FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1994
OR
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number 001-10109
BECKMAN INSTRUMENTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-104-0600
(State of Incorporation) (I.R.S. Employer
Identification No.)
2500 Harbor Boulevard, Fullerton, California 92634
(Address of principal executive offices) (Zip Code)
(714) 871-4848
(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 ( ).
APPLICABLE ONLY TO CORPORATE ISSUERS:
Outstanding shares of common stock, $0.10 par value, as of October
14, 1994: 29,124,457 shares.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements Page
Condensed Consolidated Statements of Earnings
for the three and nine month periods ended
September 30, 1994 and 1993 3
Condensed Consolidated Balance Sheets
as of September 30, 1994 and December 31, 1993 4
Condensed Consolidated Statements of Cash Flows
for the nine month periods ended September 30,
1994 and 1993 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II
OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes In Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security-Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
<PAGE>
PART I
BECKMAN INSTRUMENTS, INC.
THIRD QUARTER REPORT
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in Millions, Except Amounts Per Share)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Sales $217.8 $215.6 $638.6 $639.1
Operating costs and expenses:
Cost of sales 103.0 103.9 303.3 307.7
Marketing, administrative and general 65.7 66.1 198.3 201.5
Research, development and engineering 23.9 23.2 68.4 68.5
Restructuring 4.8 - 7.1 -
197.4 193.2 577.1 577.7
Operating income 20.4 22.4 61.5 61.4
Nonoperating income (expense):
Interest income 1.2 1.0 3.5 2.8
Interest expense (3.5) (3.6) (9.5) (9.6)
Other, net ( .7) (1.8) (3.1) (2.4)
(3.0) (4.4) (9.1) (9.2)
Earnings before income taxes 17.4 18.0 52.4 52.2
Provision for income taxes 6.1 6.5 18.3 18.8
Net earnings before cumulative effect of
changes in accounting principles $11.3 $11.5 $34.1 $33.4
Cumulative effect of changes in
accounting principles:
Accounting for income taxes - - - 26.2
Accounting for postretirement benefits
other than pensions (net of tax
benefit of $17.0) - - - (30.2)
Accounting for postemployment benefits
(net of tax benefit of $3.0) - - (5.1) -
Net earnings $11.3 $11.5 $29.0 $29.4
Average number of shares
outstanding (thousands) 28,175 27,670 28,030 27,880
Net earnings per share before cumulative effect
of changes in accounting principles $0.40 $0.42 $1.21 $1.20
Cumulative effect of changes in
accounting principles:
Accounting for income taxes - - - 0.93
Accounting for postretirement benefits
other than pensions - - - (1.07)
Accounting for postemployment benefits - - (0.18) -
Net earnings per share $0.40 $0.42 $1.03 $1.06
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
BECKMAN INSTRUMENTS,INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
Unaudited
<TABLE>
<CAPTION>
September 30 December 31
1994 1993
<S> <C> <C>
Assets
Current assets:
Cash and equivalents $47.0 $24.2
Short-term investments 0.2 21.9
Trade receivables 254.3 252.1
Inventories 164.4 163.9
Deferred income taxes 69.7 70.6
Other current assets 15.2 11.8
Total current assets 550.8 544.5
Property, plant and equipment, net 223.7 216.8
Deferred income taxes 33.6 30.3
Other assets 37.9 28.4
Total assets $846.0 $820.0
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $9.0 $31.7
Accounts payable and accrued expenses 213.9 242.7
Income taxes 58.7 48.9
Total current liabilities 281.6 323.3
Long-term debt 115.5 113.7
Other liabilities 132.3 107.5
Total liabilities 529.4 544.5
Stockholders' equity 316.6 275.5
Total liabilities and stockholders' equity $846.0 $820.0
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
BECKMAN INSTRUMENTS,INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
Unaudited
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1994 1993
<S> <C> <C>
Cash Flows From Operating Activities
Net earnings. . . . . . . . . . . . . . . . . . . . . $29.0 $29.4
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization. . . . . . . . . . . . 51.5 47.4
Changes in assets and liabilities:
Trade receivables . . . . . . . . . . . . . . . . . 12.3 9.3
Inventories . . . . . . . . . . . . . . . . . . . . 4.5 (12.6)
Deferred income taxes . . . . . . . . . . . . . . . (1.7) (37.0)
Accounts payable and accrued expenses . . . . . . . - (20.9)
Restructure reserve . . . . . . . . . . . . . . . . (29.9) -
Income taxes. . . . . . . . . . . . . . . . . . . . 9.7 6.4
Other . . . . . . . . . . . . . . . . . . . . . . . 5.1 1.9
Net cash provided by operating activities . . . . 80.5 23.9
Cash Flows from Investing Activities
Additions to property, plant and equipment. . . . . . (66.5) (64.5)
Net disposals of property, plant and equipment. . . . 13.0 11.2
Net proceeds from investments . . . . . . . . . . . . 21.7 4.9
Net cash used by investing activities . . . . . . (31.8) (48.4)
Cash Flows from Financing Activities
Dividends to stockholders . . . . . . . . . . . . . . (8.4) (7.6)
Proceeds from issuance of stock . . . . . . . . . . . 9.9 8.1
Treasury stock repurchase . . . . . . . . . . . . . . (0.4) (28.2)
Notes payable borrowing . . . . . . . . . . . . . . . 2.3 8.8
Notes payable reductions. . . . . . . . . . . . . . . (30.2) (12.7)
Long-term debt borrowing. . . . . . . . . . . . . . . 4.2 74.6
Long-term debt reductions . . . . . . . . . . . . . . (3.3) (27.3)
Other . . . . . . . . . . . . . . . . . . . . . . . . (0.6) (0.5)
Net cash provided (used) by financing activities . (26.5) 15.2
Effect of exchange rates on cash and equivalents. . . . 0.6 (0.3)
Increase (decrease) in cash and equivalents . . . . . . 22.8 (9.6)
Cash and equivalents -- beginning of period . . . . . . 24.2 25.9
Cash and equivalents -- end of period . . . . . . . . . $47.0 $16.3
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . . $9.4 $8.4
Income taxes . . . . . . . . . . . . . . . . . . . . $7.9 $5.9
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
BECKMAN INSTRUMENTS, INC.
Notes To
Condensed Consolidated Financial Statements
1 Report by Management
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments,
consisting only of normal recurring accruals, necessary for a fair
presentation of the results for the periods. The statements are
prepared in accordance with the requirements of Form 10-Q and do
not include all disclosures required by generally accepted
accounting principles or those made in the Annual Report on Form
10-K for 1993 which is on file with the Securities and Exchange
Commission.
The results of operations for the nine months ended September 30,
1994 are not necessarily indicative of the results to be expected
for the year ending December 31, 1994.
2 Inventories
Inventories are comprised of the following:
<TABLE>
<CAPTION>
September 30 December 31
1994 1993
<S> <C> <C>
Finished products $113.8 $ 110.2
Raw materials, parts
and assemblies 45.5 42.0
Work in-process 5.1 11.7
$164.4 $ 163.9
</TABLE>
3 Changes in Accounting Principles
Postemployment benefits
Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standards No. 112 ("SFAS 112") "Employers'
Accounting for Postemployment Benefits". This statement required
the Company to recognize an obligation for postemployment benefits
provided to former or inactive employees, their beneficiaries and
covered dependents after employment but before retirement.
Accordingly, the Company recognized a transition obligation of $8.1
million and a net expense of $5.1 million (net of tax benefit of
$3.0 million) as the cumulative effect of the accounting change.
SFAS 112 will not have a material impact on operating results of
the Company for 1994.
Income Taxes
Effective January 1, 1993 the Company adopted Statement of
Financial Accounting Standards No. 109 ("SFAS 109"), "Accounting
for Income Taxes". Accordingly, the Company recognized deferred
tax assets reflecting the benefit expected to be realized from net
deductible temporary differences. The recognition resulted in the
Company recording income and a deferred tax asset equal to the
cumulative effect of the accounting change of $26.2 million (net of
a valuation allowance of $10.1 million).
Postretirement Benefits Other Than Pensions
Effective January 1, 1993 the Company adopted SFAS 106 "Employer's
Accounting for Postretirement Benefits Other Than Pensions" and
immediately recognized its obligation for prior years' service
cost. Accordingly, the Company recorded a transition obligation of
$47.2 million and a net expense of $30.2 (net of tax benefits of
$17.0 million) as the cumulative effect of the accounting change.
4 Contingencies
The Company is involved in the investigation and remediation of
soil and groundwater contamination for property it sold in 1984.
During 1993 the Company made substantial progress in soil
remediation on the site, although there remain some areas of soil
contamination that may require further remediation. The Company
also operated a groundwater treatment system throughout most of
1993 and 1994. The capacity of the treatment system was expanded
in late 1993 and is believed to be adequate to remediate the
groundwater based upon available information. The Company believes
it has established adequate reserves to complete the remediation of
any remaining soil contamination, operation and maintenance of the
expanded groundwater treatment system and any additional
groundwater investigations.
In 1990 the Company entered into an agreement with the purchaser of
the above mentioned property for settlement of a 1988 lawsuit and
for sharing current and future costs of investigation, remediation
and other claims. In 1991 a lawsuit was filed against the 1984
purchaser by a third party that had subsequently purchased a
portion of the above property, alleging damages caused by the
pollution of the property. Although the Company is not a named
defendant in the action, the Company is obligated to contribute to
any resolution of that action pursuant to its 1990 settlement
agreement with the original purchaser. In 1993 the Company
increased its existing reserves for soil and groundwater
remediation and for resolution of the 1991 lawsuit by $12.5
million.
In September 1994 one of the tenants of the apartment houses built
on the above mentioned property filed a lawsuit against the
original purchaser and a number of other defendants. The lawsuit
alleges damages caused by the pollution of the property. Although
the Company is not a named defendant at this time, the Company is
obligated to contribute to any resolution of this lawsuit.
Investigations on the property are continuing and there can be no
assurance that further investigations will not reveal additional
contamination or result in additional costs. The Company believes
additional remediation costs for the contamination discovered by
the current investigations and liability for the resolution of the
1991 and 1994 lawsuits, if any, beyond those already provided will
not have a material adverse effect on the Company's operations or
financial position.
Local authorities in Palermo (Sicily), Italy are investigating the
activities of officials at a local government hospital and
laboratory. In addition to staff members in charge of the
laboratory for the Palermo hospital, a number of representatives of
the principal worldwide companies marketing diagnostic equipment in
Italy were taken into temporary custody in September and October
1994 as part of the investigation. Included were three employees
of the Company. Although the investigation is still underway, and
only individuals are involved, it appears that the allegations
focus on industrywide leasing practices throughout Italy. The
investigation relates to activities at the Palermo hospital and
laboratory that took place primarily during the 1980's. At the
present time the Company does not expect this matter to have a
material adverse effect on its operations or financial position.
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
Operations
Sales for the third quarter and nine months ended September 30,
1994 were $217.8 million and $638.6 million, respectively. Third
quarter sales represent a 1% increase over third quarter 1993 sales
and were essentially unaffected by currency. Sales for the nine
month period were down slightly, but would have increased by 1%
without the effects of foreign currencies. Sales for the North
American diagnostic business continue to outpace those for the
prior year, however the Company's North American bioresearch sales
are down for both the quarter and year-to-date. The Company's
year-to-date international sales have been adversely impacted by
currency exchange rates, the European recession, and cost
containment initiatives in several European health care systems.
The weaknesses in the European markets and the North American
bioresearch market are expected to continue.
Operating income, excluding restructuring charges, for the third
quarter and nine months ended September 30, 1994 were $25.2 million
and $68.6 million, respectively. These results represent increases
of 13% and 12% over comparable periods in the prior year as the
Company begins to realize savings from the reorganization and
restructuring begun at the end of 1993. These savings have helped
to increase gross profit margins by .9% to 52.7% for the quarter
and .6% to 52.5% year-to-date. Marketing, Administrative and
General Expenses decreased by $0.4 million and $3.2 million for the
third quarter and nine months over the same periods in 1993. The
Company continued its commitment to new product development,
investing over 10% of sales revenue in research and development
through the first nine months. Including the cost of the
restructuring, the Company generated operating income of $20.4
million and $61.5 million in the third quarter and first nine
months of 1994, respectively.
The Company continues to realize savings from its reorganization
and restructuring efforts. For the nine months ended September 30,
1994 the Company saved approximately $20.0 million. These savings
are primarily attributable to personnel reductions in excess of 700
individuals since the reorganization announcement. As the
restructuring implementation continues, these savings are expected
to increase to an anticipated total of $29.0 million for 1994. Not
all of these savings however, will be incremental to earnings
during this time of transition, constrained markets and flat sales.
Nonoperating expenses decreased, compared to the same periods in
the prior year, by $1.4 million for the quarter and $0.1 million
year-to-date. These decreases are primarily attributable to
reduced net interest expense in 1994 and a loss on the sale of a
facility in 1993.
Earnings before income taxes, excluding restructuring charges, for
the third quarter and first nine months of 1994 were $4.2 million
and $7.3 million higher, respectively, than the same periods in
1993. As a result of the restructuring charges in the third
quarter and first nine months of 1994, earnings before income taxes
declined $0.6 million and increased $0.2 million, respectively,
over the same periods in 1993. The Company has benefitted from a
decrease in its effective income tax rate from 36% to 35% as a
larger proportion of the Company's earnings have been generated in
lower tax rate jurisdictions. In the third quarter of 1994, the
Company's net earnings, excluding restructuring charges, increased
by $2.9 million over 1993 to $14.4 million or $0.51 per share. Net
earnings for the first nine months, before restructuring charges
and changes in accounting principles, were $38.7 million or $1.38
per share versus $33.4 million or $1.20 per share for the same
period of 1993.
In the first quarter of 1994, the Company adopted Statement of
Financial Accounting Standard No. 112 ("SFAS 112") "Employers'
Accounting for Postemployment Benefits". This statement required
the Company to recognize a prior service obligation for the
Company's commitment to provide benefits to former or inactive
employees and their beneficiaries or covered dependents after
employment but before retirement. Adoption of SFAS 112 resulted in
the Company recording an after tax charge of $5.1 million in the
first quarter.
Net earnings for the third quarter of 1994 were $11.3 million, or
$0.40 per share compared to $11.5 million or $0.42 in 1993. Net
earnings for the nine months ended September 30, 1994 were $29.0
million or $1.03 per share compared to $29.4 million or $1.06 per
share in 1993.
The following table summarizes the impact of restructuring charges
and the cumulative effect of changes in accounting principles on
net earnings per share for the third quarter and nine months ended
September 30, 1994.
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
Per Per Per Per
Amt Share Amt Share Amt Share Amt Share
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net earnings before
restructuring charges and
cumulative effect of changes
in accounting principles $14.4 .51 11.5 .42 38.7 1.38 33.4 1.20
Restructuring charges,
net of taxes (3.1) (.11) - - (4.6) (.17) - -
Cumulative effect of changes
in accounting principles - - - - (5.1) (.18) (4.0) (.14)
Net earnings $11.3 .40 11.5 .42 29.0 1.03 29.4 1.06
</TABLE>
Financial Condition
For the nine months ended September 30, 1994, the Company had
positive cash flow from operating and investing activities of $48.7
million. This represents an increase of $73.2 million over the
same period in 1993. Contributing to this increase were lower
pension plan contributions, lower incentive compensation
payments,and an increase in proceeds from short term investments,
partially offset by payments associated with the restructure in
1994.
The Company continued to exhibit its strong financial condition as
its ratio of debt to capitalization at September 30, 1994 of 28.2%
improved from 34.5% at December 31, 1993. The ratio of current
assets to current liabilities also improved to 1.96 at September
30, 1994 from 1.68 at December 31, 1993. The Company believes it
has adequate financial resources to meet expected cash flow
requirements for the foreseeable future, including any negative
short-term impact associated with the Company's reorganization and
restructuring activities. In 1995 and beyond, the reorganization
and restructuring will have a positive impact on cash flow.
In September 1994 the Company renegotiated its then existing
revolving credit agreement which was scheduled to expire on July 1,
1996. The Company's current $150.0 million revolving Credit
Agreement expires on September 30, 1999. Borrowings under the
Credit Agreement are determined by current market rates and are
subject to a number of conditions, including the absence of a
significant change in control of the Company. In addition, the
Credit Agreement requires the Company to maintain minimum
consolidated tangible net worth and specified ratios of debt to
total capital and operating income to interest charges. The Credit
Agreement also limits the Company's ability to mortgage its assets,
to merge or consolidate or to sell certain assets. Defaults under
the Credit Agreement include nonpayment, breach of covenants,
bankruptcy and certain cross defaults to other Company debt.
Aggregate dividend payments are limited to the sum of $20.0 million
and 30% of consolidated cumulative net earnings of the Company from
June 30, 1992. As of September 30, 1994, there were no borrowings
against the credit line and the Company is in compliance with the
covenants of the Credit Agreement.
On September 1, 1994, the Company paid a quarterly cash dividend of
$2.8 million or $0.10 per share of common stock. The Company
declared on September 29, 1994 a regular quarterly cash dividend of
$0.10 per share of common stock payable December 1, 1994.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported, the Company is obligated to
contribute to any resolution of a lawsuit filed by Forest
City Properties Corporation and FC Irvine, Inc.
(collectively, "Forest City") against The Prudential
Insurance Company of America ("Prudential") in 1991
concerning property in Irvine, California formerly owned by
the Company. The trial of the Forest City lawsuit, which
was expected to start October 31, 1994, has been
rescheduled to begin January 17, 1995.
In September 1994 Prudential and a number of other
defendants, including Forest City, were sued by one of the
tenants of the apartment houses built by Forest City on the
above mentioned property in Irvine, California. The
complaint, filed in the California Superior Court for the
County of Orange, seeks damages for alleged personal
injury, emotional distress, lost earnings, and medical
expenses, as well as punitive and other damages (no dollar
amount is specified) in connection with alleged soil and
groundwater contamination of the Irvine property. Although
the Company is not a named defendant at this time, the
Company is obligated to contribute to any resolution of
this lawsuit. The Company believes that any liability
resulting from this lawsuit will not have a material
adverse effect on the Company's operations or financial
position.
In September 1994 Aetna Casualty & Surety Company (Aetna)
filed suit against the Company and its former corporate
parent, SmithKline Beecham Corporation (SmithKline), in
Pennsylvania State Court, asking the Court to find that
Aetna has no insurance coverage obligations with respect to
the environmental remediation of a large number of sites of
SmithKline as well as a smaller number of Company sites.
Because the action is primarily a dispute between Aetna and
SmithKline, the Company plans to file a motion seeking its
dismissal from the action at an early date. The outcome of
this litigation, even if unfavorable to the Company, is not
expected to have a material adverse effect on the Company's
earnings or financial position.
As previously reported, in February, 1992 a toxic tort
action involving groundwater contamination in the
Scottsdale area was filed in Maricopa County Superior
Court, Arizona (Baker v. Motorola, Inc., et. al.) against
the Company and a number of other defendants, including
Motorola, Inc., Siemens Corporation, SmithKline Beecham
Corporation and others. In August, 1994 the Court
certified two classes, one for property damage claims and
another for medical monitoring claims. This is a
significant development which will substantially increase
the number of claimants.
In June, 1994 another toxic tort action was filed in
Maricopa County Superior Court, Arizona (Ford v. Motorola,
et al.) by a number of residents of the Phoenix/Scottsdale
area against the Company and a number of other defendants,
including Motorola, Inc., Siemens Corporation, the Cities
of Phoenix and Scottsdale, and others. The suit, which was
served on the Company in September, 1994, seeks damages for
alleged personal injury, emotional distress, lost earnings
and medical expenses, as well as punitive and other damages
(no dollar amount is specified) in connection with alleged
groundwater contamination in an area in Scottsdale, Arizona
close to a former Company manufacturing facility.
At the time SmithKline Beckman Corporation (SKB), the
Company's former controlling stockholder, divested the
Company in 1989 in conjunction with SKB's merger with
Beecham Group p.l.c., a United Kingdom company, SKB and the
Company entered into an agreement whereby SKB agreed to
indemnify the Company with respect to its former Scottsdale
manufacturing operations for any costs incurred by the
Company in excess of applicable insurance. Consequently,
the outcome of these Scottsdale groundwater contamination
cases, even if unfavorable to the Company, should have no
effect on the Company's earnings or financial position.
SmithKline Beecham Corporation, the surviving entity of the
1989 merger of SKB and Beecham Group p.l.c., assumed the
obligations of SKB in this respect.
Local authorities in Palermo (Sicily), Italy are
investigating the activities of officials at a local
government hospital and laboratory. In addition to staff
members in charge of the laboratory for the Palermo
hospital, a number of representatives of the principal
worldwide companies marketing diagnostic equipment in Italy
were taken into temporary custody in September and October
1994 as part of the investigation. Included were three
employees of the Company. Although the investigation is
still underway, and only individuals are involved, it
appears that the allegations focus on industrywide leasing
practices throughout Italy. The investigation relates to
activities at the Palermo hospital and laboratory that took
place primarily during the 1980's. At the present time the
Company does not expect this matter to have a material
adverse effect on its operations or financial position.
Item 2. Changes In Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
10.1 Revolving Credit Agreement, dated as of
September 26, 1994, among the Company, the
lenders named therein and Citicorp USA, Inc. as
Agent.
10.2 Supplement to the Company's Executive Incentive
Plan, adopted by the Company in 1994 (filed as
Exhibit 10 of the Company's Quarterly Report to
the Securities and Exchange Commission on Form
10-Q for the quarter ended June 30, 1994, File
No. 001-10109): Company Memorandum, FY 94
Incentive Plans, May 11, 1994.
15. Independent Accountants' Report, October 21,
1994
27. Financial Data Schedule
b) Reports on Form 8-K
None.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BECKMAN INSTRUMENTS, INC.
(Registrant)
Date: October 24, 1994 by WILLIAM H. MAY
William H. May
Vice President, General
Counsel and Secretary
Date: October 24, 1994 by DENNIS K. WILSON
Dennis K. Wilson
Vice President, Finance
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- - ------- -----------
10.1 Revolving Credit Agreement, dated as of September 26, 1994,
among the Company, the lenders named therein and Citicorp
USA, Inc. as Agent.
10.2 Supplement to the Company's Executive Incentive Plan,
adopted by the Company in 1994 (filed as Exhibit 10 of the
Company's Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarter ended June 30,
1994, File No. 001-10109): Company Memorandum, FY 94
Incentive Plans, May 11, 1994.
15. Independent Accountants' Report, October 21, 1994
27. Financial Data Schedule
EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
Dated as of September 26, 1994
Among
BECKMAN INSTRUMENTS, INC.
and
THE LENDERS NAMED HEREIN
and
CITICORP USA, INC.
As Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. . . . . . . . . . . 1
SECTION 1.02. Computation of Time Periods. . . . . . . . 12
SECTION 1.03. Accounting Terms . . . . . . . . . . . . . 12
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances . . . . . . . . . . . . . . . 12
SECTION 2.02. Making the Advances. . . . . . . . . . . . 13
SECTION 2.03. Fees . . . . . . . . . . . . . . . . . . . 17
SECTION 2.04. Reduction of the Commitments . . . . . . . 17
SECTION 2.05. Repayment of Advances. . . . . . . . . . . 18
SECTION 2.06. Interest on Advances . . . . . . . . . . . 18
SECTION 2.07. Additional Interest on Eurodollar Rate
Advances . . . . . . . . . . . . . . . . . 19
SECTION 2.08. Optional Prepayments of Advances . . . . . 19
SECTION 2.09. Interest Rate Determination. . . . . . . . 20
SECTION 2.10. Increased Costs. . . . . . . . . . . . . . 20
SECTION 2.11. Payments and Computations. . . . . . . . . 21
SECTION 2.12. Taxes. . . . . . . . . . . . . . . . . . . 22
SECTION 2.13. Sharing of Payments, Etc.. . . . . . . . . 24
SECTION 2.14. Mitigation of Increased Costs or Taxes . . 24
SECTION 2.15. Use of Proceeds. . . . . . . . . . . . . . 25
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Any Advance. . . . 25
SECTION 3.02. Special Conditions Precedent . . . . . . . 26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower . . . . . . . . . . . . . . . . . 27
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. . . . . . . . . . . 29
SECTION 5.02. Negative Covenants . . . . . . . . . . . . 33
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. . . . . . . . . . . . . 35
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments . . . . . . . . . . . . . . . . 39
SECTION 7.02. Notices, Etc . . . . . . . . . . . . . . . 39
SECTION 7.03. No Waiver; Remedies. . . . . . . . . . . . 40
SECTION 7.04. Costs and Expenses . . . . . . . . . . . . 40
SECTION 7.05. Confidentiality of Information . . . . . . 41
SECTION 7.06. Right of Set-Off . . . . . . . . . . . . . 42
SECTION 7.07. The Agent. . . . . . . . . . . . . . . . . 42
SECTION 7.08. Binding Effect . . . . . . . . . . . . . . 45
SECTION 7.09. Governing Law. . . . . . . . . . . . . . . 46
SECTION 7.10. Execution in Counterparts. . . . . . . . . 46
SECTION 7.11. Headings . . . . . . . . . . . . . . . . . 46
Schedule I. Lending Offices
Schedule II. Liens and Security Interests
Exhibit A-1. Domestic Note
Exhibit A-2. Eurodollar Note
Exhibit B. Notice of Borrowing
Exhibit C. Opinion of Borrower's Counsel
Exhibit D. Opinion of Agent's Counsel
<PAGE>
REVOLVING CREDIT AGREEMENT, dated as of September 26, 1994, among
BECKMAN INSTRUMENTS, INC., a Delaware corporation (the
"Borrower"), the lenders (the "Lenders") listed on the signature
pages hereof and CITICORP USA, INC., a Delaware corporation
("CUSA"), as agent (the "Agent") for the Lenders hereunder,
pursuant to which such parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain 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):
"Adjusted CD Rate" means, for the Interest Period for each
Adjusted CD Rate Advance comprising part of the same
Borrowing, an interest rate per annum equal to the sum of:
(a) the rate per annum obtained by dividing (i) the
rate of interest determined by the Agent to be the
average (rounded upward to the nearest whole multiple
of 1/100 of 1% per annum, if such mean bid rate is not
such a multiple) of the consensus bid rate determined
by each of the Reference Banks for the bid rates per
annum, at 9:00 A.M. (New York City time) (or as soon
thereafter as practicable) on the first day of such
Interest Period, of New York certificate of deposit
dealers of recognized standing selected by such
Reference Bank for the purchase at face value of
certificates of deposit of such Reference Bank in an
amount substantially equal to such Reference Bank's
Adjusted CD Rate Advance comprising part of such
Borrowing (provided, however, for purposes of
determining the amount of any such deposit in the case
of Citibank, such amount shall be substantially equal
to the Adjusted CD Rate Advance made by CUSA comprising
part of such Borrowing), and with a maturity equal to
such Interest Period, by (ii) a percentage equal to
100% minus the Adjusted CD Rate Reserve Percentage (as
defined below) for such Interest Period, plus
(b) the Assessment Rate (as defined below) for such
Interest Period.
The "Adjusted CD Rate Reserve Percentage" for the Interest
Period for each Adjusted CD Rate Advance comprising part of
the same Borrowing means the reserve percentage applicable
on the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, but not limited
to, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System
in New York City with deposits exceeding one billion dollars
with respect to liabilities consisting of or including
(among other liabilities) U.S. dollar nonpersonal time
deposits in the United States with a maturity equal to such
Interest Period. The "Assessment Rate" for the Interest
Period for each Adjusted CD Rate Advance comprising part of
the same Borrowing means the annual assessment rate
estimated by the Agent on the first day of such Interest
Period for determining the then current annual assessment
payable by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring U.S. dollar
deposits of Citibank in the United States. The Adjusted CD
Rate for the Interest Period for each Adjusted CD Rate
Advance comprising part of the same Borrowing shall be
determined by the Agent on the basis of applicable rates
furnished to and received by the Agent from the Reference
Banks on the first day of such Interest Period, subject,
however, to the provisions of Section 2.09.
"Adjusted CD Rate Advance" means an Advance which bears
interest as provided in Section 2.06(a).
"Advance" means an advance by a Lender to the Borrower
pursuant to Article II and refers to an Adjusted CD Rate
Advance, a Eurodollar Rate Advance, an Auction Rate Advance
or a Base Rate Advance, each of which shall be a "Type" of
Advance.
"Affiliate" means, as to any Person, any other Person that
directly or indirectly controls, is controlled by or is
under common control with such Person or is a director or
officer of such Person.
"Agreement" means this agreement, including the exhibits and
any schedules annexed hereto, as the same may be amended or
otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's CD Lending Office in the case of an
Adjusted CD Rate Advance, such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance, and such
Lender's Domestic Lending Office in the case of an Auction
Rate Advance or a Base Rate Advance.
"Auction Rate" means, for the Interest Period for each
Auction Rate Advance comprising part of the same Borrowing,
the interest rate equal to the rate specified by the Lender
making such Advance in its notice with respect thereto
delivered pursuant to Section 2.02(a).
"Auction Rate Advance" means an Advance which bears interest
as provided in Section 2.06(c).
"Auction Rate Advance Commitment Reduction" has the meaning
specified in Section 2.01.
"Availability Termination Date" means September 30, 1999 or
the earlier date of termination in whole of the Commitments
pursuant to Section 2.04 or Section 6.01.
"Base Rate" means, for any Interest Period or any other
period, a fluctuating interest rate per annum as shall be in
effect from time to time which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest announced publicly by
Citibank in New York, New York from time to time, as
Citibank's base rate; or
(b) 1/2 of one percent per annum above the latest
three-week moving average of secondary market morning
offering rates in the United States for three-month
certificates of deposit of major United States money
market banks, such three-week moving average being
determined weekly on each Monday (or, if any such day
is not a Business Day, on the next succeeding Business
Day) for the three-week period ending on the previous
Friday by the Agent on the basis of such rates
reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York, or
if such publication shall be suspended or terminated,
on the basis of quotations for such rates received by
the Agent from three New York certificate of deposit
dealers of recognized standing selected by the Agent,
in either case, adjusted to the nearest 1/4 of
one percent or, if there is no nearest 1/4 of
one percent, to the next higher 1/4 of one percent.
"Base Rate Advance" means an Advance which bears interest as
provided in Section 2.06(d).
"Borrowing" means a borrowing consisting of simultaneous
Advances of the same Type made by one or more of the Lenders
pursuant to Section 2.01.
"Business Day" means a day of the year on which banks are
not required or authorized to close in New York City or San
Francisco and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market.
"Capitalization" means Consolidated Direct Indebtedness and
Tangible Net Worth.
"CD Lending Office" means, with respect to any Lender, such
Lender's office specified as its "CD Lending Office" on
Schedule I hereto or such other office of such Lender as
such Lender may from time to time specify to the Borrower
and the Agent.
"Citibank" means Citibank, N.A., a national banking
association.
"Commercial Paper Rating" means a rating for senior,
unsecured, publicly held short term debt.
"Commitment" has the meaning specified in Section 2.01.
"Compliance Certificate" has the meaning specified in
Section 5.01(e).
"Consolidated" refers to the consolidation or combination of
the financial statements of the Borrower and its
Subsidiaries in accordance with generally accepted
accounting principles, including principles of consolidation
or combination.
"Debt" means (i) indebtedness for borrowed money,
(ii) obligations evidenced by bonds, debentures, notes or
other similar instruments, (iii) obligations to pay the
deferred purchase price of property or services other than
trade accounts payable on customary terms in the ordinary
course of business, (iv) obligations as lessee under leases
which shall have been, or should be, in accordance with
generally accepted accounting principles, recorded as
capital leases, (v) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness
or obligations of others of the kinds referred to in
clauses (i) through (iv) above, (vi) liabilities of the
Borrower or any ERISA Affiliate for any Insufficiency,
(vii) withdrawal liability within the meaning of
Section 4201 of ERISA incurred by the Borrower or any ERISA
Affiliate to any Multiemployer Plan, (viii) liabilities
incurred by the Borrower or any ERISA Affiliate to the PBGC
upon the termination under Section 4041 or Section 4042 of
ERISA of any Plan, and (ix) any increase in the amount of
contributions required to be made by the Borrower and its
ERISA Affiliates in each fiscal year of the Borrower to
Multiemployer Plans over the amount of such contributions
required to be made on the date hereof due to the
reorganization or termination of any such Multiemployer Plan
within the meaning of Title IV of ERISA.
"Default" means any event or condition which constitutes an
Event of Default or which with the giving of notice or lapse
of time or both would become an Event of Default.
"Direct Indebtedness" means (i) indebtedness for borrowed
money, (ii) obligations evidenced by bonds, debentures,
notes or other similar instruments, (iii) obligations to pay
the deferred purchase price of property or services, other
than trade accounts payable on customary terms in the
ordinary course of business, (iv) obligations as lessee
under leases which shall have been, or should be, in
accordance with generally accepted accounting principles,
recorded as capital leases and (v) obligations under direct
or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire,
or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kind
referred to in clauses (i) through (iv) above in the
aggregate in excess of $20,000,000.
"Direct Indebtedness-to-Capitalization Ratio" means the
ratio, stated as a percentage, of (x) Consolidated Direct
Indebtedness less an amount equal to the Excluded Investment
Amount to (y) Capitalization less an amount equal to the
Excluded Investment Amount.
"Domestic Lending Office" means, with respect to any Lender,
such Lender's office specified as its "Domestic Lending
Office" on Schedule I hereto or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Domestic Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the
form of Exhibit A-1 hereto, evidencing the aggregate
indebtedness of the Borrower to such Lender resulting from
the Adjusted CD Rate Advances, Auction Rate Advances and
Base Rate Advances made by such Lender.
"Duff & Phelps" means Duff & Phelps, Inc.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations
promulgated and the rulings issued thereunder.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) which is a member of a group of which the
Borrower is a member and which is under common control
within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means with respect to any
Lender, such Lender's office specified as its "Eurodollar
Lending Office" on Schedule I hereto or such other office of
such Lender as such Lender may from time to time specify to
the Borrower and the Agent.
"Eurodollar Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the
form of Exhibit A-2 hereto, evidencing the aggregate
indebtedness of the Borrower to such Lender resulting from
the Eurodollar Rate Advances made by such Lender.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Rate Advance comprising part of the same
Borrowing, an interest rate per annum equal to the average
(rounded upward to the nearest whole multiple of 1/16 of 1%
per annum, if such average is not such a multiple) of the
rate per annum at which deposits in U.S. dollars are offered
by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Eurodollar Rate
Advance comprising part of such Borrowing and for a period
equal to such Interest Period; provided, however, for
purposes of determining the amount of any such deposit in
the case of Citibank, such amount shall be substantially
equal to the Eurodollar Rate Advance made by CUSA comprising
part of such Borrowing. The Eurodollar Rate for the
Interest Period for each Eurodollar Rate Advance comprising
part of the same Borrowing shall be computed by the Agent on
the basis of applicable rates furnished to and received by
the Agent from the Reference Banks two Business Days before
the first day of such Interest Period, subject, however, to
the provisions of Section 2.09.
"Eurodollar Rate Advance" means an Advance which bears
interest as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" of any Lender for the
Interest Period for any Eurodollar Rate Advance means the
reserve percentage applicable during such Interest Period
(or, if more than one such percentage shall be so
applicable, the daily average of such percentages for those
days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued
from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period; provided,
however, that for purposes of determining the Eurodollar
Rate Reserve Percentage applicable to CUSA, the reserve
percentage applicable during any Interest Period shall be
the reserve percentage applicable to Citibank during such
Interest Period.
"Events of Default" has the meaning specified in
Section 6.01.
"Excluded Investment Amount" means an amount equal to
(i) two-thirds of the Liquid Short-Term Investments of
Beckman Instruments (Galway), Ltd., a corporation organized
and existing under the laws of Panama, Beckman Instruments
(Ireland), Inc., a corporation organized and existing under
the laws of Panama, and any Irish Affiliates, and their
respective Subsidiaries and any successors thereto and
(ii) all of the Liquid Short-Term Investments of Beckman
Instruments (Caribe), Inc., a corporation organized and
existing under the laws of California, and any Puerto Rican
Affiliates, and their respective Subsidiaries and any
successors thereto, up to a maximum aggregate amount of
$100,000,000 with respect to (i) and (ii) above, and (iii)
all of the Liquid Short-Term Investments of the Borrower.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum 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 Agent from three Federal funds brokers of recognized
standing selected by it.
"Indebtedness for Borrowed Money" means (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds,
debentures, notes or other similar instruments,
(iii) obligations as lessee under leases which shall have
been, or should be, in accordance with generally accepted
accounting principles, recorded as capital leases,
(iv) obligations to pay the deferred purchase price of
property or services other than trade accounts payable on
customary terms in the ordinary course of business and
(v) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise insure a
creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in
clauses (i) through (iv) above.
"Insufficiency" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in
Section 4001(a)(18) of ERISA.
"Interest Expense" means, for any accounting period, the sum
of (without duplication) (i) interest in respect of all
Indebtedness for Borrowed Money (except for Indebtedness for
Borrowed Money of the type described in subsection (v) of
the definition thereof to the extent payment in respect of
such Indebtedness for Borrowed Money is not made by the
Borrower or any Subsidiary) during such period, plus
(ii) amortization of debt expense and discount or premium
relating to any Indebtedness for Borrowed Money (except for
Indebtedness for Borrowed Money of the type described in
subsection (v) of the definition thereof to the extent
payment in respect of such Indebtedness for Borrowed Money
is not made by the Borrower or any Subsidiary) during such
period, plus (iii) the portion of rental expense payable
during such period pursuant to all capital leases
representing imputed interest, calculated at an interest
rate that results in an aggregate present value of all
rentals under such capital leases equal to the fair value of
the leased property at the beginning of the lease term, in
accordance with generally accepted accounting principles,
less interest income attributable to any Excluded Investment
Amount.
"Interest Period" means, for each Advance constituting a
Borrowing or comprising part of the same Borrowing, the
period commencing on the date of such Advance and ending on
the last day of the period selected by the Borrower pursuant
to or as specified by the provisions below. The duration of
each such Interest Period shall be (a) in the case of an
Adjusted CD Rate Advance, 30, 60, 90 or 180 days, (b) in the
case of a Eurodollar Rate Advance, 1, 2, 3 or 6 months,
(c) in the case of an Auction Rate Advance, not less than 30
nor more than 180 days, and (d) in the case of a Base Rate
Advance, up to 30 days, in each case, as the Borrower may
select upon notice received by the Agent not later than
11:00 A.M. (New York City time) in accordance with Section
2.02(a); provided, however, that:
(i) the Borrower may not select any Interest Period
which ends after the Availability Termination Date;
(ii) Interest Periods commencing on the same date for
Advances comprising part of the same Borrowing shall be
of the same duration; and
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day,
provided, in the case of any Interest Period for a
Eurodollar Rate Advance, that, if such extension would
cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding
Business Day.
"Irish Affiliate" means any Subsidiary of the Borrower which
is organized under the laws of, or the chief place of
business of which is located in, the Republic of Ireland,
other than Beckman Instruments (Galway), Ltd., Beckman
Instruments (Ireland), Inc. or any Subsidiary thereof or
successor thereto.
"Level I Period" means a period during which the Borrower
either (x) does not have a Long Term Debt Rating from at
least two of the three Rating Agencies and has a current
Commercial Paper Rating equal to or better than (i) A-1 from
S & P and P-2 from Moody's, or (ii) A-2 from S & P and P-1
from Moody's, or (y) has a current Long Term Debt Rating
from at least two of the three Rating Agencies and such Long
Term Debt Rating is better than the following for at least
two of the three Rating Agencies: (i) BBB from S & P,
(ii) Baa 2 from Moody's, and (iii) BBB from Duff & Phelps.
"Level II Period" means a period during which the Borrower
either (x) does not have a Long Term Debt Rating from at
least two of the three Rating Agencies and has a current
Commercial Paper Rating equal to (i) A-2 from S & P, and
(ii) P-2 from Moody's, or (y) has a current Long Term Debt
Rating from at least two of the three Rating Agencies and
such Long Term Debt Rating is equal to the following for at
least two of the three Rating Agencies: (i) BBB or BBB- from
S & P, (ii) Baa 2 or Baa 3 from Moody's, and (iii) BBB or
BBB- from Duff & Phelps.
"Level III Period" means any period other than a Level I
Period or a Level II Period.
"Liquid Short-Term Investments" means, at any time, cash and
cash equivalents denominated in United States dollars or in
any other currency which is readily exchangeable into United
States dollars and which is not, at such time, subject to
any form of exchange control regulations, and which are
payable by their terms at an address within the United
States and by a United States resident or other Person
having an address within the United States.
"Long-Term Debt Rating" means a rating for senior,
unsecured, publicly held long-term debt.
"Majority Lenders" means, at any time, three or more Lenders
owed at least 56% of the then aggregate unpaid principal
amount of the Adjusted CD Rate Advances, Base Rate Advances
and Eurodollar Rate Advances held by the Lenders, or, if no
such principal amount is then outstanding, three or more
Lenders having at least 56% of the Commitments.
"Margin Stock" has the meaning assigned to such term in
Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any
ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding three plan
years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means an employee benefit plan,
other than a Multiemployer Plan, subject to Title IV of
ERISA, to which the Borrower or any ERISA Affiliate, and
more than one employer other than the Borrower or an ERISA
Affiliate, is making or accruing an obligation to make
contributions or, in the event that any such plan has been
terminated, to which the Borrower or any ERISA Affiliate
made or accrued an obligation to make contributions during
any of the five plan years preceding the date of termination
of such plan.
"Note" means a Domestic Note or a Eurodollar Note.
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Operating Income" means, for any accounting period,
operating income (or operating deficit, as the case may be)
properly attributable to continuing operations (as defined
by generally accepted accounting principles) for such
period, but shall not include interest income or expense,
foreign exchange gains or losses, minority interest
adjustments, the effects of disposals of fixed assets,
charges for environmental matters (other than maintenance,
monitoring, compliance and remediation costs which occur at
properties where the Borrower is conducting current
operations), if any, unusual or other non-recurring items
(including charges associated with restructuring the
Borrower's operations) or other events or transactions that
are infrequent for the purposes of generally accepted
accounting principles, income taxes, charges to implement
new accounting standards required by the Financial
Accounting Standards Board, and any non-cash charges
associated with the write-down of long-term assets including
intangibles.
"Operating Income-to-Interest Ratio" means, for any period,
on a Consolidated basis for the Borrower and its
Subsidiaries, the ratio of (x) Operating Income to
(y) Interest Expense.
"Other Taxes" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation and
any successor thereto.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency
thereof.
"Plan" means an employee benefit plan, other than a
Multiemployer Plan, which is (or, in the event that any such
plan has been terminated within five years of a transaction
described in Section 4069 of ERISA, was) for employees of
the Borrower or any ERISA Affiliate and subject to Title IV
of ERISA.
"Puerto Rican Affiliate" means any Subsidiary of the
Borrower which is organized under the laws of, or the chief
place of business of which is located in, Puerto Rico, other
than Beckman Instruments (Caribe), Inc. or any Subsidiary
thereof or successor thereto.
"Rating Agencies" means S&P, Moody's and Duff & Phelps.
"Reference Banks" means Citibank, Bank of America National
Trust and Savings Association and Credit Suisse.
"S&P" means Standard & Poor's Corporation.
"Significant Subsidiary" means each Subsidiary of the
Borrower that is a "significant subsidiary" as defined in
Regulation S-X under the Securities Exchange Act of 1934.
"Solvent" means, with respect to any Person, at any time,
that, at such time, such Person is not insolvent within the
meaning of Section 101(31) of the Federal Bankruptcy Code,
Section 271 of the New York Debtor and Creditor Law, Cal.
Civ. Code Section 3439.02 or Del. Code Ann., Tit. 6,
Section 1302.
"Subsidiary" means any corporation, partnership or joint
venture:
(i) of which (or in which) more than 50% of:
(A) the outstanding capital stock having ordinary
voting power to elect a majority of the Board of
Directors of such corporation (irrespective of
whether or not at the time capital stock of any
other class or classes of such corporation shall
or might have voting power upon the occurrence of
any contingency), or
(B) the interest in the capital or profits of
such partnership or joint venture,
is at the time directly or indirectly owned by the Borrower,
by the Borrower and one or more Subsidiaries, or by one or
more Subsidiaries; or
(ii) is treated as a Consolidated subsidiary in the
financial reports furnished by the Borrower to the
Lenders pursuant to Section 5.01(e).
"Tangible Net Worth" means the Consolidated capital stock
(including preferred stock but excluding treasury stock
except for contra-equity accounts in an aggregate amount not
in excess of $50,000,000 created after January 1, 1993
associated with the Borrower's grantor stock trust ownership
program ("GSOP"), provided, that this exclusion will remain
in effect only so long as generally accepted accounting
principles or other applicable accounting rules provide for
contra-equity accounts for the GSOP), plus the Consolidated
surplus and retained earnings of the Borrower determined in
accordance with generally accepted accounting principles,
less any items treated as intangibles in conformity with
generally accepted accounting principles and any foreign
currency translation adjustment.
"Taxes" has the meaning specified in Section 2.12(a).
"Termination Event" means (i) a "reportable event", as such
term is described in Section 4043 of ERISA (other than a
"reportable event" not subject to the provision for 30-day
notice to the PBGC), or an event described in
Section 4068(f) of ERISA, or (ii) the withdrawal of the
Borrower or any ERISA Affiliate from a Multiple Employer
Plan during a plan year in which it was a "substantial
employer", as such term is defined in Section 4001(a)(2) of
ERISA, or the incurrence of liability by the Borrower or any
ERISA Affiliate under Section 4064 of ERISA upon the
termination of a Multiple Employer Plan, or (iii) the
distribution of a notice of intent to terminate a Plan
pursuant to Section 4041(a)(2) of ERISA or the treatment of
a Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate a
Plan by the PBGC under Section 4042 of ERISA, or (v) any
other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
"Withdrawal Liability" shall have the meaning given such
term under Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"
and the words "to" and "until" each means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred
to in Section 4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make Advances
to the Borrower from time to time on any Business Day during the
period from the date hereof until the Availability Termination
Date in an aggregate amount not to exceed at any time outstanding
the amount set opposite such Lender's name on the signature pages
hereof as such amount may be reduced pursuant to Section 2.04
(such Lender's "Commitment"); provided that the aggregate amount
of the Commitments of the Lenders shall be deemed used from time
to time to the extent of the aggregate amount of Auction Rate
Advances then outstanding and such deemed use of the aggregate
amount of the Commitments shall be applied to the Lenders ratably
according to their respective Commitments (such deemed use of
each Lender's Commitment being such Lender's "Auction Rate
Advance Commitment Reduction"). Each Borrowing shall be in an
aggregate amount not less than $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall consist of
Advances of the same Type made on the same day. Within the
limits of each Lender's Commitment, and in the case of Auction
Rate Advances, within the limits of the total Commitments, the
Borrower may borrow, repay pursuant to Section 2.05 or prepay
pursuant to Section 2.08, and reborrow under this Section 2.01.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be
made on notice given not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the
proposed Borrowing in the case of Eurodollar Rate Advances, on
the first Business Day prior to the date of the proposed
Borrowing in the case of Adjusted CD Rate Advances, on the date
of the proposed Borrowing in the case of Base Rate Advances, on
the second Business Day prior to the date of the proposed
Borrowing in the case of Auction Rate Advances, if the Borrower
shall specify in the Notice of Borrowing relating thereto that
the rates of interest to be offered by the Lenders shall be fixed
rates per annum, or on the fourth Business Day prior to the date
of the proposed Borrowing in the case of Auction Rate Advances if
the Borrower shall instead specify in the Notice of Borrowing
relating thereto the basis to be used by the Lenders in
determining the rates of interest to be offered by them, by the
Borrower to the Agent which shall give each Lender prompt notice
thereof by telex or cable. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be by telex, telecopy or cable,
confirmed promptly in writing, in substantially the form of
Exhibit B hereto, specifying therein the requested (i) date of
such Borrowing, (ii) Type of Advances comprising such Borrowing
(and, if such Type shall be Auction Rate Advances, any terms
relating to the interest rate or rates therefor), (iii) aggregate
amount of such Borrowing, and (iv) Interest Period for each such
Advance. The Agent shall promptly notify each Lender of receipt
of each Notice of Borrowing. In the case of a proposed Borrowing
comprised of Adjusted CD Rate Advances or Eurodollar Rate
Advances, the Agent shall promptly notify each Lender of the
applicable interest rate under Section 2.06(a) or
Section 2.06(b). In the case of a proposed Borrowing comprised
of Adjusted CD Rate Advances, Eurodollar Rate Advances or Base
Rate Advances, each Lender shall before 11:00 A.M. (New York City
time) on the date of such Borrowing make available for the
account of its Applicable Lending Office to the Agent at its
payment address referred to in Section 7.02 such Lender's ratable
portion of such Borrowing (according to the Lenders' respective
Commitments) in same day funds, and the Agent, after receipt of
such funds, or any portion thereof, and upon fulfillment of the
applicable conditions set forth in Article III, will make such
funds, or such portion, by transferring an amount equal thereto
in same day funds to the Borrower's account with Citibank at
Citibank's main office in New York, New York. In the case of a
proposed Borrowing comprised of Auction Rate Advances, (1) each
Lender may if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more Auction Rate Advances to
the Borrower as part of such proposed Borrowing at a rate or
rates of interest specified by such Lender in its sole discretion
by notifying the Agent (which shall give prompt notice thereof to
the Borrower), before 10:00 A.M. (New York City time) on the
Business Day immediately following the last Business Day on which
the related Notice of Borrowing could have been furnished by the
Borrower hereunder, of the minimum amount and maximum amount
(which may exceed such Lender's Commitment but which shall not in
any event exceed the then total unused Commitments outstanding)
of such Auction Rate Advance which such Lender would be willing
to make as part of such proposed Borrowing and the rate or rates
of interest therefor; provided that if the Agent in its capacity
as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer before
9:00 A.M. (New York City time) on the date on which notice of
such election is to be given to the Agent by the other Lenders;
(2) if any Lender shall elect not to make such an offer, such
Lender shall so notify the Agent, before 10:00 A.M. (New York
City time) on the date on which notice of such election is to be
given to the Agent by the other Lenders, and such Lender shall
not be obligated to, and shall not, make any Auction Rate Advance
as part of such Borrowing; provided that the failure by any
Lender to give such notice shall not cause such Lender to be
obligated to make any Auction Rate Advance as part of such
proposed Borrowing; (3) the Borrower shall, in turn, before
11:00 A.M. (New York City time) on such date, either (x) cancel
such Borrowing by giving the Agent notice to that effect (in
which case the Agent shall give prompt notice thereof to the
Lenders and such Borrowing shall not be made), or (y) accept one
or more of such offers made by any Lender or Lenders, in its sole
discretion, by giving notice to the Agent of the amount of each
Auction Rate Advance (which amount shall be equal to or greater
than the minimum amount, and equal to or less than the maximum
amount, notified to the Borrower by the Agent on behalf of such
Lender for such Auction Rate Advance) to be made by each Lender
as part of such Borrowing, and reject any remaining offers made
by Lenders pursuant hereto by giving the Agent notice to that
effect (in which case the Agent shall in turn promptly notify
(A) each Lender that has made an offer pursuant hereto of the
date and aggregate amount of such Borrowing and whether or not
any such offer or offers made by such Lender have been accepted
by the Borrower, (B) each Lender that is to make an Auction Rate
Advance as part of such Borrowing of the amount of each Auction
Rate Advance to be made by such Lender as part of such Borrowing,
and (C) each Lender that is to make an Auction Rate Advance as
part of such Borrowing, upon receipt, that the Agent has received
forms of documents appearing to fulfill the applicable conditions
set forth in Article III); and (4) each Lender that is to make an
Auction Rate Advance as part of such Borrowing shall, before
12:00 noon (New York City time) on the date of such Borrowing,
make available for the account of its Domestic Lending Office to
the Agent at its payment address referred to in Section 7.02 such
Lender's portion of such Borrowing in same day funds and, upon
fulfillment of the applicable conditions set forth in Article III
and after receipt by the Agent of such funds, or any portion
thereof, the Agent will make such funds, or such portion,
available to the Borrower by transferring an amount equal thereto
in same day funds to the Borrower's account with Citibank at
Citibank's main office in New York, New York, promptly after
which the Agent will notify each Lender of the amount of such
Borrowing.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) if any Lender shall, at least one Business Day
before the date of any requested Borrowing, notify the
Agent that the adoption of or any change in or in the
interpretation of any law or regulation makes it
unlawful, or that any central bank or other
governmental authority asserts that it is unlawful, for
such Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate
Advances hereunder, the right of the Borrower to select
Eurodollar Rate Advances for such Borrowing or any
subsequent Borrowing shall be suspended until such
Lender shall notify the Agent (which notice the Agent
shall promptly relate to the Borrower) that the
circumstances causing such suspension no longer exist,
and each Advance comprising such Borrowing shall be a
Base Rate Advance with an Interest Period of 30 days;
(ii) if less than two Reference Banks furnish timely
information to the Agent for determining the Adjusted
CD Rate for Adjusted CD Rate Advances, or the
Eurodollar Rate for Eurodollar Rate Advances,
comprising any requested Borrowing, the right of the
Borrower to select Adjusted CD Rate Advances or
Eurodollar Rate Advances, as the case may be, for such
Borrowing or any subsequent Borrowing shall be
suspended until the Agent shall notify the Borrower and
the Lenders that the circumstances causing such
suspension no longer exist, and each Advance comprising
such Borrowing shall be a Base Rate Advance with an
Interest Period of 30 days; and
(iii) if the Majority Lenders shall, at least one
Business Day before the date of any requested
Borrowing, notify the Agent that the Eurodollar Rate
for Eurodollar Rate Advances comprising such Borrowing
will not adequately reflect the cost to such Majority
Lenders of making, funding or maintaining their
respective Eurodollar Rate Advances for such Borrowing,
the right of the Borrower to select Eurodollar Rate
Advances for such Borrowing or any subsequent Borrowing
shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing
such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance
with an Interest Period of 30 days.
(c) Except as provided in subsection (a) above of this
Section 2.02 with respect to the cancellation of a Notice of
Borrowing by the Borrower for Auction Rate Advances, each
Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing which the related
Notice of Borrowing specifies is to be comprised of Adjusted
CD Rate Advances or Eurodollar Rate Advances, the Borrower
shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure
to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set
forth in Article III, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part
of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Except in the case of a Borrowing comprised of Auction
Rate Advances, unless the Agent shall have received notice
from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Agent such Lender's
ratable portion of such Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on
the date of such Borrowing in accordance with subsection (a)
of this Section 2.02 and the Agent may, in reliance upon
such assumption, make available to the Borrower on such date
a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available
to the Agent, such Lender and the Borrower severally agree
to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the
date such amount is repaid to the Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to
Advances comprising such Borrowing and (ii) in the case of
such Lender, the Federal Funds Rate. If such Lender shall
repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Lender's Advance as part of
such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be
made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make
its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the date
of any Borrowing.
SECTION 2.03. Fees. (a) Facility Fee. The Borrower agrees to
pay to the Agent, for the account of each Lender, a facility fee
at the rate of .125% per annum for each day when a Level I Period
is in effect, .15% per annum for each day when a Level II Period
is in effect and .25% per annum for each day when a Level III
Period is in effect, in each case on the average daily amount of
such Lender's Commitment during the period for which such payment
is then due (irrespective of usage), from the date hereof until
the Availability Termination Date, payable in arrears on the last
day of each March, June, September and December during the term
of such Lender's Commitment, commencing December 31, 1994, and on
the Availability Termination Date.
(b) Utilization Fee. The Borrower agrees to pay to the
Agent, for the account of each Lender, for each day when the
aggregate amount of Advances outstanding hereunder
(including Auction Rate Advances) exceeds 50% of the
aggregate amount of the Commitments then in effect, a
utilization fee at the rate of .125% per annum on the daily
average amount of such Lender's outstanding Advances which
are not Auction Rate Advances during the period for which
such payment is then due, payable in arrears on the last day
of each March, June, September and December during the term
of such Lender's Commitment, commencing September 30, 1994,
and on the Availability Termination Date.
SECTION 2.04. Reduction of the Commitments. (a) Mandatory
Reduction. The Commitments shall be ratably reduced by an amount
equal to the net proceeds (being any cash proceeds plus the fair
value (as determined by the Borrower's Board of Directors in good
faith) of any non-cash consideration) of any issuance, sale,
transfer or other disposal of any shares of capital stock of any
Significant Subsidiary to any Person other than the Borrower or
another Subsidiary of the Borrower, which reduction shall be
effective (i) immediately upon such issuance, sale, transfer or
other disposal with respect to the portion of the Commitments
which is unused at the time of such issuance, sale, transfer or
other disposal and with respect to the portion which is
outstanding as Base Rate Advances, and (ii) on the last day of
the Interest Period during which such issuance, sale, transfer or
other disposal occurs with respect to the portion of the
Commitments which is outstanding at the time of such issuance,
sale, transfer or other disposal (other than as Base Rate
Advances).
(b) Optional Reduction. The Borrower shall have the right,
upon at least one Business Day's notice to the Agent, to
terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders;
provided that each partial reduction shall be in an
aggregate amount of not less than $10,000,000 or an integral
multiple of $1,000,000 in excess thereof.
SECTION 2.05. Repayment of Advances. The Borrower shall repay
the principal amount of each Advance made by each Lender on the
last day of the Interest Period for such Advance.
SECTION 2.06. Interest on Advances. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to
each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) Adjusted CD Rate Advances. If such Advance is an
Adjusted CD Rate Advance, a rate per annum equal to the sum
of the Adjusted CD Rate for such Interest Period plus .25%
per annum for each day that occurs during a Level I Period,
.375% per annum for each day that occurs during a Level II
Period, and .50% per annum for each day that occurs during a
Level III Period, payable on the last day of the applicable
Interest Period and, if the applicable Interest Period has a
duration of more than 90 days, on the 90th day from the
first day of such Interest Period; provided that any amount
of principal which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest,
from the date on which such amount is due until such amount
is paid in full, payable on demand, at a rate per annum
equal at all times to 1% per annum above the Base Rate in
effect from time to time.
(b) Eurodollar Rate Advances. If such Advance is a
Eurodollar Rate Advance, a rate per annum equal to the sum
of the Eurodollar Rate for such Interest Period plus .25%
per annum for each day that occurs during a Level I Period,
.375% per annum for each day that occurs during a Level II
Period, and .50% per annum for each day that occurs during a
Level III Period, payable on the last day of the applicable
Interest Period and, if the applicable Interest Period has a
duration of more than three months, on the day which occurs
during such Interest period three months from the first day
of such Interest Period; provided, further, that any amount
of principal which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest,
from the date on which such amount is due until such amount
is paid in full, payable on demand, at a rate per annum
equal at all times to 1% per annum above the Base Rate in
effect from time to time.
(c) Auction Rate Advances. If such Advance is an Auction
Rate Advance, a rate equal to the Auction Rate for such
Interest Period, payable on the last day of the applicable
Interest Period and, if the applicable Interest Period has a
duration of more than three months, on each day which occurs
during such Interest Period at intervals of three months
from the first day of such Interest Period; provided that
any amount of principal which is not paid when due (whether
at stated maturity, by acceleration or otherwise) shall bear
interest, from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate
per annum equal at all times to 1% per annum above the Base
Rate in effect from time to time.
(d) Base Rate Advances. If such Advance is a Base Rate
Advance, a rate per annum equal at all times during the
Interest Period for such Advance equal to the Base Rate in
effect from time to time, payable on the last day of such
Interest Period; provided that any amount of principal which
is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid
in full, payable on demand, at a rate per annum equal at all
times to 1% per annum above the Base Rate in effect from
time to time.
SECTION 2.07. Additional Interest on Eurodollar Rate Advances.
The Borrower shall pay to the Agent for the account of each
Lender additional interest on the unpaid principal amount of each
Eurodollar Rate Advance of such Lender, from the date of such
Advance until such principal amount is paid in full, at an
interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Advance from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage of such Lender for such
Interest Period, payable on each date on which interest is
payable on such Advance. Such additional interest shall be
determined by such Lender and notified to the Borrower through
the Agent. It shall be assumed, for the purpose of computing the
additional interest to be paid by the Borrower to CUSA pursuant
to this Section 2.07, that the making, funding or maintaining by
CUSA of any Eurodollar Rate Advance hereunder has been by
Citibank.
SECTION 2.08. Optional Prepayments of Advances. The Borrower
may, upon at least three Business Days' notice to the Agent in
the case of Adjusted CD Rate Advances and Eurodollar Rate
Advances, and upon one Business Day's notice in the case of Base
Rate Advances, in either case stating the proposed date and
aggregate principal amount of the prepayment, and, if such notice
is given, the Borrower shall prepay, the outstanding principal
amounts of the Advances comprising part of the same Borrowing, in
whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid;
provided, however, that each partial prepayment shall be in an
aggregate principal amount not less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and in the
event of such prepayment of a Eurodollar Rate Advance or an
Adjusted CD Rate Advance, the Borrower shall be obligated to
reimburse the Lenders in respect thereof pursuant to
Section 7.04(b). The Borrower shall have no right to prepay any
Auction Rate Advance prior to the last day of the Interest Period
applicable thereto.
SECTION 2.09. Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Agent timely information for the
purpose of determining each Adjusted CD Rate or Eurodollar Rate,
as applicable. Subject to the provisions of Section 2.02(b)(ii),
if any one or more of the Reference Banks shall not furnish such
timely information to the Agent for the purpose of determining
any such interest rate, the Agent may determine such interest
rate on the basis of timely information furnished by the
remaining Reference Banks.
(b) The Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by
the Agent for purposes of Section 2.06(a), Section 2.06(b),
Section 2.06(c), and Section 2.06(d) and the applicable
rate, if any, furnished by each Reference Bank for the
purpose of determining the applicable interest rate under
Section 2.06(a) or Section 2.06(b).
SECTION 2.10. Increased Costs. (a) If, due to either (i) the
adoption of or any change after the date hereof (other than any
change by way of imposition or increase of reserve requirements,
in the case of Adjusted CD Rate Advances, included in the
Adjusted CD Rate Reserve Percentage or, in the case of Eurodollar
Rate Advances, included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or regulation
or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost
to any Lender of agreeing to make or making, funding or
maintaining Adjusted CD Rate Advances or Eurodollar Rate
Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Agent), pay to
the Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost,
provided, however, that such Lender shall have given the Borrower
notice of such adoption, change or compliance and provided
further, however, that the Borrower shall not be liable for any
increased cost from such adoption, change or compliance which was
incurred or accrued more than 60 days prior to such notice. A
certificate as to the amount of such increased cost, submitted to
the Borrower and the Agent by such Lender, shall be conclusive
and binding for all purposes, absent error. It shall be assumed,
for the purpose of computing amounts to be paid by the Borrower
to CUSA pursuant to this Section 2.10(a), that the making,
funding or maintaining by CUSA of any Advance hereunder has been
by Citibank.
(b) If any Lender determines that either (i) the adoption
of, or any change after the date hereof in, or in the
interpretation or administration of, any law, order or
regulation or (ii) compliance with any guideline or request
from any central bank or other governmental authority
(whether or not having the force of law) affects or would
affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling
such Lender and that the amount of such capital is increased
by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type, then,
upon demand by such Lender (with a copy of such demand to
the Agent), the Borrower shall pay to the Agent for the
account of such Lender, from time to time as specified by
such Lender, additional amounts sufficient to compensate
such Lender in the light of such circumstances, to the
extent that such Lender reasonably determines such increase
in capital to be allocable to the existence of such Lender's
commitment to lend hereunder; provided, however, that if the
Borrower objects within five (5) days of such demand to
payment of such additional amounts, then the Borrower and
such Lender agree to negotiate regarding the additional
amounts that shall be sufficient to so compensate such
Lender, and the Borrower's obligation to pay the amounts
certified by such Lender shall be deferred for thirty (30)
days after such demand; and provided further that, if the
Borrower and such Lender do not reach agreement on such
additional amounts during such thirty (30) day period, the
Borrower shall promptly upon the end of such thirty (30) day
period pay to such Lender the amount certified by such
Lender and; provided, further, that the Borrower shall not
be liable for any such additional amounts arising from such
adoption, change or compliance which were incurred or
accrued more than 60 days prior to such demand. Subject to
each proviso in the preceding sentence, a certificate as to
such amounts submitted to the Borrower and the Agent by such
Lender shall be conclusive and binding for all purposes,
absent error. It shall be assumed, for the purpose of
computing amounts to be paid by the Borrower to CUSA
pursuant to this Section 2.10(b), that the making, funding
or maintaining by CUSA of any Advance hereunder has been by
Citibank.
SECTION 2.11. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes not later than
1:00 P.M. (New York City time) on the day when due in U.S.
dollars to the Agent at its payment address referred to in
Section 7.02 in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the
payment of principal or interest or fees ratably (other than
amounts payable pursuant to Section 2.06(c), Section 2.07,
Section 2.10 or Section 2.12) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender
to such Lender for the account of its Applicable Lending Office,
in each case to be applied in accordance with the terms of this
Agreement.
(b) The Borrower hereby authorizes each Lender, if and to
the extent payment owed to such Lender is not made when due
hereunder or under the Notes held by such Lender, to charge
from time to time against (i) any or all of the Borrower's
accounts with such Lender or (ii) in the event any such
payment is not made to CUSA when due, any or all of the
Borrower's accounts with Citibank (and the Borrower hereby
authorizes Citibank to permit such charge), any amount so
due.
(c) All computations of interest based on the Base Rate,
the Auction Rate, the Adjusted CD Rate or the Eurodollar
Rate (including additional interest owed pursuant to
Section 2.07) and of fees shall be made by the Agent on the
basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day)
occurring in the period for which such interest or fees are
payable. Each determination by the Agent (or, in the case
of Section 2.07, by a Lender) of an interest rate hereunder
shall be conclusive and binding for all purposes, absent
error.
(d) Whenever any payment hereunder or under the Notes shall
be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in
the computation of payment of interest or fees, as the case
may be; provided, however, if such extension would cause
payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business
Day.
(e) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to
the Lenders hereunder that the Borrower will not make such
payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent
the Borrower shall not have so made such payment in full to
the Agent, each Lender shall repay to the Agent forthwith on
demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with
Section 2.11, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent,
taxes imposed on its income, and franchise taxes imposed on such
Lender or the Agent (as the case may be), by the jurisdiction
under the laws of which it is organized or any political
subdivision thereof and, in the case of each Lender, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof and, in the case of any Lender,
taxes imposed by reason of such Lender's status as a nonresident
alien individual, foreign partnership, foreign corporation,
foreign estate, or foreign trust or by reason of such holder's
failure to provide the Borrower with sufficient information or
certifications to discharge the Borrower from any obligation to
withhold tax under Section 3406 of the Internal Revenue Code of
1986, as amended (or any statutory provision successor thereto)
(all non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under
any Note to any Lender or the Agent (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 2.12) such Lender or the Agent
receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise taxes,
charges or similar levies which arise from any payment made
hereunder or under the Notes or from the execution, delivery
or registration of, or otherwise with respect to, this
Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.12)
paid by such Lender or the Agent (as the case may be) after
reasonable notice to the Borrower and any liability
(including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted; provided,
however, that (i) the Borrower shall not be liable with
respect to any fines or penalties imposed by any
jurisdiction on any Lender due solely to such Lender's gross
negligence or willful misconduct in failing to pay such
Taxes or Other Taxes, and (ii) each Lender shall return to
the Borrower the amount, without interest thereon, of any
Taxes or Other Taxes which have been paid to such Lender by
the Borrower and which are subsequently recovered by such
Lender. This indemnification shall be made within 30 days
from the date such Lender or the Agent (as the case may be)
makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Borrower will furnish to the Agent, at its address
referred to in Section 7.02, the original or a certified
copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 2.12 shall survive
the payment in full of principal and interest hereunder and
under the Notes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of the
Advances owing to it (other than pursuant to Section 2.07,
Section 2.10 or Section 2.12 or in connection with an Auction
Rate Advance made by it) in excess of its ratable share of
payments on account of the Advances obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such
participations in the Advances owing to them as shall be
necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all
or any portion of such excess payment is thereafter recovered
from such purchasing Lender, such purchase from each Lender shall
be rescinded and such Lender shall repay to the purchasing Lender
the purchase price to the extent of such recovery together with
an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment
to (ii) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.14. Mitigation of Increased Costs or Taxes. If, in
respect of any Lender, circumstances arise which become known to
such Lender which would or would upon the giving of notice result
in (a) an increase in the amount of any payment to be made to it
or for its account pursuant to Section 2.10, (b) a claim for
payment of Taxes pursuant to Section 2.12 or (c) the suspension
of the Borrower's right to request a CD Rate Advance or a
Eurodollar Rate Advance pursuant to Section 2.02(b), then without
in any way limiting, reducing or otherwise qualifying the
Borrower's obligations under such Sections to such Lender, such
Lender shall promptly notify the Agent thereof and, in
consultation with the Borrower, to the extent that it can do so
without prejudice to its own position, take such steps as may be
reasonably available to it to mitigate the effects of such
circumstances (including, without limitation, the transfer of its
Applicable Lending Office to another jurisdiction or the transfer
of its rights and obligations hereunder to another financial
institution acceptable to the Borrower). If and so long as a
Lender has been unable to take, or has not taken, steps
acceptable to the Borrower, such Lender shall be obligated, at
the request of the Borrower, to transfer all its rights and
obligations hereunder to another financial institution nominated
by the Borrower and acceptable to the Agent at a purchase price
equal to the principal of and accrued but unpaid interest and
fees (to the date of purchase) on all Advances owed to such
Lender, whereupon the obligations of such Lender hereunder shall
be released and discharged, provided, however, that such Lender's
obligations under Section 7.07(e) shall survive such release and
discharge as to matters occurring prior to such date.
SECTION 2.15. Use of Proceeds. The proceeds of any Advance
shall be used solely, directly or indirectly, in the Borrower's
U.S. operations. In applying the proceeds from any Advance, the
Borrower represents that in no event will any portion of the
proceeds of any Advance be used to repay the portion of any
Indebtedness for Borrowed Money, the proceeds of which were used
to previously fund any foreign investment or the working capital
needs of any foreign Subsidiary, foreign Affiliate or other
foreign entity. The Borrower further represents that in no event
will any portion of any Advance be used to fund any foreign
investment or the working capital needs of any foreign
Subsidiary, foreign Affiliate or other foreign entity.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Any Advance. The
obligation of each Lender to make an Advance on the occasion of
each Borrowing (including the initial Borrowing) shall be subject
to the satisfaction of the conditions precedent that (i) the
Agent shall have received a Notice of Borrowing and (ii) on the
date of such Borrowing the following statements shall be true,
and each of the giving of the applicable Notice of Borrowing and
the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation that such statements are true:
(a) The representations and warranties set forth in
Section 4.01 (excluding those contained in subsections (e)
and (f) thereof) shall be true and correct in all material
respects on and as of the date of such Borrowing before and
after giving effect to such Borrowing and the application of
the proceeds therefrom as though made on and as of such
date;
(b) No Event of Default has occurred and is continuing, or
would result from such Borrowing or from the application of
the proceeds therefrom, and, with respect to the events
specified in Section 6.01(e) and Section 6.01(f), no Default
has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom;
and
(c) No Person or two or more Persons acting in concert has
acquired beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Borrower (or other
securities convertible into such securities) representing
20% or more of the combined voting power of all securities
of the Borrower entitled to vote in the election of
directors other than securities having such power only by
reason of the happening of a contingency; nor, during any
period of up to 24 consecutive months commencing on or after
the date of this Agreement, have individuals who at the
beginning of such 24-month period were directors of the
Borrower ceased for any reason to constitute a majority of
the board of directors of the Borrower; nor has any Person
or two or more Persons acting in concert acquired by
contract or otherwise, or entered into a contract or
arrangement which upon consummation will result in its or
their acquisition of, the power to exercise, directly or
indirectly, a controlling influence over the management or
policies of the Borrower.
SECTION 3.02. Special Conditions Precedent. The obligation of
each Lender to make the initial Advance is subject to the further
condition precedent that the Agent shall have received on or
before the date of the initial Advance the following, in form and
substance satisfactory to the Agent and in sufficient copies for
each Lender:
(a) The Notes payable to the order of the Lenders,
respectively;
(b) Counterparts of this Agreement;
(c) A favorable opinion of William May, Esq., Vice
President and General Counsel to the Borrower, substantially
in the form of Exhibit C hereto;
(d) A favorable opinion of Steefel, Levitt and Weiss,
counsel to the Agent, substantially in the form of Exhibit D
hereto;
(e) A certificate of the Secretary or any Assistant
Secretary of the Borrower, certifying as to (i) resolutions
of the Board of Directors of the Borrower authorizing the
execution, delivery and performance of this Agreement and
the Notes to be made by it, the borrowings by it hereunder
and the consummation of the other transactions contemplated
hereby; (ii) the full force and effect of such resolutions;
and (iii) the incumbency and signature of each of its
officers authorized to execute this Agreement, the Notes to
be made by it or any other closing papers hereunder and/or
to give notices required or permitted hereby;
(f) A certificate of the chief accounting or financial
officer or Treasurer of the Borrower certifying that, as of
the date of the delivery of such certificate, there exists
no Default and the representations and warranties set forth
in Section 4.01 are true and correct in all material
respects; and
(g) A certificate of the chief accounting or financial
officer or Treasurer of the Borrower certifying that all
commitments under that certain Revolving Credit Agreement
dated as of July 2, 1992 among the Borrower, the lenders
party thereto and CUSA, as agent, have been cancelled and
all outstanding principal of and accrued interest on the
indebtedness outstanding thereunder, together with all fees
and other amounts payable thereunder, have been paid in
full.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
(b) The execution, delivery and performance by the Borrower
of this Agreement and the Notes are within the Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) the Borrower's
charter or by-laws or (ii) law or any decree, order or
judgment or any contractual restriction binding on or
affecting the Borrower.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery
and performance by the Borrower of this Agreement or the
Notes.
(d) This Agreement is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance
with their respective terms.
(e) The balance sheets of the Borrower and its Subsidiaries
as at December 31, 1993 and June 30, 1994, and the related
statements of income, cash flow and retained earnings of the
Borrower and its Subsidiaries for the fiscal period then
ended, copies of which have been furnished to each Lender,
fairly present the financial condition of the Borrower and
its Subsidiaries as at the date of such financial statements
and the results of the operations of the Borrower and its
Subsidiaries for the fiscal period ended on such date, all
in accordance with generally accepted accounting principles
consistently applied, and since December 31, 1993, there has
been no material adverse change in the financial condition
or operations of the Borrower and its Subsidiaries, taken as
a whole.
(f) There is no pending or threatened action or proceeding
affecting the Borrower or any of its Subsidiaries before any
court, governmental agency or arbitrator, which purports to
affect the transactions contemplated hereby or the legality,
validity or enforceability of this Agreement or any Note or,
except as and to the extent heretofore disclosed in writing
by the Borrower to the Lenders, which may materially
adversely affect the financial condition or operations of
the Borrower and its Subsidiaries taken as a whole.
(g) No Termination Event has occurred or is reasonably
expected to occur with respect to any Plan, except to the
extent that the Borrower has given prior notice thereof to
the Agent.
(h) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) with respect to each Plan,
copies of which have been filed with the Internal Revenue
Service, is complete and accurate and fairly presents the
funding status and financial condition of such Plan, and
since the date of such Schedule B there has been no material
adverse change in such funding status or financial
condition, except to the extent the Borrower has given prior
notice thereof to the Agent.
(i) Neither the Borrower nor any ERISA Affiliate has
incurred, or is reasonably expected to incur, any Withdrawal
Liability to any Multiemployer Plan, except to the extent
the Borrower has given prior notice thereof to the Agent.
(j) Neither the Borrower nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in
reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated within
the meaning of Title IV of ERISA, except to the extent the
Borrower has given prior notice thereof to the Agent.
(k) The Borrower is not an "investment company", or a
company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
(l) The Borrower is, and immediately after giving effect to
the Borrowings made or to be made hereunder and the intended
use of proceeds thereof will be, Solvent. The Borrower is
not, and following the Borrowings hereunder and the intended
use of proceeds thereof will not be, left with an
unreasonably small capital (within the meaning of
Section 548 of the Federal Bankruptcy Code, Section 274 of
the New York Debtor Creditor Law, Cal. Civ. Code
Section 3439.04 or Del. Code Ann., tit. 6, Section 1305);
and in entering into and carrying out its obligations as
contemplated by this Agreement and the transactions
contemplated thereby, does not intend to incur, or believe
that it would incur, debts beyond its ability to pay as such
debts mature or become due (within the meaning of
Section 548 of the Federal Bankruptcy Code, Section 275 of
the New York Debtor Creditor Law, Cal. Civ. Code
Section 3439.02 or Del. Code Ann., tit. 6 Section 1306).
(m) As of the date hereof, the Borrower is, and has not
entered into a binding agreement the performance of which
would cause it to cease to be, directly or through its
Subsidiaries the record and beneficial owner of the capital
stock of each of its Significant Subsidiaries.
(n) Following application of the proceeds of each Advance,
not more than 25 percent of the value of the assets of
either the Borrower only or of the Borrower and its
Consolidated Subsidiaries will be Margin Stock (within the
meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System).
(o) The Borrower and each of its Subsidiaries have filed
all tax returns (Federal, state and local) required to be
filed and paid all taxes shown thereon to be due, including
interest and penalties, or provided adequate reserves for
payment thereof, except where the failure to so file would
not reasonably be expected to have a material adverse effect
on the operations or conditions (financial or otherwise) of
the Borrower and its Significant Subsidiaries, taken as a
whole.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Note or any
amount payable by the Borrower hereunder shall remain unpaid or
any Lender shall have any Commitment hereunder, the Borrower
will, unless the Majority Lenders shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Significant Subsidiaries to comply, in all material
respects, with all applicable laws, rules, regulations and
orders with which the non-compliance would have a material
adverse effect on the financial condition or operations of
the Borrower, such compliance to include, without
limitation, paying before the same become delinquent all
taxes, assessments and governmental charges imposed upon it
or upon its property, except to the extent contested in good
faith and for which adequate reserves have been established.
(b) Maintenance of Consolidated Direct Indebtedness-to-
Capitalization Ratio. Maintain a Consolidated Direct
Indebtedness-to-Capitalization Ratio not in excess of 45% on
and after the effective date hereof.
(c) Maintenance of Consolidated Tangible Net Worth.
Maintain a Consolidated Tangible Net Worth of not less than
the sum of (a) $200,000,000, plus (b) 30% of the positive
Consolidated net income of the Borrower and its Consolidated
Subsidiaries arising after June 30, 1992 (without reduction
for Consolidated net losses, if any), plus (c) 30% of the
net proceeds derived from the issuance of any shares of any
class of capital stock or other equity securities of the
Borrower after June 30, 1992.
(d) Maintenance of Operating Income-to-Interest Ratio.
Maintain for each fiscal semi-annual period ending on
June 30 or December 31, respectively, an Operating Income-
to-Interest Ratio of at least three-to-one for the period of
twelve consecutive calendar months ending as of the date of
determination.
(e) Reporting Requirements. Furnish to the Lenders:
(i) as soon as practicable and in any event within
sixty (60) days after the end of each fiscal quarter of
the Borrower (other than the last quarter of any fiscal
year), Consolidated statements of income, cash flow and
retained earnings of the Borrower and its Subsidiaries
for the period from the beginning of the then current
fiscal year of the Borrower to the end of such fiscal
quarter, and a Consolidated balance sheet of the
Borrower and its Subsidiaries, as at the end of such
fiscal quarter, setting forth in each case in
comparative form Consolidated figures for the
corresponding period(s) of the preceding fiscal year,
all in reasonable detail and certified by the chief
financial or accounting officer or Treasurer or any
Assistant Treasurer of the Borrower to fairly present
the financial condition of the Borrower and its
Subsidiaries as at the end of such quarter and the
results of the operations of the Borrower and its
Subsidiaries for the period ending on such date,
subject to year-end audit adjustments;
(ii) as soon as practicable and in any event within
one hundred (100) days after the end of each fiscal
year of the Borrower, a Consolidated balance sheet of
the Borrower and its Subsidiaries, as at the close of
such fiscal year, and Consolidated statements of
income, cash flow and retained earnings of the Borrower
and its Subsidiaries for such year, setting forth in
comparative form Consolidated figures for the preceding
fiscal year, all in reasonable detail and certified
without qualification as to the scope of the audit by
Coopers & Lybrand or other independent certified public
accountants of nationally recognized standing selected
by the Borrower;
(iii) together with each set of financial statements
delivered to the Lenders pursuant to subsections (i)
and (ii) above, (A) a certificate of the chief
accounting or financial officer or Treasurer or any
Assistant Treasurer of the Borrower, setting forth in
reasonable detail for, and/or as of the last day of,
the most recent fiscal quarter of the Borrower then
ended all data necessary to show the extent to which
the Borrower has complied or failed to comply, as the
case may be, with the requirements of Sections 5.02(a)
through (e), including a certificate by such officer
stating that, to the best of such officer's knowledge,
information and belief, upon due inquiry, there exists
no Event of Default and (b) a certificate of such
officer stating the Borrower's compliance with the
covenants set forth in Section 5.01(b), Section 5.01(c)
and Section 5.01(d) and setting forth in reasonable
detail the calculation thereof (the "Compliance
Certificate");
(iv) with reasonable promptness, such other
information respecting the business, operations,
assets, liabilities or financial condition of the
Borrower or any of its Significant Subsidiaries as any
Lender through the Agent may, from time to time,
reasonably request and, to the extent otherwise
available, such financial statements of any of the
Significant Subsidiaries as any Lender through the
Agent may, from time to time, request;
(v) with reasonable promptness, copies of all
prospectuses, definitive proxy statements, regular and
periodic reports and other information (other than
routine pricing supplements to prospectuses,
registration statements on Form S-8 under the
Securities Act of 1933, as amended, and annual reports
on Form 11-K under the Securities Exchange Act of 1934,
as amended, or, in either case, successor forms
relating to registration and reporting regarding
employee stock option or purchase plans) made available
by the Borrower to its stockholders or filed by it with
the Securities and Exchange Commission (or any
successor thereof) or, if requested by any Lender
through the Agent, made available by the Borrower to
other lenders;
(vi) promptly upon any officer of the Borrower
obtaining knowledge thereof, notice of any Event of
Default or of any action, suit, investigation or other
proceeding of the kind referred to in Section 4.01(f),
together with a statement describing the action, if
any, which the Borrower proposes to take with respect
thereto, which notice may be provided by the Borrower
to the Agent by the Borrower delivering to the Agent
the Borrower's Form 8-K Current Report, or other
reports as required pursuant to the provisions of the
Securities Exchange Act of 1934, with respect to such
matters;
(vii) as soon as possible and in any event (A) within
30 days after the Borrower or any Subsidiary knows that
any Termination Event described in clause (i) of the
definition of Termination Event with respect to any
Plan has occurred and (B) within 10 days after the
Borrower or any Subsidiary knows that any other
Termination Event with respect to any Plan has
occurred, a statement of the chief financial officer of
the Borrower describing such Termination Event and the
action, if any, which the Borrower, such Subsidiary or
any ERISA Affiliate proposes to take with respect
thereto;
(viii) promptly and in any event within two (2)
Business Days after receipt thereof by the Borrower or
any Subsidiary, or after the Borrower or any Subsidiary
knows of receipt thereof by any other ERISA Affiliate,
copies of each notice received by the Borrower or any
ERISA Affiliate from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to
administer any Plan;
(ix) if requested by any Lender through the Agent,
promptly and in any event within thirty (30) days after
the filing thereof with the Internal Revenue Service,
copies of each Schedule (B) (Actuarial Information) to
the annual report (Form 5500 Series) filed by the
Borrower or any Subsidiary with respect to any Plan,
and as soon as possible after a request by any Lender,
copies of each Schedule (B) (Actuarial Information) to
the annual report (Form 5500 Series) filed by any other
ERISA Affiliate with respect to any Plan; and
(x) promptly and in any event within five (5) Business
Days after receipt thereof by the Borrower or any
Subsidiary, or after the Borrower or any Subsidiary
knows of receipt thereof by any other ERISA Affiliate,
from the sponsor of a Multiemployer Plan, a copy of
each notice received by the Borrower or any ERISA
Affiliate concerning (A) the imposition of Withdrawal
Liability by a Multiemployer Plan, (B) the
determination that a Multiemployer Plan is, or is
expected to be, in reorganization within the meaning of
Title IV of ERISA, (C) the termination of a
Multiemployer Plan within the meaning of Title IV of
ERISA, or (D) the amount of liability incurred, or
expected to be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in
clause (A), (B) or (C) above.
(f) Maintenance of Insurance. Maintain or cause to be
maintained on its behalf, and maintain or cause to be
maintained by or on behalf of each Subsidiary, liability
insurance, and all other types of insurance, in each case
with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in
which the Borrower or such Subsidiary or Significant
Subsidiary, as the case may be, operates.
(g) Preservation of Existence. Preserve and maintain, and
cause each Subsidiary to preserve and maintain, its
corporate existence, rights, franchises and privileges in
the jurisdiction of its incorporation, and qualify and
remain qualified, and cause each Subsidiary to qualify and
remain qualified, as a foreign corporation in each
jurisdiction in which such qualification is necessary or
desirable in the Borrower's good faith determination in view
of its business and operations or the ownership of its
properties.
(h) Maintenance of Properties. Maintain and preserve, and
cause each Subsidiary to maintain and preserve, all of its
properties, necessary or useful in the conduct of its
business, in good working order and condition, ordinary wear
and tear excepted.
SECTION 5.02. Negative Covenants. So long as any Note or any
amount payable by the Borrower hereunder shall remain unpaid or
any Lender shall have any Commitment hereunder, the Borrower will
not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any
of its Significant Subsidiaries to create or suffer to
exist, any lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement,
upon or with respect to any of its properties, whether now
owned or hereafter acquired, or assign, or permit any of its
Significant Subsidiaries to assign, any right to receive
income, in each case to secure or provide for the payment of
any Debt of any Person, other than any of the following
liens:
(i) purchase money liens or purchase money security
interests upon or in any property acquired or held by
the Borrower or any Significant Subsidiary in the
ordinary course of business to secure the purchase
price of such property or to secure indebtedness
incurred solely for the purpose of financing the
acquisition of such property;
(ii) liens or security interests existing on such
property at the time of its acquisition (other than any
such lien or security interest created in contemplation
of such acquisition);
(iii) liens or security interests existing on the date
hereof securing Debt existing on the date hereof as
set forth on Schedule II hereto;
(iv) liens or security interests existing on property
of any Person acquired by the Borrower or any of its
Significant Subsidiaries at the time of acquisition of
such Persons (other than any such lien or security
interest created in contemplation of such acquisition);
(v) liens for taxes, assessments or governmental
charges or levies on property of the Borrower or any
Significant Subsidiary if the same shall not at the
time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by
appropriate proceedings and for which appropriate
reserves have been established;
(vi) liens in favor of the PBGC arising in connection
with any Insufficiency resulting from the actions of,
and with respect to any Plan of, any ERISA Affiliate of
the Borrower which is not a Subsidiary of the Borrower,
securing Debt not exceeding $5,000,000;
(vii) other liens, security interests or other charges
or encumbrances securing an aggregate principal amount
of Debt not exceeding $20,000,000 at any time
outstanding, and
(viii) any lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of
the cost of acquiring or constructing such asset,
provided that such lien attaches to such asset
concurrently with or within 180 days after the
acquisition or construction thereof.
(b) Sales of Accounts. Sell or assign or permit any of its
Subsidiaries to sell or assign any "accounts" within the
meaning of Section 9-106 of the California Uniform
Commercial Code, except that the Borrower and its
Subsidiaries may sell or assign the outstanding amount of
such accounts and the discounted present value of operating
leases in an aggregate amount not to exceed $75,000,000,
provided that the proceeds of any such sale or assignment
shall be used to repay outstanding Indebtedness for Borrowed
Money of the Borrower.
(c) Disposition of Assets. During any fiscal year, lease,
sell, transfer or otherwise dispose of, or permit its
Subsidiaries to lease, sell, transfer or otherwise dispose
of, voluntarily or involuntarily, any asset or assets with a
fair market value in an aggregate amount in excess of
$5,000,000, for consideration in an amount less than the
fair market value of such asset as determined in good faith
by the Borrower's Board of Directors.
(d) Dividends and Other Payments. Declare or make any
dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities on
account of any shares of any class of capital stock of the
Borrower, except that the Borrower may (i) declare and make
any dividend payment or other distribution payable in common
stock of the Borrower, (ii) declare and pay cash dividends
to its stockholders not in excess of 30% of Consolidated net
income of the Borrower and its Consolidated Subsidiaries
arising after June 30, 1992 through the date of such
declaration (but in no event shall such calculation include
any income arising after the Availability Termination Date)
plus $45,000,000 computed on a cumulative Consolidated
basis, provided that, immediately after giving effect to
such proposed action, no Default would exist, and
(iii) declare and make any dividend payment or other
distribution of rights to purchase equity securities of the
Borrower.
(e) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions), all or
substantially all of its assets (whether now owned or
hereafter acquired) to, or acquire all or substantially all
of the assets of, any Person, or permit any of its
Subsidiaries to do so, except that (i) any Subsidiary of the
Borrower may merge or consolidate with or into, or transfer
assets to, or acquire assets of, any other Subsidiary of the
Borrower, (ii) any Subsidiary of the Borrower may merge into
or transfer assets to the Borrower and (iii) the Borrower
may acquire all or substantially all of the assets or equity
of any person (including any unincorporated division or
business of such Person) or permit any of its Subsidiaries
to do so, provided in each case that, immediately after
giving effect to such proposed transaction, no Default would
exist, and, in the case of any such merger to which the
Borrower is a party, the Borrower is the surviving
corporation.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of, or
interest on, any Note when the same becomes due and payable
(whether at stated maturity or by required prepayment or
otherwise); or
(b) any representation or warranty made by the Borrower
herein or by the Borrower (or any of its officers) in
connection with this Agreement shall prove to have been
incorrect in any material respect when made; or
(c) The Borrower shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 5.01(b),
Section 5.01(c), and Section 5.01(d) or Section 5.02, or
(ii) any other term, covenant or agreement contained in this
Agreement on its part to be performed or observed if such
failure shall remain unremedied for ten (10) days after
written notice thereof shall have been given to the Borrower
by the Agent or any Lender; or
(d) The Borrower or any of its Significant Subsidiaries
shall fail to pay any principal of, or premium or interest
on, any Indebtedness for Borrowed Money which is outstanding
in a principal amount of at least $5,000,000 in the
aggregate (but excluding Indebtedness for Borrowed Money
evidenced by the Notes) of the Borrower or such Significant
Subsidiary (as the case may be), when the same becomes due
and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if
any, specified in such other agreement or instrument
relating to such Indebtedness for Borrowed Money; or any
other event shall occur or condition shall exist under any
agreement or instrument relating to any such Indebtedness
for Borrowed Money and shall continue after the applicable
grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity
of such Indebtedness for Borrowed Money; or, as a result of
the failure by the Borrower or any of its Significant
Subsidiaries to perform any obligation or comply with any
agreement with respect to any such Indebtedness for Borrowed
Money, such Indebtedness for Borrowed Money shall be
declared due and payable or required to be prepaid prior to
the stated maturity thereof; or
(e) The Borrower or any of its Significant Subsidiaries
shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted
by or against the Borrower or any of its Significant
Subsidiaries seeking to adjudicate it bankrupt or insolvent,
or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment
of a receiver, trustee, or other similar official for it or
for any substantial part of its property, and, in the case
of such a proceeding commenced against (but not by) the
Borrower or any of its Significant Subsidiaries, such
proceeding shall not have been terminated within sixty (60)
days of its commencement; or the Borrower or any of its
Significant Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this
subsection (e); or
(f) Any judgment or order for the payment of money (except
for any such judgment or order with respect to which the
maximum liability of the Borrower that is in excess of the
amount covered by insurance does not exceed $5,000,000)shall
be rendered against the Borrower or any of its Subsidiaries
and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or
(ii) there shall be any period of ten (10) consecutive days
during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not
be in effect; or
(g) Any Termination Event with respect to a Plan shall have
occurred, and, thirty (30) days after notice thereof shall
have been given to the Borrower by any Lender or the Agent,
(i) such Termination Event shall still exist and (ii) the
sum (determined as of the date of occurrence of such
Termination Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to
which a Termination Event shall have occurred and then exist
(or in the case of a Plan with respect to which a
Termination Event described in clause (ii) of the definition
of Termination Event shall have occurred and then exist, the
liability related thereto) is equal to or greater than
$5,000,000, if such Insufficiency is in a Plan of the
Borrower or its Subsidiaries; or
(h) The Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan in
an amount which, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection
with Withdrawal Liabilities (determined as of the date of
such notification), exceeds $5,000,000 or requires payments
exceeding $5,000,000 per annum; or
(i) The Borrower or any Subsidiary shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount
which, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with Withdrawal
Liabilities of the Borrower and its Subsidiaries (determined
as of the date of such notification), exceeds $5,000,000 or
requires payments exceeding $1,250,000 per annum; or
(j) The Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if,
solely as a result of such reorganization or termination,
(i) the aggregate annual contributions of the Borrower and
its ERISA Affiliates to all Multiemployer Plans which are
then in reorganization or being terminated have been or will
be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years which
include the date hereof by an amount exceeding $5,000,000 or
(ii) the aggregate annual contributions of the Borrower and
its Subsidiaries to all Multiemployer Plans which are then
in reorganization or being terminated have been or will be
increased over the amounts contributed to such
Multiemployer Plans for the respective plan years which
include the date hereof by an amount exceeding $1,250,000;
then, and in any such event, the Agent (i) shall at the request,
or may with the consent, of (x) three or more Lenders owed at
least 56% of the then aggregate unpaid principal amount of the
Adjusted CD Rate Advances, Base Rate Advances and Eurodollar Rate
Advances held by the Lenders, or (y) if no such principal amount
is then outstanding, one or more Lenders owed at least 56% of the
then aggregate unpaid principal amount of the Auction Rate
Advances held by the Lenders, or (z) if no such principal amount
is then outstanding, three or more Lenders having at least 56% of
the Commitments, declare the obligations of each Lender to make
Advances to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the
consent, of (x) three or more Lenders owed at least 56% of the
then aggregate unpaid principal amount of the Adjusted CD Rate
Advances, Base Rate Advances and Eurodollar Rate Advances held by
the Lenders, or (y) if no such principal amount is then
outstanding, one or more Lenders owed at least 56% of the then
aggregate unpaid principal amount of the Auction Rate Advances
held by the Lenders, or (z) if no such principal amount is then
outstanding, three or more Lenders having at least 56% of the
Commitments, by notice to the Borrower, declare the Notes, all
interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of
an actual or deemed entry of an order for relief with respect to
the Borrower under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be
terminated and (B) the Notes, all interest thereon and all other
amounts payable under this Agreement shall automatically become
and be due and payable, without such approval by the Lenders as
described above and without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any
departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Majority Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the
Lenders, do any of the following: (a) waive any of the
conditions specified in Section 3.01 or Section 3.02,
(b) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations, (c) reduce the principal
of, or interest on, the Notes or any fees or other amounts
payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, (e) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the
Notes, or the number of Lenders which shall be required for the
Lenders or any of them to take any action hereunder, (f) amend
the proviso in Section 6.01 or subsection (a) thereof, or
(g) amend this Section 7.01; and provided further that no
amendment, waiver or consent shall, unless in writing and signed
by the Agent in addition to the Lenders required above to take
such action, affect the rights or duties of the Agent under this
Agreement or any Note.
SECTION 7.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed,
telecopied, telegraphed, telexed, cabled or delivered, if to the
Borrower, at its address at 2500 Harbor Boulevard, Fullerton,
California 92634, telecopier number (714) 773-6840, Attention:
Treasurer, with a copy to the General Counsel of the Borrower at
the same address (except that the failure to deliver such copy of
any notice shall not affect the effectiveness of such notice); if
to any Lender, at its Domestic Lending Office specified opposite
its name on Schedule I hereto with, if to The First National Bank
of Chicago, a copy to Anthony B. Mathews, Vice President, 777
South Figueroa Street, 4th Floor, Los Angeles, California 90017,
telecopier number (213) 683-4999, and, if to Bank of America
National Trust and Savings Association, a copy to Robert W.
Troutman, Vice President, Credit Products No. 5618, 555 South
Flower Street, Los Angeles, California 90071, telecopier number
(213) 228-2756, and, if to Mellon Bank, N.A., a copy to Susan
Dalton, Vice President, 300 South Grand Street, Suite 1200, Los
Angeles, California 90071, telecopier number (213) 626-3745,
and, if to Credit Suisse, a copy to Deborah Shea, Associate, 633
West Fifth Street, 64th Floor, Los Angeles, California 90071,
telecopier number (213) 955-8245, if to Istituto Bancario San
Paolo di Torino SpA, a copy to Donald Brown, Branch Manager, 444
S. Flower Street, Suite 4450, Los Angeles, California 90071,
telecopier number (213) 622-2514, (except that the failure to
deliver a copy of any notice shall not affect the effectiveness
of such notice); and, if to the Agent, c/o Citicorp Bank Loan
Syndication Operations, One Court Square, 7th Floor, Long Island
City, New York 11120, telecopier number (718) 248-4844,
Attention: Aurelio Almonte, or as to the Borrower or the Agent,
at such other address as shall be designated by such party in a
written notice to the other parties, 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 Agent. All such notices
and communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when deposited in the mails,
telecopied, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively,
except that notices and communications to the Agent pursuant to
Article II or Section 7.08 shall not be effective until received
by the Agent.
All payments made or funds delivered to the Agent hereunder shall
be made or delivered to the Agent at its Domestic Lending Office
or at such other address as the Agent shall designate in a
written notice to the other parties.
SECTION 7.03. No Waiver; Remedies. No failure on the part of
any Lender or the Agent to exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 7.04. Costs and Expenses. (a) The Borrower agrees to
pay on demand (i) all costs and expenses of the Agent in
connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the
Notes and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees (such fees to
be in an amount not to exceed $30,000) and out-of-pocket expenses
of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under
this Agreement, and (ii) all costs and expenses, if any
(including, without limitation, reasonable counsel fees and
expenses), of any Lender and the Agent in connection with the
enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement, the Notes and the other documents
to be delivered hereunder.
(b) If any payment of principal of any Adjusted CD Rate
Advance, Eurodollar Rate Advance or Auction Rate Advance is
made by the Borrower to or for the account of any Lender
other than on the last day of the Interest Period for such
Advance, as a result of a payment pursuant to Section 2.08
or acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, the Borrower shall,
upon demand by such Lender (with a copy of such demand to
the Agent), pay to the Agent for the account of such Lender
any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without
limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(c) The Borrower agrees, to the fullest extent permitted by
law, to indemnify and hold harmless the Agent and each
Lender and each of their respective directors, officers,
employees, agents and affiliates from and against any and
all claims, damages, liabilities and expenses (including,
without limitation, reasonable fees and disbursements of
counsel) which may be incurred by or asserted against the
Agent and such Lender or any such director, officer,
employee, agent or affiliate in connection with or arising
out of any investigation, litigation, or proceeding related
to any use by the Borrower of the proceeds of all or any of
the Advances (including, without limitation, any such use by
the Borrower related to any acquisition or proposed
acquisition by the Borrower, or any Subsidiary or affiliate
thereof, of any shares of stock of the Borrower or of all or
any portion of the shares of stock or substantially all the
assets of any other person or entity) whether or not the
Agent or such Lender or any such other person or entity is a
party thereto, unless such claim, damage, liability or
expense is found to have resulted from the gross negligence
or wilful misconduct of the Agent or such Lender or such
other person or entity. Upon receipt of notice in writing
of any investigation, litigation or proceeding which might
give rise to a right of indemnification hereunder, the
Borrower shall promptly notify the Agent thereof and
periodically keep the Agent informed of the status thereof,
and the Agent shall promptly notify the Lenders of any such
notice or periodic information it receives from the Borrower
pursuant to this subsection (c). The obligations of the
Borrower under this subsection (c) shall survive the
Availability Termination Date.
SECTION 7.05. Confidentiality of Information. Information about
the Borrower and its Subsidiaries and their operations, affairs
and financial condition not generally disclosed to, or known by,
creditors or the public which is furnished by the Borrower to any
Lender or the Agent pursuant to the provisions hereof shall not
be divulged to others, except: (i) to other Lenders (including
prospective participants and assignees pursuant to
Section 7.07(f) or Section 7.08) which have agreed to keep such
information confidential or to the Agent or to their respective
representatives, legal counsel, accountants or other advisers
and/or consultants; (ii) in connection with the enforcement of
the rights of any Lender or the Agent hereunder and under the
Notes; (iii) as may otherwise be permitted or required by
judicial process or by any regulatory authority having
jurisdiction over such Lender or the Agent (as the case may be)
or by any applicable statute, rule or regulation (the good faith
opinion of such Lender's counsel or counsel to the Agent
concerning the making of such disclosure to be binding on the
parties hereto); and (iv) as may be required to answer fully and
accurately any inquiries directed to such Lender or the Agent (as
the case may be) by creditors or prospective creditors of the
Borrower or any of its Subsidiaries; provided, however, that upon
receipt of a written direction of the Borrower, such Lender or
the Agent shall direct its operations personnel not to disclose
any such confidential information in response to such inquiries.
Neither such Lender nor the Agent shall incur any liability to
the Borrower or any of its Subsidiaries or Affiliates by reason
of any disclosure permitted by this Section 7.05, or by reason
of any other disclosure so long as such Lender or the Agent (as
the case may be) attempts to obtain compliance by its employees
with any such directive not to disclose such information in
response to such inquiries.
SECTION 7.06. Right of Set-Off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the
making of the request or the granting of the consent specified by
Section 6.01 to authorize the Agent to declare the Notes due and
payable pursuant to the provisions of Section 6.01, each Lender
is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set-off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and the Note or
Notes held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such
Note or Notes and although such obligations may be unmatured.
Each Lender agrees promptly to notify the Borrower and the Agent
after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of each
Lender under this Section 7.06 are in addition to other rights
and remedies (including, without limitation, other rights of set-
off) which such Lender may have. The Borrower hereby authorizes
CUSA, in accordance with the provisions of this Section 7.06, to
so set-off and apply any and all such deposits held and other
indebtedness owing by Citibank to or for the credit or the
account of the Borrower and hereby authorizes Citibank to permit
such set-off and application by CUSA.
SECTION 7.07. The Agent.
(a) Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as Agent on its
behalf and to exercise such powers under this Agreement as
are delegated to the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. As
to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of
the Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be fully protected
in so acting or refraining from acting) upon the
instructions of the Majority Lenders, and such instructions
shall be binding upon all Lenders; provided, however, that
the Agent shall not be required to take any action which
exposes the Agent to personal liability or which is contrary
to this Agreement or applicable law. The Agent agrees to
give to each Lender prompt notice of each notice given to it
by the Borrower pursuant to the terms of this Agreement.
(b) Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them
under or in connection with this Agreement, except for its
or their own gross negligence or wilful misconduct. Without
limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of any Note as the holder thereof
until the Agent receives notice from such holder of an
assignment thereof as provided in Section 7.08; (ii) may
consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken
or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts;
(iii) makes no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with
this Agreement; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part
of the Borrower or to inspect the property (including the
books and records) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability
under or in respect of this Agreement by acting upon any
notice, consent, certificate or other instrument or writing
(which may be by telegram, cable or telex) believed by it to
be genuine and signed or sent by the property party or
parties.
(c) CUSA and Affiliates. With respect to its Commitment,
and the Advances made by it and the Note issued to it, CUSA
shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it
were not the Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include CUSA in
its individual capacity. CUSA and its affiliates may accept
deposits from, lend money to, act as trustee under the
indentures of, and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person
who may do business with or own securities of the Borrower
or any such subsidiary, all as if CUSA were not the Agent
and without any duty to account therefor to the Lenders.
(d) Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or
any other Lender and based on the financial statements
referred to in Section 4.01(e) and such other documents and
information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently
and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this
Agreement.
(e) Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower),
ratably according to the respective principal amounts of the
Notes then owing to each of them (or if no Notes are at the
time outstanding, ratably according to the respective
amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any action
taken or omitted by the Agent under this Agreement,
provided, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or wilful
misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand
for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Agent in connection
with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal
advice in respect of, rights or responsibilities under this
Agreement, to the extent that the Agent is not reimbursed
for such expenses by the Borrower.
(f) Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without
cause by the Majority Lenders, such resignation or removal
to become effective upon the appointment of a successor
Agent in accordance with the terms of this Section 7.07(f).
Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint a successor Agent with the
consent of the Borrower. If no successor Agent shall have
been so appointed by the Majority Lenders with the consent
of the Borrower, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of
notice of resignation or the Majority Lenders' removal of
the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent without the
necessity of the consent of the Borrower, which shall be a
commercial bank organized under the laws of the United
States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000 or an
Affiliate thereof. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section 7.07 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
SECTION 7.08. Binding Effect. This Agreement shall become
effective as of September 26, 1994 when it shall have been
executed by the Borrower and the Agent and when the Agent has
been notified that each Lender has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower,
each Lender and the Agent and their respective successors and
assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the
prior written consent of the Lenders. Any Lender, may, without
the consent of the Borrower, sell participations to one or more
banks or other entities in or to all or any part of any Advance
or Advances owing to such Lender, any Note held by such Lender or
its Commitment or any other interest herein, provided that such
Lender's obligations under this Agreement, including, without
limitation, its Commitment to the Borrower hereunder, shall
remain unchanged, such Lender shall remain solely responsible for
the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Agreement, and the
Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations
under this Agreement. Any Lender may assign to its successors
and affiliates and, with the consent of the Borrower, which shall
not be unreasonably withheld, may assign to one or more banks or
other entities all or any part of any Advance or Advances owing
to such Lender and any Note held by such Lender, provided that
such Lender shall give notice of such assignment to the Agent.
Any Lender may assign to its successors and affiliates and, with
the consent of the Borrower, may assign to one or more banks or
other entities all of its rights and obligations under this
Agreement, provided that such Lender shall give notice of such
assignment to the Agent. The Borrower may withhold its consent
to any such assignment of any Advance or Note or any rights and
obligations hereunder if such assignment would result in an
increase in either the Taxes required to be paid by the Borrower
under Section 2.12 or increased costs required to be paid by the
Borrower under Section 2.10. To the extent of any assignment,
the assignee shall have the same obligations, rights and benefits
with respect to the Borrower as it would have had if it were a
Lender hereunder and the assigning Lender shall be released from
such obligations. Notwithstanding any other provision set forth
in this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it and the
Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 7.09. Governing Law. This Agreement and the Notes shall
be governed by, and construed in accordance with, the laws of the
State of California.
SECTION 7.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
SECTION 7.11. Headings. Article and Section headings in this
Agreement (and parenthetical expressions contained in references
thereto) are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other
purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly
authorized as of the date first above written.
BECKMAN INSTRUMENTS, INC.
By: PAUL GLYER
Name: Paul Glyer
Title: Treasurer
CITICORP USA, INC., as Agent
By: BARBARA A. COHEN
Name: Barbara A. Cohen
Title: Vice President
<PAGE>
Commitment Lenders
$ 40,000,000 CITICORP USA, INC.
By: BARBARA A. COHEN
Name: Barbara A. Cohen
Title: Vice President
$ 22,000,000 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: ROBERT W. TROUTMAN
Name: Robert W. Troutman
Title: Vice President
$ 22,000,000 CREDIT SUISSE
By: MARILOU PALENZUELA
Name: Marilou Palenzuela
Title: Member of Senior Management
By: DEBORAH SHEA
Name: Deborah Shea
Title: Associate
$ 22,000,000 ISTITUTO BANCARIO SAN PAOLO DI TORINO, SpA
By: DONALD W. BROWN
Name: Donald W. Brown
Title: Branch Manager
By: ANNETTE BERGSTEN
Name: Annette Bergsten
Title: Assistant Vice President
$ 22,000,000 MELLON BANK, N.A.
By: EDWIN H. WIEST
Name: Edwin H. Wiest
Title: First Vice President
$ 22,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By: L. GENE BEUBE
Name: L. Gene Beube
Title: Senior Vice President
$ 150,000,000 Total of the Commitments
<PAGE>
SCHEDULE I
BECKMAN INSTRUMENTS, INC.
$150,000,000 Revolving Credit Agreement
Lending Offices
<TABLE>
<CAPTION>
Name of Lender CD Lending Office Eurodollar Lending Office Domestic Lending Office
<S> <C> <C> <C>
Citicorp USA, Inc. 399 Park Avenue 399 Park Avenue 399 Park Avenue
New York, NY 10043 New York, NY 10043 New York, NY 10043
Telex: (WU) 127001/Citibank Telex: (WU) 127001/Citibank Telex:(WU)127001/Citibank
NYKB/Attention:SFOGB NYKB/Attention:SFOGB NYKB/Attention:SFOGB
Telecopier: 415/433-8190 Telecopier: 415/433-8190 Telecopier: 415/433-8190
Bank of America 1850 Gateway Boulevard 1850 Gateway Boulevard 1850 Gateway Boulevard
National Trust and Concord, CA 94520 Concord, CA 94520 Concord, CA 94520
Savings Association Attn: Barbara Garabaldi Attn: Barbara Garabaldi Attn: Barbara Garabaldi
GPO #5693 GPO #5693 GPO #5693
Telex: 34346 Telex: 34346 Telex: 34346
Telecopier: 510/675-7532 Telecopier: 510/675-7532 Telecopier: 510/675-7532
Telephone: 510/675-7729 Telephone: 510/675-7729 Telephone: 510/675-7729
Credit Suisse 633 West Fifth Street 633 West Fifth Street 633 West Fifth Street
64th Floor 64th Floor 64th Floor
Los Angeles, CA 90071 Los Angeles, CA 90071 Los Angeles, CA 90071
Attn: Ms. Rita Asa Attn: Ms. Rita Asa Attn: Ms. Rita Asa
Telex: 67227 Telex: 67227 Telex: 67227
Telecopier: 213/955-8245 Telecopier: 213/955-8245 Telecopier: 213/955-8245
Telephone: 213/955-8248 Telephone: 213/955-8248 Telephone: 213/955-8248
Istituto Bancario 444 S. Flower Street 444 S. Flower Street 444 S. Flower Street
San Paolo Di Suite 4550 Suite 4550 Suite 4550
Torino, SpA Los Angeles, CA 90071 Los Angeles, CA 90071 Los Angeles, CA 90071
Attn: Ms. Jean Chang Attn: Ms. Jean Chang Attn: Ms. Jean Chang
Telex: 220045 SPAOL UR Telex: 220045 SPAOL UR Telex: 220045 SPAOL UR
Telecopier: 213-622-2514 Telecopier: 213-622-2514 Telecopier: 213-622-2514
Telephone: 213-489 3100 Telephone: 213-489 3100 Telephone: 213-489-3100
Mellon Bank, N.A. Three Mellon Bank Center Three Mellon Bank Center Three Mellon Bank Center
Room 153-2305 Room 153-2305 Room 153-2305
Pittsburgh, PA 15259-0003 Pittsburgh, PA 15259-0003 Pittsburgh, PA 15259-0003
Attn: Loan Administration Attn: Loan Administration Attn: Loan Administration
Telex: 812367 Telex: 812367 Telex: 812367
Telecopier: 412/236-2027 Telecopier: 412/236-2027 Telecopier: 412/236-2027
The First National One First National Plaza One First National Plaza One First National Plaza
Bank of Chicago Suite 0324, 1-10 Suite 0324, 1-10 Suite 0324, 1-10
Chicago, IL 60670 Chicago, IL 60670 Chicago, IL 60670
Attn: Ms. Marilyn Fisher Attn: Ms. Marilyn Fisher Attn: Ms. Marilyn Fisher
Client Services Associate Client Services Associate Client Services Associate
Telex: 4330253 FNBCUI Telex: 4330253 FNBCUI Telex: 4330253 FNBCUI
Telecopier: 312/732-4840 Telecopier: 312/732-4840 Telecopier: 312/732-4840
</TABLE>
<PAGE>
SCHEDULE II
BECKMAN INSTRUMENTS, INC.
$150,000,000 Revolving Credit Agreement
Liens or Security Interests as of June 24, 1994
<TABLE>
<CAPTION>
Item Instrument or Agreement Interest Rate Lender Term Security Outstanding
<S> <C> <C> <C> <C> <C>
1. Capital Lease Obligations Buildings $ 1,600,000
2. Capital Lease Obligations Machinery/ $ 2,902,000
Equipment
3. Capital Lease Obligations Automobiles $
</TABLE>
<PAGE>
EXHIBIT A-1
DOMESTIC NOTE
Dated: _____________, 1994
FOR VALUE RECEIVED, the undersigned, BECKMAN INSTRUMENTS, INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to
the order of _____________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Revolving Credit
Agreement referred to below) the principal amount of each Advance
(as defined below) which is an Adjusted CD Rate Advance or
Auction Rate Advance or Base Rate Advance (each such Advance as
defined in the Revolving Credit Agreement) made by the Lender to
the Borrower pursuant to the Revolving Credit Agreement on the
last day of the Interest Period (as defined in the Revolving
Credit Agreement) for such Advance.
The Borrower promises to pay interest on the unpaid principal
amount of each Advance which is an Adjusted CD Rate Advance or
Auction Rate Advance or Base Rate Advance from the date of such
Advance until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in
the Revolving Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citicorp USA, Inc. as Agent, at its
account with Citibank, N.A. at 399 Park Avenue, New York, New
York 10043, in same day funds. Each Advance which is an Adjusted
CD Rate Advance or Auction Rate Advance or Base Rate Advance made
by the Lender to the Borrower and the maturity thereof, and all
payments made on account of principal thereof, shall be recorded
by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto which is part of this Promissory Note, and
the Borrower authorizes the Lender to do the same; provided, that
the Lender shall not be liable to the Borrower or to any other
party for failure to record a payment or any other matter on the
grid.
This Promissory Note is the Domestic Note referred to in, and is
entitled to the benefits of, the Revolving Credit Agreement dated
as of September 26, 1994 (the "Revolving Credit Agreement") among
the Borrower, the Lender and certain other lenders parties
thereto, and Citicorp USA, Inc., as Agent for the Lender and such
other lenders. The Revolving Credit Agreement, among other
things, (i) provides for the making of advances (the "Advances")
by the Lender to the Borrower from time to time pursuant to the
provisions of the Revolving Credit Agreement, the indebtedness of
the Borrower resulting from each such Advance which is an
Adjusted CD Rate Advance or Auction Rate Advance or Base Rate
Advance being evidenced by this Promissory Note, and
(ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of California, United
States.
BECKMAN INSTRUMENTS, INC.
By:
Name:
Title:
<PAGE>
ADVANCES, MATURITIES AND PAYMENTS OF PRINCIPAL
GRID
<PAGE>
EXHIBIT A-2
EURODOLLAR NOTE
U.S. $_____________ Dated: ___________ __, 1994
FOR VALUE RECEIVED, the undersigned, BECKMAN INSTRUMENTS, INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to
the order of ___________________ (the "Lender") for the account
of its Applicable Lending Office (as defined in the Revolving
Credit Agreement referred to below) the principal amount of each
Advance (as defined below) which is a Eurodollar Rate Advance (as
defined in the Revolving Credit Agreement) made by the Lender to
the Borrower pursuant to the Revolving Credit Agreement on the
last day of the Interest Period (as defined in the Revolving
Credit Agreement) for such Advance.
The Borrower promises to pay interest on the unpaid principal
amount of each Advance which is a Eurodollar Rate Advance from
the date of such Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are
specified in the Revolving Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citicorp USA, Inc. as Agent, at its
account with Citibank, N.A. at 399 Park Avenue, New York, New
York 10043, in same day funds. Each Advance which is a
Eurodollar Rate Advance made by the Lender to the Borrower and
the maturity thereof, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which
is part of this Promissory Note, and the Borrower authorizes the
Lender to do the same; provided, that the Lender shall not be
liable to the Borrower or to any other party for failure to
record a payment or any other matter on the grid.
This Promissory Note is the Eurodollar Note referred to in, and
is entitled to the benefits of, the Revolving Credit Agreement
dated as of September 26, 1994 (the "Revolving Credit Agreement")
among the Borrower, the Lender and certain other lenders parties
thereto and Citicorp USA, Inc., as Agent for the Lender and such
other lenders. The Revolving Credit Agreement, among other
things, (i) provides for the making of advances (the "Advances")
by the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar
amount first above-mentioned, the indebtedness of the Borrower
resulting from each such Advance which is a Eurodollar Rate
Advance being evidenced by this Promissory Note, and
(ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of California, United
States.
BECKMAN INSTRUMENTS, INC.
By:
Name:
Title:
<PAGE>
ADVANCES, MATURITIES AND PAYMENTS OF PRINCIPAL
GRID
<PAGE>
EXHIBIT B
Notice of Borrowing
_____________, 19__
Citicorp USA, Inc., as Agent for the
Lenders parties to the Revolving
Credit Agreement referred to below
c/o Citicorp North America, Inc.
Citicorp Center
One Sansome Street, Suite 2730
San Francisco, California 94104
Attn: Connie Pecsar
Gentlemen/Ladies:
The undersigned, Beckman Instruments, Inc., refers to
the Revolving Credit Agreement dated as of September 26, 1994
(the "Revolving Credit Agreement," the terms defined therein
being used herein as therein defined), among the undersigned and
certain Lenders parties thereto and Citicorp USA, Inc. as Agent
for said Lenders, and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Revolving Credit Agreement that
the undersigned hereby requests a Borrowing under the Revolving
Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Borrowing")
as required by Section 2.02(a) of the Revolving Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
___________, 19__.
(ii) The Type of Advances comprising the Proposed
Borrowing is [Adjusted CD Rate Advances] [Eurodollar Rate
Advances] [Auction Rate Advances] [Base Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$_________.
(iv) The Interest Period for each Advance made as part
of the Proposed Borrowing is [____ days] [____ month[s]].
[(v) Any terms relating to the interest rate or rates
for a Proposed Borrowing comprised of Auction Rate Advances.]
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Borrowing:
(A) the representations and warranties set forth in
Section 4.01 (excluding those contained in subsections (e) and
(f) thereof) are true and correct in all material respects,
before and after giving effect to the Proposed Borrowing and to
the application of the proceeds therefrom, as though made on and
as of such date;
(B) no Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from
the application of the proceeds therefrom, and, with respect to
the events specified in Section 6.01(e) and Section 6.01(f), no
Default has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom; and
(C) no Person or two or more Persons acting in concert
has acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of
securities of the Borrower (or other securities convertible into
such securities) representing 20% or more of the combined voting
power of all securities of the Borrower entitled to vote in the
election of directors, other than securities having such power
only by reason of the happening of a contingency; nor, during any
period of up to 24 consecutive months commencing on or after the
date of the Agreement, have individuals who at the beginning of
such 24-month period were directors of the Borrower ceased for
any reason to constitute a majority of the board of directors of
the Borrower; nor has any Person or two or more Persons acting in
concert acquired by contract or otherwise, or entered into a
contract or arrangement which upon consummation will result in
its or their acquisition of, the power to exercise, directly or
indirectly, a controlling influence over the management or
policies of the Borrower.
Very truly yours,
BECKMAN INSTRUMENTS, INC.
By:
Name:
Title:
<PAGE>
EXHIBIT C
[Form of Opinion of Borrower's Counsel]
[Date of initial Borrowing]
To each of the Lenders listed on Schedule 1 hereto
Beckman Instruments, Inc.
Gentlemen:
This opinion is furnished to you pursuant to
Section 3.02(c) of the Revolving Credit Agreement, dated as of
September 26, 1994 (the "Credit Agreement"), between Beckman
Instruments, Inc. (the "Borrower") and the Lenders parties
thereto and Citicorp USA, Inc. as Agent for said Lenders. Terms
defined in the Credit Agreement are used herein as therein
defined.
I have acted as counsel to the Borrower in connection
with the preparation, execution and delivery of, and the initial
borrowing made under, the Credit Agreement.
In that connection, I have examined:
(1) The Credit Agreement.
(2) The Notes.
(3) The documents furnished by the Borrower
pursuant to Article III of the Credit Agreement.
(4) The Certificate of Incorporation of the
Borrower and all amendments thereto (the "Charter").
(5) The by-laws of the Borrower as amended
through the date hereof (the "By-laws").
(6) A certificate of the Secretary of the State
of Delaware, dated _____________, 1994, attesting to the
continued corporate existence and good standing of the
Borrower in that State.
I have examined the originals, or copies certified to my
satisfaction, of such other corporate records of the Borrower,
certificates of public officials and of officers of the Borrower,
and agreements, instruments and other documents, as I have deemed
necessary as a basis for the opinions expressed below.
I am qualified to practice law in the State of
California and I do not purport to be expert on, and do not opine
with respect to, any laws other than the laws of the State of
California, the Delaware General Corporation Law (the "DGCL") and
the Federal laws of the United States.
Based upon the foregoing and upon such investigation as
I have deemed necessary and upon the other qualifications,
exceptions, and limitations set forth herein, I am, as of the
date hereof, of the following opinion:
1. The Borrower is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of Delaware.
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are
within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do
not contravene (i) the Charter or the By-laws or
(ii) any federal or California law, rule or regulation
applicable to the Borrower (including, without
limitation, Regulation X of the Board of Governors of
the Federal Reserve System) or the "DGCL" except, as
to performance only, such contravention as might affect
enforceability to the extent contemplated in Paragraphs
(a) through (e) herein, or (iii) any material
contractual or legal restriction contained in any
document that affects or purports to affect the
Borrower's right to borrow money or the Borrower's
obligations under the Credit Agreement and the Notes.
The Credit Agreement and the Notes have been duly
executed and delivered on behalf of the Borrower.
3. No authorization, approval or other action by,
and no notice to or filing with, any governmental
authority or regulatory body is required for the due
execution, delivery and performance, in each case by
the Borrower, of the Credit Agreement and the Notes.
4. The Credit Agreement and the Notes (to the
extent of any Borrowings thereunder) are legally valid
and binding obligations of the Borrower enforceable
against the Borrower in accordance with their
respective terms.
5. To the best of my knowledge, there are no
pending or threatened actions or proceedings against
the Borrower or any of its Subsidiaries before any
court, governmental agency or arbitrator which purport
to affect the legality, validity, binding effect or
enforceability of the Credit Agreement or any of the
Notes or which, except as and to the extent previously
disclosed by the Borrower to the Lenders in writing,
are likely to have a materially adverse effect upon the
financial condition or operations of the Borrower or
any of its subsidiaries.
The opinions set forth above are subject to the following
qualifications:
(a) The opinion in Paragraph 4 above is subject
to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law relating to
or affecting creditors' rights generally.
(b) The opinion in Paragraph 4 above is subject
to the effect of general principles of equity
(regardless of whether considered in a proceeding in
equity or at law).
(c) With respect to the opinion in Paragraph 4, I
call to your attention that certain rights, remedies
and waivers contained in the Credit Agreement and the
Notes may be limited or rendered ineffective by
applicable California laws or judicial decisions
governing such provisions, but such laws or judicial
decisions do not render the Credit Agreement or the
Notes invalid or unenforceable as a whole.
(d) With respect to the opinion in Paragraph 4, I
express no opinion as to the validity or enforceability
of any provision of the Credit Agreement or the Notes
that permit the Lenders to increase the rate of
interest or collect a late charge or prepayment premium
in the event of a delinquency or default.
(e) I express no opinion as to the effect of the
law of any jurisdictions other than the State of
California and the State of Delaware (with respect to
the DGCL only) wherein the Lender may be located or
wherein enforcement of the Credit Agreement or the
Notes may be sought which limits the rates of interest
legally chargeable or collectible.
To the extent that the obligations of the Borrower may
be dependent upon such matters, I have assumed for purposes of
this opinion that each payee under any of the Notes and each
party to the Credit Agreement other than the Borrower (i) has
complied with any applicable requirement to file returns and pay
taxes under the Franchise Tax Law of the State of California,
(ii) is duly incorporated, validly existing and in good standing
under the laws of its jurisdiction or incorporation, (iii) has
the requisite corporate power and authority to execute and
deliver the Credit Agreement and to perform its obligations under
the Credit Agreement and that the Credit Agreement has been duly
authorized, executed and delivered by each of such parties and
constitutes their legally valid and binding obligation. I
express no opinion as to compliance by any payee under any of the
Notes or any party to the Credit Agreement other than the
Borrower with respect to any state or federal laws or regulations
applicable to the subject transactions because of the nature of
their business.
This opinion is rendered only to you and is solely for
your benefit in connection with the transactions covered hereby.
This opinion may not be relied upon by you for any other purpose,
or furnished to, quoted to or relied upon by any other person,
firm or corporation for any purpose, without my prior written
consent, except that Messrs. Steefel, Levitt and Weiss may assume
the correctness of the opinions set forth in Paragraphs 1,2,3,4
and 5 of this opinion in rendering their opinion furnished
pursuant to Section 3.02(d) of the Credit Agreement.
Very truly yours,
WILLIAM H. MAY
<PAGE>
SCHEDULE 1
Citicorp USA, Inc.
Bank of America National Trust and Savings Association
Istituto Bancario San Paolo Di Torino, SpA
Mellon Bank, N.A.
The First National Bank of Chicago
Credit Suisse
<PAGE>
EXHIBIT D
[Form of Opinion of Agent's Counsel]
_________ __, ____
To each of the Lenders listed
on Schedule 1 hereto
Re: Beckman Instruments, Inc.
Gentlemen/Ladies:
We have acted as counsel to Citicorp USA, Inc., acting
individually and as Agent, in connection with the preparation,
execution and delivery of the Revolving Credit Agreement dated as
of September 26, 1994 (the "Credit Agreement"), among Beckman
Instruments, Inc., each of you and Citicorp USA, Inc., as Agent.
Terms defined in the Credit Agreement are used herein as therein
defined.
In this connection, we have examined the following
documents, each of which, unless otherwise indicated, is dated
September 26, 1994 or as of such date:
1. Counterparts of the Credit Agreement executed by
each of the parties thereto.
2. The Notes executed by the Borrower and payable to
the order of the respective Lenders, delivered pursuant to
Section 3.02(a) of the Credit Agreement.
3. A certificate of the Secretary of the Borrower as
to certain resolutions of the Board of Directors of the Borrower
and the incumbency and signatures of certain officers of the
Borrower delivered pursuant to Section 3.02(e) of the Credit
Agreement.
4. A certificate of the Treasurer of the Borrower
certifying that, as of September 26, 1994, there exists no
Default and the representations and warranties set forth in
Section 4.01 are true and correct in all material respects.
5. An opinion of William May, Esq., counsel to the
Borrower, delivered pursuant to Section 3.02(c) of the Credit
Agreement.
In our examination of the documents referred to above,
we have assumed the authenticity of all such documents submitted
to us as originals, the genuineness of all signatures, the due
authority of the parties executing such documents and the
conformity to the originals of all such documents submitted to us
as copies. We have relied, as to factual matters, on the
documents we have examined and, as to the matters of law covered
by the opinion of counsel referred to above, on such opinion. We
are qualified to practice law in the State of California and our
opinion is limited to the law of such jurisdiction and to the
federal law of the United States, and we do not express any
opinion herein concerning any other law.
Based upon and subject to the foregoing, and while we
have not independently considered the matters covered by the
opinion referred to in Item 5 above to the extent necessary to
enable us to express the conclusions stated therein, we are of
the opinion (i) such opinion, the Credit Agreement and the other
documents listed above appear to be in substantially acceptable
legal form, and (ii) such opinion and the documents referred to
in Items 2, 3 and 4 above are substantially responsive to the
requirements of the Credit Agreement.
Very truly yours,
STEEFEL, LEVITT AND WEISS
<PAGE>
SCHEDULE 1
Citicorp USA, Inc.
Bank of America National Trust and Savings Association
Istituto Bancario San Paolo Di Torino, SpA
Mellon Bank, N.A.
The First National Bank of Chicago
Credit Suisse
EXHIBIT 10.2
INTER-OFFICE MEMORANDUM
_______________________________________
BECKMAN
DATE: May 11, 1994
TO: U.S. Management Incentive Plan Participants
FROM: Dick Sears
SUBJECT: FY 94 Incentive Plans
Enclosed is your FY 94 Incentive Plan. The focus of this year's
incentive plan design is total company performance as reflected by
our "earnings per share" achievement. This is viewed as an
especially critical measure monitored by the financial community in
assessing the company's progress. Summarized below are the major
elements of the plan:
- - - Company Earnings per Share - This is the fundamental measure
for annual incentive eligibility and is structured by specific
levels of achievement. The highest award percentage will be
earned for an EPS of $2.15 or higher and there is no incentive
eligibility below $1.95. The fiscal year results for
incentive eligibility will exclude special charges for
restructuring and FASB accounting changes.
- - - Sales Revenue Modifier - Sales growth is a key driver in our
business strategies. Because of its importance, if the
company's sales goal is met or exceeded, and EPS is $2.05 or
higher for FY 94, the award percentage for EPS achievement
will be increased by 10%.
- - - Individual Performance Multiplier - Final individual incentive
awards will be derived by applying a performance multiplier,
with a spread from 0 to 150%, to the award percentage for EPS
achievement after any adjustment for sales revenue results.
The multiplier will be tied to your "overall rating" for
Performance Expectations in the EXCEL process.
Questions regarding the FY 94 plan can be directed to Bill Baldwin
or Jane Morrison in Corporate Human Resources.
DICK
Exhibit 15
KPMG Peat Marwick LLP
Orange County Office
Center Tower
650 Town Center Drive
Costa Mesa, CA 92626
Independent Accountants' Report
The Stockholders and Board of Directors
Beckman Instruments, Inc:
We have reviewed the condensed consolidated balance sheet of Beckman
Instruments, Inc. and subsidiaries as of September 30, 1994, and the
related condensed consolidated statements of earnings for the three
month and nine month periods ended September 30, 1994 and 1993 and the
condensed consolidated statements of cash flows for the nine month
periods ended September 30, 1994 and 1993 in accordance with standards
established by the American Institute of Certified Public Accountants.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of
interim financial information, applying analytical review procedures
to financial data, and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope
than an audit in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the condensed consolidated financial statements
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Beckman
Instruments, Inc. and subsidiaries as of December 31, 1993, and the
related consolidated statements of earnings and cash flows for the
year then ended (not presented herein); and in our report dated
January 20, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information
set forth in the accompanying condensed consolidated balance sheet as
of December 31, 1993, is fairly presented, in all material respects,
in relation to the consolidated balance sheet from which it has been
derived.
As discussed in Note 3 to the condensed consolidated financial
statements, the Company changed its method of accounting for
postemployment benefits in 1994 and income taxes and postretirement
benefits other than pensions in 1993.
(KPMG Peat Marwick LLP)
Orange County, California
October 21, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND THE CONDENSED CONSOLIDATED
BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 47
<SECURITIES> 0
<RECEIVABLES> 265
<ALLOWANCES> 11
<INVENTORY> 164
<CURRENT-ASSETS> 551
<PP&E> 565
<DEPRECIATION> 341
<TOTAL-ASSETS> 846
<CURRENT-LIABILITIES> 282
<BONDS> 116
<COMMON> 3
0
0
<OTHER-SE> 314
<TOTAL-LIABILITY-AND-EQUITY> 846
<SALES> 531
<TOTAL-REVENUES> 639
<CGS> 227
<TOTAL-COSTS> 303
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (1)
<INTEREST-EXPENSE> 10
<INCOME-PRETAX> 52
<INCOME-TAX> 18
<INCOME-CONTINUING> 34
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 5
<NET-INCOME> 29
<EPS-PRIMARY> 1.03
<EPS-DILUTED> 1.03
</TABLE>
