive Bid Loans in
response to any Invitation for Competitive Bids. Each Competitive Bid
must comply with the requirements of this subsection 2.04(c) and must
be submitted to the Administrative Agent by facsimile transmission at
the Administrative Agent's office for notices set forth on the
signature pages hereto not later than (A) 6:30 a.m. (San Francisco
time) three Business Days prior to the proposed date of Borrowing, in
the case of a Spread Auction or (B) 6:30 a.m. (San Francisco time) on
the proposed date of Borrowing, in the case of an Absolute Rate
Auction; provided that Competitive Bids submitted by the Administrative
Agent (or any Affiliate of the Administrative Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the
Administrative Agent or such Affiliate notifies the Borrower of the
terms of the offer or offers contained therein not later than (X) 6:15
a.m. (San Francisco time) three Business Days prior to the proposed
date of Borrowing, in the case of a Spread Auction or (Y) 6:15 a.m.
(San Francisco time) on the proposed date of Borrowing, in the case of
an Absolute Rate Auction.
(ii) Each Competitive Bid shall be in substantially the form
of Exhibit C, specifying therein:
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(A) the proposed date of Borrowing;
(B) the principal amount of each Competitive
Bid Loan for which such Competitive Bid is being made, which
principal amount (I) may be equal to, greater than or less
than the Commitment of the quoting Bank, (II) must be
$1,000,000 or in multiples of $1,000,000 in excess thereof,
and (III) may not exceed the principal amount of Competitive
Bid Loans for which Competitive Bids were requested;
(C) in case the Borrower elects a Spread
Auction, the margin above or below the Interest Rate Basis
(the "Spread Bid Margin") offered for each such Bid Loan,
expressed in multiples of 1/1000th of one basis point to be
added to or subtracted from the applicable Interest Rate Basis
and the Interest Period applicable thereto;
(D) in case the Borrower elects an Absolute
Rate Auction, the rate of interest per annum expressed in
multiples of 1/1000th of one basis point (the "Absolute Rate")
offered for each such Bid Loan; and
(E) the identity of the quoting Bank.
A Competitive Bid may contain up to three separate offers by
the quoting Bank with respect to each Interest Period
specified in the related Invitation for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with
Exhibit C or does not specify all of the information required
by subsection (c)(ii) of this Section ;
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(B) contains qualifying, conditional or
similar language;
(C) proposes terms other than or in addition
to those set forth in the applicable Invitation for
Competitive Bids; or
(D) arrives after the time set forth in
subsection (c)(i).
(d) Promptly on receipt and not later than 7:00 a.m. (San
Francisco time) three Business Days prior to the proposed date of Borrowing in
the case of a Spread Auction, or 7:00 a.m. (San Francisco time) on the proposed
date of Borrowing, in the case of an Absolute Rate Auction, the Administrative
Agent will notify the Borrower of the terms (i) of any Competitive Bid submitted
by a Bank that is in accordance with subsection 2.04(c), and (ii) of any
Competitive Bid that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid submitted by such Bank with respect to the same Notice
of Competitive Bid Borrowing. Any such subsequent Competitive Bid shall be
disregarded by the Administrative Agent unless such subsequent Competitive Bid
is submitted solely to correct a manifest error in such former Competitive Bid
and only if received within the times set forth in subsection 2.04(c). The
Administrative Agent's notice to the Borrower shall specify (1) the aggregate
principal amount of Competitive Bid Loans for which offers have been received
for each Interest Period specified in the related Notice of Competitive Bid
Borrowing; and (2) the respective principal amounts and Spread Bid Margins or
Absolute Rates, as the case may be, so offered. Subject only to the provisions
of Sections 2.11 and 5.02 hereof and the provisions of this subsection (d), any
Competitive Bid shall be irrevocable except with the written consent of the
Administrative Agent given on the written instructions of the Borrower.
(e) Not later than 7:30 a.m. (San Francisco time) three
Business Days prior to the proposed date of Borrowing, in the case of a Spread
Auction, or 7:30 a.m. (San Francisco time) on the proposed date of Borrowing, in
the case of an Absolute Rate Auction, the Borrower shall notify the
Administrative Agent (which notice shall be
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irrevocable) of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection 2.04(d). The Borrower shall be under no obligation to
accept any offer and may choose to reject all offers. In the case of acceptance,
such notice shall specify the aggregate principal amount of offers for each
Interest Period that is accepted. The Borrower may accept any Competitive Bid in
whole or in part; provided that:
(i) the aggregate principal amount of each
Competitive Bid Borrowing may not exceed the applicable amount
set forth in the related Notice of Competitive Bid Borrowing;
(ii) the principal amount of each Competitive Bid
Borrowing must be $10,000,000 or in any multiple of $1,000,000
in excess thereof;
(iii) acceptance of offers may only be made on the
basis of ascending Spread Bid Margins or Absolute Rates within
each Interest Period, as the case may be; and
(iv) the Borrower may not accept any offer that is
described in subsection 2.04(c)(iii) or that otherwise fails
to comply with the requirements of this Agreement.
(f) If offers are made by two or more Banks with the same
Spread Bid Margins or Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which such offers are
accepted for the related Interest Period, and if the Borrower elects to accept
any such offers, the principal amount of Competitive Bid Loans in respect of
which such offers are accepted shall be allocated by the Administrative Agent
among such Banks as nearly as possible (in such multiples, not less than
$1,000,000, as the Administrative Agent may deem appropriate) in proportion to
the aggregate principal amounts of such offers. Determination by the
Administrative Agent of the amounts of Competitive Bid Loans shall be conclusive
in the absence of manifest error.
(g) (i) The Administrative Agent will promptly notify each
Bank having submitted a Competitive Bid if
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its offer has been accepted and, if its offer has been accepted, of the
amount of the Competitive Bid Loan or Competitive Bid Loans to be made
by it on the date of the Competitive Bid Borrowing.
(ii) Each Bank which has received notice pursuant to
subsection 2.04(g)(i) that its Competitive Bid has been accepted shall
make the amounts of such Competitive Bid Loans available to the
Administrative Agent for the account of the Borrower at the
Administrative Agent's Payment Office, by 11:00 a.m. (San Francisco
time) in the case of Absolute Rate Competitive Bid Loans, and by 11:00
a.m. (San Francisco time) in the case of Spread Bid Loans, on such date
of Competitive Bid Borrowing, in funds immediately available.
(iii) Promptly following each Competitive Bid
Borrowing, the Administrative Agent shall notify each Bank of the
ranges of bids submitted and the highest and lowest bids accepted for
each Interest Period requested by the Borrower and the aggregate amount
borrowed pursuant to such Competitive Bid Borrowing.
(iv) From time to time, the Borrower and the Banks
shall furnish such information to the Administrative Agent as the
Administrative Agent may request relating to the making of Competitive
Bid Loans, including the amounts, interest rates, dates of borrowings
and maturities thereof, for purposes of the allocation of amounts
received from the Borrower for payment of all amounts owing hereunder.
(h) If, on or prior to the proposed date of Borrowing, the
Commitments have not been terminated and if, on such proposed date of Borrowing
all applicable conditions to funding referenced in Sections 2.11 and 5.02 hereof
are satisfied, the Banks whose offers the Borrower has accepted will fund each
Competitive Bid Loan so accepted. Nothing in this Section 2.04 shall be
construed as a right of first offer in favor of the Banks or to otherwise limit
the ability of the Borrower to request and accept credit
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facilities from any Person (including any of the Banks), provided that no
Default or Event of Default would otherwise arise or exist as a result of the
Borrower executing, delivering or performing under such credit facilities.
2.05 Disbursement of Funds. No later than 11:00 a.m. (San
Francisco time) on the date specified in each Notice of Borrowing, each Bank
will make available, through such Bank's 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 2.09, for the respective Loans. Nothing in
this Section 2.05 shall be deemed to relieve any Bank from its obligation to
fulfill its commitments hereunder or to prejudice any
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rights which the Borrower may have against any Bank as a result of any default
by such Bank hereunder.
2.06 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 D 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 Committed Loans
evidenced thereby, (iii) mature on the Commitment Expiration Date, (iv) bear
interest as provided in the appropriate clause of Section 2.09 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.
2.07 Conversions and Continuations. The Borrower shall have
the option (a) to convert on any Business Day all or a portion equal to
$10,000,000 (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
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(i) except as otherwise provided in Section 2.11(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
$10,000,000, (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 2.07 shall result in
a greater number of Borrowings than is permitted under Section 2.01, and (b) to
continue all or a portion equal to $10,000,000 (and, if larger, an integral
multiple of $1,000,000) of the outstanding principal amount of the Eurodollar
Rate Loans made pursuant to one or more Borrowings upon the expiration of the
applicable Interest Periods. Each such conversion or continuation, as the case
may be, shall be effected by the Borrower by giving the Administrative Agent at
its Notice Office at least three Business Days' prior notice (which notice shall
be deemed to have been given on a certain day only if given (A) before 9:00 a.m.
(San Francisco time) on such day if a conversion into, or continuation of, a
Eurodollar Rate Loan having a twelve month Interest Period is requested and (B)
before 10:00 a.m. (San Francisco time) on such day in all other cases)
substantially in the form of Exhibit E with blanks appropriately completed (each
a "Notice of Conversion/Continuation") specifying the Committed Loans to be so
converted or so continued 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 or proposed
continuation. 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
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such Eurodollar Rate Loan as provided in Section 2.10, 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.
2.08 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.
2.09 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.
(a) 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.
(b) 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 per annum specified by the quoting Bank or Banks, as the case may be,
pursuant to Section 2.04(c) and accepted by the Borrower pursuant to Section
2.04(e).
(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
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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 and thereafter at
a per annum rate equal to 2% per annum in excess of the Base Rate in effect from
time to time.
(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 Competitive Bid Loan, on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three month intervals after the first day of such
Interest Period, (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 in excess of three months, on each date occurring at three month
intervals 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 3.04, on
the date on which such Bank's Commitment is terminated and (v) in respect of
each Loan, on any conversion or prepayment (on the amount so converted or
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 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.
2.10 Interest Periods. Subject to the terms of Section 2.07,
at the time it gives any Notice of Borrowing or Notice of
Conversion/Continuation in respect of the making of, or conversion into, any
Eurodollar Rate Loan (in the case of the initial Interest Period applicable
thereto) or at the time it gives any Notice of Conversion/Continuation in
respect of the continuation of
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any 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, two,
three, six or, if agreed to by all Banks, twelve 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 2.11(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 Commitment Expiration Date.
2.11 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
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(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 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
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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/Continuation 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 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 the net 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 (including any reduction in
such amounts by reason of credits or deductions), 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, the
Borrower may (and, if required, shall) take one of the actions specified in
Section 2.11(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 2.11(a)(ii) or
any Eurodollar Rate Loan or Competitive Bid Loan is affected by the
circumstances described in Section 2.11(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 2.11(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 2.11(a)(ii) or
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(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 2.11(b).
(c) If any Bank determines at any time that compliance with
any applicable law or governmental rule, regulation, order, guideline 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 2.11(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 2.11(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 2.11(c).
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2.12 Compensation. The Borrower shall compensate each Bank,
upon its written request, with a copy to the Administrative Agent, (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 2.04(e) does not occur
on a date specified therefor in a Notice of Committed Borrowing, Notice of
Competitive Bid Borrowing or Notice of Conversion/Continuation (whether or not
withdrawn by the Borrower or deemed rescinded pursuant to Section 2.11(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 4.01 or any prepayment
as a result of a facility increase pursuant to Section 2.15 or the termination
of a Bank's Commitment pursuant to Section 3.04); (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 2.11(b).
2.13 Change of Applicable Lending Office. Each Bank agrees
that, upon the occurrence of any event giving rise to the operation of Section
2.11(a)(ii) or (iii), 2.11(c) or 4.04 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
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suffer no economic, legal or regulatory disadvantage, determined by such Bank in
its reasonable discretion, with the object of avoiding the consequence of the
event giving rise to the operation of any such Section . Nothing in this Section
2.13 shall affect or postpone any of the obligations of the Borrower or the
right of any Bank provided in Section 2.11 or 4.04.
2.14 Notice of Certain Costs. Notwithstanding anything in this
Agreement to the contrary, to the extent any notice required by Section 2.11 or
4.04 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 2.11 or 4.04, as the case may be, for
any such amounts incurred or accruing prior to the giving of such notice to the
Borrower.
2.15 Facility Increases. (a) The Borrower may from time to
time request an increase in the Commitments then in effect (any such increase
being referred to as a "Facility Increase"); provided, however, that the
Borrower may not request any Facility Increase (i) that would result in the
Total Commitment exceeding $600,000,000 or (ii) if a Default or Event of Default
then exists or would result from such Facility Increase or (iii) if any other
request for a Facility Increase is then outstanding. In order to request a
Facility Increase, the Borrower shall notify the Administrative Agent, at least
30 calendar days in advance of the proposed effective date of such Facility
Increase, of its request for a Facility Increase, the proposed amount of such
Facility Increase (which must be in a minimum amount of $50,000,000 and, if
larger, an integral multiple of $50,000,000) and the proposed effective date of
such Facility Increase. The Administrative Agent shall promptly notify the Banks
that are parties to this Agreement at the time of such request (the "Original
Banks") of the Borrower's request for a Facility Increase. Each Original Bank
shall have 10 Business Days after the date the Borrower's request was received
by such Bank from the Administrative Agent to indicate, by notice to the
Administrative Agent, the amount of the Facility Increase, if any, that such
Original Bank is willing to make as of the proposed effective date (such amount,
an "Additional
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Commitment"); provided, however, that no Original Bank may propose an Additional
Commitment greater than the amount specified by the Borrower in its request for
a Facility Increase. If any Original Bank shall not so notify the Administrative
Agent within such period of 10 Business Days, it shall be deemed to have elected
not to provide an Additional Commitment. The Administrative Agent shall promptly
after the end of such period notify the Borrower of the Additional Commitments
proposed by the Original Banks. If the total amount of Additional Commitments
proposed by the Banks exceeds the requested Facility Increase, then the Facility
Increase shall be made pro rata among the Original Banks proposing such
Additional Commitments in accordance with the amount of the Additional
Commitments proposed by such Banks.
(b) If the total amount of Additional Commitments proposed by
the Original Banks is less than the requested Facility Increase, the Borrower
may arrange for one or more lending institutions that are not Original Banks
("New Banks") to extend commitments ("New Commitments") in an aggregate amount
not exceeding the unsubscribed balance of the amount of the Facility Increase
requested from the Original Banks; provided, however, that (i) each proposed New
Bank shall be an Eligible Assignee and (ii) the effective date of any such New
Commitments shall be the same as the effective date proposed to the Original
Banks pursuant to paragraph (a) above. The Administrative Agent, Syndication
Agent and the Borrower shall mutually agree as to the approval of and New
Commitment of each New Bank.
(c) In the event that any Original Bank agrees to provide an
Additional Commitment pursuant to paragraph (a) above or any New Bank is
proposed to provide a New Commitment pursuant to paragraph (b) above, then the
Borrower, the Administrative Agent and the Banks shall use all reasonable
efforts to effect such Additional Commitments and New Commitments in accordance
with the provisions of this Section 2.15 and Section 5.03 by the effective date
initially proposed by the Borrower. Each New Bank shall deliver to the Borrower
and the Administrative Agent an Acceptance (a "New Bank Acceptance") in the form
of Exhibit F, and each Original Bank that is making an Additional Commitment
shall deliver to the Borrower and the Administrative Agent an Acknowledgment (an
"Original Bank
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Acknowledgment") in the form of Exhibit G. The effectiveness of any Additional
Commitment or New Commitment shall be subject to the conditions of this Section
2.15 and Section 5.03. In the event that each of the conditions specified in
this Section 2.15 and Section 5.03 shall have been satisfied prior to 8:00 a.m.
(San Francisco time) on the proposed effective date of the requested Facility
Increase, the Administrative Agent will notify the Banks (including any New
Banks) and the Borrower of the occurrence of such Facility Increase by facsimile
transmission, and in any event no later than 11:00 a.m. (San Francisco time) on
such date, and shall record in the Register the relevant information with
respect to each Additional Commitment and New Commitment. Each Original Bank
making an Additional Commitment and each New Bank making a New Commitment shall,
before 12:00 noon (San Francisco time) on the effective date of such Facility
Increase, make available for the account of its Applicable Lending Office to the
Administrative Agent at its Payment Office, in immediately available funds, (i)
in the case of such Original Bank, an amount equal to the excess of (A) such
Original Bank's ratable portion of the Committed Loans then outstanding
(calculated based on its Commitment as a percentage of the Total Commitment
outstanding after giving effect to the relevant Facility Increase) over (B) such
Original Bank's ratable portion of the Committed Loans then outstanding
(calculated based on its Commitment (without giving effect to the relevant
Facility Increase) as a percentage of the Total Commitment (without giving
effect to the relevant Facility Increase)) and (ii) in the case of such New
Bank, an amount equal to such New Bank's ratable portion of the Committed Loans
then outstanding (calculated based on its Commitment as a percentage of the
Total Commitment outstanding after giving effect to the relevant Facility
Increase). After the Administrative Agent's receipt of such funds from each such
Original Bank and each such New Bank, the Administrative Agent will promptly
thereafter cause to be distributed like funds to the other Banks for the account
of their respective Applicable Lending Offices in an amount to each other Bank
such that the aggregate amount of the outstanding Committed Loans owing to each
Bank after giving effect to such distribution equals such Bank's ratable portion
of the Committed Loans then outstanding (calculated based on its Commitment as a
percentage of the Total Commitment outstanding after giving effect to the
relevant Facility
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Increase). Promptly after the effective date of such Facility Increase, the
Borrower shall pay to each Bank any compensation payable to such Bank pursuant
to Section 2.12 on account of the repayment of such Bank's outstanding Loans on
a date other than the last day of an Interest Period and shall pay to the
Administrative Agent all processing fees due to the Administrative Agent in
connection with Loan assignments (or deemed Loan assignments) related to such
Facility Increase.
(d) Upon the effectiveness of any Facility Increase, (i) each
Additional Commitment and New Commitment made in connection therewith shall be a
"Commitment" for purposes of this Agreement, (ii) each New Bank shall be a party
hereto and, to the extent provided in its Acceptance, have the rights and
obligations of a "Bank" herein and (iii) the Administrative Agent shall deliver
to the Borrower and to each Bank a revised Schedule I hereto setting forth the
Commitment of each Bank after giving effect to such Facility Increase and a
revised Schedule II setting forth the address of each Bank, including each New
Bank.
(e) Any Facility Increase in accordance with the provisions of
this Section 2.15 shall be binding on each Original Bank, provided that no
Original Bank will have any obligation hereunder to make any Additional
Commitment without its consent. In the event that Additional Commitments and New
Commitments, collectively, in the minimum aggregate amount of $50,000,000 are
not provided as of the proposed effective date of a requested Facility Increase,
then no such Facility Increase shall be permitted.
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3. FEES; TERMINATION OF COMMITMENTS.
3.01 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 Commitment Expiration Date
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 the 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 3.04, on the date on which such
Bank's Commitment is terminated.
(a) The Borrower agrees to pay to the Administrative Agent,
the Syndication Agent and the Co-Arrangers, for the account of the
Administrative Agent, the Syndication Agent and each Co-Arranger, when and as
due, such fees as have been, or are from time to time, separately agreed upon.
3.02 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 $10,000,000 (and, if larger, in an integral multiple of $1,000,000),
provided that any such termination shall apply proportionately to reduce the
Commitment of each Bank.
3.03 Mandatory Termination of a Bank's Commitment. The
Commitment of each Bank shall terminate on the Commitment Expiration Date.
3.04 Replacement of Bank; Voluntary Termination of a Bank's
Commitment. If any Bank is owed increased costs under Section 2.11 or 4.04 which
in the judgment of the Borrower are material in amount and which are not
otherwise
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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 90 days following the delivery by such
Bank to the Borrower of a request for compensation pursuant to Section 2.11 or
4.04 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
2.12), 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 3.04.
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4. PREPAYMENTS; PAYMENTS.
4.01 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'
prior notice, in the case of Eurodollar Rate Loans and same day notice (prior to
9:00 a.m. (San Francisco time)), in the case of Base Rate Loans, 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 4.01 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 2.12 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 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 3.04). The Borrower shall have
no right under this Section 4.01 to prepay any principal amount of any
Competitive Bid Loans.
4.02 Principal Repayments and Mandatory Prepayments. (a) The
Borrower shall repay all Committed Loans of the Banks on the Commitment
Expiration Date.
(b) The Borrower shall repay any Competitive Bid Loans made by
a Bank on the maturity date specified pursuant to Section 2.04(a) with respect
to such Competitive Bid Loan.
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(c) On any day prior to the Commitment Expiration Date on
which the aggregate outstanding principal amount of the Committed Loans made by
any 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 3.04), 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 4.02(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 4.02(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 4.02(e), 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 2.12.
4.03 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 11:00 a.m. (San Francisco time) on the date when
due and shall be made in Dollars from a source within the United States 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
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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 4.02(c) as a result of the termination of one or
more, but less than all, of the Banks' Commitments pursuant to Section 3.04,
each prepayment of any Loans made pursuant to a Borrowing shall be applied pro
rata among such Loans.
4.04 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 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 or, if certified copies of tax receipts
are not available within such 45 days, the Borrower will furnish to
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the Administrative Agent such other documentation as is then reasonably
available to it evidencing such payment and will thereafter furnish to the
Administrative Agent such certified copies of tax receipts promptly upon receipt
thereof. 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.
5. CONDITIONS PRECEDENT.
5.01 Conditions to Initial Loan. The obligation of each Bank
to make its initial Committed Loan hereunder, and to receive through the
Administrative Agent the initial Competitive Bid Request, is subject to the
satisfaction of the following conditions:
(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 facsimile
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 and 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 counsel to the Borrower (which may be in-house counsel), an
opinion addressed to each of the Banks and dated the Effective Date covering the
matters set forth in Exhibit H and such other matters
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incident to the transactions contemplated herein as any Bank may reasonably
request.
(d) Corporate Documents; Proceedings. (i) On or prior to the
Initial Borrowing 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 I 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) On the Initial Borrowing Date, 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) Payment of Fees. On or prior to the Initial Borrowing
Date, all costs, fees and expenses, and all other compensation contemplated by
this Agreement or the other Credit Documents, due to the Agents (including,
without limitation, the reasonable fees and disbursements of Administrative
Agent's counsel, including allocated costs of in-house counsel and all
disbursements of in-house counsel), the Co-Arrangers and the Banks shall have
been paid to the extent due.
(f) Existing Credit Agreement. On or prior to the Initial
Borrowing 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 been terminated; and the
Administrative Agent shall have received evidence in form, scope and substance
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satisfactory to it that the matters set forth in this Section 5.01(f) have been
satisfied.
The occurrence of the Initial Borrowing Date shall constitute a representation
and warranty by the Borrower to each of the Banks that all the conditions
specified in Section 5.01(b) exist as of that time. All the Notes, certificates,
legal opinions and other documents and papers referred to in this Section 5.01,
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.
5.02 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 2.03 in the case of a
Borrowing of Committed Loans, or a Notice of Competitive Bid Borrowing with
respect thereto meeting the requirements of Section 2.04 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 5.01(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 6.05(a)) and in
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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 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 5.02(c) exist as of that time. All the legal opinions and
other documents and papers referred to in this Section 5.02, 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.
5.03 Conditions to Facility Increase. Each Original Bank's
agreement to make an Additional Commitment and each New Bank's agreement to make
a New Commitment pursuant to a Facility Increase in accordance with the
provisions of Section 2.15 shall be subject to the satisfaction of the following
conditions:
(a) No Default; Representations and Warranties. At the time of
the making of each Facility Increase and also after giving effect thereto (i)
there shall exist no Default or Event of Default and (ii) all representations
and warranties contained herein and 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 the date of the making
of such Facility Increase.
(b) Notes. Each Original Bank and each New Bank shall have
received a Note, in each case dated as of the effective date of such Facility
Increase, duly executed by the duly authorized officer or officers of the
Borrower, reflecting the Additional Commitment or New Commitment, respectively,
of each such Bank and otherwise complying with Section 2.06; provided, however,
that the Borrower shall not be obligated to deliver a new Note to an Original
Bank in connection with such Facility Increase until such Original Bank shall
have surrendered its old Note to the Borrower.
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(c) Payment of Fees. On the effective date of such Facility
Increase, all costs, fees and expenses, and all other compensation contemplated
by this Agreement or the other Credit Documents, due to the Agents (including,
without limitation, the reasonable fees and disbursements of the Administrative
Agent's counsel, including allocated costs of in-house counsel and all
disbursements of in-house counsel), the Co-Arrangers and the Banks shall have
been paid to the extent due.
(d) Acceptances and Acknowledgments. The Administrative Agent
shall have received a New Bank Acceptance duly completed and executed by each
New Bank, if any, and an Original Bank Acknowledgment duly completed and
executed by each Original Bank that is making an Additional Commitment.
The occurrence of the effective date for each Facility Increase shall constitute
a representation and warranty by the Borrower to each of the Banks that all the
conditions specified in Section 5.03(a) exist as of that time. All the Notes,
certificates, legal opinions and other documents and papers referred to in this
Section 5.03, 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.
6. 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:
6.01 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
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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.
6.02 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.
6.03 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 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.
6.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been
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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.
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; etc. (a) The consolidated statements of financial condition of the
Borrower and its Consolidated Subsidiaries at June 30, 1996 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, 1996, 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.
(a) Except as fully reflected in the financial statements
referred to in Section 6.05(a) 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 6.05(a) which, either individually or in the aggregate,
could be material to the Borrower or to the Borrower and its Subsidiaries taken
as a whole.
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6.06 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.
6.07 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.
6.08 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 in violation of Regulation U or X of the
Board of Governors of the Federal Reserve Board. 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. The value of Margin Stock (including treasury stock) owned by
the Borrower does not exceed 25% of the value of the assets of the Borrower.
6.09 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
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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.
6.010 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, 4204
or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code 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 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
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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.
6.011 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 VI correctly
sets forth, as of the Effective Date, the Material Subsidiaries of the Borrower.
6.012 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.
6.013 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.
6.014 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.
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6.015 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.
6.016 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.
6.017 Compliance with Environmental Laws. (a) Each of the
Borrower and its Subsidiaries is, and will continue to be, in full compliance
with all applicable
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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 VII 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 VII 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).
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(a) 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 VII 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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7. 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:
7.01 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 7.01(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
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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 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 7.01(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 7.01(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 8.04 and 8.05, 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
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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) 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 7.01(e) 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.
(f) 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") and copies of all financial statements, proxy statements,
notices and reports as the Borrower shall generally send to the holders
of its capital stock (in each case to the extent not previously
delivered to the Banks pursuant to this Agreement).
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(g) Other Information. From time to time, such other
information or documents (financial or otherwise) as any Bank may
reasonably request.
7.02 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.
7.03 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 "B+"
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 the kinds and in the amounts
customarily
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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 commercial general 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.
7.04 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 7.04 shall prevent (i) any transactions permitted under
Section 8.02 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.
7.05 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.
7.06 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
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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, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 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.
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7.07 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.
7.08 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.
7.09 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
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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.
8. 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:
8.01 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.
8.02 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;
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(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) 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
aggregate amount of assets sold or otherwise disposed of pursuant to
this Section 8.02(d) (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.
8.03 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 VIII hereto;
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(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 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
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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 any other asset at the time owned by the Borrower or any
Subsidiary, and (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;
(f) Liens of or resulting from any judgments or decrees so
long as no Event of Default exists under Section 9.07;
(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 8.02 hereof, or
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(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) Liens in connection with the Lease Financing, so long as
such Liens attach only to the assets subject to such Lease Financing;
(l) the extension, renewal or replacement of any Lien
specified in the foregoing clauses (a) through (k) 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
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(m) Liens not permitted by the foregoing clauses (a) through
(l) of this Section 8.03 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
shall not exceed an amount equal to the greater of (x) $150,000,000 and
(y) 20% of Consolidated Tangible Net Worth at any time.
8.04 Leverage Ratio. The Borrower will not permit the ratio of
(i) Consolidated Total Debt to (ii) Total Capitalization at any time to exceed
0.55 to 1.0.
8.05 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 June 30, 1996, to be less than 1.75:1; provided, however, that for
purposes of determining compliance with this Section 8.05 prior to December 31,
1996, the Fixed Charges Coverage Ratio shall be determined (a) for the period
ended June 30, 1996, as the ratio of (i) the aggregate of Consolidated EBIT for
the two most recent fiscal quarters of the Borrower then ended to (ii) the
aggregate of Consolidated Fixed Charges for such fiscal quarters and (b) for the
period ended September 30, 1996, as the ratio of (i) the aggregate of
Consolidated EBIT for the three most recent fiscal quarters of the Borrower then
ended to (ii) the aggregate of Consolidated Fixed Charges for such fiscal
quarters.
9. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events
(each an "Event of Default"):
9.01 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
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9.02 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
9.03 Covenants. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(d)(i), 7.07 or 8 or (ii) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Sections 9.01 and 9.02 and clause (i) of this Section 9.03) 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
9.04 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) 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
9.05 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
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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
9.06 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, 4204 or 4212 of ERISA or Section 401(a)(29), 4971,
4975 or 4980 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
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from any such event or events described above in this Section 9.06 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
9.07 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 by the Borrower 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
9.08 Change of Control. A Change of Control 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
9.05 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
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payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.
10. THE AGENTS.
10.01 Appointment. Each of the Banks hereby irrevocably
(subject to Section 10.09) appoints and designates BofA, as Administrative Agent
and The Chase Manhattan Bank, 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 (subject to Section 10.09) authorizes each
Agent to take such action on its behalf under the provisions of this Agreement
and each other Credit Document and to exercise such powers and perform such
duties as are expressly delegated to such Agent by the terms of this Agreement
or any other Credit Document, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Credit Document, no Agent shall have
any duties or responsibilities, except those expressly set forth herein in
respect of such Agent, nor shall any Agent have or be deemed to have any
fiduciary relationship with any Bank or other Agent, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Credit Document or otherwise exist against such
Agent. Without limiting the generality of the foregoing sentence, the use of the
term "agent" in this Agreement with reference to the Agents is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
10.02 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement or any other Credit Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects with reasonable care.
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10.03 Liability of the Agents. None of the Agent-Related
Persons shall (a) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Credit Document
or the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the Banks for
any recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Credit Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by it
under or in connection with, this Agreement or any other Credit Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Credit Document, or for any failure of the Borrower or
any other party to any Credit Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Credit
Document, or to inspect the properties, books or records of the Borrower or any
of the Borrower's Subsidiaries or Affiliates.
10.04 Reliance by the Agents. (a) Each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by
such Agent. Each Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Credit Document unless it shall
first receive such advice or concurrence of the Required Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. Each
Agent shall in all cases be
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fully protected in acting, or in refraining from acting, under this Agreement or
any other Credit Document in accordance with a request or consent of the
Required Banks and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Banks.
(b) Notwithstanding any other provision contained in this
Agreement or in any other Credit Document, for purposes of determining
compliance with the conditions specified in Section 5.01, each Bank that has
executed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter either sent by
the Administrative Agent to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Bank.
10.05 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and Fees required to be paid to the Administrative Agent for the account of the
Banks, unless the Administrative Agent shall have received written notice from a
Bank or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". The
Administrative Agent will notify the Banks of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required Banks in accordance with
Section 9; provided, however, that unless and until the Administrative Agent has
received any such request, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Banks.
10.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agents hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to
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the Agents that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
credit worthiness of the Borrower and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Credit Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and credit worthiness of the
Borrower and its Subsidiaries. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Agents, the Agents
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or credit worthiness of the Borrower which may
come into the possession of any of the Agent-Related Persons.
10.07 Indemnification of the Agents. Whether or not the
transactions contemplated hereby are consummated, the Banks shall indemnify upon
demand the Agent-Related Persons (to the extent not reimbursed by or on behalf
of the Borrower and without limiting the obligation of the Borrower to do so),
pro rata on the basis of their respective Commitments (or if such Commitments
have been terminated, then on the basis of their outstanding Loans), from 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 the
payment to the Agent-Related Persons of any portion of such
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liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank shall reimburse the Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including, without
limitation, the reasonable fees and disbursements of counsel, including
allocated costs of in-house counsel and all disbursements of in-house counsel)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Credit Document, or any document contemplated by or referred to herein, to the
extent that the Administrative Agent is not reimbursed for such expenses by or
on behalf of the Borrower. The undertaking in this Section 10.07 shall survive
the payment of all Obligations hereunder and the resignation or replacement of
each Agent.
10.08 The Agents in their Individual Capacity. Each Agent and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
the Borrower and its Subsidiaries and Affiliates as though it were not an Agent
hereunder and without notice to or consent of the Banks. The Banks acknowledge
that, pursuant to such activities, each Agent or its Affiliates may receive
information regarding the Borrower or its Affiliates (including information that
may be subject to confidentiality obligations in favor of the Borrower or such
Subsidiary) and acknowledge that such Agent shall be under no obligation to
provide such information to them. With respect to its Loans, each Agent shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not an Agent, and the terms "Bank" and
"Banks" include each Agent in its individual capacity.
10.09 Resignation by the Agents. Each Agent may, and at the
request of the Required Banks shall, resign as Agent (a) in the case of the
Administrative Agent, upon
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30 days' notice to the Banks and (b) in the case of the Syndication Agent, upon
immediate notice to the Banks. If the Administrative Agent resigns under this
Agreement, the Required Banks shall appoint from among the Banks a successor
agent for the Banks which successor agent shall be reasonably acceptable to the
Borrower. If no successor agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Banks and the Borrower, a successor agent from among
the Banks. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "Administrative Agent" shall mean
such successor agent and the retiring Administrative Agent's appointment, powers
and duties as Administrative Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 10 and
Section 11.01 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. If no successor agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Banks and the Borrower shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Banks
appoint a successor agent as provided for above.
10.10 Withholding Tax Matters. (a) If any Bank is a "foreign
corporation, partnership or trust" within the meaning of the Code, such Bank
agrees to deliver on or before the Effective Date to the Administrative Agent,
with a copy to the Borrower, the forms listed below, as applicable, as may be
required to claim exemption from, or a reduction of, U.S. withholding tax under
Sections 1441 or 1442 of the Code:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, two
properly completed and executed copies of IRS Form 1001 before the
payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding
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calendar year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Each such Bank further agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances (including, without limitation,
as a result of any United States Treasury Regulations promulgated under Sections
1441 or 1442 of the Code) renders the previous forms obsolete or inaccurate in
any material respect, it will deliver to the Administrative Agent, with a copy
to the Borrower, such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement or any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such forms.
(b) Such Bank agrees to promptly notify the Administrative
Agent, with a copy to the Borrower, of any change in circumstances which would
modify or render invalid any exemption or reduction pursuant to subsection (a)
of this Section .
(c) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Borrower to such Bank, such Bank agrees to
notify the Administrative Agent of the
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percentage amount in which it is no longer the beneficial owner of Obligations
of the Borrower to such Bank. To the extent of such percentage amount, the
Administrative Agent will treat such Bank's IRS Form 1001 as no longer valid.
(d) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Administrative Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Borrower to such Bank, such Bank agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(e) If any Bank is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any interest payment
to such Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. However, if the forms or other documentation
required by subsection (a) of this Section are not delivered to the
Administrative Agent, then the Administrative Agent may withhold from any
payment to such Bank not providing such forms or other documentation an amount
equivalent to the applicable withholding tax imposed by Sections 1441 and 1442
of the Code without reduction.
(f) If the IRS or any other Governmental Authority of the
United States, the State of California or other jurisdiction asserts a claim
that the Administrative Agent or the Borrower did not properly withhold tax from
amounts paid to or for the account of any Bank (because the appropriate form was
not delivered or was not properly executed, or because such Bank failed to
notify the Administrative Agent or the Borrower of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Bank shall indemnify the Administrative Agent and
the Borrower fully for all amounts paid, directly or indirectly, by the
Administrative Agent and the Borrower, respectively, as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent and the Borrower
under this Section , together with all costs and expenses (including, without
limitation, the reasonable fees and disbursements of counsel, including
allocated costs of in-house counsel and all disbursements of
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in-house legal counsel). The obligation of the Banks under this subsection
10.10(f) shall survive the payment of all Obligations and the resignation or
replacement of the Administrative Agent.
10.11 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 ex change therefor.
11. MISCELLANEOUS.
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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 Administrative Agent
(including, without limitation, the reasonable fees and disbursements of
counsel, including allocated costs of in-house counsel and all disbursements of
in-house counsel) 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 Administrative Agent 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 and all disbursements of in-house counsel,
for the Agent 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 Agent-Related Persons 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 and all disbursements 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).
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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
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shall not be effective until received by the Administrative Agent.
11.04 Benefit of Agreement. 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.
11.05 Assignments, Participations, Etc. (a) Any Bank may, with
the written consent of the Borrower (at all times other than during the
existence of an Event of Default) and the Agents, which consents shall not be
unreasonably withheld, at any time assign and delegate to one or more Eligible
Assignees (provided that no written consent of the Borrower or any Agent shall
be required in connection with any assignment and delegation by a Bank to an
Eligible Assignee that is an Affiliate of such Bank) (each an "Assignee") all,
or any ratable part of all, of the Loans, the Commitments and the other rights
and obligations of such Bank hereunder, in a minimum amount of $10,000,000;
provided, however, that (i) such assignment shall not reduce the Commitment of
the assigning Bank to an amount less than $10,000,000 unless such assigning
Bank's Commitment is reduced to $0 and (ii) the Borrower and the Administrative
Agent may continue to deal solely and directly with such Bank in connection with
the interest so assigned to an Assignee until (A) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Borrower
and the Administrative Agent by such Bank and the Assignee; (B) such Bank and
its Assignee shall have delivered to the Borrower and the Administrative Agent
an Assignment and Acceptance substantially in the form of Exhibit J ("Assignment
and Acceptance") together with any Note or Notes subject to such assignment and
(iii) the assigning Bank or Assignee has paid to the Administrative Agent a
processing fee in the amount of $3,500.00; provided, further, that Loans may be
assigned (or deemed assigned) in connection with any Facility Increase without
regard to any minimum amount. Promptly following any assignment pursuant to this
Section 11.05(a), the Borrower shall, at its own expense, execute and deliver to
the Administrative Agent, in exchange for the surrendered Note or Notes, a new
Note or
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Notes to the order of such Assignee in a principal amount equal to the
applicable Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained a Commitment, a new Note to the order of
such assigning Bank in a principal amount equal to the applicable Commitment
retained by it. Such new Note or Notes shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit D.
(b) From and after the date that the Administrative Agent
notifies the assigning Bank that it has received (and provided its consent with
respect to) an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Bank under this Agreement and the other Credit Documents,
and (ii) the assigning Bank shall, to the extent that rights and obligations
hereunder and under the other Credit Documents have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights (other than any
indemnities) and be released from its obligations under the Credit Documents.
(c) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Borrower (a "Participant")
participating interests in any Loans, the Commitment of that Bank and the other
interests of that Bank (the "Originator") hereunder and under the other Credit
Documents; provided, however, that (i) the Originator's obligations under this
Agreement shall remain unchanged, (ii) the Originator shall remain solely
responsible for the performance of such obligations, (iii) the Borrower and the
Administrative Agent shall
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continue to deal solely and directly with the Originator in connection with the
Originator's rights and obligations under this Agreement and the other Credit
Documents, and (iv) no Bank shall transfer or grant any participating interest
under which the Participant has rights to approve any amendment to, or any
consent or waiver with respect to, this Agreement or any other Credit Document,
except to the extent such amendment, consent or waiver would require unanimous
consent of the Banks as described in the first proviso to Section 11.14. In the
case of any such participation, the Participant shall be entitled to the benefit
of Sections 2.11, 2.12, 4.04 and 11.01(iii) as though it were also a Bank
hereunder to, and only to, the extent that the selling Bank would be entitled to
such benefits if the participation had not been sold, and if amounts outstanding
under this Agreement are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest (subject to Section 11.07(b)) in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and the Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve
Bank may enforce such pledge or security interest in any manner permitted under
applicable law.
11.06 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.
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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.
11.07 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 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.
11.08 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant
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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 8 shall utilize
accounting principles and policies in conformity with those used to prepare the
historical financial statements delivered to the Banks pursuant to Section 7.01.
(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 Reference 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.
11.09 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 CALIFORNIA, EXCLUDING CONFLICTS-OF-LAW
PRINCIPLES. 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 California or of the United States for the Northern District of
California, 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
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.
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(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.
11.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which the condition set forth in Section
5.01(a)(i) shall be satisfied. The Administrative Agent will give the Borrower
and each Bank prompt notice of the occurrence of the Effective Date.
11.11 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.
11.12 Domicile of Loans. Subject to Section 2.13, each Bank
may transfer and carry its Loans at, to or for the account of any office,
Subsidiary or Affiliate of such Bank.
11.13 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.
11.14 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
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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 11.14 or Sections 10.07,
11.01, 11.02, 11.04, 11.05, 11.07 or 11.08(b), (iii) reduce the percentage
specified in the definition of Required Banks or (iv) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement; provided further, that (i) no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in addition to the
Required Banks or all the Banks, as the case may be, affect the rights or duties
of the Administrative Agent under this Agreement or any other Credit Document.
11.15 Survival. All indemnities set forth herein including,
without limitation, in Sections 4.04, 10.07 and 11.01 shall survive the
execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans and all other Obligations.
11.16 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.
11.17 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.
11.18 Payments Set Aside. To the extent that the Borrower
makes a payment to the Administrative Agent or the Banks, or the Administrative
Agent or the Banks exercise
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their right of set-off, and such payment or the proceeds of such set-off or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent or such Bank in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
insolvency proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Bank severally agrees to pay to the
Administrative Agent upon demand its pro rata share of any amount so recovered
from or repaid by the Administrative Agent.
11.19 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
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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
With a copy to: By /s/ Raymond J Sims
-----------------------------
Name: Raymond J. Sims
300 Constitution Drive Title: Senior Vice
Menlo Park, CA 94025-1164 President and
Attention: Legal Department Chief Financial
Officer
<PAGE> 104
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION,
individually and
as Administrative
Agent
By /s/ J Dillon
------------------------
Title: Vice President
<PAGE> 105
THE CHASE MANHATTAN BANK,
individually and as
Syndication Agent
By /s/ Robert Sacks
-----------------------------
Title: Robert T. Sacks
Vice President
<PAGE> 106
COMMERZBANK AG, LOS
ANGELES BRANCH
By /s/ W Schmidbauer
--------------------------
Title:Werner Schmidbauer
Vice President
By /s/ Wolter Mehring
--------------------------
Title:Wolter Mehring
Vice President
<PAGE> 107
DEUTSCHE BANK AG
LOS ANGELES BRANCH
AND/OR CAYMAN ISLANDS
BRANCH
By /s/ Janke
--------------------------
Title: Olaf Janke
Associate
By /s/Johnathon Scott Jessup
--------------------------
Title:J. Scott Jessup
Vice President
<PAGE> 108
THE SANWA BANK, LIMITED,
SAN FRANCISCO BRANCH
By /s/ Daisuke Nagao
--------------------------
Title: Vice President
<PAGE> 109
CREDIT LYONNAIS LOS
ANGELES BRANCH
By /s/ Thierry Vincent
--------------------------
Title: Thierry Vincent
VP & Manager
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By /s/ Thierry Vincent
--------------------------
Title: Thierry Vincent
Authorized Signatory
<PAGE> 110
ROYAL BANK OF CANADA
By /s/ S Hughes
--------------------------
Title: Stephen S Hughes
Senior Manager
<PAGE> 111
UNION BANK OF CALIFORNIA,
N.A.
By /s/ Wanda Headrick
--------------------------
Title:Vice President
<PAGE> 112
KREDIETBANK, N.V., GRAND
CAYMAN BRANCH
By /s/ R Snauffer
--------------------------
Title:Robert Snauffer
Vice President
By /s/ Murray
--------------------------
Title: Raymond F. Murray
Vice President
<PAGE> 113
BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
By /s/ Joyce Thunnissen
----------------------------
Title: Joyce Thunnissen
Vice President
By /s/ D Vangaever
----------------------------
Title:Dominick H.J.
Vangaever
Vice President, Credit
Department
<PAGE> 114
GULF INTERNATIONAL BANK,
B.S.C.
By /s/ Abdel F Tahoun
----------------------------
Title: Abdel-Fattah Tahoun
Senior Vice President
By /s/ William B Shepard
----------------------------
Title: William B.Shepard
Vice President
<PAGE> 115
THE DAI-ICHI KANGYO BANK,
LIMITED, SAN FRANCISCO
AGENCY
By /s/ Takuo Yoshida
-------------------------
Title: Takuo Yoshida
General Manager
& Agent
<PAGE> 116
SOCIETE GENERALE
By /s/ J Shaum
----------------------------
Title: J Blaine Shaum
Regional Manager
<PAGE> 117
STANDARD CHARTERED BANK
By /s/ Rita Raychaudhuri
----------------------------
Title: V.P.
<PAGE> 118
INDUSTRIAL BANK OF JAPAN,
LTD.
By /s/ Yoh Nakahara
------------------------
Yoh Nakahara
General Manager
<PAGE> 119
BANK OF MONTREAL
By /s/ Joyce
-------------------------------
Title: Michael P Joyce
Managing Director
<PAGE> 120
BANQUE NATIONALE DE PARIS
By /s/ Debra Wright ;
-------------------------
/s/ Katherine Wolfe
-------------------------
Title: Vice President;
Vice President
<PAGE> 1
Exhibit 10(z)
[ Raychem letterhead ]
August 16, 1996
Mr. Isaac Stein
President
Waverley Associates, Inc.
525 University Avenue
Suite 700
Palo Alto, CA 94301-1900
Dear Isaac:
The purpose of this letter is to confirm the June 30, 1996, amendment to your
consulting arrangement with Raychem as set forth in the August 12, 1994,
Agreement between you and Raychem.
Effective as of June 30, 1996, you will remain available as a consultant to
Raychem on various matters at a per diem rate of $3,000 per day plus reasonable
expenses. Your services may be requested by the Chief Executive Officer/Chairman
of the Board of Directors from time to time as may be mutually agreeable. You
will no longer receive a monthly retainer of $30,000 and Waverley Associates
will no longer receive the $5,000 per month expense contribution. You and
Waverley will continue to receive a customary indemnity from Raychem for the
consulting services covering liabilities, including costs of defense.
Please sign and return the enclosed copy of this Agreement to confirm this
arrangement.
Very truly yours,
/s/ Dick
- ---------------------------
Richard A. Kashnow
ACKNOWLEDGED AND ACCEPTED BY:
/s/ Isaac Stein 8/16/96
- ------------------------------ -------
Isaac Stein Date
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS AS AT AND FOR THE PERIOD ENDED
SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 115,603
<SECURITIES> 6,088
<RECEIVABLES> 347,556
<ALLOWANCES> 11,296
<INVENTORY> 232,501
<CURRENT-ASSETS> 838,526
<PP&E> 1,113,432
<DEPRECIATION> 626,260
<TOTAL-ASSETS> 1,479,271
<CURRENT-LIABILITIES> 321,487
<BONDS> 158,435
0
0
<COMMON> 44,903
<OTHER-SE> 843,655
<TOTAL-LIABILITY-AND-EQUITY> 1,479,271
<SALES> 429,896
<TOTAL-REVENUES> 430,311
<CGS> 208,525
<TOTAL-COSTS> 209,076
<OTHER-EXPENSES> 30,086
<LOSS-PROVISION> 2,098
<INTEREST-EXPENSE> 1,929
<INCOME-PRETAX> 88,683
<INCOME-TAX> 15,963
<INCOME-CONTINUING> 72,720
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 72,720
<EPS-PRIMARY> 1.58
<EPS-DILUTED> 0
</TABLE>
