<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
(AMENDMENT NO. 1)
ALLIANT TECHSYSTEMS INC.
(Name of Issuer and Person Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
------------------------------
018804 10 4
(CUSIP Number of Class of Securities)
------------------------------
DARYL L. ZIMMER, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
ALLIANT TECHSYSTEMS INC.
600 SECOND STREET, N.E.
HOPKINS, MINNESOTA 55343
(612) 931-6140
(Name, Address and Telephone Number of Person Authorized to Receive Notice
and Communications on Behalf of the Person(s) Filing Statement)
COPY TO:
ROBERT A. PROFUSEK, ESQ.
JERE R. THOMSON, ESQ.
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
(212) 326-3939
November 6, 1998
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
<TABLE>
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TRANSACTION VALUATION AMOUNT OF FILING FEE
<S> <C>
$215,600,000* $43,120
</TABLE>
* Calculated solely for purposes of determining the filing fee in accordance
with Section 13(e)(3) of the Securities Exchange Act of 1934 and Rule O-11
thereunder. This amount assumes the purchase of 2,800,000 shares of Common
Stock at $77 per share.
/ / Check box if any part of the fee is offset as provided by Rule O-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number on the Form or
Schedule and the date of its filing.
<TABLE>
<S> <C>
Amount previously paid: $43,120 Filing party: Alliant Techsystems Inc.
Form or registration no.: Schedule 13E-4 Date filed: November 6, 1998
</TABLE>
<PAGE>
ITEM 7. FINANCIAL INFORMATION.
(a)-(b)The financial information set forth in "Certain Information
Concerning the Company-- Summary Historical Consolidated Financial Information"
and "--Summary Unaudited Pro Forma Consolidated Financial Information" in the
Offer to Purchase is incorporated herein by reference. The financial information
set forth on pages 37 through 58 of the Company's Annual Report on Form 10-K/A
for the fiscal year ended March 31, 1998, a copy of which is filed as Exhibit
(g)(1) hereto, is incorporated herein by reference. The financial information
set forth on pages 2 through 11 of the Company's Quarterly Report on Form 10-Q
for the quarterly period ended September 27, 1998, a copy of which is filed as
Exhibit (g)(2) hereto, is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <C> <S>
(a) (1)* Form of Offer to Purchase, dated November 6, 1998, as amended.
(2) Form of Letter of Transmittal.
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(5) Form of Letter to Clients.
(6) Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(7) Form of Letter to Stockholders from Peter Bukowick, President, acting Chief
Executive Officer and Chief Operating Officer of the Company.
(8) Form of Letter to Participants in the Company's 401(k) plans.
(9) Form of Letter to Participants in the Company's employee stock purchase
plans.
(10) Form of Press Release issued by the Company on November 6, 1998.
(11) Form of Summary Advertisement published on November 6, 1998.
(b) (1) Commitment Letter between the Company and The Chase Manhattan Bank, dated
October 26, 1998.
(2)* Form of Amended and Restated Credit Agreement, dated as of November 23, 1998
between the Company and The Chase Manhattan Bank.
(3)* Form of Credit Agreement, dated as of November 23, 1998 between the Company
and The Chase Manhattan Bank.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g) (1)* Audited Consolidated Financial Statements of the Company as of and for the
fiscal years ended March 31, 1997 and 1998 (incorporated by reference to
pages 37 through 58 of the Company's Annual Report on Form 10-K/A for the
fiscal year ended March 31, 1998).
(2) Unaudited Consolidated Financial Statements of the Company as of and for the
six-month periods ended September 28, 1997 and September 27, 1998
(incorporated by reference to pages 2 through 11 of the Company's Quarterly
Report on Form 10-Q for the quarterly period ended September 27, 1998).
</TABLE>
- ------------------------
* Filed herewith.
All other exhibits have been previously filed.
1
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this Amendment No. 1 to the Schedule 13E-4 is true,
complete and correct.
<TABLE>
<S> <C> <C>
ALLIANT TECHSYSTEMS INC.
By: /s/ DARYL L. ZIMMER
-----------------------------------------
Daryl L. Zimmer
VICE PRESIDENT AND
GENERAL COUNSEL
</TABLE>
November 30, 1998
2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBITS PAGE
- -------------------- -----------------
<S> <C> <C> <C>
(a) (1) Form of Offer to Purchase, dated November 6, 1998, as amended............................
(b) (2) Form of Amended and Restated Credit Agreement, dated as of November 23, 1998 between the
Company and The Chase Manhattan Bank.....................................................
(3) Form of Credit Agreement, dated as of November 23, 1998 between the Company and The Chase
Manhattan Bank...........................................................................
(g) (1) Audited Consolidated Financial Statements of the Company as of and for the years ended
March 31, 1997 and 1998 (incorporated by reference to pages 37 through 58 of the
Company's Annual Report on Form 10-K/A for the fiscal year ended March 31, 1998)......... --
</TABLE>
3
<PAGE>
OFFER TO PURCHASE FOR CASH
UP TO 2,800,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT GREATER THAN $77
NOR LESS THAN $67 PER SHARE
BY
ALLIANT TECHSYSTEMS INC.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, DECEMBER 8, 1998,
UNLESS THE OFFER IS EXTENDED.
------------------------
ALLIANT TECHSYSTEMS INC., A DELAWARE CORPORATION ("ALLIANT" OR THE
"COMPANY"), IS OFFERING TO PURCHASE UP TO 2,800,000 SHARES OF ITS COMMON STOCK,
PAR VALUE $.01 PER SHARE (THE "SHARES") (INCLUDING THE ASSOCIATED PREFERRED
STOCK PURCHASE RIGHTS (THE "RIGHTS") ISSUED PURSUANT TO THE RIGHTS AGREEMENT,
DATED AS OF SEPTEMBER 28, 1990, AS AMENDED, BETWEEN THE COMPANY AND THE CHASE
MANHATTAN BANK (AS SUCCESSOR TO MANUFACTURERS HANOVER TRUST COMPANY), AS THE
RIGHTS AGENT), AT PRICES NOT GREATER THAN $77 NOR LESS THAN $67 PER SHARE, NET
TO THE SELLER IN CASH, SPECIFIED BY THE TENDERING STOCKHOLDERS, UPON THE TERMS
AND SUBJECT TO THE CONDITIONS SET FORTH HEREIN AND IN THE RELATED LETTER OF
TRANSMITTAL (WHICH TOGETHER CONSTITUTE THE "OFFER"). UNLESS THE CONTEXT
OTHERWISE REQUIRES, ALL REFERENCES TO SHARES SHALL INCLUDE THE ASSOCIATED
RIGHTS. THE COMPANY WILL DETERMINE A SINGLE PER SHARE PRICE (NOT GREATER THAN
$77 NOR LESS THAN $67 PER SHARE) THAT IT WILL PAY FOR THE SHARES VALIDLY
TENDERED PURSUANT TO THE OFFER AND NOT PROPERLY WITHDRAWN (THE "PURCHASE
PRICE"), TAKING INTO ACCOUNT THE NUMBER OF SHARES SO TENDERED AND THE PRICES
SPECIFIED BY THE TENDERING STOCKHOLDERS. THE COMPANY WILL SELECT THE PURCHASE
PRICE THAT WILL ENABLE IT TO PURCHASE 2,800,000 SHARES (OR SUCH LESSER NUMBER OF
SHARES AS ARE VALIDLY TENDERED AT PRICES NOT GREATER THAN $77 NOR LESS THAN $67
PER SHARE) PURSUANT TO THE OFFER. THE COMPANY WILL PURCHASE ALL SHARES VALIDLY
TENDERED AT PRICES AT OR BELOW THE PURCHASE PRICE AND NOT PROPERLY WITHDRAWN,
UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER, INCLUDING THE
PROVISIONS THEREOF RELATING TO PRORATION AND CONDITIONAL TENDERS DESCRIBED
HEREIN. SHARES TENDERED AT PRICES IN EXCESS OF THE PURCHASE PRICE AND SHARES NOT
PURCHASED BECAUSE OF PRORATION AND CONDITIONAL TENDERS WILL BE RETURNED.
STOCKHOLDERS MUST COMPLETE THE SECTION OF THE LETTER OF TRANSMITTAL RELATING TO
THE PRICE AT WHICH THEY ARE TENDERING SHARES IN ORDER TO VALIDLY TENDER SHARES.
--------------------------
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7.
------------------------
IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF HIS OR HER SHARES
SHOULD EITHER (I) COMPLETE AND SIGN THE LETTER OF TRANSMITTAL OR A FACSIMILE
THEREOF IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF TRANSMITTAL, MAIL
OR DELIVER IT AND ANY OTHER REQUIRED DOCUMENTS TO CHASEMELLON SHAREHOLDER
SERVICES, L.L.C. (THE "DEPOSITARY"), AND EITHER DELIVER THE CERTIFICATES FOR
SHARES TO THE DEPOSITARY ALONG WITH THE LETTER OF TRANSMITTAL OR DELIVER SUCH
SHARES PURSUANT TO THE PROCEDURE FOR BOOK-ENTRY TRANSFER SET FORTH IN SECTION 3
OR (II) REQUEST HIS OR HER BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR
NOMINEE TO EFFECT THE TRANSACTION FOR HIM OR HER. A STOCKHOLDER WHOSE SHARES ARE
REGISTERED IN THE NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR
NOMINEE MUST CONTACT SUCH BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR
NOMINEE IF HE OR SHE DESIRES TO TENDER SUCH SHARES. STOCKHOLDERS DESIRING TO
TENDER SHARES AND WHOSE CERTIFICATES FOR SUCH SHARES ARE NOT IMMEDIATELY
AVAILABLE, OR WHO CANNOT COMPLY IN A TIMELY MANNER WITH THE PROCEDURE FOR
BOOK-ENTRY TRANSFER, SHOULD TENDER SUCH SHARES BY FOLLOWING THE PROCEDURES FOR
GUARANTEED DELIVERY SET FORTH IN SECTION 3.
HOLDERS OR BENEFICIAL OWNERS OF SHARES UNDER THE COMPANY'S 401(K) PLANS OR
UNDER ITS EMPLOYEE STOCK PURCHASE PLANS (IF SUCH SHARES ARE NOT, AT THE TIME OF
TENDER, SUBJECT TO ANY OF THE RESTRICTIONS ON TRANSFERABILITY DESCRIBED IN
SECTION 3) WHO WISH TO TENDER ANY OF SUCH SHARES IN THE OFFER MUST FOLLOW THE
SEPARATE INSTRUCTIONS AND PROCEDURES DESCRIBED IN SECTION 3.
--------------------------
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED
THAT NO DIRECTOR OR EXECUTIVE OFFICER INTENDS TO TENDER SHARES
PURSUANT TO THE OFFER, EXCEPT FOR RICHARD SCHWARTZ, ITS RETIRED
CHIEF EXECUTIVE OFFICER AND RETIRING CHAIRMAN OF THE BOARD WHO,
AS PART OF HIS RETIREMENT PLANNING, INTENDS TO TENDER A
PORTION OF HIS SHARES.
------------------------
THE SHARES ARE LISTED AND PRINCIPALLY TRADED ON THE NEW YORK STOCK EXCHANGE
(THE "NYSE") UNDER THE SYMBOL "ATK." ON NOVEMBER 5, 1998, THE LAST TRADING DAY
PRIOR TO THE ANNOUNCEMENT OF THE OFFER, THE LAST REPORTED SALE PRICE OF THE
SHARES ON THE NYSE COMPOSITE TAPE WAS $73 7/8 PER SHARE. STOCKHOLDERS ARE URGED
TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
--------------------------
QUESTIONS OR REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THIS OFFER
TO PURCHASE, THE LETTER OF TRANSMITTAL, NOTICE OF GUARANTEED DELIVERY OR OTHER
TENDER OFFER MATERIALS MAY BE DIRECTED TO MACKENZIE PARTNERS, INC. (THE
"INFORMATION AGENT") OR MORGAN STANLEY & CO. INCORPORATED (THE "DEALER MANAGER")
AT THEIR RESPECTIVE ADDRESSES AND TELEPHONE NUMBERS SET FORTH ON THE BACK COVER
OF THIS OFFER TO PURCHASE.
--------------------------
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY DEAN WITTER
NOVEMBER 6, 1998
<PAGE>
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER SHARES PURSUANT
TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE
CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH
RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY.
------------------------
THE OFFER IS NOT BEING MADE TO (NOR WILL ANY TENDER OF SHARES BE ACCEPTED
FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE
OFFER OR THE ACCEPTANCE OF ANY TENDER OF SHARES THEREIN WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, THE COMPANY MAY, AT ITS
DISCRETION, TAKE SUCH ACTION AS IT MAY DEEM NECESSARY FOR THE COMPANY TO MAKE
THE OFFER IN ANY SUCH JURISDICTION AND EXTEND THE OFFER TO HOLDERS IN SUCH
JURISDICTION. IN ANY JURISDICTION THE SECURITIES OR BLUE SKY LAWS OF WHICH
REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER IS BEING
MADE ON BEHALF OF THE COMPANY BY THE DEALER MANAGER OR ONE OR MORE REGISTERED
BROKERS OR DEALERS WHICH ARE LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
------------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
INTRODUCTION............................................................................................... 1
Summary Terms of the Offer............................................................................. 1
General Information.................................................................................... 2
Forward-looking Information............................................................................ 2
THE OFFER.................................................................................................. 3
1. Number of Shares; Proration; Expiration Date....................................................... 3
2. Tenders by Holders of Fewer than 100 Shares........................................................ 4
3. Procedure for Tendering Shares..................................................................... 5
4. Withdrawal Rights.................................................................................. 9
5. Acceptance for Payment of Shares and Payment of Purchase Price..................................... 10
6. Conditional Tender of Shares....................................................................... 10
7. Certain Conditions of the Offer.................................................................... 11
8. Price Range of Shares; Dividends................................................................... 13
9. Purpose of the Offer; Certain Effects of the Offer................................................. 15
10. Certain Information Concerning the Company......................................................... 17
11. Source and Amount of Funds......................................................................... 22
12. Interests of Directors and Officers; Transactions and Agreements Concerning the Shares............. 23
13. Certain Federal Income Tax Considerations.......................................................... 24
14. Certain Legal Matters; Regulatory Approvals........................................................ 27
15. Extension of Tender Period; Termination; Amendments................................................ 28
16. Fees and Expenses.................................................................................. 28
17. Additional Information............................................................................. 29
18. Miscellaneous...................................................................................... 30
</TABLE>
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF
ALLIANT TECHSYSTEMS INC.:
INTRODUCTION
SUMMARY TERMS OF THE OFFER
Alliant Techsystems Inc., a Delaware corporation (the "Company"), hereby
offers to purchase up to 2,800,000 shares of its Common Stock, par value $.01
per share (the "Shares") (including the associated preferred stock purchase
rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
September 28, 1990, as amended, between the Company and The Chase Manhattan Bank
(as successor to Manufacturers Hanover Trust Company), as the Rights Agent), at
prices not greater than $77 nor less than $67 per Share, net to the seller in
cash, specified by the tendering stockholders, upon the terms and subject to the
conditions set forth herein and in the related Letter of Transmittal (which
together constitute the "Offer"). Unless the context otherwise requires, all
references to Shares shall include the associated Rights.
The Company will determine a single per Share price (not greater than $77
nor less than $67 per Share) that it will pay for Shares validly tendered
pursuant to the Offer and not properly withdrawn (the "Purchase Price"), taking
into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the Purchase Price that will
enable it to purchase 2,800,000 Shares (or such lesser number of Shares as is
validly tendered at prices not greater than $77 nor less than $67 per Share)
pursuant to the Offer. The Company will purchase all Shares validly tendered at
prices at or below the Purchase Price and not properly withdrawn on or prior to
the Expiration Date (as defined in Section 1), upon the terms and subject to the
conditions of the Offer, including the provisions relating to proration and
conditional tenders described below. The Purchase Price will be paid in cash,
net to the seller, with respect to all Shares purchased. Shares tendered at
prices in excess of the Purchase Price and Shares not purchased because of
proration or conditional tenders will be returned.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 7. The Company reserves the right (but is not obligated) to waive any or
all such conditions, other than those that are legally mandated.
Tendering stockholders who tender their Shares directly to the Depositary
will not be obligated to pay brokerage commissions, solicitation fees or,
subject to the Instructions to the Letter of Transmittal, stock transfer taxes
on the purchase of Shares by the Company. However, a tendering stockholder who
holds Shares through a broker or bank, including a discount broker, may be
required by such institution to pay a service fee or other charge. The Company
will pay all charges and expenses incurred in connection with the Offer of
Morgan Stanley & Co. Incorporated (the "Dealer Manager"), ChaseMellon
Shareholder Services, L.L.C. (the "Depositary"), MacKenzie Partners, Inc. (the
"Information Agent") and the tabulation agent retained by Fidelity Management
Trust Company, as trustee for the beneficial owners of Shares under the
Company's 401(k) plans (the "401(k) Trustee"). See Section 16. HOWEVER, ANY
TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE
SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE SUBJECT
TO A REQUIRED FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF THE GROSS PROCEEDS
PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTIONS 3
AND 13.
Holders or beneficial owners of Shares under the Company's 401(k) plans or
its employee stock purchase plans (if such Shares, at the time of tender, are
not subject to any of the restrictions on transferability described in Section
3) who wish to tender any of such Shares in the Offer must follow the separate
instructions and procedures described in Section 3 and should also read the
separate tax provisions applicable to participants in such plans described in
Section 13.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER
1
<PAGE>
SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS
BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER INTENDS TO TENDER SHARES
PURSUANT TO THE OFFER, EXCEPT FOR RICHARD SCHWARTZ, ITS RETIRED CHIEF EXECUTIVE
OFFICER AND RETIRING CHAIRMAN OF THE BOARD. MR. SCHWARTZ, AS PART OF HIS
RETIREMENT PLANNING, INTENDS TO TENDER UP TO 100,000 SHARES OF THE 50,493 SHARES
HE OWNS BENEFICIALLY AND THE 215,000 SHARES HE IS ENTITLED TO ACQUIRE PURSUANT
TO THE EXERCISE OF STOCK OPTIONS, ALL OF WHICH ARE CURRENTLY EXERCISEABLE.
GENERAL INFORMATION
As of November 5, 1998, the Company had issued and outstanding 12,151,965
Shares (not including 1,711,648 Shares held in treasury), and had reserved
2,101,975 Shares for issuance under its various benefit and/or incentive
compensation plans. Of the reserved Shares, 790,625 Shares are issuable upon
exercise of outstanding stock options and 25,900 Shares are reserved for
issuance to key officers who have been granted performance shares, some or all
of which may be issued upon achievement of certain earnings per share growth
goals. The 2,800,000 Shares that the Company is offering to purchase represent
approximately 23% of the Shares issued and outstanding as of such date and
approximately 22% of the Shares on a diluted basis (assuming the exercise of all
outstanding vested stock options).
A tender of Shares pursuant to the Offer will include a tender of the
associated Rights. No separate consideration will be paid for such Rights. See
Section 8.
The Shares are listed and principally traded on the New York Stock Exchange
("NYSE") under the symbol "ATK." Stockholders are urged to obtain current market
quotations for the Shares. See Section 8.
Shares acquired by the Company pursuant to the offer may be held as treasury
stock or retired by the Company. See Section 9.
FORWARD-LOOKING INFORMATION
This Offer to Purchase (including the documents incorporated or deemed
incorporated by reference herein) includes forward-looking statements. All
statements other than statements of historical fact provided or incorporated by
reference herein are forward-looking statements and may contain information
about financial results, economic conditions, trends and known uncertainties.
The forward-looking statements contained or incorporated by reference herein are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those reflected in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
changes in governmental spending and budgetary policies, governmental laws and
other rules and regulations regarding various matters such as environmental
remediation, contract pricing and procurement policies, changing economic and
political conditions in the United States and in other countries, international
trade restrictions, customer product acceptance, continued access to technical
and capital resources, and merger and acquisition activity within the industry,
among others. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis, judgment,
belief or expectations only as of the date hereof and, in the case of a document
incorporated by reference, only as of the date thereof. Neither the Company nor
the Dealer Manager undertakes any obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date hereof. In addition to the disclosure contained herein, readers should
carefully review any disclosure of risks and uncertainties contained in other
documents the Company files or has filed from time to time with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
2
<PAGE>
THE OFFER
1. NUMBER OF SHARES; PRORATION; EXPIRATION DATE.
Upon the terms and subject to the conditions described herein and in the
Letter of Transmittal, the Company will purchase up to 2,800,000 Shares that are
validly tendered on or prior to the Expiration Date (and not properly withdrawn
in accordance with Section 4) at a price (determined in the manner set forth
below) not greater than $77 nor less than $67 per Share. The later of 5:00 P.M.,
New York City time, on Tuesday, December 8, 1998, or the latest time and date to
which the Offer is extended, is referred to herein as the "Expiration Date." If
the Offer is oversubscribed as described below, only Shares tendered at or below
the Purchase Price on or prior to the Expiration Date will be eligible for
proration.
The Company will determine the Purchase Price taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. The
Company will select the Purchase Price that will enable it to purchase 2,800,000
Shares (or such lesser number of Shares as is validly tendered and not properly
withdrawn at prices not greater than $77 nor less than $67 per Share) pursuant
to the Offer. The Company reserves the right to purchase more than 2,800,000
Shares at the selected Purchase Price pursuant to the Offer, but does not
currently plan to do so. The Offer is not conditioned on any minimum number of
Shares being tendered.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder who wishes to tender Shares must specify the price (not greater than
$77 nor less than $67 per Share) at which such stockholder is willing to have
the Company purchase such Shares. As promptly as practicable following the
Expiration Date, the Company will determine the Purchase Price (which will not
be greater than $77 nor less than $67 per Share) that it will pay for Shares
validly tendered pursuant to the Offer, taking into account the number of Shares
so tendered and the prices specified by tendering stockholders. All Shares not
purchased pursuant to the Offer, including Shares tendered at prices greater
than the Purchase Price and Shares not purchased because of proration or
conditional tenders, will be returned to the tendering stockholders at the
Company's expense as promptly as practicable following the Expiration Date.
Upon the terms and subject to the conditions of the Offer, if 2,800,000 or
fewer Shares have been validly tendered at or below the Purchase Price and not
properly withdrawn on or prior to the Expiration Date, the Company will purchase
all such Shares. Upon the terms and subject to the conditions of the Offer, if
more than 2,800,000 Shares have been validly tendered at or below the Purchase
Price and not properly withdrawn on or prior to the Expiration Date, the Company
will purchase Shares in the following order of priority:
(a) all Shares validly tendered at or below the Purchase Price and not
properly withdrawn on or prior to the Expiration Date by any stockholder (an
"Odd Lot Owner") who owned beneficially or of record an aggregate of fewer
than 100 Shares (not including any Shares held pursuant to the Company's
401(k) plans ("401(k) Plan Shares") or its employee stock purchase plans
("ESPP Shares")) as of the close of business on November 5, 1998 and who
validly tenders all of such Shares (partial tenders will not qualify for
this preference) and completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, the Notice of Guaranteed Delivery; and
(b) after purchase of all of the foregoing Shares, subject to the
conditional tender provisions described in Section 6, all other Shares
validly tendered at or below the Purchase Price and not properly withdrawn
on or prior to the Expiration Date on a pro rata basis, if necessary (with
appropriate rounding adjustments to avoid purchases of fractional Shares).
If proration of tendered Shares is required, because of the difficulty in
determining the number of Shares validly tendered (including Shares tendered by
the guaranteed delivery procedure described in Section 3) and as a result of the
"odd lot" procedure described in Section 2 and conditional tender procedure
described in Section 6, the Company does not expect that it will be able to
announce the final proration factor or to commence payment for any Shares
purchased pursuant to the Offer until approximately five (5) NYSE trading days
after the Expiration Date. Proration for each stockholder
3
<PAGE>
tendering Shares other than Odd Lot Owners will be based on the ratio of the
number of Shares tendered by such stockholder at or below the Purchase Price to
the total number of Shares tendered by all stockholders other than Odd Lot
Owners at or below the Purchase Price. This ratio will be applied to
stockholders tendering Shares other than Odd Lot Owners to determine the number
of Shares that will be purchased from each stockholder pursuant to the Offer.
Preliminary results of proration will be announced by press release as promptly
as practicable after the Expiration Date. Holders of Shares may obtain such
preliminary information from the Dealer Manager or the Information Agent and may
also be able to obtain such information from their brokers.
Subject to the applicable rules and regulations of the Commission, the
Company expressly reserves the right, in its sole discretion, to change the
terms of the Offer, including, but not limited to, purchasing more or less than
2,800,000 Shares in the Offer. If (i) the Company increases or decreases the
price to be paid for Shares, increases the number of Shares being sought and
such increase in the number of Shares being sought exceeds 2% of the outstanding
Shares or decreases the number of Shares being sought and (ii) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from, and including, the date that notice of such
increase or decrease is first published, sent or given in the manner described
in Section 15, the Offer will be extended until the expiration of ten business
days from the date of publication of notice of any such increase or decrease.
For purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or federal holiday and consists of the time period from 12:01 a.m.
through Midnight, New York City time.
The Company also expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary. See Section 15. There can be no assurance, however, that the Company
will exercise its right to extend the Offer.
As described in Section 13, the number of Shares that the Company will
purchase from a stockholder may affect the U.S. federal income tax consequences
to the stockholder of such purchase and therefore may be relevant to a
stockholder's decision whether to tender Shares. Stockholders may designate the
order in which their Shares shall be purchased in the event less than all of the
Shares tendered are purchased as a result of proration. This right of
designation is not available, however, with respect to 401(k) Plan Shares or
ESPP Shares.
If, as a result of the number of Shares tendered and the conditions thereto,
the number of Shares to be purchased from any stockholder making a conditional
tender is reduced below the minimum number specified by such stockholder, such
tender will automatically be regarded as withdrawn, except as provided in
Section 6, and all Shares tendered by such stockholder will be returned as
promptly as practicable after the Expiration Date at the Company's expense.
Copies of this Offer to Purchase, the Letter of Transmittal and Notice of
Guaranteed Delivery are being mailed to record holders of Shares and will be
furnished to brokers, banks and similar persons whose names, or the names of
whose nominees, appear on the Company's stockholder list or, if applicable, who
are listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES.
All Shares validly tendered at or below the Purchase Price and not properly
withdrawn on or prior to the Expiration Date by or on behalf of persons who each
owned beneficially or of record an aggregate of fewer than 100 Shares (not
including any 401(k) Plan Shares or ESPP Shares) as of the close of business on
November 5, 1998, will be accepted before proration, if any, of the purchase of
other tendered Shares. See Section 1. Partial tenders will not qualify for this
preference, and it is not available to beneficial or record holders of 100 or
more Shares (not including any 401(k) Plan Shares or ESPP Shares), even if such
holders have separate stock certificates for fewer than 100 Shares. This
preference is also not available for any 401(k) Plan Shares or ESPP Shares. By
accepting the Offer and tendering Shares directly to the
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Depositary, a stockholder owning beneficially or of record fewer than 100 Shares
will avoid the payment of brokerage commissions and any applicable odd lot
discount payable in a sale of such Shares in a transaction effected on a
securities exchange.
As of November 4, 1998, there were approximately 11,868 holders of record of
Shares. Approximately 84.68% of these holders of record held individually fewer
than 100 Shares and held in the aggregate approximately 133,362 Shares. Because
of the large number of Shares held in the names of brokers and nominees, the
Company is unable to estimate the number of beneficial owners of fewer than 100
Shares or the aggregate number of Shares they own. Any beneficial or record
owner of fewer than 100 Shares (not including any 401(k) Plan Shares or ESPP
Shares) who wishes to tender all of his or her Shares pursuant to this Section
should complete the box captioned "Odd Lots" on the Letter of Transmittal and,
if applicable, on the Notice of Guaranteed Delivery.
3. PROCEDURE FOR TENDERING SHARES.
PROPER TENDER OF SHARES. To validly tender Shares pursuant to the Offer,
either (a) a properly completed and duly executed Letter of Transmittal or
facsimile thereof, together with any required signature guarantees and any other
documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and either (i) certificates for the Shares to be tendered must be
received by the Depositary at one of such addresses or (ii) such Shares must be
delivered pursuant to the procedures for book-entry transfer described below
(and a confirmation of such delivery received by the Depositary), in each case
on or prior to the Expiration Date, or (b) the tendering holder of Shares must
comply with the guaranteed delivery procedure described below.
IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, IN ORDER TO
TENDER SHARES PURSUANT TO THE OFFER, A STOCKHOLDER MUST EITHER (A) CHECK THE BOX
IN THE SECTION OF THE LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE
DETERMINED BY DUTCH AUCTION" OR (B) CHECK ONE OF THE BOXES IN THE SECTION OF THE
LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY
STOCKHOLDER."
A STOCKHOLDER WHO WISHES TO MAXIMIZE THE CHANCE THAT HIS OR HER SHARES WILL
BE PURCHASED AT THE RELEVANT PURCHASE PRICE SHOULD CHECK THE BOX ON THE RELEVANT
LETTER OF TRANSMITTAL MARKED, "SHARES TENDERED AT PRICE DETERMINED BY DUTCH
AUCTION." NOTE THAT THIS ELECTION COULD RESULT IN SUCH STOCKHOLDER'S SHARES
BEING PURCHASED AT THE MINIMUM PRICE OF $67 PER SHARE. A STOCKHOLDER WHO WISHES
TO INDICATE A SPECIFIC PRICE (IN INCREMENTS OF $0.25) AT WHICH HIS OR HER SHARES
ARE BEING TENDERED MUST CHECK A BOX UNDER THE SECTION CAPTIONED "SHARES TENDERED
AT PRICE DETERMINED BY STOCKHOLDER" OF THE LETTER OF TRANSMITTAL IN THE TABLE
LABELED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED." A
STOCKHOLDER WHO WISHES TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE
SEPARATE LETTERS OF TRANSMITTAL FOR EACH PRICE AT WHICH SUCH SHARES ARE BEING
TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE PRICE.
A TENDER OF SHARES WILL BE PROPER, IF, AND ONLY IF, ON THE APPROPRIATE
LETTER OF TRANSMITTAL EITHER THE BOX IN THE SECTION CAPTIONED "SHARES TENDERED
AT PRICE DETERMINED BY DUTCH AUCTION" OR ONE OF THE BOXES IN THE SECTION
CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER" IS CHECKED.
Stockholders may tender Shares subject to the condition that all or none of
such Shares be purchased, or that a specified minimum number of Shares be
purchased. Any stockholder desiring to make such a conditional tender should so
indicate in the box captioned "Conditional Tender" on the Letter of Transmittal
and, if applicable, on the Notice of Guaranteed Delivery. It is the tendering
stockholder's responsibility to determine the minimum number of Shares to be
purchased. STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE
EFFECT OF PRORATION OF THE OFFER AND THE ADVISABILITY OF MAKING A CONDITIONAL
TENDER. See Sections 6 and 13.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing such Book-Entry
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Transfer Facility to transfer such Shares into the Depositary's account in
accordance with the procedures of such Book-Entry Transfer Facility. Although
delivery of Shares may be effected through book-entry transfer into the
Depository's account at the Book-Entry Transfer Facility, a properly completed
and duly executed Letter of Transmittal or facsimile thereof, together with any
required signature guarantees, or an Agent's Message (as defined below), and any
other required documents, must, in any case, be transmitted to and received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase on or prior to the Expiration Date, or the tendering stockholder
must comply with the guaranteed delivery procedure described below. The
confirmation of a book-entry transfer of Shares into the Depositary's account at
the Book-Entry Transfer Facility as described above is referred to herein as a
"Book-Entry Confirmation." Delivery of the Letter of Transmittal and any other
required documents to a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against the participant.
SIGNATURE GUARANTEES. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a firm that is a member of a
registered national securities exchange or the National Association of
Securities Dealers, Inc., or by a commercial bank or trust company having an
office or correspondent in the United States which is a participant in an
approved Signature Guarantee Medallion Program (each of the foregoing, an
"Eligible Institution"). Signatures on a Letter of Transmittal need not be
guaranteed if (a) the Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith and such holder has not completed the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) such Shares are tendered for
the account of an Eligible Institution. See Instructions 1 and 6 of the Letter
of Transmittal. If a certificate representing Shares is registered in the name
of a person other than the signer of a Letter of Transmittal, or if payment is
to be made, or Shares not purchased or tendered are to be issued to a person
other than the registered holder, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as the
name of the registered holder appears on the certificate with the signature on
the certificate or stock power guaranteed by an Eligible Institution.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and cannot deliver certificates for such Shares and all other required
documents to the Depositary on or prior to the Expiration Date or the procedure
for book-entry transfer cannot be complied with in a timely manner, such Shares
may nevertheless be tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company (with any
required signature guarantees) is received by the Depositary as provided
below on or prior to the Expiration Date; and
(iii) the certificates for the tendered Shares (or a confirmation of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other
documents required by the Letter of Transmittal, are received by the
Depositary no later than 5:00 p.m., New York City time, on the third NYSE
trading day after the date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a guarantee by
an Eligible Institution in the form set forth in such Notice.
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The method of delivery of Shares, the Letter of Transmittal and all other
required documents is at the option and risk of the tendering stockholder.
Shares will be deemed delivered only when actually received by the Depositary
(including, in the case of a book-entry transfer, by Book-Entry Confirmation).
If delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases sufficient time should be allowed to
assure timely delivery.
No interest will be paid on the purchase price of the Shares to be paid by
the Company, regardless of any extension of the Offer or any delay in making
such payment.
U.S. FEDERAL INCOME TAX WITHHOLDING. To avoid federal income tax backup
withholding equal to 31% of the gross payments made pursuant to the Offer, each
stockholder must notify the Depositary of such stockholder's correct taxpayer
identification number and provide certain other information by properly
completing the substitute form W-9 included in the Letter of Transmittal.
Foreign stockholders (as defined in Section 13) may be required to submit a
properly completed form W-8, certifying non-United States status, in order to
avoid backup withholding. In addition, foreign stockholders may be subject to
30% (or lower treaty rate) withholding on gross payments received pursuant to
the Offer (as discussed in Section 13). Holders of ESPP Shares under the 1997
Employee Stock Purchase Plan who tender all or any of such Shares pursuant to
the Offer may be subject to income and employment tax withholding. For a
discussion of certain federal income tax consequences to tendering stockholders,
see Section 13. Each stockholder is urged to consult with his or her own tax
advisor.
TENDER CONSTITUTES AN AGREEMENT. It is a violation of Rule 14e-4
promulgated under the Exchange Act for a person, directly or indirectly, to
tender Shares for his or her own account unless, at the time of the tender and
at the end of the proration period, the person so tendering (a) has a net long
position equal to or greater than the amount of (i) Shares tendered or (ii)
other securities immediately convertible into, exercisable or exchangeable for
the amount of Shares tendered and will acquire such Shares for tender by
conversion, exercise or exchange of such other securities and (b) will cause
such Shares to be delivered in accordance with the terms of the Offer. Rule
14e-4 provides a similar restriction applicable to the tender or guarantee of a
tender on behalf of another person. The tender of Shares pursuant to any one of
the procedures described above or pursuant to the Special Instructions for
401(k) Plan Shares or ESPP Shares described below, as applicable, will
constitute the tendering stockholder's acceptance of the terms and conditions of
the Offer, as well as the tendering stockholder's representation and warranty
that (a) such stockholder has a net long position in the Shares being tendered
within the meaning of Rule 14e-4, and (b) the tender of such Shares complies
with Rule 14e-4. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
stockholder and the Company upon the terms and subject to the conditions of the
Offer.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the Purchase Price,
the number of shares to be accepted, the form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company, in its sole discretion, and its
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders of Shares that it determines are
not in proper form or the acceptance for payment of or payment for which may be
unlawful. The Company also reserves the absolute right to waive any condition of
the Offer or any defect or irregularity in any tender of Shares. A tender of
Shares will not be deemed to have been properly made until all defects or
irregularities have been cured by the tendering stockholder or waived by the
Company. None of the Company, the Dealer Manager, the Depositary, the
Information Agent or any other person will be under any duty to give notice of
any defect or irregularity in tenders, nor shall any of them incur any liability
for failure to give any such notice.
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SPECIAL INSTRUCTIONS FOR SHARES HELD PURSUANT TO THE COMPANY'S BENEFIT AND
INCENTIVE COMPENSATION PLANS
401(K) PLANS. Participants in the Company's 401(k) plans desiring to direct
the 401(k) Trustee to tender any Shares credited to their accounts under such
plans pursuant to the Offer must instruct the 401(k) Trustee to tender such
Shares by properly completing, duly executing and returning to the 401(k)
Trustee the Direction Forms sent to such participants by the 401(k) Trustee as
explained in the materials on YELLOW paper included herewith. The 401(k) Trustee
will aggregate all such tenders and execute one Letter of Transmittal on behalf
of all 401(k) plan participants desiring to tender Shares credited pursuant to
such plans. DELIVERY OF A LETTER OF TRANSMITTAL BY A PARTICIPANT IN THE
COMPANY'S 401(K) PLANS WITH RESPECT TO ANY SHARES CREDITED PURSUANT TO SUCH
PLANS DOES NOT CONSTITUTE PROPER TENDER OF SUCH SHARES. PROPER TENDER OF ANY
SHARES CREDITED PURSUANT TO THE COMPANY'S 401(K) PLANS CAN ONLY BE MADE BY THE
401(K) TRUSTEE, WHO IS THE RECORD OWNER OF SUCH SHARES. THE DEADLINE FOR
SUBMITTING DIRECTION FORMS TO THE 401(K) TRUSTEE IS SET BY THE 401(K) TRUSTEE
AND IS EARLIER THAN THE EXPIRATION DATE. If a stockholder desires to tender
non-401(k) Plan Shares as well as 401(k) Plan Shares, such stockholder must
properly complete and duly execute a Letter of Transmittal for the non-401(k)
Plan Shares and deliver such Letter of Transmittal directly to the Depositary,
as well as following the special instructions provided by the 401(k) Trustee for
directing the 401(k) Trustee to tender 401(k) Plan Shares. Any questions
regarding tender of 401(k) Plan Shares should be directed to the 401(k) Trustee
at the number provided in the separate materials on YELLOW paper.
EMPLOYEE STOCK PURCHASE PLANS, 1990 EQUITY INCENTIVE PLAN, AND NON-EMPLOYEE
DIRECTOR RESTRICTED STOCK PLANS. Shares acquired pursuant to the Company's
employee stock purchase plans, 1990 Equity Incentive Plan, as amended and
restated (the "1990 Equity Incentive Plan"), the Alliant Techsystems Inc.
Non-Employee Director Restricted Stock Plan, and the Alliant Techsystems Inc.
Restricted Stock Plan for Non-Employee Directors, may be subject to certain
restrictions on transferability, some of which are described below. The
provisions regarding transferability described below are only a summary and
participants in the aforementioned plans are urged to consult the actual terms
of the plans for applicability of these restrictions to particular Shares and
particular participants. Only those Shares which are not restricted as to
transferability at the time of tender may be tendered in the Offer and tenders
of any other Shares held pursuant to these plans will not be accepted.
EMPLOYEE STOCK PURCHASE PLANS. Certain Shares acquired pursuant to the
Company's employee stock purchase plans may be subject to restrictions on
transfer (the "ESPP Restricted Shares"). Specifically, Shares acquired
pursuant to the Company's 1997 Employee Stock Purchase Plan are restricted
and may not be withdrawn, sold or otherwise transferred by the participant
until the first to occur of the following events: (a) twelve months from the
date of purchase; (b) the participant's death; (c) the participant's
termination of employment; or (d) a "change of control" (as defined in the
plans). Holders or beneficial owners of ESPP Shares (other than the ESPP
Restricted Shares) who desire to tender any such Shares in the Offer, must
instruct Piper Jaffray Inc., as administrator of the employee stock purchase
plans (the "ESPP Administrator"), to tender any such Shares by properly
completing, duly executing and returning to the ESPP Administrator the
Direction Form sent to such holder by the ESPP Administrator as explained in
the materials on the PINK paper included herewith. DELIVERY OF A LETTER OF
TRANSMITTAL BY A PARTICIPANT IN THE COMPANY'S ESPP PLANS WITH RESPECT TO ANY
SHARES CREDITED PURSUANT TO SUCH PLANS DOES NOT CONSTITUTE PROPER TENDER OF
SUCH SHARES. PROPER TENDER OF ANY SHARES CREDITED PURSUANT TO THE COMPANY'S
ESPP PLANS CAN ONLY BE MADE BY THE ESPP ADMINISTRATOR. THE DEADLINE FOR
SUBMITTING DIRECTION FORMS TO THE ESPP ADMINISTRATOR IS SET BY THE ESPP
ADMINISTRATOR AND IS EARLIER THAN THE EXPIRATION DATE. If a stockholder
desires to tender non-ESPP Shares, such stockholder must properly complete
and duly execute a letter or transmittal directly to the Depositary, as well
as following the special instructions provided by the ESPP Administrator
directing the ESPP Administrator to tender ESPP Shares. Any questions
regarding the tender of ESPP Shares should be directed to the ESPP
Administrator at the number provided in the separate materials on PINK
paper.
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1990 EQUITY INCENTIVE PLAN. Shares acquired under the 1990 Equity
Incentive Plan (the "EIP Shares") may be subject to certain restrictions on
transferability. Specifically, Shares of restricted stock (the "Restricted
EIP Shares") issued under the 1990 Equity Incentive Plan, which are held by
the Company as custodian, are non-transferable and are restricted until such
Shares become nonforfeitable. Holders of EIP Shares should consult the Plan
for conditions of forfeitability. Holders of EIP Shares (other than
Restricted EIP Shares) who desire to tender such Shares in the Offer may do
so by complying with one of the procedures for tendering Shares described
above under "--Proper Tender of Shares." Any questions regarding the tender
of EIP Shares should be directed to the Company, as custodian for the
restricted stock, at (612) 931-6144.
OPTIONS. The Company is not offering, as part of the Offer, to purchase any
options ("Options") outstanding under the Company's 1990 Equity Incentive Plan
and tenders of Options will not be accepted. Holders of Options who wish to
participate in the Offer must exercise their Options by paying the applicable
exercise price and withholding taxes and then tender the Shares issued upon such
exercise in the Offer, provided that any exercise of an Option and tender of
Shares is in accordance with the terms of the 1990 Equity Incentive Plan and the
Options. In no event are any Options to be delivered to the Depositary in
connection with a tender of Shares hereunder. An exercise of an Option cannot be
revoked even if Shares received upon the exercise and tendered in the Offer are
not accepted for purchase in the Offer for any reason.
LOST, STOLEN, DESTROYED OR MUTILATED CERTIFICATES. If certificates
representing Shares to be tendered have been lost, stolen, destroyed or
mutilated, stockholders must complete the box captioned "Description of Shares
Tendered" on the Letter of Transmittal, indicating the number of Shares the
certificates for which have been so lost, stolen, destroyed or mutilated. The
stockholder will then be instructed by the Depositary as to the steps that must
be taken in order to replace the certificate(s). In order to avoid delay, any
such stockholder should contact the Depositary, ChaseMellon Shareholder
Services, L.L.C., at (800) 851-9677 (toll free).
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after January 17, 1999 unless theretofore accepted
for payment as provided in this Offer to Purchase. If the Company extends the
period of time during which the Offer is open, is delayed in accepting for
payment or paying for Shares or is unable to accept for payment or pay for
Shares pursuant to the Offer for any reason, then, without prejudice to the
Company's rights under the Offer, the Depositary may, on behalf of the Company,
retain all Shares tendered, and such Shares may not be withdrawn except as
otherwise provided in this Section 4, subject to Rule 13e-4(f)(5) under the
Exchange Act, which provides that the issuer making the tender offer shall
either pay the consideration offered, or return the tendered securities promptly
after the termination or withdrawal of the tender offer. To be effective, a
written or facsimile transmission notice of withdrawal must be timely received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase and must specify the name of the person who tendered the
Shares to be withdrawn and the number of Shares to be withdrawn. If the Shares
to be withdrawn have been delivered to the Depositary, a signed notice of
withdrawal with signatures guaranteed by an Eligible Institution (except in the
case of Shares tendered by an Eligible Institution) must be submitted prior to
the release of such Shares. In addition, such notice must specify, in the case
of Shares tendered by delivery of certificates, the name of the registered
holder (if different from that of the tendering stockholder) and the serial
numbers shown on the particular certificates evidencing the Shares to be
withdrawn or, in the case of Shares tendered by book-entry transfer, the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares. Withdrawals may not be rescinded, and Shares
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be
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retendered by again following one of the procedures described in Section 3 at
any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Company, in its sole discretion,
which determination shall be final and binding. None of the Company, the Dealer
Manager, the Depositary, the Information Agent or any other person will be under
any duty to give notification of any defect or irregularity in any notice of
withdrawal or incur any liability for failure to give any such notification.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer and as promptly as
practicable after the Expiration Date, the Company will determine the Purchase
Price, taking into account the number of Shares tendered and the prices
specified by tendering stockholders, announce the Purchase Price, and will
(subject to the proration and conditional tender provisions of the Offer) accept
for payment and pay for Shares validly tendered at or below the Purchase Price.
Thereafter, payment for all Shares validly tendered on or prior to the
Expiration Date and accepted for payment pursuant to the Offer will be made by
the Depositary by check as promptly as practicable. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for Shares (or of a confirmation of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility), a properly completed and duly executed Letter of
Transmittal or facsimile thereof, and any other required documents.
For purposes of the Offer, the Company will be deemed to have accepted for
payment (and thereby purchased) Shares that are validly tendered and not
properly withdrawn as, if and when it gives oral or written notice to the
Depositary of its acceptance for payment of such Shares. The Company will pay
for Shares that it has purchased pursuant to the Offer by depositing the
Purchase Price therefor with the Depositary. The Depositary will act as agent
for tendering stockholders for the purpose of receiving payment from the Company
and transmitting payment to tendering stockholders. Under no circumstances will
interest be paid on amounts to be paid to tendering stockholders, regardless of
any delay in making such payment.
Certificates for all Shares not purchased will be returned (or, in the case
of Shares tendered by book-entry transfer, such Shares will be credited to an
account maintained with a Book-Entry Transfer Facility) as promptly as
practicable without expense to the tendering stockholder.
Payment for Shares may be delayed in the event of difficulty in determining
the number of Shares properly tendered or if proration is required. See Section
1. In addition, if certain events occur, the Company may not be obligated to
purchase Shares pursuant to the Offer. See Section 7.
The Company will pay or cause to be paid any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the Purchase Price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder, or if tendered Shares are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of any stock transfer taxes (whether imposed on the registered
holder, such other person or otherwise) payable on account of the transfer to
such person will be deducted from the Purchase Price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
Instruction 7 to the Letter of Transmittal.
6. CONDITIONAL TENDER OF SHARES.
Under certain circumstances and subject to the exceptions set forth in
Section 1, the Company may prorate the number of Shares purchased pursuant to
the Offer. As discussed in Section 13, the number of Shares to be purchased from
a particular stockholder might affect the tax treatment of such purchase to such
stockholder and such stockholder's decision whether to tender. Each stockholder
is urged to consult
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with his or her own tax advisor. Accordingly, a stockholder may tender Shares
subject to the condition that a specified minimum number of such holder's Shares
tendered pursuant to a Letter of Transmittal or Notice of Guaranteed Delivery
must be purchased if any such Shares so tendered are purchased, and any
stockholder desiring to make such a conditional tender must so indicate in the
box captioned "Conditional Tender" in such Letter of Transmittal or, if
applicable, in the Notice of Guaranteed Delivery. However, this right to tender
conditionally is not available with respect to tenders of 401(k) Plan Shares or
ESPP Shares.
Any tendering stockholder wishing to make a conditional tender must
calculate and appropriately indicate such minimum number of Shares. If the
effect of accepting tenders on a pro rata basis would be to reduce the number of
Shares to be purchased from any stockholder (tendered pursuant to a Letter of
Transmittal or Notice of Guaranteed Delivery) below the minimum number so
specified, such tender will automatically be regarded as withdrawn (except as
provided in the next paragraph) and all Shares tendered by such stockholder
pursuant to such Letter of Transmittal or Notice of Guaranteed Delivery will be
returned as promptly as practicable thereafter.
If conditional tenders would otherwise be so regarded as withdrawn and would
cause the total number of Shares to be purchased to fall below 2,800,000, then,
to the extent feasible, the Company will select enough of such conditional
tenders that would otherwise have been so withdrawn to permit the Company to
purchase 2,800,000 Shares. In selecting among such conditional tenders, the
Company will select by random lot and will limit its purchase in each case to
the designated minimum number of Shares to be purchased.
7. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company will not be
required to accept for payment or pay for any Shares tendered, and may terminate
or amend and may postpone (subject to the requirements of the Exchange Act for
prompt payment for or return of Shares) the acceptance for payment of Shares
tendered, if at any time on or after November 5, 1998 and at or before the
Expiration Date any of the following shall have occurred:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person, domestic
or foreign, or before any court, authority, agency or tribunal that (i)
challenges the acquisition of Shares pursuant to the Offer or otherwise in
any manner relates to or affects the Offer or (ii) in the reasonable
judgment of the Company, could materially and adversely affect the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of the
Company or any of its subsidiaries or materially impair the Offer's
contemplated benefits to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any legislative body, court, authority, agency
or tribunal which, in the Company's reasonable judgment, would or might
directly or indirectly (i) make the acceptance for payment of, or payment
for, some or all of the Shares illegal or otherwise restrict or prohibit
consummation of the Offer, (ii) delay or restrict the ability of the
Company, or render the Company unable, to accept for payment or pay for some
or all of the Shares, (iii) materially impair the contemplated benefits of
the Offer to the Company or (iv) materially and adversely affect the
business, condition (financial or other), income, operations or prospects of
the Company and its subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of the
Company or any of its subsidiaries;
11
<PAGE>
(c) it shall have been publicly disclosed or the Company shall have
learned that (i) any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) has acquired or proposes to acquire beneficial
ownership of more than 5% of the outstanding Shares whether through the
acquisition of stock, the formation of a group, the grant of any option or
right, or otherwise (other than as disclosed in a Schedule 13D or 13G on
file with the Commission on or prior to November 5, 1998) or (ii) any such
person or group that on or prior to November 5, 1998 had filed a Schedule
13D or 13G with the Commission thereafter shall have acquired or shall
propose to acquire whether through the acquisition of stock, the formation
of a group, the grant of any option or right, or otherwise, beneficial
ownership of additional Shares representing 2% or more of the outstanding
Shares;
(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market, (ii) any significant decline in the
market price of the Shares, (iii) any change in the general political,
market, economic or financial condition in the United States or abroad that
could have a material adverse effect on the Company's business, condition
(financial or other), income, operations, prospects or ability to obtain
financing generally or the trading in the Shares, (iv) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or any limitation on, or any event which, in the Company's
reasonable judgment, might affect, the extension of credit by lending
institutions in the United States, (v) the commencement of a war, armed
hostilities or other international or national calamity directly or
indirectly involving the United States or (vi) in the case of any of the
foregoing existing at the time of the commencement of the Offer, in the
Company's sole judgment, a material acceleration or worsening thereof;
(e) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger, acquisition or other business
combination proposal for the Company, shall have been proposed, announced or
made by any person;
(f) there shall have occurred any event or events that have resulted, or
may in the reasonable judgment of the Company result, in an actual or
threatened change in the business, condition (financial or other), income,
operations, stock ownership or prospects of the Company and its
subsidiaries, taken as a whole;
(g) there shall have occurred any decline in the Dow Jones Industrial
Average or the Standard & Poor's Composite 500 Stock Index by an amount in
excess of 10% measured from the close of business on November 5, 1998; or
(h) any conditions in the credit agreements described in Section 11
relating to the borrowing of funds to repurchase Shares shall not have been
satisfied or waived;
and, in the reasonable judgment of the Company, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment or payment.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and any such
condition may be waived by the Company, in whole or in part, at any time and
from time to time, in its reasonable discretion, whether or not any other
condition of the Offer is also waived. The failure by the Company at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time. Any determination by the Company concerning
the events described above will be final and binding on all parties.
12
<PAGE>
8. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and principally traded on the NYSE under the symbol
"ATK." The following table sets forth the high and low sales prices of the
Shares on the NYSE Composite Tape for the Company's fiscal quarters indicated.
<TABLE>
<CAPTION>
HIGH* LOW*
--------- ---------
<S> <C> <C>
Fiscal Year Ended March 31, 1997:
Quarter ended June 30, 1996.................................................................. $ 49.13 $ 43.75
Quarter ended September 29, 1996............................................................. 53.25 46.25
Quarter ended December 29, 1996.............................................................. 57.38 47.63
Quarter ended March 31, 1997................................................................. 55.00 42.00
Fiscal Year Ended March 31, 1998:
Quarter ended June 29, 1997.................................................................. 52.88 40.50
Quarter ended September 28, 1997............................................................. 69.00 51.44
Quarter ended December 28, 1997.............................................................. 65.69 53.75
Quarter ended March 31, 1998................................................................. 65.00 54.50
Fiscal Year Ending March 31, 1999:
Quarter ended June 28, 1998.................................................................. 65.56 57.88
Quarter ended September 27, 1998............................................................. 68.88 61.38
Quarter ended December 27, 1998 (through November 5, 1998)................................... 74.38 65.00
</TABLE>
- ------------------------
* Information provided was obtained from The Wall Street Journal, and the
Company believes such information to be accurate.
On November 5, 1998, the last full NYSE trading day prior to the
announcement of the Offer, the last reported sale price of the Shares on the
NYSE Composite Tape was $73 7/8 per Share. Stockholders are urged to obtain
current market quotations for the shares.
The Company has not paid cash dividends since its spin-off from Honeywell
Inc. The Company's dividend policy will be reviewed by the Board of Directors at
such future times as may be appropriate in light of relevant factors existing at
such times, including the extent to which the payment of cash dividends may be
limited by covenants contained in the agreements governing its outstanding
indebtedness, including the Credit Agreement. The Company does not expect to pay
cash dividends in the foreseeable future.
On September 28, 1990, the Board of Directors of the Company declared a
dividend distribution of one Right on each share of Common Stock outstanding at
the close of business on October 9, 1990, and in connection therewith entered
into the Rights Agreement, dated as of September 28, 1990, as amended, between
the Company and The Chase Manhattan Bank (as successor to Manufacturers Hanover
Trust Company), as Rights Agent.
When exercisable, each Right will entitle the registered holder to purchase
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
par value $1.00 per share (the "Preferred Stock"), at an exercise price of
$80.00, subject to adjustment. The Rights are not exercisable, transferrable, or
separable from the Company's Common Stock until the Distribution Date, which is
defined as the tenth business day after the earliest to occur of: (i) a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to require, beneficial
ownership of 20% or more of the outstanding shares of the Company's Common Stock
(the "Stock Acquisition Date"), (ii) the commencement of a tender offer or
exchange offer that upon consummation would result in a person being a
beneficial owner of 20% or more of the Common Stock or (iii) the Board of
Directors' determination that any person, alone or together with its affiliates
and associates, has become the beneficial owner of an amount of Common Stock
which the Board of Directors determines to be
13
<PAGE>
substantial (in no event less than 10% of the outstanding shares of Common
Stock) and at least a majority of the Board of Directors who are not officers of
the Company, determines that (a) such beneficial ownership by such person is
intended to cause pressure on the Company to take action or enter into a
transaction (or series of transactions) intended to provide such person with
short-term financial gain under circumstances which the Board of Directors
determines that the long-term interests of the Company and its stockholders
would not be best served by taking any such actions at that time or (b) such
beneficial ownership is causing or is reasonably likely to cause a material
adverse impact on the business or prospects of the Company (any such person
being referred to as an "Adverse Person").
The Company is entitled to redeem the Rights in whole, but not in part, at
$.01 per Right (subject to adjustment) prior to the Distribution Date. Under
certain circumstances which are set forth in the Rights Agreement, the decision
to redeem requires the concurrence of a majority of the continuing directors.
The Company may not redeem the Rights if the Board of Directors has previously
declared a person to be an Adverse Person. Unless earlier redeemed, the Rights
will expire on September 28, 2000.
In general, the Rights Agreement provides that in the event of (i) a Person
becoming the beneficial owner of 20% or more of the then outstanding shares of
Common Stock (except pursuant to an offer for all outstanding shares of Common
Stock that a majority of the independent directors determine to be fair to and
otherwise in the best interests of the Company and its stockholders), or (ii)
the Board of Directors determining that a person is an Adverse Person, each
holder of a Right (except as provided in the Rights Agreement) will have the
right to receive, upon payment of the exercise price, a number of shares of
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) equal to the result obtained by (a) multiplying the Purchase
Price (as defined in the Rights Agreement) by the number of one-hundredths of a
share of Series A Junior Participating Preferred Stock for which a Right was
exercisable prior to the triggering event and (b) dividing that product by 50%
of the current market price per share of Common Stock on the triggering date. In
addition, if at any time following the Stock Acquisition Date, (i) the Company
is acquired in a merger or other business combination transaction in which the
Company is not the surviving corporation (other than in a merger that follows an
offer described in the following paragraph), or (ii) more than 50% of the
Company's assets, cash flow or earning power is sold or transferred, provision
must be made prior to the consummation of such transaction to entitle each
holder of a Right (except as provided in the Rights Agreement) to purchase at
the exercise price a number of the acquiring company's common shares (or, in
certain circumstances, cash, property, or other securities of the company) equal
to the result obtained by (a) multiplying the Purchase Price by the number of
one-hundredths of a share of Series A Junior Participating Preferred Stock for
which a Right was exercisable prior to the triggering event and (b) dividing
that product by 50% of the current market price per share of Common Stock on the
triggering date. Further, following the occurrence of any of the events set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person or Adverse Person (or by certain related parties) become immediately null
and void.
The Rights may have certain anti-takeover effects, including deterring
someone from acquiring control of the Company in a manner or on terms not
approved by the Board of Directors. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors, because
the Rights may be redeemed generally at any time by the Company as set forth
above, except in the case of a declaration by the Board of Directors that the
person seeking a merger or business combination is an Adverse Person.
The foregoing description of the Rights is qualified in its entirety by
reference to the Rights Agreement, a copy of which has been included as an
exhibit to the Company's 1990 Registration Statement on Form 10, and to the
amendments to the Rights Agreement (including the rescission agreement which
rescinded Amendment No. 1 to the Rights Agreement in its entirety), copies of
which have been included as exhibits to the Company's Annual Report on Form 10-K
for the year ended March 31, 1993 and to its
14
<PAGE>
Current Report on Form 8-K dated October 28, 1994, in each case filed with the
Commission. Such reports and exhibits may be obtained from the Commission in the
manner provided in Section 17.
9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Company believes that the repurchase of outstanding Shares at this time
is consistent with the Company's goal to increase earnings per share and
maximize shareholder value. The Company further believes that the debt to be
incurred to repurchase the Shares will not affect the Company's prospects for
future internal growth or impede possible future acquisitions.
This Offer supersedes any other share repurchase previously authorized by
the Company's Board of Directors. However, the Company may in the future
purchase Shares on the open market, in privately negotiated transactions,
through tender offers or otherwise. Any such purchases may be on the same terms
or on terms that are more or less favorable to stockholders than the terms of
the Offer. However, under the Exchange Act rules, the Company and its affiliates
are prohibited from purchasing any Shares, other than pursuant to the Offer,
until at least ten business days after expiration or termination of the Offer.
Any possible future purchases by the Company will depend on many factors,
including the market price of the Shares, the results of the Offer, the
Company's business and financial position and general economic and market
conditions.
The Offer will afford to stockholders who are considering the sale of all or
a portion of their Shares the opportunity to determine the price at which they
are willing to sell their Shares and, in the event the Company accepts such
Shares for purchase, to dispose of Shares without the usual transaction costs
associated with a market sale. By tendering Shares directly to the Depositary,
the Offer will also allow qualifying stockholders owning beneficially or of
record fewer than 100 Shares (not including any 401(k) Plan Shares) to avoid the
payment of brokerage commissions and the applicable odd lot discount payable on
a sale of Shares in a transaction effected on a securities exchange.
Correspondingly, the costs to the Company for servicing the accounts of odd lot
holders will be reduced. See Section 2.
As of November 5, 1998, the Company had issued and outstanding 12,151,965
Shares (not including 1,711,648 Shares held in treasury), and had reserved
2,101,975 Shares for issuance under its various benefit and/or incentive
compensation plans. Of the reserved Shares, 790,625 Shares are issuable upon
exercise of outstanding stock options and up to 25,900 Shares are reserved for
issuance to key officers, which will vest upon achievement of certain earnings
per Share growth goals. The 2,800,000 Shares that the Company is offering to
purchase represent approximately 23% of the Shares issued and outstanding as of
such date and approximately 22% of the Shares on a diluted basis (assuming the
exercise of all outstanding vested stock options). As of November 5, 1998, all
directors and executive officers of the Company as a group owned beneficially an
aggregate of 605,445 Shares (including an aggregate of 331,962 Shares that may
be acquired pursuant to the exercise of outstanding stock options exercisable
within 60 days of the date hereof) or approximately 4.8% of the Shares then
outstanding (assuming the exercise of all such outstanding stock options). The
Company has been advised that no director or executive officer intends to tender
Shares pursuant to the Offer, except for Richard Schwartz, its retired Chief
Executive Officer and retiring Chairman of the Board. Mr. Schwartz, as part of
his retirement planning, intends to tender up to 100,000 Shares of the 50,493
Shares he owns beneficially and the 215,000 Shares he is entitled to acquire
pursuant to the exercise of stock options, all of which are currently
exercisable. If the Company purchases 2,800,000 Shares pursuant to the Offer and
no director or executive officer of the Company other than Mr. Schwartz
(assuming Mr. Schwartz tenders all 100,000 Shares) tenders Shares, the
percentage of outstanding Shares owned beneficially by all of the Company's
directors and executive officers as a group would increase to approximately 5.4%
of the Shares then outstanding (including for this purpose, Shares that may be
acquired by such directors and executive officers pursuant to the exercise of
outstanding stock options exercisable within 60 days of the date hereof).
Stockholders who determine not to accept the Offer will obtain a
proportionate increase in their ownership interest in the Company. After
consummation of the Offer, increases or decreases in net income
15
<PAGE>
will likely be reflected in greater increases or decreases in earnings per Share
than is presently the case because of the smaller number of Shares outstanding
thereafter.
Shares that the Company acquires pursuant to the Offer will become
authorized but unissued Shares and will be available for issuance by the Company
without further stockholder action (except as may be required by applicable law
or the rules of the NYSE or any other securities exchange on which the Shares
are listed). Such Shares could be issued without stockholder approval for, among
other things, acquisitions, the raising of additional capital for use in the
Company's business, stock dividends or in connection with employee stock, stock
option and other plans or a combination thereof.
Except as disclosed in this Offer to Purchase, the Company has no plans or
proposals which relate to or would result in: (a) the acquisition by any person
of additional securities of the Company or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (d) any change in the present Board of Directors or management
of the Company; (e) any material change in the present dividend rate or policy,
or indebtedness or capitalization of the Company; (f) any other material change
in the Company's corporate structure or business; (g) any change in the
Company's Restated Certificate of Incorporation or By-Laws, as amended, or any
actions which may impede the acquisition of control of the Company by any
person; (h) a class of equity security of the Company being delisted from a
national securities exchange; (i) a class of equity security of the Company
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Exchange Act; or (j) the suspension of the Company's obligation to file
reports pursuant to Section 15(d) of the Exchange Act.
The Company's purchase of Shares in the Offer will reduce the number of
Shares that might otherwise trade publicly. Nonetheless, it is expected that
there will still be a sufficient number of Shares outstanding and publicly
traded following the consummation of the Offer to ensure a continued trading
market in the Shares. Based upon the published guidelines of the NYSE, the
Company does not believe that the Offer will result in delisting of the Shares
on the NYSE.
The Shares are registered under the Exchange Act which requires, among other
things, that the Company furnish certain information to its stockholders and to
the Commission and comply with the Commission's proxy rules in connection with
meetings of the Company's stockholders. The Company has no reason to believe
that the purchase of Shares pursuant to the Offer will result in the termination
of registration of the Shares under the Exchange Act.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company expects that,
following the repurchase of the Shares in the Offer, the Shares will continue to
be "margin securities" for purposes of the Federal Reserve Board's margin
regulations. Eligibility for treatment as margin securities will, however,
continue to depend on maintenance of minimum daily trading volume.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES, NOR HAS THE COMPANY
AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. HOLDERS ARE URGED TO
EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER AND TO CONSULT THEIR OWN
INVESTMENT AND TAX ADVISORS. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND AT WHAT
PRICE.
10. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company, a Delaware corporation, was incorporated on May 2, 1990 as a
wholly-owned subsidiary of Honeywell Inc. in connection with Honeywell's plan to
spin off to its stockholders its defense
16
<PAGE>
and marine systems business, its test instruments division and its signal
analysis center. On September 28, 1990, Honeywell completed the spin-off. The
Shares are listed and principally traded on the NYSE under the symbol "ATK." The
Company's executive offices are located at 600 Second Street, N.E., Hopkins,
Minnesota 55343, and its telephone number is (612) 931-6000.
The Company is a leading developer and supplier of aerospace and defense
technologies, products and systems to the U.S. Government. The Company
specializes in the production of high quality products manufactured to meet
exacting specifications designed to insure consistent, reliable performance. The
Company (including its predecessors) has supplied products and services to the
U.S. Government for more than 50 years. The Company has approximately 6,300
employees.
The Company's principal business areas are conventional munitions, solid
propulsion systems, smart weapons and composite structures. In the conventional
munitions and solid propulsion businesses, the Company holds a number one or two
position in most major market segments. The Company is a defense contractor for
the U.S. Government and a major component and subsystem supplier to the largest
Department of Defense prime contractors including Lockheed Martin, Boeing and
Raytheon. For the fiscal year ended March 31, 1998 ("Fiscal 1998"), the Company
generated sales of approximately $1.1 billion, operating income of $92.1 million
and net income of $68.2 million.
In order to focus the Company's development and production efforts and
respond effectively to its customer base, the Company is organized in the
following business groups:
CONVENTIONAL MUNITIONS GROUP. The Company is one of two principal suppliers
of conventional ammunition to the Department of Defense. Principal products and
services include conventional ammunition, propellants, solid propulsion systems
for tactical missiles, warheads, metal parts and composite structures for
weapons systems, infrared decoy flares and commercial gun powder. The Group has
four distinct business units: Ammunition Systems (tank ammunition, medium
caliber ammunition and warheads); Ordinance (military propellants and commercial
gun powders); Tactical Propulsion (solid propulsion for tactical missiles,
composite structures and warheads); and Kilgore Operations (flares). For Fiscal
1998, the Conventional Munitions Group had sales of approximately $465 million,
representing approximately 43% of the Company's total sales during such year.
SPACE AND STRATEGIC SYSTEMS GROUP. The Company is a leading designer,
developer and manufacturer of solid rocket propulsion systems for space launch
vehicles and strategic missile systems and high performance composite structures
for military and commercial aircraft and spacecraft. In addition, the Company
provides operational and technical support services for space launch activities.
The Company is the world's leading producer of solid rocket motors for unmanned
expendable space launch vehicles and one of the two leading developers and
producers of solid propulsion systems for U.S. strategic missile programs. For
Fiscal 1998, the Space and Strategic Systems Group had sales of approximately
$370 million, representing approximately 34% of the Company's total sales during
such year.
DEFENSE SYSTEMS GROUP. The Company is also a leading designer, developer
and manufacturer of tactical weapons systems, smart weapons, anti-tank and
demolition systems, unmanned aerial vehicles, fuzes, weapons test equipment
systems and targeting sensors. The Defense Systems Group has three distinct
business units: Tactical Systems (smart weapons, anti-tank and demolition
systems, fuzes); Defense Electronics Systems (smart weapons systems, missile
warning systems and weapons test equipment systems); and Unmanned Aerial
Vehicles (unmanned aerial vehicles and tactical ground control systems). For
Fiscal 1998, the Defense Systems Group had sales of approximately $242 million,
representing approximately 23% of the Company's total sales during such year.
The foregoing description of the Company's business is qualified in its
entirety by the more detailed discussion contained in the Company's Annual
Report on Form 10-K for the year ended March 31, 1998 and in its other filings
made with the Commission pursuant to the Exchange Act.
17
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RECENT DEVELOPMENTS
The Company had net sales of approximately $259 million for the quarter
ended September 27, 1998 (the "Second Quarter") and approximately $515.3 million
for the first half of fiscal 1999. The Company also had EBITDA of approximately
$35.6 million for the Second Quarter and approximately $70.8 million for the
first half of fiscal 1999. The Conventional Munitions Group reported net sales
of approximately $118 million for the Second Quarter and approximately $240
million for the first half of fiscal 1999. Second-quarter sales from the Space
and Strategic Systems Group were approximately $103 million and approximately
$194 million for the first half of fiscal 1999. The Defense Systems Group posted
second quarter sales of approximately $40 million and approximately $83 million
for the first half of fiscal 1999.
The Company's debt-to-capitalization ratio at the end of the second quarter
declined to 45% from 50% a year ago, reflecting the repayment of $44 million of
debt over the past year. The results set forth above are unaudited and no
assurance can be given that actual audited results for fiscal 1999 will not
differ materially from such unaudited results.
On September 15, 1998, the Company completed the repurchase of $140 million
of its outstanding 11 3/4% Senior Subordinated Notes due 2003 (the "Notes")
pursuant to a tender offer for such Notes. Approximately $10 million of the
Notes remain outstanding. The cost to extinguish the $140 million of Notes
(including the required premium) was approximately $153 million, which was
financed with borrowings under the Company's revolving credit facility. The
total extraordinary loss on debt extinguishment of $17.2 million ($14.6 million
after a tax benefit of $2.6 million) includes the $13 million premium paid to
purchase the Notes, and also includes the write-off of approximately $4 million,
representing the unamortized debt-issuance costs related to the debt.
In connection with the Offer, on November 23, 1998, the Company amended and
restated a portion of its existing credit facility and entered into a new credit
facility, which together permit borrowings by the Company of up to $650 million
in the aggregate. As a result, the Company has significantly increased its
leverage and debt service requirements. See Section 11.
On November 24, 1998, the Company announced it had hired a new Chairman of
the Board and Chief Executive Officer, Paul David Miller, Admiral, United States
Navy (Retired), who will commence his duties on January 1, 1999. Admiral Miller
will replace Richard Schwartz, who will step down as Chairman of the Board on
January 1, 1999. He will also take over the duties of Chief Executive Officer
from Peter A. Bukowick, who had been acting in such position since September 1,
1998 when Mr. Schwartz resigned that post. Mr. Bukowick will continue to serve
as President and Chief Operating Officer of the Company.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The following is a summary of certain historical consolidated financial
information regarding the Company for the periods indicated. The summary
financial information (other than the ratio of earnings to fixed charges) set
forth below for the years ended March 31, 1997 and 1998 is derived from the
audited consolidated financial statements contained in the Company's Annual
Report, filed as an exhibit to and incorporated by reference into the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 1998 (the "1998
10-K"). The financial information (other than the ratio of earnings to fixed
charges) set forth below for the six-month periods ended September 28, 1997 and
September 27, 1998 is derived from the unaudited consolidated financial
statements set forth in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 27, 1998 (the "1999 Second Quarter 10-Q"),
which has been prepared on a basis substantially consistent with the audited
consolidated financial statements, and which, in the opinion of management,
reflects all adjustments necessary to a fair presentation of the financial
position and results of operations for such periods. The results for the six-
month periods are not necessarily indicative of the results for the full year.
The information presented below should be read in conjunction with the Company's
consolidated financial statements and the notes thereto, incorporated by
reference herein. Copies of the 1999 Second Quarter 10-Q, and the 1998 10-K, in
each case complete with exhibits, may be obtained as described in Section 17.
18
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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX-MONTH PERIOD ENDED FISCAL YEAR ENDED
---------------------------- MARCH 31,
SEPT. 28, SEPT. 27, --------------------------
1997 1998 1997 1998
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
(UNAUDITED)
INCOME STATEMENT DATA:
Sales................................................... $ 518,593 $ 515,319 $ 1,089,397 $ 1,075,506
Income before extraordinary loss........................ $ 30,578 $ 32,469 $ 59,159 $ 68,183
Extraordinary loss(1)................................... -- $ (14,627) -- --
Net income(2)........................................... $ 30,578 $ 17,842 $ 59,159 $ 68,183
Basic earnings per common share:
Income before extraordinary loss...................... $ 2.35 $ 2.58 $ 4.55 $ 5.23
Extraordinary loss.................................... -- (1.16) -- --
------------- ------------- ------------ ------------
Net income............................................ $ 2.35 $ 1.42 $ 4.55 $ 5.23
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
Diluted earnings per common share:
Income before extraordinary loss...................... $ 2.28 $ 2.51 $ 4.41 $ 5.10
Extraordinary loss.................................... -- (1.13) -- --
------------- ------------- ------------ ------------
Net Income............................................ $ 2.28 $ 1.38 $ 4.41 $ 5.10
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
Number of common shares used in computing basic net
income per common share............................... 13,023 12,607 13,015 13,048
Number of common shares used in computing diluted net
income per common share............................... 13,407 12,918 13,402 13,371
OTHER FINANCIAL DATA:
Ratio of earnings to fixed charges...................... 3.0x 4.4x 2.0x 3.4x
<CAPTION>
AS OF
---------------------------- AS OF MARCH 31,
SEPT. 28, SEPT. 27, --------------------------
1997 1998 1997 1998
------------- ------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......................................... $ 116,259 $ 98,786 $ 108,191 $ 95,628
Total assets............................................ $ 946,606 $ 871,183 $ 1,000,588 $ 932,180
Total debt.............................................. $ 252,514 $ 208,814 $ 268,397 $ 198,648
Shareholders' equity and redeemable common shares(3).... $ 249,385 $ 256,445 $ 218,792 $ 265,754
Book value per common share............................. $ 19.01 $ 20.66 $ 16.72 $ 20.67
</TABLE>
- ------------------------
(1) On September 15, 1998, the Company repurchased $140 million of its $150
million 11 3/4% Senior Subordinated Notes pursuant to a tender offer for
such Notes. The cost to extinguish the $140 million of Notes (including the
required premium) was approximately $153 million, which was financed with
borrowings under the Company's revolving credit facility. The total
extraordinary loss on debt extinguishment of $17.2 million ($14.6 million
after a tax benefit of $2.6 million) includes the $13 million premium paid
to purchase the Notes, and also includes the write-off of approximately $4
million, representing the unamortized debt-issuance costs related to the
debt.
(2) On December 22, 1996, the Company entered into an agreement to sell its
Marine Systems Group, including substantially all of the assets of that
business, to Hughes Aircraft Co. (Hughes) for $141.0 million in cash. The
sale was completed on February 28, 1997, resulting in a pre-tax gain to the
Company of approximately $27.2 million (or $17.7 million after tax), which
the Company recognized in the fourth quarter of fiscal 1997. Marine System's
results of operations through the disposal date included pre-tax income from
operations of $7.4 million (or $4.8 million after tax).
The Company's fiscal 1997 results from operations also include a one-time
charge of $17.4 million for the Company's adoption of AICPA Statement of
Position No. 96-1 (SOP 96-1) "Environmental Remediation Liabilities."
(3) Redeemable common shares represent 813,000 shares and 271,000 shares,
redeemable at prescribed prices totaling $44,979 and $14,993, as of March
31, 1998 and September 27, 1998, respectively. The shares were redeemable in
three equal lots of 271,000 shares each during each of the last three
calendar quarters of 1998. On November 5, 1998, the Company purchased the
last lot of 271,000 shares.
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<PAGE>
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following summary unaudited consolidated pro forma financial information
gives effect to the purchase of Shares pursuant to the Offer, based on the
assumptions described in the Notes to Summary Unaudited Consolidated Pro Forma
Financial Information as if such purchase had occurred on the first date of each
of the periods presented, with respect to the income statement data, and on
March 31, 1998 and September 27, 1998, with respect to the balance sheet data.
The summary unaudited pro forma consolidated financial information is presented
for illustrative purposes only, should be read in conjunction with the summary
historical consolidated financial information and does not purport to be
indicative of the results that would actually have been obtained, or results
that may be obtained in the future, or the financial condition that would have
resulted had the purchase of the Shares pursuant to the Offer been completed at
the dates indicated.
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Fiscal Year Ended March 31, 1998 Six Months Ended September 27, 1998
-------------------------------------- --------------------------------------
Pro Forma Pro Forma
INCOME STATEMENT DATA Actual Adjustments(1) Pro Forma Actual Adjustments(1) Pro Forma
--------- -------------- ----------- --------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Sales........................... $1,075,506 $1,075,506 $ 515,319 $ 515,319
Income before extraordinary
loss.......................... $ 68,183 $ (13,937)(2) $ 54,246 $ 32,469 $ (6,923)(2) $ 25,546
Extraordinary loss.............. -- -- $ (14,627) $ (14,627)
Net income...................... $ 68,183 $ (13,937) $ 54,246 $ 17,842 $ (6,923) $ 10,919
Basic earnings per common share:
Income before extraordinary
loss........................ $ 5.23 $ 5.29 $ 2.58 $ 2.60
Extraordinary loss............ -- -- (1.16) (1.49)
--------- ----------- --------- -----------
Net income.................... $ 5.23 $ 5.29 $ 1.42 $ 1.11
--------- ----------- --------- -----------
--------- ----------- --------- -----------
Diluted earnings per common
share:
Income before extraordinary
loss........................ $ 5.10 $ 5.13 $ 2.51 $ 2.52
Extraordinary loss............ -- -- (1.13) (1.44)
--------- ----------- --------- -----------
Net income.................... $ 5.10 $ 5.13 $ 1.38 $ 1.08
--------- ----------- --------- -----------
--------- ----------- --------- -----------
Number of common shares used in
computing basic net income per
common share.................. 13,048 (2,800)(3) 10,248 12,607 (2,800)(3) 9,807
Number of common shares used in
computing diluted net income
per common share.............. 13,371 (2,800)(3) 10,571 12,918 (2,800)(3) 10,118
OTHER FINANCIAL DATA
Ratio of earnings to fixed
charges....................... 3.4x 2.3x 4.4x 2.5x
<CAPTION>
As of March 31, 1998 As of September 27, 1998
-------------------------------------- --------------------------------------
Pro Forma Pro Forma
BALANCE SHEET DATA Actual Adjustments(1) Pro Forma Actual Adjustments(1) Pro Forma
--------- -------------- ----------- --------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Working capital................. $ 95,628 $ 95,628 $ 98,786 $ 98,786
Total assets.................... $ 932,180 $ 6,900(2) $ 939,080 $ 871,183 $ 8,500(2) $ 879,683
Total debt...................... $ 198,648 $ 238,600(2,3) $ 437,248 $ 208,814 $ 225,600(2,3) $ 434,414
Shareholders' equity and
redeemable common shares...... $ 265,754 $ (231,700)( ,3) $ 34,054 $ 256,445 $ (217,100)(3) $ 39,345
Book value per common share..... $ 20.67 $ 3.39 $ 20.66 $ 4.09
</TABLE>
20
<PAGE>
ALLIANT TECHSYSTEMS INC.
NOTES TO SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(1) Where applicable, the tax rate applicable to pro forma adjustments was
15% for the six-month period ended September 27, 1998, and 0% for the fiscal
year ended March 31, 1998, consistent with the rates applied in each of the
respective historical periods.
(2) The purchase of Shares pursuant to the Offer will be financed by the
Company's new bank credit facilities, as described in Section 11. These new bank
credit facilities will also refinance the Company's existing bank credit
facility. In accordance with the Commitment Letter (as defined herein) the
Company has come to agreement on all substantive terms of the new bank credit
facilities and currently expects the new bank facilities to be effective prior
to the Expiration Date. Fees and expenses associated with the refinancing are
expected to be approximately $8.5 million. For pro forma purposes, such fees and
expenses are classified in other assets and are being charged to earnings on a
straight-line basis over the term of the new bank credit facilities (6 years, or
approximately $1.4 million per year). The interest rate charged under the new
bank credit facilities is a floating rate. For pro forma purposes, the interest
rate associated with the borrowings financed under the new bank credit
facilities is assumed to be 7.85%, which approximates what the Company's current
average cost of borrowing would be under the facility. As the repurchase of the
Shares pursuant to the Offer could not have occurred under the covenants
pertaining to the Company's Senior Subordinated Notes (the "Notes") and as the
costs of repurchasing the Notes, which occurred on September 15, 1998, will be
refinanced with borrowings under the new bank credit facilities, the Company's
pro forma interest expense (part of pro forma income before extraordinary loss)
is shown net of reductions totaling approximately $1.0 million and $4.3 million
for the six months ending September 27, 1998 and the year ending March 31, 1998,
respectively, to reflect the refinancing of the costs to repurchase the Notes on
a long term basis.
(3) For pro forma purposes, it is assumed that 2,800,000 Shares are
purchased pursuant to the Offer at $77 per Share (the maximum number of shares
and highest price contemplated by the terms of the Offer) for a total Share
purchase price of approximately $216 million. There can be no assurance that the
Company will purchase 2,800,000 Shares or at what price any Shares will be
purchased. Fees and expenses associated with the purchase of Shares are
estimated to be approximately $1.5 million.
21
<PAGE>
11. SOURCE AND AMOUNT OF FUNDS.
Assuming the Company purchases 2,800,000 Shares pursuant to the Offer at a
purchase price of $77 per Share, the Company expects the maximum aggregate cost
to be approximately $216 million (excluding estimated fees and expenses). It is
anticipated that the Company will fund the purchase of Shares pursuant to the
Offer and the payment of related fees and expenses with borrowings under the
credit facilities provided for in the Amended and Restated Credit Agreement (the
"Amended and Restated Credit Agreement") and the Credit Agreement (the "New
Credit Agreement" and together with the Amended and Restated Credit Agreement,
the "Credit Agreements") each dated as of November 23, 1998 between the Company
and The Chase Manhattan Bank, as Administrative Agent ("Chase").
The Amended and Restated Credit Agreement refinanced the Company's existing
credit facility in an aggregate principal amount of $35 million. All $35 million
aggregate principal amount of loans outstanding thereunder will be repayable on
November 23, 2004. The New Credit Agreement provides for new credit facilities
which consist of: (1) a six-year term loan facility (the "Closing Date Term Loan
Facility") providing for term loans in an aggregate principal amount not to
exceed $165 million, all of which was drawn on November 23, 1998; (2) a six-year
term loan facility (the "Delayed Draw Term Loan Facility") providing for term
loans at any time and from time to time on or prior to June 30, 1999 in an
aggregate principal amount not to exceed $200 million and in minimum drawings of
at least $20 million; and (3) a six-year revolving credit facility (the
"Revolving Credit Facility") providing for revolving loans in an aggregate
principal amount at any time outstanding not to exceed $250 million. Term loans
under the Closing Date Term Loan Facility and the Delayed Draw Term Loan
Facility will be repayable beginning June 30, 1999 and December 31, 1999,
respectively, in each case, in equal quarterly installments in accordance with a
fixed amortization schedule. Revolving loans may be borrowed, repaid, and
reborrowed at any time and from time to time and will be repayable at maturity.
Up to $150 million of the Revolving Credit Facility is available for letters of
credit.
Loans under these credit facilities bear interest at floating rates based
on, at the option of the Company, an alternate base rate ("ABR") plus a margin
of 0-1.25%, depending on the Company's leverage ratio, or LIBOR (as defined
below) plus a margin of 1.25-2.50%, depending on the Company's leverage ratio,
provided that all swingline loans are required to be ABR loans. Under the Credit
Agreements, ABR is defined to be the highest of (i) Chase's New York prime rate;
(ii) the secondary market rate for three-month certificates of deposit plus 1%;
and (iii) the federal funds effective rate from time to time plus 0.5%. LIBOR is
defined to mean the average of the London interbank offered rates at which
eurodollar deposits for one, two, three or six months are offered to Chase, and
such other lenders as Chase and the Company may agree, in the interbank
eurodollar market.
The Credit Agreements provide for certain financial covenants, including a
maximum ratio of total debt to EBITDA, a minimum ratio of EBITDA to interest
expense and a minimum net worth. The Credit Agreements also contain customary
affirmative and negative covenants, including limitations with respect to
indebtedness, liens, consolidations, mergers and sales of assets, changes in
business conducted, investments and acquisitions, transactions with affiliates,
amendments of certain material agreements and instruments, restricted payments,
and customary events of default, in each case, subject to certain exceptions and
limitations. The Company is also required to pay certain commitment fees, letter
of credit fees and annual fees and to reimburse the lenders thereunder for
certain fees and expenses they incurred in making the loan. The Credit
Agreements also require prepayments and commitment reductions upon the
occurrence of certain events, including certain incurrences of indebtedness,
certain issuances of preferred stock and certain asset sales.
The obligations of the Company under the Credit Agreements are secured by a
first priority security interest in substantially all tangible and intangible
assets of the Company and its subsidiaries (subject to certain permitted liens)
and are guaranteed by each of the Company's U.S. subsidiaries.
22
<PAGE>
The availability of borrowings under the Delayed Draw Term Loan Facility and
the Revolving Credit Facility is subject to the satisfaction by the Company of
certain conditions, and the consummation of the Offer is contingent upon
sufficient borrowings being available to the Company at the time of acceptance
of and payment for tendered Shares. See Section 7.
The preceding summary of the terms of the new bank credit facilities is
qualified in its entirety by reference to the text of the Credit Agreements,
which have been filed as exhibits to the Schedule 13E-4 filed by the Company
with the Commission. A copy of the Schedule 13E-4 may be obtained from the
Commission in the manner provided in Section 17.
The Company has incurred substantial indebtedness in connection with the
Credit Agreements and, as a result, depending on the Company's borrowings, will
be highly leveraged. As of September 27, 1998, on a pro forma basis after giving
effect to the Offer and the borrowings under the Credit Agreements in connection
therewith, as if each such event had been consummated on September 27, 1998, the
Company's total indebtedness and stockholders' equity would have been
approximately $434 million and $39 million, respectively, assuming that
2,800,000 Shares are validly tendered and accepted for purchase.
The Company's high leverage could have material consequences to the Company,
including, but not limited to, the following: (i) the Company's ability to
obtain additional financing in the future for acquisitions, working capital,
capital expenditures, and general corporate or other purposes may be impaired or
any such financing may not be available on terms favorable to the Company; (ii)
a substantial portion of the Company's cash flow will be required for debt
service and, as a result, will not be available for its operations or other
purposes; (iii) a substantial decrease in net operating cash flows or an
increase in expenses could make it difficult for the Company to meet its debt
service requirements or force it to modify its operations or sell assets; (iv)
the Company's ability to withstand competitive pressures may be limited; and (v)
the Company's level of indebtedness could make it more vulnerable to economic
downturns, and reduce its flexibility in responding to changing business and
economic conditions.
The ability of the Company to meet its debt service and other obligations
(including compliance with financial covenants) will depend upon the future
performance of the Company and its cash flow from operations, which will be
subject to prevailing economic conditions and financial, business and other
factors, certain of which are beyond the Company's control. These factors could
include general economic conditions, operating difficulties, increased operating
costs, product pricing pressures, potential revenue instability arising from
cost savings initiatives or other factors, labor relations, the response of
competitors or customers to the Company's business strategy or projects and
delays in implementation of the Company's business strategy, among others.
12. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND AGREEMENTS CONCERNING
THE SHARES.
Except as described below, neither the Company, nor any subsidiary of the
Company nor, to the best of the Company's knowledge, any of the Company's
directors or executive officers, nor any affiliates of any of the foregoing, had
any transactions involving the Shares during the 40 business days prior to the
date hereof.
Except for outstanding options to purchase Shares granted from time to time
to certain employees (including executive officers) and non-employee directors
of the Company pursuant to the Company's stock option plans and performance
shares granted from time to time to certain employees (including executive
officers) pursuant to the Company's incentive compensation programs and except
as otherwise described herein, neither the Company nor, to the best of the
Company's knowledge, any of its affiliates, directors or executive officers, is
a party to any contract, arrangement, understanding or relationship with any
other person relating, directly or indirectly, to the Offer with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls,
23
<PAGE>
guaranties of loans, guaranties against loss or the giving or withholding or
proxies, consents or authorizations.
The Company has been advised that none of its directors or executive
officers intends to tender Shares in the Offer, except for Richard Schwartz, its
retired Chief Executive Officer and retiring Chairman of the Board. Mr.
Schwartz, as part of his retirement planning, intends to tender up to 100,000
Shares of the 50,493 Shares he owns beneficially and the 215,000 Shares he is
entitled to acquire pursuant to the exercise of stock options, all of which are
currently exercisable.
13. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS.
IN GENERAL. The following summary describes certain United States federal
income tax consequences relating to the Offer. The summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), and existing final,
temporary and proposed Treasury Regulations, Revenue Rulings and judicial
decisions, all of which are subject to prospective and retroactive changes. The
summary deals only with Shares held as capital assets within the meaning of
Section 1221 of the Code and does not address tax consequences that may be
relevant to investors in special tax situations, such as certain financial
institutions, tax-exempt organizations, life insurance companies, dealers in
securities or currencies, or stockholders holding the Shares as part of a
conversion transaction, as part of a hedge or hedging transaction, or as a
position in a straddle for tax purposes. The Company will not seek a ruling from
the Internal Revenue Service (the "IRS") with regard to the United States
federal income tax treatment of the Offer and, therefore, there can be no
assurance that the IRS will agree with the conclusions set forth below.
Accordingly, each stockholder should consult its own tax advisor with regard to
the Offer and the application of United States federal income tax laws, as well
as the laws of any state, local or foreign taxing jurisdiction, to its
particular situation.
CHARACTERIZATION OF THE SALE. A sale of Shares by a stockholder of the
Company pursuant to the Offer will be a taxable transaction for United States
federal income tax purposes and may also be a taxable transaction under
applicable state, local and foreign tax laws. The United States federal income
tax consequences to a stockholder may vary depending upon the stockholder's
particular facts and circumstances. Under Section 302 of the Code, a sale of
Shares by a stockholder to the Company pursuant to the Offer will be treated as
a "sale or exchange" of such Shares for United States federal income tax
purposes (rather than as a dividend distribution by the Company with respect to
the Shares held by the tendering stockholder) if the receipt of cash upon such
sale (a) is "substantially disproportionate" with respect to the stockholder,
(b) results in a "complete redemption" of the Shares owned by the stockholder,
or (c) is "not essentially equivalent to a dividend" with respect to the
stockholder (each as described below).
If any of the above three tests is satisfied, and the sale of the Shares is
therefore treated as a "sale or exchange" of such Shares for United States
federal income tax purposes, the tendering stockholder will recognize gain or
loss equal to the difference between the amount of cash received by the
stockholder pursuant to the Offer and the stockholder's tax basis in the Shares
sold pursuant to the Offer. Any such gain or loss will be capital gain or loss.
Stockholders should consult their own tax advisors concerning the tax treatment
of capital gains and losses.
If none of the above three tests is satisfied, the tendering stockholder
would be treated as having received a dividend, to the extent the Company has
earnings and profits, which would be includible in gross income in an amount
equal to the entire amount of cash received by the stockholder pursuant to the
Offer (without reduction for the tax basis of the Shares sold pursuant to the
Offer), no loss would be recognized, and the tendering stockholder's basis in
the Shares sold pursuant to the Offer would be added to such stockholder's basis
in its remaining Shares, if any. If the aggregate amounts of the cash proceeds
of the Offer which are treated as dividends exceed the earnings and profits of
the Company, the excess would not be treated as a dividend. That portion of the
distribution which is not a dividend would be applied against
24
<PAGE>
and reduce the adjusted basis of the Shares in the hands of the tendering
stockholders who received dividend treatment. The portion of the distribution
which is not a dividend, to the extent that it exceeded the adjusted basis of
the Shares, would be treated as gain from the sale or exchange of property
(capital gain).
In determining whether any of the three tests under Section 302 of the Code
is satisfied, each stockholder must take into account not only the Shares which
are actually owned by the stockholder, but also Shares which are constructively
owned by the stockholder within the meaning of Section 318 of the Code. Under
Section 318 of the Code, a stockholder may constructively own Shares actually
owned, and in some cases constructively owned, by certain related individuals or
entities and Shares which the stockholder has the right to acquire by exercise
of an option or by conversion. Each stockholder should be aware that because
proration may occur in the Offer, even if all the Shares actually and
constructively owned by a stockholder are tendered pursuant to the Offer, fewer
than all of such Shares may be purchased by the Company. Thus, proration may
affect whether a sale by a stockholder pursuant to the Offer will meet any of
the three tests under Section 302 of the Code. See Section 6 for information
regarding each stockholder's option to make a conditional tender of a minimum
number of Shares. A stockholder should consult its own tax advisor regarding
whether to make a conditional tender of a minimum number of Shares, and the
appropriate calculation thereof.
SECTION 302 TESTS. The receipt of cash by a stockholder will be
"substantially disproportionate" if the percentage of the outstanding Shares
actually and constructively owned by the stockholder immediately following the
sale of Shares pursuant to the Offer (treating as not outstanding all Shares
purchased pursuant to the Offer) is less than 80% of the percentage of the
outstanding Shares actually and constructively owned by such stockholder
immediately before the sale of Shares pursuant to the Offer (treating as
outstanding all Shares purchased pursuant to the Offer). Stockholders should
consult their tax advisors with respect to the application of the "substantially
disproportionate" test to their particular situation.
The receipt of cash by a stockholder will be a "complete redemption" of all
the Shares owned by the stockholder if either (a) all of the Shares actually and
constructively owned by the stockholder are sold pursuant to the Offer, or (b)
all of the Shares actually owned by the stockholder are sold pursuant to the
Offer and, with respect to Shares constructively owned by the stockholder which
are not sold pursuant to the Offer, the stockholder is eligible to waive (and
effectively waives) constructive ownership of all such Shares under procedures
described in Section 302(c)(2) of the Code.
Even if the receipt of cash by a stockholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, a
stockholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test, if the stockholder's sale of Shares pursuant to the Offer
results in a "meaningful reduction" in the stockholder's interest in the
Company. Whether the receipt of cash by a stockholder will be "not essentially
equivalent to a dividend" will depend upon the individual stockholder's facts
and circumstances. The IRS has indicated in published rulings that even a small
reduction in the proportionate interest of a small minority stockholder in a
publicly held corporation who exercises no control over corporate affairs may
constitute such a "meaningful reduction." The IRS held in Rev. Rul. 76-385,
1976-2 C.B. 92, that a reduction in the percentage ownership interest of a
stockholder in a publicly held corporation from .0001118% to .0001081% (a
reduction to 96.7% of the stockholder's prior percentage ownership interest)
would constitute a "meaningful reduction." Under this ruling, it is likely that
a small minority stockholder who exercises no control over the Company, and all
of whose actual and constructively owned Shares are tendered at or below the
Purchase Price, would satisfy the "not essentially equivalent to a dividend"
test notwithstanding proration in the Offer. Stockholders expecting to rely on
the "not essentially equivalent to a dividend" test should consult their own tax
advisors as to its application in their particular situation.
CORPORATE STOCKHOLDER DIVIDEND TREATMENT. Under current law, if a sale of
Shares by a corporate stockholder is treated as a dividend, the corporate
stockholder may be entitled to claim a dividends-
25
<PAGE>
received deduction under Section 243 of the Code, subject to applicable
limitations. However, it is expected that any amount received by a corporate
stockholder pursuant to the Offer that is treated as a dividend would constitute
an "extraordinary dividend" under Section 1059 of the Code. Accordingly, a
corporate stockholder would be required under Section 1059(a) of the Code to
reduce its basis (but not below zero) in its Shares by the non-taxed portion of
the dividend (i.e., the portion of the dividend for which a deduction is
allowed). If such portion exceeds the stockholder's tax basis for its Shares,
the excess will be recognized immediately as taxable gain from the sale of such
Shares in the year in which Shares are sold pursuant to the Offer. Corporate
stockholders should consult their own tax advisors as to the application of
Section 1059 of the Code to the Offer.
ADDITIONAL TAX CONSIDERATIONS. The distinction between capital gains and
ordinary income is relevant because certain individuals are subject to taxation
at reduced rates on certain capital gains. For example, a stockholder who is an
individual and has held his Shares for more than 12 months may be entitled to a
20% maximum federal tax rate for gains from the sale of these Shares.
Stockholders should consult their own tax advisors in this regard.
FOREIGN STOCKHOLDERS. The Company will withhold United States federal
income tax at a rate of 30% from gross proceeds paid pursuant to the Offer to a
foreign stockholder or his agent, unless the Company determines that a reduced
rate of withholding is applicable pursuant to a tax treaty or that an exemption
from withholding is applicable because such gross proceeds are effectively
connected with the conduct of a trade or business by the foreign stockholder
within the United States. For this purpose, a "foreign stockholder" is a person
or entity that, for United States federal income tax purposes, is a non-resident
alien individual, a foreign corporation, a foreign partnership or a foreign
estate or trust. Without definite knowledge to the contrary, the Company will
determine whether a stockholder is a foreign stockholder by reference to the
stockholder's address. A foreign stockholder may be eligible to file for a
refund of such tax or a portion of such tax if such stockholder (a) meets the
"complete redemption," "substantially disproportionate" or "not essentially
equivalent to a dividend" tests described above, (b) is entitled to a reduced
rate of withholding pursuant to a treaty and the Company withheld at a higher
rate, or (c) is otherwise able to establish that no tax or a reduced amount of
tax was due. In order to claim an exemption from withholding on the ground that
gross proceeds paid pursuant to the Offer are effectively connected with the
conduct of a trade or business by a foreign stockholder within the United States
or that the foreign stockholder is entitled to the benefits of a tax treaty, the
foreign stockholder must deliver to the Depositary (or other person who is
otherwise required to withhold United States tax) a properly executed statement
claiming such exemption or benefits. Such statements may be obtained from the
Depositary. Foreign stockholders are urged to consult their own tax advisors
regarding the application of United States federal income tax withholding,
including eligibility for a withholding tax reduction or exemption and the
refund procedures.
The Company has not determined whether or not it is or has been, during a
five-year lookback period, a United States real property holding corporation,
within the meaning of Section 897(c) of the Code. A foreign stockholder who (a)
meets the "complete redemption," "substantially disproportionate" or "not
essentially equivalent to a dividend" tests described above and (b) beneficially
owns or has owned, during a five-year lookback period, directly, indirectly or
constructively more than five percent of the Shares (a foreign stockholder who
is described in both clauses (a) and (b) of this sentence is hereafter called a
"Large Foreign Stockholder"), will be presumed, under Treasury Regulation
Section 1.897-2(g), to dispose of shares in a United States real property
holding corporation unless the Large Foreign Stockholder establishes, by methods
prescribed in the above-cited Treasury regulation, that the Shares do not
constitute a United States real property interest. A Large Foreign Stockholder
who does not rebut the presumption by the prescribed methods generally will
recognize gain or loss on the disposition of its Shares pursuant to the Offer as
if such gain or loss were effectively connected with a United States trade or
business. Large Foreign Stockholders, if any, are urged to consult their own tax
advisors regarding the particular United States federal income tax consequences
to them of a sale of Shares pursuant to the Offer.
26
<PAGE>
BACKUP WITHHOLDING. See Section 3 with respect to the application of the
United States federal income tax backup withholding.
ESPP SHARES. ESPP Shares held by participants in the Company's 1997
Employee Stock Purchase Plan (the "1997 ESPP Shares") were purchased at a price
(the "Purchase Price") equal to 85% of their fair market value at the end of the
applicable calendar quarter. This 15% discount will be referred to as the
"Bargain Amount." The difference between the amount received in the Offer and
the Purchase Price of the 1997 ESPP Shares (including the Bargain Amount) will
be referred to as the "Gain Amount."
If the 1997 ESPP Shares tendered and accepted in the Offer are not ESPP
Restricted Shares the full Gain Amount will be treated as compensation income to
the stockholder. Such income will be taxed to the stockholder at ordinary income
rates and will be subject to withholding for U.S. federal income and employment
taxes by the Company.
A holder of ESPP Shares which are not 1997 ESPP Shares will be taxed as
described under the heading "Characterization of the Sale" if any of the Section
302 tests are satisfied and as a dividend if none of the Section 302 tests are
satisfied.
401(K) PLANS. The exchange of Shares for cash by the 401(k) plans, as
instructed by participants in such plans in accordance with the terms of such
plans, will not be a taxable transaction for federal income tax purposes for
either the 401(k) plans or the participants in such plans. A subsequent
distribution in cash from a 401(k) plan to a participant normally will be
taxable in full as ordinary income to the participant.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY
AND MAY NOT APPLY TO SHARES ACQUIRED IN CONNECTION WITH THE EXERCISE OF STOCK
OPTIONS OR PURSUANT TO OTHER COMPENSATION ARRANGEMENTS WITH THE COMPANY. THE TAX
CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING UPON, AMONG
OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE TENDERING STOCKHOLDER. NO
INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES MADE BY THEM PURSUANT TO THE
OFFER AND THE EFFECT OF THE STOCK OWNERSHIP ATTRIBUTION RULES MENTIONED ABOVE.
14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit that it
believes is material to the Company's business that might be adversely affected
by the Company's acquisition of Shares as contemplated herein or of any approval
or other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by the Company as contemplated herein. Should
any such approval or other action be required, the Company presently
contemplates that such approval or other action will be sought. The Company is
unable to predict whether it will be required to delay the acceptance for
payment of, or payment for, Shares tendered pursuant to the Offer pending the
outcome of any such matter. There can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that the failure to obtain any such approval or other
action might not result in adverse consequences to the Company's business. The
Company's obligations under the Offer to accept for payment and pay for Shares
are subject to certain conditions. See Section 7.
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.
The Company expressly reserves the right, in its sole discretion and at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such
27
<PAGE>
extension to the Depositary. There can be no assurance, however, that the
Company will exercise its right to extend the Offer. During any such extension,
all Shares previously tendered will remain subject to the Offer, except to the
extent that such Shares may be withdrawn as set forth in Section 4. The Company
also expressly reserves the right, in its sole discretion, (a) to terminate the
Offer and not accept for payment any Shares not theretofore accepted for payment
or, subject to Rule 13-4(f)(5) under the Exchange Act , which requires the
Company either to pay the consideration offered or to return the Shares tendered
promptly after the termination or withdrawal of the Offer, to postpone payment
for Shares upon the occurrence of any of the conditions specified in Section 7
hereof by giving oral or written notice of such termination to the Depositary
and making a public announcement thereof and (b) at any time or from time to
time amend the Offer in any respect. Amendments to the Offer may be effected by
public announcement. Without limiting the manner in which the Company may choose
to make public announcement of any termination or amendment, the Company shall
have no obligation (except as otherwise required by applicable law) to publish,
advertise or otherwise communicate any such public announcement, other than by
making a release to the Dow Jones News Service, except in the case of an
announcement of an extension of the Offer, in which case the Company shall have
no obligation to publish, advertise or otherwise communicate such announcement
other than by issuing a notice of such extension by press release or other
public announcement, which notice shall be issued no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Material changes to information previously provided to holders
of the Shares in this Offer or in documents furnished subsequent thereto will be
disseminated to holders of Shares in compliance with Rule 13e-4(e)(2)
promulgated by the Commission under the Exchange Act.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) under the Exchange Act. Those rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer (other than a change in price,
change in dealer's soliciting fee or change in percentage of securities sought)
will depend on the facts and circumstances, including the relative materiality
of such terms or information. In a published release, the Commission has stated
that in its view, an offer should remain open for a minimum of five business
days from the date that notice of such a material change is first published,
sent or given. The Offer will continue or be extended for at least ten business
days from the time the Company publishes, sends or gives to holders of Shares a
notice that it will (a) increase or decrease the price it will pay for Shares or
the amount of the Dealer Manager's soliciting fee or (b) increase (except for an
increase not exceeding 2% of the outstanding Shares) or decrease the number of
Shares it seeks.
16. FEES AND EXPENSES.
Morgan Stanley & Co. Incorporated has been retained by the Company to act as
Dealer Manager in connection with the Offer. The Company has agreed to pay the
Dealer Manager, upon acceptance for payment of Shares pursuant to the Offer, a
fee of $900,000. The Company has also agreed to reimburse the Dealer Manager for
its reasonable out-of-pocket expenses and to indemnify the Dealer Manager
against certain liabilities and expenses, including liabilities under the
federal securities laws, in connection with the Offer.
The Dealer Manager has rendered, is currently rendering and is expected to
continue to render various investment banking and other advisory services to the
Company. It has received, and will continue to receive, customary compensation
from the Company for such services.
The Company has retained ChaseMellon Shareholder Services, L.L.C., as
Depositary, and MacKenzie Partners, Inc., as Information Agent, in connection
with the Offer. The Information Agent may contact stockholders by mail,
telephone, telex, telegraph and personal interviews, and may request brokers,
dealers and other nominee stockholders to forward materials relating to the
Offer to beneficial owners. The
28
<PAGE>
Depositary and the Information Agent will receive reasonable and customary
compensation for their services and will also be reimbursed for certain
out-of-pocket expenses. The Company has agreed to indemnify the Depositary and
the Information Agent against certain liabilities, including certain liabilities
under the federal securities laws, in connection with the Offer.
The Company retained Fidelity Management Trust Company to act as trustee for
its 401(k) plans and Piper Jaffray Inc. to act as administrator for its employee
stock purchase plans. In connection with the Offer, the 401(k) Trustee and the
ESPP Administrator may contact participants in such plans by mail, telephone,
telex, telegraph and personal interviews. Pursuant to its arrangements with the
Company to act as trustee for the Company's 401(k) plans or administrator for
the Company's Employee Stock Purchase Plan, as the case may be, the 401(k)
Trustee and the ESPP Administrator each receives reasonable and customary
compensation for its services and each is reimbursed for certain out-of-pocket
expenses. Under those arrangements, no separate fee is payable to the 401(k)
Trustee or the ESPP Administrator in connection with the Offer. However, the
401(k) Trustee has retained its own tabulation agent for purposes of tenders of
401(k) Plan Shares. This tabulation agent will receive reasonable and customary
compensation for its services in connection with the Offer and will also be
reimbursed for certain out-of-pocket expenses.
None of the Information Agent, the Depositary, the 401(k) Trustee or the
ESPP Administrator has been retained to make solicitations or recommendations in
connection with the Offer.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other than
the fee of the Dealer Manager). However, a tendering stockholder who holds
Shares through a broker or bank, including a discount broker, may be required by
such institution to pay a service fee or other charge. The Company will, upon
request, reimburse brokers, dealers, commercial banks and trust companies for
reasonable and customary handling and mailing expenses incurred by them in
forwarding materials relating to the Offer to their customers.
17. ADDITIONAL INFORMATION.
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, files with the Commission periodic
reports, proxy statements and other information relating to its business,
financial condition and other matters. The Company is required to disclose in
such reports certain information, as of particular dates, concerning its
operating results and financial condition, officers and directors, principal
holders of securities, any material interests of such persons in transactions
with the Company and other matters. These reports and other informational
filings required by the Exchange Act are available for inspection at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W. Washington, D.C. 20549 and also are available for
inspection and copying at the regional offices of the commission located at
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60611 and 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material may
be obtained by mail, upon payment of the Commission's customary fees, from the
Commission's principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission's Web site address,
http://www.sec.gov. Information regarding the Company may also be obtained at
the offices of The New York Stock Exchange, 20 Broad Street, New York, NY 10005.
The Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1998 (File No. 1-10582), the Company's Quarterly Reports on Form 10-Q for the
quarterly periods ended June 28, 1998 and September 27, 1998 and all reports and
other documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Offer to Purchase and on or prior to the termination of the Offer shall be
deemed incorporated herein by reference. Any statement contained herein or in a
document or report incorporated or deemed to be
29
<PAGE>
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Offer to Purchase to the extent that a statement contained
herein or in any subsequently filed document or report that also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Offer to Purchase.
The information related to the Company contained in this Offer to Purchase
should be read in conjunction with the information contained in the documents
incorporated by reference.
The Company will provide without charge to each person to whom a copy of
this Offer to Purchase is delivered, upon the written or oral request of any
such person, a copy of any or all of the documents incorporated herein by
reference, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Alliant Techsystems Inc., 600 Second Street N.E., Hopkins, Minnesota
55343-8384, Attention: Investor Relations (telephone: (612) 931-6080). In order
to ensure timely delivery of the documents prior to the Expiration Date, any
such requests should be made by December 1, 1998.
This Offer to Purchase constitutes part of an Issuer Tender Offer Statement
on Schedule 13E-4 (as amended, the "Schedule 13E-4") filed with the Commission
by the Company pursuant to Section 13 of the Exchange Act and the rules and
regulations promulgated thereunder. The Schedule 13E-4 and all exhibits thereto
are incorporated by reference into this Offer to Purchase.
18. MISCELLANEOUS.
The Offer is not being made to (nor will any tender of Shares be accepted
from or on behalf of) holders in any jurisdiction in which the making of the
Offer or the acceptance of any tender of Shares therein would not be in
compliance with the laws of such jurisdiction. However, the Company may, at its
discretion, take such action as it may deem necessary for the Company to make
the offer in any such jurisdiction and extend the Offer to holders in such
jurisdiction. In any jurisdiction the securities or blue sky laws of which
require the Offer to be made by a licensed broker or dealer, the Offer is being
made on behalf of the Company by the Dealer Manager or one or more registered
brokers or dealers which are licensed under the laws of such jurisdiction.
ALLIANT TECHSYSTEMS INC.
November 6, 1998
30
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted from Eligible
Institutions. The Letter of Transmittal and certificates for Shares and any
other required documents should be sent or delivered by each tendering person or
his broker, dealer, commercial bank, trust company or nominee to the Depository
at the address set forth below.
The Depositary is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<CAPTION>
BY REGISTERED MAIL: BY HAND BY OVERNIGHT COURIER:
<S> <C> <C>
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
P.O. Box 3301 120 Broadway, 13th Floor 85 Challenger Road
South Hackensack, New York, New York 10271 Mail Drop--Reorg
New Jersey 07606 Attn: Reorganization Department Ridgefield Park,
Attn: Reorganization Department New Jersey 07660
Attn: Reorganization Department
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(201) 296-4293
CONFIRM RECEIPT OF FACSIMILE BY TELEPHONE:
(201) 296-4860
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
address set forth below. You may also contact the Dealer Manager or your broker,
dealer, commercial bank or trust company for assistance concerning this Offer.
To confirm the delivery of your Shares, you are directed to contact the
Depositary.
The Information Agent is:
[LOGO]
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 (collect)
(800) 322-2885 (toll-free)
The Dealer Manager is:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-5722 (collect)
(800) 223-2440 ext. 5722 (toll-free)
<PAGE>
Exhibit 9.(b)(2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
November 23, 1998
among
ALLIANT TECHSYSTEMS INC.
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
---------------------------
CHASE SECURITIES INC.
as Lead Arranger and Book Manager
BANK OF AMERICA NT&SA
as Syndication Agent
CREDIT LYONNAIS CHICAGO BRANCH
as Documentation Agent
and
BANK OF AMERICA NT&SA,
CREDIT LYONNAIS CHICAGO BRANCH,
THE BANK OF NEW YORK
as Co-Arrangers
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
-----------
<S> <C> <C>
SECTION 1.01. Defined Terms......................................................... 1
SECTION 1.02. Classification of Loans and
Borrowings.......................................................... 23
SECTION 1.03. Terms Generally ...................................................... 23
SECTION 1.04. Accounting Terms; GAAP................................................ 24
ARTICLE II
The Credits
-----------
SECTION 2.01. Loans and Borrowings.................................................. 24
SECTION 2.02. [Intentionally Omitted]............................................... 24
SECTION 2.03. Interest Elections.................................................... 24
SECTION 2.04. Repayment of Loans; Evidence of Debt.................................. 26
SECTION 2.05. Prepayment of Loans................................................... 27
SECTION 2.06. Fees.................................................................. 29
SECTION 2.07. Interest.............................................................. 29
SECTION 2.08. Alternate Rate of Interest............................................ 30
SECTION 2.09. Increased Costs....................................................... 31
SECTION 2.10. Break Funding Payments................................................ 32
SECTION 2.11. Withholding Tax Exemption; Other Taxes................................ 33
SECTION 2.12. Payments Generally; Pro Rata Treatment;
Sharing of Set-Offs................................................. 34
SECTION 2.13. Mitigation Obligations; Replacement
of Lenders.......................................................... 36
SECTION 2.14. Obligations Constitute Designated
Senior Indebtedness................................................. 37
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Corporate Existence and Power......................................... 37
SECTION 3.02. Corporate and Governmental
Authorization; No Contravention..................................... 38
SECTION 3.03. Binding Effect........................................................ 38
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 3.04. Financial Information................................................. 38
SECTION 3.05. Litigation and ERISA.................................................. 39
SECTION 3.06. Compliance with ERISA................................................. 39
SECTION 3.07. Environmental Matters................................................. 40
SECTION 3.08. Taxes................................................................. 40
SECTION 3.09. Subsidiaries.......................................................... 40
SECTION 3.10. Not an Investment Company............................................. 40
SECTION 3.11. Full Disclosure....................................................... 41
SECTION 3.12 Compliance with Laws.................................................. 41
SECTION 3.13. Solvency.............................................................. 41
SECTION 3.14. Senior Indebtedness................................................... 42
SECTION 3.15. Year 2000............................................................. 42
ARTICLE IV
Conditions
----------
SECTION 4.01. Closing Date.......................................................... 43
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other
Information......................................................... 46
SECTION 5.02. Payment of Obligations................................................ 49
SECTION 5.03. Maintenance of Property; Insurance.................................... 51
SECTION 5.04. Conduct of Business and Maintenance
of Existence........................................................ 51
SECTION 5.05. Compliance with Laws.................................................. 52
SECTION 5.06. Inspection of Property, Books
and Records......................................................... 52
SECTION 5.07. Use of Proceeds and Letters of Credit 52
SECTION 5.08. Additional Subsidiaries............................................... 53
SECTION 5.09. Further Assurances.................................................... 53
SECTION 5.10. Maintenance of Collateral;
Alterations......................................................... 53
ARTICLE VI
Negative Covenants
SECTION 6.01. Limitation on Subsidiary Debt......................................... 54
SECTION 6.02. Negative Pledge....................................................... 55
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 6.03. Consolidations; Mergers and Sales
of Assets........................................................... 58
SECTION 6.04. Investments in Subsidiaries........................................... 59
SECTION 6.05 Transactions with Affiliates.......................................... 60
SECTION 6.06. Constitutional Documents.............................................. 61
SECTION 6.07. Waivers and Amendments of Related
Documents........................................................... 61
SECTION 6.08. Restricted Payments................................................... 61
SECTION 6.09. Foreign Subsidiaries.................................................. 61
SECTION 6.10. Minimum Consolidated Net Worth........................................ 62
SECTION 6.11. Leverage Ratio........................................................ 62
SECTION 6.12. Interest Coverage..................................................... 62
SECTION 6.13. Outside Letters of Credit............................................. 62
SECTION 6.14. Designated Senior Debt................................................ 63
SECTION 6.15. Derivatives Obligations............................................... 64
SECTION 6.16. Additional Debt Incurrence............................................
64
ARTICLE VII
Events of Default............................................... 64
-----------------
ARTICLE VIII
The Administrative Agent............................................ 68
------------------------
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices............................................................... 71
SECTION 9.02. Waivers; Amendments................................................... 71
SECTION 9.03. Expenses; Indemnity; Damage Waiver.................................... 73
SECTION 9.04. Successors and Assigns................................................ 74
SECTION 9.05. Survival.............................................................. 78
SECTION 9.06. Counterparts; Integration;
Effectiveness....................................................... 78
SECTION 9.07. Severability.......................................................... 79
SECTION 9.08. Right of Setoff....................................................... 79
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process............................................... 79
SECTION 9.10. WAIVER OF JURY TRIAL.................................................. 80
SECTION 9.11. Headings.............................................................. 81
SECTION 9.12. Confidentiality....................................................... 81
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 9.13. Interest Rate Limitation.............................................. 81
SECTION 9.14. Information Concerning Foreign Persons................................ 82
</TABLE>
SCHEDULES:
- ----------
Schedule 2.01 -- Loans
Schedule 5.03 -- Insurance
Schedule 5.10 -- Mortgaged Property
Schedule 6.02 -- Existing Liens
EXHIBITS:
- ---------
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Perfection Certificate
Exhibit C -- Form of Pledge Agreement
Exhibit D -- Form of Security Agreement
Exhibit E -- Form of Subsidiary Guaranty Agreement
Exhibit F-1 -- Form of Opinion of Jones, Day, Reavis & Pogue
Exhibit F-2 -- Form of Opinion of Daryl L. Zimmer
Exhibit F-3 -- Form of Opinion of Local Counsel to the Borrower
Exhibit G -- New Credit Agreement
Exhibit H -- Solvency Certificate
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT dated as of November
23, 1998, amending, restating and continuing the Credit Agreement
(the "Existing Credit Agreement") dated as of March 15, 1995, as
amended and restated as of November 14, 1996, among ALLIANT
TECHSYSTEMS INC., the LENDERS party hereto, and THE CHASE
MANHATTAN BANK, as Administrative Agent.
The parties wish, upon satisfaction of the conditions set forth in
Section 4.01 hereof, to amend and restate the Existing Credit Agreement as set
forth herein; provided that in no event shall such amendment and restatement be
deemed to extinguish or constitute a novation of the obligations under the
Existing Credit Agreement and the Existing Credit Agreement shall continue in
full force and effect as amended and restated as herein provided.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Abandoned Subsidiary" means any Subsidiary of any Loan Party (a) (i)
as to which a determination shall have been made in accordance with Section 5.04
to terminate its corporate existence and (ii) the fair market value of the
assets of which, prior to such termination, shall not exceed $5,000,000 or (b)
the assets of which consist solely of surplus, discontinued or worn-out
equipment or other assets (including leasehold interests) no longer used in the
on-going business of the Borrower and the Subsidiaries.
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acquisition Documents" means the Hercules Purchase Agreement and all
agreements, documents and instruments executed and delivered pursuant thereto or
in
<PAGE>
connection with the foregoing, each as amended from time to time in accordance
with the terms hereof and thereof.
"Acquired Indebtedness" means any Indebtedness (i) of any Subsidiary
existing at the time of acquisition of such Subsidiary or (ii) assumed by a
Subsidiary in connection with the acquisition of assets, or the business of
another Person, whether by purchase, merger, consolidation or otherwise, in each
case in clause (i) or (ii) above, which Indebtedness is not incurred by the
selling, transferring, merging or consolidating Person in contemplation of such
acquisition, purchase, merger, consolidation or other event.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity
as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent, duly completed by each Lender
and submitted to the Administrative Agent (with a copy to the Borrower).
"Affiliate" means, with respect to any Person, (i) any Person that
directly, or indirectly through one or more intermediaries, controls such former
Person (a "Controlling Person") and (ii) any Person (other than a Subsidiary of
such former Person) which is controlled by or is under common control with a
Controlling Person; provided that, no officer or director of a Person, who is
not otherwise an Affiliate of such Person, will be considered an Affiliate of
such Person solely because of their position as an officer or director of such
Person. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. For purposes of Section 6.05, "Affiliate" shall include
any person that, by itself or as a member of a group of persons (in each case
within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934,
as amended), other than any employee
2
<PAGE>
benefit plan (including any stock ownership plan (including 401K plans,
restricted stock plans, employee stock purchase plans, performance sharing
planing and incentive plans)) maintained for the benefit of the employees of the
Borrower, owns 10% or more of the outstanding shares of common stock of the
Borrower (including any Affiliates of such person).
"Aggregate Net Investment in Unrestricted Subsidiaries" means, at any
date of determination, the excess of (x) all Investments (valued at the fair
market value of the consideration paid or given in respect of such Investments)
after the Closing Date by the Borrower or any Subsidiary in all Unrestricted
Subsidiaries (including all designations of a Subsidiary as an Unrestricted
Subsidiary, which shall be deemed to constitute an Investment in an amount equal
to the shareholders equity in such Subsidiary at the time of such designation)
over (y) the sum, without duplication, of (i) net proceeds of the disposition of
the Equity Interests and other Investments in Unrestricted Subsidiaries received
by the Borrower or any Subsidiary, plus (ii) principal payments and returns of
capital received on or in respect of Investments in Unrestricted Subsidiaries by
the Borrower or any Subsidiary, in each case since the Closing Date.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Rate" means, for any day, with respect to any Loan the
applicable rate per annum set forth below under the caption "ABR Spread" or
"Eurodollar Spread", as the case may be, based upon the Leverage Ratio as of the
most recent determination date; provided that until June 30, 1999, or, if later,
the date on which the financial statements with respect to the Borrower's fiscal
quarter ended March 31, 1999, have been delivered, the "Applicable Rate" shall
be the applicable rate per annum set forth below in Category 5:
3
<PAGE>
<TABLE>
<CAPTION>
ABR Eurodollar
Leverage Ratio: Spread Spread
--------------- ------ ------
<S> <C> <C>
Category 1
----------
Less Than 1.5 0 1.25
Category 2
----------
Greater Than or equal to
1.5 but Less Than 2.0 0.25 1.50
Category 3
----------
Greater Than or equal to
2.0 but Less Than 2.5 0.50 1.75
Category 4
----------
Greater Than or equal to
2.5 but Less Than 3.0 0.75 2.00
Category 5
----------
Greater Than or equal to
3.0 but Less Than 3.5 1.00 2.25
Category 6
----------
Greater Than or equal to 3.5 1.25 2.50
</TABLE>
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower's fiscal year
based upon the Borrower's consolidated financial statements delivered pursuant
to Section 5.01(a) or (b) and (ii) each change in the Applicable Rate resulting
from a change in the Leverage Ratio shall be effective during the period
commencing on and including the third Business Day after the date of delivery to
the Administrative Agent of such consolidated financial statements indicating
such change and ending on the date immediately preceding the effective date of
the next such change; provided that the Leverage Ratio shall be deemed to be in
Category 6 (A) at any time that an Event of Default has occurred and is
continuing or (B) at the option of the Agent or at the request of the Required
Lenders if the Borrower fails to deliver the consolidated financial statements
required to be delivered by it pursuant to Section 5.01(a) or (b), during the
period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.
At any time that the rating assigned to the Borrower's senior
unsecured, non-credit-enhanced long-term indebtedness for borrowed money by each
of S&P and Moody's is lower than the respective rating assigned thereto by such
rating agency on September 30, 1998, each ABR Spread and Eurodollar Spread
specified on the chart above shall be increased by 0.25.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the
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Federal Deposit Insurance Corporation for insurance by such Corporation of time
deposits made in dollars at the offices of such member in the United States;
provided that if, as a result of any change in any law, rule or regulation, it
is no longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the
Administrative Agent to be representative of the cost of such insurance to the
Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means Alliant Techsystems Inc., a Delaware corporation and
its successors permitted under Section 5.04 or 6.03.
"Borrowing" means Loans of the same Type, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
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"Capital Lease" means a lease that would be capitalized on a balance
sheet of the lessee prepared in accordance with GAAP.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.09(b), by any lending office of such Lender making or
maintaining Loans or by such Lender's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Closing Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Consolidated EBITDA" means, for any fiscal period, Consolidated Net
Income for such period plus, to the extent deducted in determining Consolidated
Net Income for such period (i) the aggregate amount of Consolidated Interest
Charges, income tax expense, depreciation, amortization and other similar
non-cash charges and (ii) the net effect of the aggregate amount of charges (not
to exceed $20,000,000) attributable to early extinguishment of up to
$150,000,000 aggregate stated principal amount of Subordinated Notes (including
premium over par value plus unamortized debt issuance costs).
"Consolidated Interest Charges" means for any period the aggregate
interest charges incurred by the Borrower and its Consolidated Subsidiaries for
such period, whether expensed or capitalized, including (a) the portion of any
obligation under Capital Leases allocable to interest expense in accordance with
GAAP and (b) the portion of any debt discount (but not expenses of issuance)
that shall be amortized in such period.
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"Consolidated Net Income" means for any period the consolidated net
income of the Borrower and its Consolidated Subsidiaries for such period.
"Consolidated Net Worth" means at any date the sum of consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries plus the
amount (if any) deducted in determining such consolidated stockholders' equity
as a result of the aggregate gross payments made by the Borrower to effect the
Stock Buyback.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"Constitutional Documents" in relation to any corporate Person means
the Certificate of Incorporation and By-Laws or other constitutional documents
of such corporate Person.
"Default" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Demil Assets" means, collectively, all the assets of the Borrower and
the Subsidiaries that are located in either the Ukraine or Belarus prior to the
Closing Date and are used or useful in the treatment, dismantling, and disposal
of non-nuclear and non-biological weapons and the components and by-products
thereof and any Investment made prior to the Closing Date of the Borrower or any
Subsidiary in any Joint Venture or other Person that has controlled or owned
such assets, and any recovery in respect of insurance proceeds or otherwise of,
or in respect of, any of the foregoing.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect
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to any of the foregoing transactions) or any combination of the foregoing
transactions.
"dollars" or "$" refers to lawful money of the United States of
America.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"Environmental Liabilities" means any and all liabilities of or
related to the Borrower and its Subsidiaries, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to Environmental Laws.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"Equity Issuance" means any sale or issuance by the Borrower of its
capital stock other than (i) any Preference Stock to the extent of the Maturing
Amounts thereof, (ii) capital stock issued pursuant to employee stock options or
director stock options issued by the Borrower in the ordinary course of
business, or in connection with employee benefit plans (including stock
ownership plans (including 401K plans, restricted stock plans, employee stock
purchase plans, performance sharing plans and incentive plans)) and (iii)
capital stock issued as consideration for the acquisition of operating assets or
business operations of any Person (whether through an acquisition of stock or
assets).
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Final Maturity Date" means the sixth anniversary of the Closing Date.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Financing Transactions" means the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, including
the execution as of the Closing Date of the New Credit Agreement, the borrowing
of loans thereunder on the Closing Date, the use of the proceeds thereof and the
issuance of letters of credit thereunder, and the payment of related fees and
expenses.
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"Fiscal Year" means a fiscal year of the Borrower, and "Fiscal
Year"for any particular year means the fiscal year of the Borrower ended or
ending during the specified calendar year (for example, "Fiscal Year 1998" means
the fiscal year of the Borrower ending on March 31, 1998).
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Person" means (a) any government (a "Foreign Government")
other than the United States government or the government of any political
subdivision thereof, (b) any agency of a Foreign Government, (c) any form of
business enterprise organized under the laws of any country other than the
United States or its possessions or any political subdivision thereof or (d) any
form of business enterprise owned or controlled by any of the persons described
in clauses (a), (b) or (c).
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia. The Borrower will promptly notify the
Administrative Agent if any additional Foreign Subsidiaries are formed or
acquired after the Closing Date.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment
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of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hercules Purchase Agreement" means the Purchase and Sale Agreement
dated as of October 28, 1994 between the Borrower and Hercules Incorporated,
including the exhibits and schedules thereto, as amended from time to time in
accordance with the terms hereof and thereof.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with GAAP, (v) all Indebtedness of others secured by a
Lien on any asset of such Person, whether or not such Indebtedness is assumed by
such Person (to the extent of the lesser of the amount of such Indebtedness and
the book value of any assets subject to such Lien), (vi) all non-contingent
obligations (and, for purposes of Section 6.02 and the definitions of Material
Indebtedness and Material Financial Obligations, all contingent obligations) of
such Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (vii) to the extent of any
Maturing Amount thereof, any Preference Stock, and (viii) all Indebtedness of
others Guaranteed by such Person (to the extent of the lesser of the amount of
such Indebtedness Guaranteed or the amount of such Guarantee).
"Information Memorandum" means the Confidential Information Memorandum
dated October 1998 relating to the Borrower and the Transactions.
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<PAGE>
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes of this definition only, the date of
a Borrowing shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise, except,
in the case of the Borrower, for any investment to the extent made utilizing
common stock of the Borrower.
"Joint Venture" means at any time (i) any corporation of which not
less than 20% nor more than 50% of each class of capital stock having ordinary
voting power to elect the board of directors of such corporation or other
persons performing similar functions are at the time directly or indirectly
owned by the Borrower and (ii) any partnership, association or joint venture not
less than 20%
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nor more than 50% of the Equity Interests of which are at the time directly or
indirectly owned by the Borrower, but excluding in any event any Subsidiary of
the Borrower.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto in accordance with Section 9.04 and
pursuant to an Assignment and Acceptance, other than any such Person that ceases
to be a party hereto pursuant to an Assignment and Acceptance.
"Leverage Ratio" means, as of any date, the ratio of (i) consolidated
Indebtedness of the Borrower and its Consolidated Subsidiaries on such date to
(ii) Consolidated EBITDA for the four consecutive fiscal quarters ending on or
most recently prior to such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the average (rounded upwards, if necessary, to the next 1/100
of %) of the respective rates per annum at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered to the
principal London offices of the Reference Lenders in immediately available funds
in the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period. If any
Reference Lender does not furnish a timely quotation, the Administrative Agent
shall determine the relevant rate on the basis of the quotation or quotations
furnished by the remaining Reference Lender or Reference Lenders. In the event
that no timely quotation is available from any of the Reference Lenders at such
time for any reason, then the "LIBO Rate" with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate appearing on Page 3750 of
the Telerate Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or
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encumbrance of any kind in respect of such asset. For the purposes of this
Agreement, a Loan Party or any Subsidiary of a Loan Party shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan Documents" means this Agreement, the New Credit Agreement and
the Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
"Loans" means the loans assumed by the Lenders pursuant to this
Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan Document or (c) the
rights of or benefits available to the Lenders under any Loan Document.
"Material Financial Obligations" means a principal or face amount of
Indebtedness and/or payment obligations in respect of Derivatives Obligations of
the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, exceeding in the aggregate $10,000,000.
"Material Indebtedness" means Indebtedness (other than the
Indebtedness under the Loan Documents) of the Borrower and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate principal or face amount exceeding $10,000,000.
"Material Plan" means a Plan or Plans having aggregate Unfunded
Liabilities in excess of $5,000,000.
"Maturing Amount" means, with respect to any Preference Stock, an
amount equal to the lesser of (i) the aggregate amount of cash proceeds received
by the issuer of such Preference Stock from or in respect of such Preference
Stock less any expenses reasonably incurred by such Person in respect of such
Preference Stock and (ii) the aggregate amount of Preference Stock thereby
issued that will or may
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become due before the Final Maturity Date as a result of any scheduled maturity,
amortization or mandatory redemption or any right on the part of any holder
thereof to require any repayment or prepayment of any portion thereof.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations or any part thereof. Each Mortgage
shall be satisfactory in form and substance to the Administrative Agent.
"Mortgaged Property" means, initially, each parcel of real property
and the improvements thereto owned by a Loan Party and identified on Schedule
6.09, and includes each other parcel of real property and improvements thereto
with respect to which a Mortgage is granted pursuant to Section 5.08 or 5.09.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) or statutory or other obligations secured by or
subject to any Lien on such asset or otherwise subject to mandatory prepayment
(or other application of such
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<PAGE>
proceeds) as a result of such event, whether pursuant to any contractual
obligation, law, rule or regulation and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Borrower and the Subsidiaries, and
the amount of any reserves established by the Borrower and the Subsidiaries to
fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by the treasurer or chief financial officer of the Borrower).
"New Credit Agreement" means the Borrower's Credit Agreement dated as
of November 23, 1998.
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Original Closing Date" means March 15, 1995.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document (but excluding
in any event income taxes, taxes determined by reference to income, franchise
taxes, branch profits taxes, withholding taxes and other similar taxes).
"Parent" means, with respect to any Lender, any Person as to which
such Lender is a subsidiary.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Perfection Certificate" means a certificate in the form of Exhibit B
or any other form approved by the Administrative Agent.
"Permitted Lines of Business" means the business of
government-owned contractor-operated facilities management or research and
development for, or the development, manufacture, acquisition and distribution,
sale, treatment, dismantling and disposal of, and other businesses related to,
non-nuclear and non-biological weapons, defense, aerospace, navigation, control
and marine systems, and providing insurance or self-insurance coverage
16
<PAGE>
for, or liability management or sales or marketing services and activities with
respect to, the foregoing (including that described in Part I, Item 1 of the
Borrower's Form 10-K for the Fiscal Year ended March 31, 1998).
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means at any time an employee pension benefit plan as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Pledge Agreement" means the Pledge Agreement among the Borrower, the
Subsidiary Loan Parties and the Administrative Agent, substantially in the form
of Exhibit C.
"Preference Stock" means, with respect to any issuer, an Equity
Interest in such issuer which under the Constitutional Documents of such issuer
is entitled to a preference over any other Equity Interest in such issuer as to
payment of dividends and/or distributions upon the voluntary or involuntary
liquidation of such issuer.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of the Borrower or
any Subsidiary (other than dispositions described in clauses (i)-(ix) of
Section 6.03(b)); provided that no sale, transfer, or other disposition made
in any fiscal year and subject to this paragraph (a) shall constitute
a "Prepayment Event" until the aggregate Net Proceeds from all such sales,
transfers and other dispositions not otherwise applied in accordance with
Section 2.05(b) in respect of Net Proceeds received in respect of sales,
transfers and other dispositions
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during such fiscal year exceeds $5,000,000 (the amount of the first
prepayment after exceeding $5,000,000 being equal to the aggregate Net
Proceeds received from all such sales, transfers and dispositions during
such fiscal year) and thereafter in such fiscal year no such sale, transfer
or other disposition shall constitute a "Prepayment Event" until the
aggregate Net Proceeds therefrom not otherwise applied in accordance with
Section 2.05(b) in respect of Net Proceeds received in respect of sales,
transfers and other dispositions during such fiscal year exceeds $500,000
(the amount of each subsequent prepayment being equal to the aggregate of
such Net Proceeds not previously applied in accordance with Section 2.05(b)
in respect of Net Proceeds received in respect of sales, transfers and other
dispositions during such fiscal year); or
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or assets, but only to the extent that an amount equal to the
amount of the Net Proceeds therefrom has not been applied to repair, restore
or replace such property or assets, or to acquire other property or assets
as contemplated in Section 2.05(b), within 270 days after such event; or
(c) the incurrence by the Borrower of any Indebtedness of the type
referred to in clauses (i) or (ii) of the definition of "Indebtedness" or to
the extent of any Maturing Amount thereof, the issuance by the Borrower of
any Preference Stock, other than
(i) Indebtedness under the Loan Documents,
(ii) up to $11,000,000 of Subordinated Indebtedness the proceeds
of which are applied to repay principal, interest or premium in
respect of the Subordinated Notes,
(iii) Indebtedness incurred or assumed for the purpose of
financing all or part of the costs (including purchase or
construction costs, design, engineering, transportation,
installation, testing and analogous costs, and all related
professional costs and expenses) of acquiring, constructing or
improving assets or services; provided that such Indebtedness is
incurred no later than 180 days
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after such acquisition or completion of such construction or
improvement, and
(iv) Acquired Indebtedness.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Reference Lenders" means the principal London offices of The Chase
Manhattan Bank and any other Lenders agreed to by the Borrower and the
Administrative Agent.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders and lenders under the
New Credit Agreement, voting as a single class, representing at least 50.01% of
the sum of (a) the aggregate principal amount of outstanding Loans and (b) the
total Revolving Exposures (as defined in the New Credit Agreement), outstanding
Term Loans (as defined in the New Credit Agreement) and unused Commitments (as
defined in the New Credit Agreement).
"Responsible Officers" means the chief executive officer,
chief financial officer, president, treasurer, controller, secretary and any
executive or senior vice president of the Borrower.
"Restricted Payment" means (i) any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or (ii) any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Equity Interests in the Borrower or any
Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in the Borrower or any Subsidiary.
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"Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by a Loan Party or any Subsidiary of a Loan Party of
any property that, or of any property similar to and used for substantially the
same purposes as any other property that, has been or is to be sold, assigned,
transferred or otherwise disposed of by a Loan Party or any of its Subsidiaries
to such Person with the intention of entering into such a lease.
"S&P" means Standard & Poor's.
"Security Agreement" means the Security Agreement among the Borrower,
the Subsidiary Loan Parties and the Administrative Agent, substantially in the
form of Exhibit D.
"Security Documents" means the Pledge Agreement, the Security
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.08 or 5.09 to secure
any of the Obligations.
"September 1998 10-Q" means the Borrower's report on Form 10-Q for the
period ended September 27, 1998, as filed with the Securities and Exchange
Commission.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
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"Stock Buyback" means the repurchase by the Borrower of up to
3,000,000 shares of its common stock (such number to be adjusted to give effect
to stock splits, stock dividends and analogous events occurring after the
Closing Date) at an aggregate purchase price not in excess of $220,000,000 plus
the payment of related fees and expenses.
"Subordinated Indebtedness" means Indebtedness of the Borrower
subordinated to the payment of the Loans having terms no less favorable to the
Lenders (including subordination terms) than the Subordinated Notes, in an
aggregate principal amount not to exceed $250,000,000 incurred after the Closing
Date, provided that no scheduled principal amortization or payment date in
respect of such Indebtedness shall occur prior to the Final Maturity Date.
"Subordinated Notes" means, at any time, the remaining outstanding
subordinated notes, in an aggregate principal amount not to exceed $10,100,000,
issued pursuant to the Subordinated Note Indenture; and "Subordinated Note"
means any of the foregoing.
"Subordinated Note Indenture" means the Subordinated Note Indenture
dated as of March 1, 1995 between the Borrower and U.S. Bank National
Association (formerly First Bank National Association), as Trustee, with regard
to the issuance of $150,000,000 aggregate principal amount of subordinated notes
of the Borrower, substantially in the form delivered to the Lenders prior to the
date hereof, and as amended from time to time in accordance with the terms
thereof and hereof.
"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty
Agreement among the Subsidiary Loan Parties and the Administrative Agent,
substantially in the form of Exhibit E.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general
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partnership interests are, as of such date, owned, controlled or held, or (b)
that is, as of such date, otherwise controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" means any subsidiary of the Borrower (other than an
Unrestricted Subsidiary).
"Subsidiary Loan Party" means any Subsidiary that is not a Foreign
Subsidiary.
"Temporary Cash Investment" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by S&P and P-1 by Moody's, (iii) time deposits with,
including certificates of deposit issued by, any office located in the United
States of any bank or trust company which is organized under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $1,000,000,000, (iv) shares of any money market or
mutual fund not less than 90% of the assets of which are invested solely in
securities or obligations of the type described in clauses (i) through (iii)
above and not more than 10% of the assets of which are invested in securities or
other obligations rated at least A-2 by S&P and P-2 by Moody's, and (v)
repurchase agreements with respect to securities described in clause (i) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (iii) above, provided in each case that such Investment
matures within one year from the date of acquisition thereof by the Borrower or
a Subsidiary.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported
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on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City time,
on such day (or, if such day is not a Business Day, on the next preceding
Business Day) by the Administrative Agent from three negotiable certificate of
deposit dealers of recognized standing selected by it.
"Transactions" means the Stock Buyback and the Financing Transactions.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the ERISA Group to
the PBGC or any other Person under Title IV of ERISA.
"Unrestricted Subsidiary" means any subsidiary of the Borrower or any
other Person in which the Borrower or any Subsidiary shall have a direct or
indirect Investment so long as (i) the Borrower shall have notified the
Administrative Agent of its acquisition or creation of such subsidiary or such
other Investment and its ownership interest therein or of its designation of an
existing Subsidiary as an Unrestricted Subsidiary concurrently with such
acquisition, creation, designation or Investment and of the intended purposes of
such subsidiary or Investment, (ii) any such subsidiary (unless it is a foreign
subsidiary) shall have entered into a tax sharing agreement containing terms
which, in the reasonable judgment of the Administrative Agent, are customary in
similar circumstances to provide an appropriate allocation of tax liabilities
and benefits, (iii) except as permitted in the proviso below, none of the
Borrower and the Subsidiaries shall have any contingent liability in respect of
such subsidiary or Investment and (iv) any such subsidiary or Investment shall
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be capitalized solely from the following sources: (A) any Investment by any
Person other than the Borrower and the Subsidiaries; (B) Indebtedness issued by
such subsidiary or any of its subsidiaries that is nonrecourse to the Borrower
and the Subsidiaries (except as otherwise permitted by the proviso below), or
proceeds thereof; and (C) Investments permitted to be made in Unrestricted
Subsidiaries pursuant to Section 6.04; provided that the Borrower may incur a
contingent liability or Indebtedness in a specified and limited amount in
respect of such a subsidiary or Investment if it would at the time of such
incurrence be permitted to make an additional Investment in such subsidiary or
Investment in the amount of such incurrence and the amount so incurred shall
thereafter constitute an Investment in such subsidiary or Investment in such
amount for purposes of calculating compliance with Section 6.04. Any subsidiary
of an Unrestricted Subsidiary is an Unrestricted Subsidiary.
"Wholly-Owned Consolidated Subsidiary" means, with respect to any
Person, any Consolidated Subsidiary of such Person all of the shares of capital
stock or other ownership interests of which (except directors qualifying shares)
are at the time directly or indirectly owned by such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan"). Borrowings also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
mascu line, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to
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any restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Loans and Borrowing. Subject to the terms and
conditions set forth herein, each Lender agrees on the Closing Date to assume a
term Loan hereunder in the principal amount set forth for such Lender on
Schedule 2.01. In connection with such assumption, the proceeds of the loans
made under the New Credit Agreement and the proceeds of payments made hereunder
by the Lenders in respect of any increase in their outstanding loans under this
Agreement will be applied on the Closing Date to repay
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all the loans outstanding under this Agreement that will not continue after the
Closing Date and to make payments to lenders under this Agreement prior to
giving effect to the amendment and restatement hereof in respect of any decrease
in their portion of any loans continuing after the Closing Date as assumed Loans
under this Section 2.01. On the Closing Date, $35,000,000 in aggregate principal
amount of Loans are outstanding. Loans assumed and outstanding pursuant to this
Section 2.01 are not revolving in nature and amounts of such Loans repaid or
prepaid may not be reborrowed.
SECTION 2.02. [intentionally omitted]
SECTION 2.03. Interest Elections. (a) Each Loan outstanding on the
Closing Date shall be an ABR Loan. The Borrower may elect to convert a Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. At the commencement of each Interest Period for any Eurodollar
Borrowing such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $10,000,000. Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to elect to
convert or continue any Borrowing if the Interest Period requested with respect
thereto would end after the Final Maturity Date. Each Loan outstanding on the
Closing Date shall be an ABR Loan.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone (i) in the case of
a Borrowing to be converted to a Eurodollar Borrowing, not later than 12:00
noon, New York City time, three Business Days before the date of the proposed
Borrowing or (ii) in the case of a Borrowing to be converted to an ABR
Borrowing, not later than 11:30 a.m., New York City time, on the date of the
proposed conversion. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Borrower.
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(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid,
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each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
(f) A Borrowing may not be converted to or continued as a Eurodollar
Borrowing if after giving effect thereto (i) the Interest Period therefor would
commence before and end after a date on which any principal of the Loans is
scheduled to be repaid and (ii) the sum of the aggregate principal amount of
outstanding Eurodollar Borrowings with Interest Periods ending on or prior to
such scheduled repayment date plus the aggregate principal amount of outstanding
ABR Borrowings would be less than the aggregate principal amount of Loans
required to be repaid on such scheduled repayment date.
SECTION 2.04. Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan of such
Lender on the Final Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made and outstanding hereunder, the Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
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(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.05. Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, within three Business Days after such Net
Proceeds are received, prepay Borrowings and Borrowings (as defined in the New
Credit Agreement) in accordance with paragraph (c) of the Section 2.05 in an
aggregate amount equal to such Net Proceeds; provided that to the extent any
such repayment or reduction would otherwise require repayment or prepayment of
Eurodollar Loans or portions thereof prior to the last day of the related
Interest Period, such portion of such repayment or reduction shall, unless a
Default or Event of Default exists, be deferred to such last day; provided
further that, in the case of any event described in clause (a) or (b) of the
definition of the term Prepayment Event, if the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer to the effect that the
Borrower and the Subsidiaries intend to apply an amount equal to the Net
Proceeds from such event, within 270 days after receipt of such Net Proceeds, to
acquire real property, equipment or other tangible assets to be used in the
business of the Borrower and the Subsidiaries, and certifying that no Default
has occurred and is continuing, then no prepayment shall be required pursuant to
this paragraph in respect of such event except to the extent an amount equal to
any Net Proceeds therefrom that have not been so applied by the end of such
270-day period, at which time a prepayment shall be required in an amount equal
to the Net Proceeds that have not been so applied.
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(c) Prior to any optional or mandatory prepayment of Borrowings
hereunder and Borrowings (as defined in the New Credit Agreement) under the New
Credit Agreement, the Borrower shall select the Borrowing or Borrowings to be
prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (d) of this Section. In the event of any optional or
mandatory prepayment made at a time when any Term Borrowings (as defined in the
New Credit Agreement) remain outstanding under the New Credit Agreement, the
Borrower shall select Loans and Term Borrowings (as defined in the New Credit
Agreement) so that the aggregate amount of such prepayment is allocated among
Loans and Term Borrowings (as defined in the New Credit Agreement) pro rata
based on the aggregate principal amount of the outstanding Borrowings of each of
these. The lenders under the New Credit Agreement shall be third party
beneficiaries of the agreements contained in this paragraph (d).
(d) The Borrower shall notify the Administrative Agent of any
prepayment hereunder(i) in the case of prepayment of a Eurodollar Borrowing, not
later than 2:00 p.m., New York City time, three Business Days before the date of
prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and, in the
case of a mandatory prepayment, a reasonably detailed calculation of the amount
of such prepayment. Promptly following receipt of any such notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $10,000,000, except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.07.
SECTION 2.06. Fees. (a) The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.
(b) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the
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Administrative Agent. Fees paid shall not be refundable under any circumstances.
SECTION 2.07. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to an ABR Borrowing as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
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SECTION 2.08. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective.
SECTION 2.09. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), in each case by an amount deemed
by such Lender to be material, then the Borrower will pay to such Lender such
additional amount or amounts as will compensate such
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Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), and by an amount deemed by such Lender to be material, then
from time to time the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company for any
such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 15 days after
receipt thereof.
(d) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
Closing Date, which will entitle such Lender to compensation pursuant to Section
2.09.
Notwithstanding the foregoing subsections (a) and (b) of this Section
2.09, the Borrower shall only be obligated to compensate any Lender for any
amount arising or accruing during (i) any time or period commencing not more
than (x) in the case of subsection (a), six months and (y) in the case of
subsection (b), three months, prior to the date on which such Lender notifies
the Administrative Agent and the Borrower that it proposes to demand such
compensation and identifies to the Administrative Agent and the Borrower the
statute, regulation or other basis upon which the claimed compensation is or
will be based and (ii) any time or period during which, because of the
retroactive application of such statute, regulation or other basis, such Lender
did not know that such amount would arise or accrue.
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SECTION 2.10. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.05(d) and is revoked in accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.13, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market increased
by Statutory Reserves at the same rate as utilized in computing such Adjusted
LIBO Rate. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 15
days after receipt thereof.
SECTION 2.11. Withholding Tax Exemption; Other Taxes. (a) At
least five Business Days prior to the first date on which interest or fees are
payable hereunder for the account of any Lender, each Lender that is not
incorporated or organized under the laws of the United States of America or a
state thereof agrees that it will deliver to each of the Borrower and the
Administrative Agent two duly and properly completed copies of (i) United States
Internal
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Revenue Service Form 1001 or 4224 (or any successor form, in either case),
certifying in either case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes or (ii) solely if such Lender is claiming exemption from United
States withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any successor form
prescribed by the Internal Revenue Service, a certificate representing that such
Lender is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code) and such other
documentation as the Borrower may reasonably require to permit it to determine
that such Lender is entitled to the exemption. Each Lender which so delivers a
Form 1001 or 4224, or Form W-8 (or any successor form, in either case) further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(b) The Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Other Taxes paid by the Administrative Agent or such Lender on or
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with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of the receipt, if any,
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
SECTION 2.12. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest or
fees or of amounts payable under Section 2.09, 2.10 or 2.11, or otherwise) prior
to the time expressly required hereunder or under such other Loan Document for
such payment (or, if no such time is expressly required, prior to 12:00 noon,
New York City time), on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 270 Park Avenue, New York, New York except that payments pursuant
to Sections 2.09, 2.10, 2.11 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any
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payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or resulting such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation. For
purposes of this
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paragraph (c) references to "Lenders" shall include the lenders under the New
Credit Agreement, references to "Loans" shall include the loans under the New
Credit Agreement and the lenders under the New Credit Agreement shall be third
party beneficiaries of the agreements contained in this paragraph (c).
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.12(d) or 9.03(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.13. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.09, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.11, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.09 or 2.11, as the case may be, in the
future and (ii) would not subject such
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Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.09, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.11,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) if the
assignment is not to another Lender, the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.09 or payments required to be made pursuant to Section 2.11, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 2.14. Obligations Constitute Designated Senior Indebtedness.
The Obligations constitute "Designated Senior Indebtedness" under and as defined
in the Subordinated Note Indenture.
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ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Corporate Existence and Power. Each Loan Party is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
SECTION 3.02. Corporate and Governmental Authorization; No
Contravention. The execution and delivery by each Loan Party of each of the Loan
Documents to which it is a party and the performance by each such Loan Party of
its obligations thereunder are within the corporate power of such Loan Party,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
(except for any such action or filing that has been taken and is in full force
and effect) and do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the Constitutional Documents of any Loan
Party or of any material agreement, judgment, injunction, order, decree or other
material instrument binding upon such Loan Party or result in the creation or
imposition of any Lien on any asset of any Loan Party other than Liens created
pursuant to the Loan Documents.
SECTION 3.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower, and the other Loan Documents, when executed
and delivered as contemplated by this Agreement, will constitute valid and
binding obligations of each Loan Party that is a party thereto, in each case
enforceable in accordance with its terms.
SECTION 3.04. Financial Information. (a) The consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of March 31, 1998 and
the related consolidated statements of income and of cash flows for the Fiscal
Year then ended, reported on by Deloitte & Touche and set forth in the
Borrower's Form 10-K for Fiscal Year 1998, a copy of which has been delivered to
each of the
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Lenders, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such Fiscal Year.
(b) The unaudited consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of September 27, 1998, and the related unaudited
consolidated statements of income and cash flow for the six months then ended,
set forth in the September 1998 10-Q, copies of which have been delivered to
each of the Lenders, fairly present, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in Section 4.04(a), the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six-month period (subject to normal year-end adjustments).
(c) Since March 31, 1998, there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries considered as a whole.
SECTION 3.05. Litigation. Except as described in the September 1998
10-Q, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, any Loan Party or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which would materially adversely affect the business, consolidated
financial position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries, or which in any manner draws into question the
validity of any Loan Document.
SECTION 3.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations in all material aspects under the minimum funding
standards of ERISA and the Code with respect to each Plan and is in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code with respect to each Plan. No member of the ERISA Group has (i) sought
a waiver of the minimum funding standard under Section 412 of the Code in
respect of any Plan, (ii) failed to make any contribution or payment to any Plan
or Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment
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to any Plan or Benefit Arrangement, which in either event has resulted or could
reasonably be expected to result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums or
similar items under Section 4007 of ERISA.
SECTION 3.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any capital
or operating expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted thereat and any actual
or potential liabilities to third parties, including employees, and any related
costs and expenses). On the basis of this review, and as set forth in the
September 1998 10-Q, the Borrower anticipates that Environmental Laws are
unlikely to have a Material Adverse Effect.
SECTION 3.08. Taxes. The Borrower and each of its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by any of them and have paid all taxes
due pursuant to such returns or pursuant to any assessment received by any of
them, except for any such taxes which are being contested in good faith and for
which adequate reserves have been made on the books of the Borrower and its
Subsidiaries in accordance with GAAP. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of income taxes are, in
the opinion of the Borrower, adequate in accordance with GAAP.
SECTION 3.09. Subsidiaries. Each corporate Subsidiary of each Loan
Party is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses,
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authorizations, consents and approvals required to carry on its business as now
conducted.
SECTION 3.10. Not an Investment Company. Neither Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 3.11. Full Disclosure (a) As of the Closing Date, the
information contained in the Information Memorandum, the Borrower's Form 10-K
for the period ended March 31, 1998 and the September 1998 10-Q, taken together,
does not and will not contain any untrue statement of a material fact and does
not or will not omit to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances under which they
are made, not misleading. All information hereafter furnished in writing by any
Loan Party to any Agent or any Lender will be, taken as a whole and considered
together with all information previously so furnished, true and accurate in all
material respects on the date as of which such information is stated or
furnished.
(b) The Loan Parties have disclosed to each of the Lenders in writing
any and all facts which currently do or may have a Material Adverse Effect (to
the extent the Loan Parties can now reasonably foresee).
(c) Each of the representations and warranties of the Borrower made in
or pursuant to the Loan Documents other than this Agreement is true and correct.
(d) It is understood that the representations and warranties set forth
in clauses (a) and (b) above are limited to the extent that (i) any projections
or forecasts are represented to be based upon reasonable estimates believed by
the Loan Parties to be accurate, but are not warranted to be obtained and (ii)
no representation is made as to disclosure of matters of a general economic
nature or matters of public knowledge that generally affect any of the industry
segments included in the business of the Borrower and its Consolidated
Subsidiaries.
SECTION 3.12. Compliance with Laws. Each Loan Party and each of its
Subsidiaries is in compliance in all material respects with all applicable laws,
rules and regulations, and is not in violation of, or in default under, any term
or provision of any charter, bylaw,
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mortgage, indenture, agreement, instrument, statute, rule, regulation, judgment,
decree, order, writ or injunction applicable to it, except for any such
violations, defaults or failures to comply which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.13. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each loan made under the New Credit Agreement on the Closing Date and on each
date on which Delayed Draw Term Loans (as defined in the New Credit Agreement)
are made under the New Credit Agreement and after giving effect to the
application of the proceeds of such loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
SECTION 3.14. Senior Indebtedness. The Obligations constitute
"Designated Senior Indebtedness" under and as defined in the Subordinated Note
Indenture.
SECTION 3.15. Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the computer systems
of the Borrower and its Subsidiaries and (b) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Borrower's systems interface) and the testing of all such systems and equipment,
as so reprogrammed, will be completed by August 31, 1999, except with respect to
the failure to complete such reprogramming or testing of systems or equipment
that are not critical to the Borrower's business. The cost to the Borrower and
its Subsidiaries of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Borrower and its Subsidiaries
(including reprogramming
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errors and the failure of others' systems or equipment) will not result in a
Default or a Material Adverse Effect. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary, the computer and
management information systems of the Borrower and its Subsidiaries are and,
with ordinary course upgrading and maintenance, will continue for the term of
this Agreement to be, sufficient to permit the Borrower to conduct its
businesses without Material Adverse Effect.
ARTICLE IV
Conditions
SECTION 4.01. Closing Date. This Agreement shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Closing Date) of each of (i) Jones, Day, Reavis & Pogue, special counsel for
the Borrower, substantially in the form of Exhibit F-1, (ii) Daryl L.
Zimmer, Vice President and General Counsel of the Borrower, substantially in
the form of Exhibit F-2, and (iii) local counsel in each jurisdiction where
a Mortgaged Property is located, substantially in the form of Exhibit F-3,
and, in the case of each such opinion required by this paragraph, covering
such other matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Required Lenders shall reasonably request. The Borrower
hereby requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative
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Agent or its counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization of the
Transactions and any other legal matters relating to the Loan Parties, the
Loan Documents or the Transactions, all in form and substance satisfactory
to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated
the Closing Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the conditions
set forth in paragraphs (m) and (n) of this Section 4.01.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.
(f) The Administrative Agent shall have received counterparts of the
Subsidiary Guaranty Agreement signed on behalf of each Subsidiary Loan Party
and counterparts of each of the Pledge Agreement and the Security Agreement
signed on behalf of the Borrower and each Subsidiary Loan Party that is a
party thereto, together with the following:
(i) stock certificates representing all the outstanding shares of
capital stock of each Subsidiary owned by or on behalf of any Loan
Party as of the Closing Date after giving effect to the Transactions
(except that stock certificates representing shares of common stock of
a Foreign Subsidiary may be limited to 65% of the outstanding shares
of common stock of such Foreign Subsidiary), promissory notes
evidencing all intercompany Indebtedness owed to any Loan Party by the
Borrower or any Subsidiary as of the Closing Date after giving effect
to the Transactions and stock powers and instruments of transfer,
endorsed in blank, with respect to such stock certificates and
promissory notes;
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(ii) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded to
continue, create or perfect the Liens intended to be continued or
created under the Security Documents; and
(iii) a completed Perfection Certificate dated the Closing Date
and signed by an executive officer or Financial Officer of the
Borrower, together with all attachments contemplated thereby,
including, to the extent returns have been received, the results of a
search of the Uniform Commercial Code (or equivalent) filings made
with respect to the Loan Parties in the jurisdictions contemplated by
the Perfection Certificate and copies of the financing statements (or
similar documents) disclosed by such search and evidence reasonably
satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by
Section 6.02 or have been released.
(g) The Administrative Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property signed on behalf of the
record owner of such Mortgaged Property and (ii) a policy or policies of
title insurance issued by a nationally recognized title insurance company,
insuring the Lien of each such Mortgage as a valid first Lien on the
Mortgaged Property described therein, free of any other Liens except as
permitted by Section 6.02, together with such endorsements, coinsurance and
reinsurance as the Administrative Agent or the Required Lenders may
reasonably request.
(h) The Administrative Agent shall have received evidence that the
insurance required by Section 5.03 and the Security Documents is in effect.
(i) The Administrative Agent shall have received a certificate of the
chief financial officer of the Borrower, substantially in the form of
Exhibit H, with respect to the solvency of the Loan Parties after giving
effect to the Transactions on the Closing Date.
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(j) All consents and approvals necessary or advisable to be obtained
from any Governmental Authority or other Person in connection with the
Transactions shall have been obtained, and all applicable waiting periods
and appeal periods shall have expired, in each case without the imposition
of any burdensome conditions.
(k) The New Credit Agreement shall have been executed in the form set
forth in Exhibit G. The Borrower shall have paid to the Lenders an aggregate
amount equal to all the principal of the Loans together with the interest
accrued thereon as of the Closing Date and all other obligations of the
Borrower accrued hereunder prior to the Closing Date (other than $35,000,000
aggregate principal amount of the Loans which will remain outstanding).
(l) The Lenders shall have received a pro forma consolidated balance
sheet of the Borrower as of September 27, 1998, reflecting all pro forma
adjustments as if the Transactions had been consummated on such date, and
such pro forma consolidated balance sheet shall be consistent in all
material respects with the forecasts and other information previously
provided to the Lenders.
(m) The representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct on and as of the Closing Date.
(n) As of the Closing Date, no Default shall have occurred and be
continuing.
The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding.
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ARTICLE V
Affirmative Covenants
Until the principal of and interest on each Loan and all fees
payable hereunder shall have been paid in full, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 100 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated statements of
income and of cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange
Commission by Deloitte & Touche or other independent public accountants
of nationally recognized standing;
(b) as soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income and of cash flows for such quarter
and for the portion of the Borrower's fiscal year ended at the end of
such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
the Borrower's previous fiscal year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and
consistency by the chief financial officer or the chief accounting
officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in subsections (a) and (b) of this Section, a
certificate of the treasurer, controller or chief
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financial officer of the Borrower (i) setting forth in reasonable
detail such calculations as are required to establish whether the
Borrower was in compliance with the requirements of Sections 6.10
through 6.12, inclusive on the date of such financial statements, (ii)
stating whether, to the best of such person's knowledge after due
inquiry, there exists on the date of such certificate any Default and,
if any Default then exists, setting forth the details thereof and the
action that the Borrower is taking or proposes to take with respect
thereto and (iii) stating whether, since the date of the most recent
financial statements previously delivered pursuant to subsection (a)
or (b) of this Section, there has been a change in the generally
accepted accounting principles applied in preparing the financial
statements then being delivered from those applied in preparing the
most recent audited financial statements so delivered which is
material to the financial statements then being delivered;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe
that any Default existed on the date of such statements and (ii)
confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (c) above;
(e) within five Business Days after any Responsible Officer of
the Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the treasurer, controller or chief
financial officer of the Borrower setting forth the details thereof and
the action which the Borrower is taking or proposes to take with
respect thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
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(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of the incurrence of complete or partial
withdrawal liability with respect to any Multiemployer Plan under Title
IV of ERISA or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii)
receives notice from the PBGC under Title IV of ERISA of its intent to
terminate, impose liability (other than for premiums under Section 4007
of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Code, a copy of such application; (v)
gives notice of intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with the PBGC;
(vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the
Internal Revenue Code, a certificate of the chief financial officer
or the chief accounting officer of the Borrower setting forth details
as to such occurrence and action, if any, which the Borrower
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or applicable member of the ERISA Group is required or proposes to
take;
(i) as soon as reasonably practicable after any Responsible
Officer of the Borrower obtains knowledge of the commencement of, or of
a material threat of the commencement of, an action, suit or proceeding
against the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there
is a reasonable likelihood of an adverse decision which would
materially and adversely affect the business, financial position,
results of operations or prospects of the Borrower and its Consolidated
Subsidiaries, in each case considered as a whole, or which in any
manner questions the validity of any Loan Document, a written report
informing the Lenders in reasonable detail of the nature of such
pending or threatened action, suit or proceeding and will provide such
additional information as may be reasonably requested by the
Administrative Agent at the request of any Lender; and
(j) except to the extent prohibited by applicable law, rule,
regulations or orders, from time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Administrative Agent, at the request of any Lender,
may reasonably request.
SECTION 5.02. Payment of Obligations. Each Loan Party will pay
and discharge, and will cause each of its Subsidiaries to pay and discharge, at
or before maturity, all their respective obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and except where the failure to pay or
discharge such obligations and liabilities could not in the aggregate reasonably
be expected to have a Material Adverse Effect, and will maintain, and will cause
each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for
the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. (a) Each
Loan Party will keep, and will cause each of its Subsidiaries to keep, all
property materially useful and
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necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will maintain, and will cause each of its
Subsidiaries to maintain, insurance in responsible companies in such amounts and
against such risks as is usually carried by owners of similar businesses and
properties in the same general areas in which the Borrower and its Subsidiaries
operate, provided that in any event the Borrower will maintain, and will cause
each of its Subsidiaries to maintain, (i) property and casualty insurance on all
real and personal property on an all risks basis (including the perils of flood
and quake), covering the repair or replacement cost of all such property and
consequential loss coverage for business interruption and extra expense (which
shall be limited to fixed continuing expenses and such other business
interruption expenses as are otherwise generally available to similar
businesses), covering such risks, for such amounts not less than those, and with
deductible and self-insurance amounts not greater than those, set forth in Part
I of Schedule 5.03, (ii) public liability insurance (including products
liability coverage) covering such risks, for such amounts not less than those,
and with deductible amounts not greater than those, set forth in Part II of
Schedule 5.03 and (iii) such other insurance coverage in such amounts and with
respect to such risks as the Required Lenders may reasonably request. All such
insurance shall be provided by insurers or reinsurers which (x) in the case of
United States insurers and reinsurers have an A.M. Best policyholders rating of
not less than A- with respect to primary insurance, and B+ with respect to
excess insurance, and (y) in the case of non-United States insurers or
reinsurers, the providers of at least 80% of such insurance have either an ISI
policyholders rating of not less than A, an A.M. Best policyholders rating of
not less than A-, or a surplus of not less than $500,000,000 with respect to
primary insurance, and an ISI policyholders rating of not less than BBB with
respect to excess insurance, or such other insurers as the Required Lenders may
approve in writing. Such insurers may include a Subsidiary of the Borrower;
provided that such Subsidiary need not satisfy the foregoing requirements if all
but $15,000,000 of the insurance provided by such Subsidiary is reinsured by one
or more reinsurers which satisfy such requirements.
(c) The Borrower will deliver to the Administrative Agent on behalf of
the Lenders, (i) on the
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Closing Date, a certificate dated such date showing the amount of coverage as of
such date, (ii) upon request of any Lender through the Administrative Agent from
time to time full information as to the insurance carried, (iii) within five
days of receipt of notice from any insurer, a copy of any notice of cancelation
or material change in coverage from that existing on the Closing Date, (iv)
forthwith, notice of any cancelation or nonrenewal of coverage by the Borrower
or any Subsidiary, and (v) within five days of filing, full information as to
any claim for an amount in excess of $2,500,000 with respect to any property and
casualty insurance policy maintained by the Borrower or any Subsidiary. The
Administrative Agent shall be named as additional insured on all property and
casualty insurance policies and a loss payee on all property insurance policies.
Any proceeds from any such insurance policy in respect of any claim, or any
condemnation award or other compensation in respect of a condemnation (or any
transfer or disposition of property in lieu of condemnation) for which the
Borrower or any of its Subsidiaries receives a condemnation award or other
compensation shall be paid to the Borrower or the Subsidiary; provided that, (A)
the Borrower or the Subsidiary will use such proceeds, condemnation award or
other compensation in accordance with Section 2.05(b) or (B) if, at the time of
the receipt of such proceeds, condemnation award or other compensation, a
Default has occurred and is continuing, the aggregate amount of all such
proceeds, condemnation award or other compensation shall be paid to the
Administrative Agent and held as collateral for application in accordance with
the Security Documents.
SECTION 5.04. Conduct of Business and Maintenance of Existence. Each
Loan Party will continue, and will cause each Subsidiary to continue, to
engage in business of the same general type as now conducted by the Borrower
and its Subsidiaries, and will preserve, renew and keep in full force and
effect, and will cause each of its Subsidiaries to preserve, renew and keep
in full force and effect their respective corporate existence and, except for
any such rights, privileges and franchises the failure to preserve which
would not in the aggregate have a Material Adverse Effect, their respective
rights, privileges and franchises necessary or desirable in the normal
conduct of business; provided that nothing in this Section 5.04 shall
prohibit (i) the merger of a Subsidiary of the Borrower into the Borrower or
the merger or consolidation of the Borrower or any Subsidiary of the Borrower
with or into another Person
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if the corporation surviving such consolidation or merger is, in the case of any
merger or consolidation involving the Borrower, the Borrower, and in the case of
any merger or consolidation involving any Subsidiary of the Borrower, a
Wholly-Owned Consolidated Subsidiary of the Borrower and if, in each case, after
giving effect thereto, no Default shall have occurred and be continuing or (ii)
the termination of the corporate existence of any Subsidiary of the Borrower or
the discontinuation of any line of business of the Borrower or any of its
Subsidiaries if the board of directors of the Borrower in good faith determines
that such termination is in the best interest of the Borrower and is not
materially disadvantageous to the Lenders; and provided further that the parties
agree that this Section 5.04 shall not prohibit the Borrower and its
Subsidiaries from engaging in the business of (or acquiring other businesses and
assets not otherwise prohibited by this Agreement if such businesses are engaged
in, or such assets are used to conduct the business of) any Permitted Lines of
Business.
SECTION 5.05. Compliance with Laws. Each Loan Party will comply, and
cause each of its Subsidiaries to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including Environmental Laws and ERISA and the rules
and regulations thereunder) the failure to comply with which would reasonably be
expected to have a Material Adverse Effect, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. Each
Loan Party will keep, and will cause each of its Subsidiaries to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and, except to the extent prohibited by applicable law, rule,
regulations or orders, will permit, and will cause each of its Subsidiaries to
permit, representatives of any Lender at such Lender's expense to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as often as may
reasonably be desired.
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SECTION 5.07. Use of Proceeds. The proceeds of the Loans will be used
only for the general corporate purposes, including to finance acquisitions and
to pay related fees and expenses. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X. Not more
than 25% of the assets subject under the Loan Documents to any negative pledge
or restriction on deposition shall at any time consist of "margin stock" within
the meaning of such regulations.
SECTION 5.08. Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Closing Date, the Borrower will notify the
Administrative Agent and the Lenders thereof and (a) if such Subsidiary is a
Subsidiary Loan Party, the Borrower will cause such Subsidiary to become a party
to the Subsidiary Guaranty Agreement and the Security Agreement within five
Business Days after such Subsidiary is formed or acquired and promptly take such
actions to create and perfect Liens on such Subsidiary's assets to secure the
Obligations as the Administrative Agent or the Required Lenders shall reasonably
request and (b) if any Equity Interest in or Indebtedness of such Subsidiary are
owned by or on behalf of any Loan Party, the Borrower will cause such Equity
Interests and promissory notes evidencing such Indebtedness to be pledged
pursuant to the Pledge Agreement within five Business Days after such Subsidiary
is formed or acquired (except that, if such Subsidiary is a Foreign Subsidiary,
shares of common stock of such Subsidiary to be pledged pursuant to the Pledge
Agreement may be limited to 65% of the outstanding shares of common stock of
such Subsidiary).
SECTION 5.09. Further Assurances. (a) The Borrower will, and
will cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents or to grant, preserve, protect or perfect the Liens created
or intended to be created by the Security Documents or the validity or priority
of any such Lien, all at the expense of the Loan Parties. The Borrower also
agrees to provide to the
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Administrative Agent (i) from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents and (ii)
upon request, survey updates in connection with the Mortgaged Property; provided
that the Borrower shall not be required to provide such a survey update with
respect to a Mortgaged Property more than once in any 24-month period.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Closing Date (other than assets constituting
Collateral under the Security Agreement that become subject to the Lien of the
Security Agreement upon acquisition thereof), the Borrower will notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties.
SECTION 5.10. Maintenance of Collateral; Alterations. No Loan Party
shall commit any waste of any Collateral, or, except in the ordinary course of
its business, make any material change in the use of any Collateral, provided
that any Loan Party may lease to any other Person all or any portion of any item
of Collateral that the Borrower has determined in good faith is not used or
useful in such Loan Party's operating business. Each Loan Party granting a
security interest in any Mortgaged Property represents and warrants that, to the
best of its knowledge: (i) such Mortgaged Property is served by all utilities
required or necessary for the current use thereof; (ii) all streets necessary to
serve such Mortgaged Property are completed and serviceable and have been
dedicated and accepted as such by the appropriate governmental entities; and
(iii) such Loan Party has access to such Mortgaged Property from public roads
sufficient to allow such Loan Party to conduct its business at such Mortgaged
Property in accordance with sound commercial and industrial practices. The Loan
Parties shall, at all times, maintain all Collateral that is materially useful
or necessary in their respective businesses, in good operating order, condition
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and repair, ordinary wear and tear excepted, and in compliance with all
applicable laws, rules and regulations, (including Environmental Laws) the
failure to comply with which would have a material adverse effect on the value
or usefulness of such Collateral, except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings. Each Loan Party
shall (a) not, except in the ordinary course of business or as provided in the
proviso to the first sentence of this Section, alter the occupancy or use of all
or any part of any Mortgaged Property without the prior written consent of the
Required Lenders, which consent shall not be unreasonably withheld and (b) do
what is deemed commercially reasonable to maintain and preserve the value of the
Collateral.
ARTICLE VI
Negative Covenants
Until the principal of and interest on each Loan and all fees payable
hereunder have been paid in full, the Borrower covenants and agrees with the
Lenders that:
SECTION 6.01. Limitation on Subsidiary Debt. Except for any
Indebtedness to the Borrower or any Wholly-Owned Consolidated Subsidiary of the
Borrower, and except for Acquired Indebtedness, the Borrower will not permit any
of its Subsidiaries to incur or at any time be liable with respect to any
Indebtedness in an aggregate amount at any one time outstanding in excess of
$20,000,000.
SECTION 6.02. Negative Pledge. Neither the Borrower nor any of its
Subsidiaries will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens (i) existing on the Closing Date securing Indebtedness or
other obligations or liabilities outstanding on such date and identified or
referred to on Schedule 6.02 or (ii) disclosed in title insurance policies
delivered to the Administrative Agent prior to the Closing Date relating to
the Mortgaged Properties;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a
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Consolidated Subsidiary of such Loan Party and not created in contemplation
of such event;
(c) any Lien on any asset securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the costs (including
purchase or construction costs, design, engineering, transportation,
installation, testing and analogous costs, and all related professional
costs and expenses) of acquiring, constructing or improving such asset;
provided that such Lien attaches to such asset concurrently with or within
180 days after the acquisition thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into such Loan Party or any of its
Consolidated Subsidiaries and not created in contemplation of such event;
(e) any Lien existing on any asset, or on any asset of any Person,
prior to the acquisition of such asset or such Person, as the case may be,
by such Loan Party or any of its Consolidated Subsidiaries and not created
in contemplation of such acquisition;
(f) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
and which are not overdue for a period of more than 30 days or which are
being contested in good faith by appropriate proceedings;
(g) Liens for taxes, assessments or other governmental charges not yet
overdue or which are being contested in good faith and by appropriate
proceedings;
(h) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(i) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like
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nature incurred in the ordinary course of business;
(j) easements, right-of-way, zoning and similar restrictions and other
encumbrances or title defects incurred, or leases or subleases granted to
others, in the ordinary course of business which do not in any material
respect interfere with or adversely affect the use or value of any Mortgaged
Property or the ordinary conduct of the business of the Borrower or such
Subsidiary and the matters listed in the policies of title insurance
referred to in Section 4.01(g)(ii);
(k) Liens on the property of the Borrower or any of its Subsidiaries
in favor of the Borrower or such Subsidiary, as the case may be;
(l) Liens created by the Loan Documents;
(m) Liens arising under documentary letters of credit; provided that
such Liens attach only to the assets purchased thereunder and documents
relating thereto;
(n) Liens arising in the ordinary course of its business which (i) do
not secure Indebtedness or Derivatives Obligations, (ii) do not secure any
obligation in an amount exceeding $500,000 and (iii) do not in the aggregate
materially detract from the value of its assets or materially impair the use
thereof in the operation of its business;
(o) any interest or title of a lessor in assets or property subject to
a Capital Lease of the Borrower or any Subsidiary; provided that the
aggregate capitalized value on the consolidated balance sheet of the
Borrower of all the Capital Leases at any time does not exceed $25,000,000;
(p) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness or obligation secured by any Lien permitted by
any of the foregoing clauses of this Section; provided that such
Indebtedness or obligation is not increased and is not secured by any
additional assets;
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(q) Liens arising from filing Uniform Commercial Code or personal
property security financing statements (or substantially equivalent filings
outside the United States) regarding leases;
(r) Liens encumbering property or assets under construction (and
proceeds and products thereof) arising from progress or partial payments by
a customer of the Borrower or the Subsidiaries relating to such property or
assets;
(s) Liens not otherwise permitted by this Section 6.02 securing
obligations in an aggregate principal, stated or face amount at any date not
to exceed $10,000,000; and
(t) Liens on any proceeds (including insurance, condemnation and
eminent domain proceeds) or products of any collateral a Lien over which is
otherwise permitted by the foregoing clauses of this Section, and on general
intangibles relating to or embodied in such collateral.
SECTION 6.03. Consolidations, Mergers and Sales of Assets. (a) No Loan
Party will, and no Loan Party will permit any of its Subsidiaries to,
consolidate or merge with or into any other Person except as permitted in
accordance with Section 5.04.
(b) No Loan Party will, and will not permit any of its Subsidiaries
to, sell, transfer, lease or otherwise dispose of any asset, including any
Equity Interest owned by it, nor will any Loan Party permit any of it
Subsidiaries to issue any additional Equity Interest in such Subsidiary, except:
(i) sales of inventory in the ordinary course of business;
(ii) any disposition of surplus, discontinued or worn-out equipment or
other assets (including leasehold interests) no longer used in the on-going
business of the Borrower and the Subsidiaries (including any Abandoned
Subsidiaries and the assets thereof);
(iii) any disposition of cash or Temporary Cash Investments;
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(iv) any sale or other disposition of readily marketable securities in
the ordinary course of business;
(v) any disposition of the Demil Assets;
(vi) any sale, transfer or other disposition not otherwise permitted
by this Section 6.03 (x) to the Borrower or any Wholly-Owned Consolidated
Subsidiary or (y) to any other Subsidiary or Joint Venture that would not be
prohibited by Section 6.04 if it were an Investment; provided that any such
sale, transfer or other disposition involving a Subsidiary or Joint Venture
that is not a Loan Party shall be made in compliance with Section 6.05;
(vii) the grant of any Lien permitted under Section 6.02;
(viii) sales, transfer and other dispositions of Equity Interests in
Subsidiaries which are solely engaged in the business of providing insurance
or self-insurance coverage for the businesses of the Borrower and the
Subsidiaries permitted by Section 5.04, or the issuance of Equity Interests
in such Subsidiaries to non-Affiliated third Persons in an aggregate value
(as determined by the Borrower in good faith) in case of issuance, or
aggregate book value in the case of sales, transfers or other dispositions,
not to exceed in the aggregate $10,000,000 for all such Subsidiaries;
(ix) any disposition of assets with a fair market value of $50,000 or
less;
(x) sales, transfers and dispositions to Joint Ventures of assets with
an aggregate fair market value in any fiscal year not in excess of
$5,000,000; and
(xi) sales, transfers and other dispositions of assets (other than
Equity Interests in a Subsidiary) that are not permitted by any other clause
of this Section; provided that the aggregate fair market value of all assets
sold, transferred or otherwise disposed of in reliance upon this clause (xi)
shall not exceed $10,000,000 during any fiscal year of the Borrower;
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provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clauses (iii), (vi) and (vii) above)
shall be made for fair value and for at least 80% cash consideration.
SECTION 6.04. Investments in Subsidiaries. Neither the Borrower nor
any Subsidiary will hold, make or acquire any Investment in any Person other
than:
(a) Investments in Persons that are, or as a result of such Investment
will become, Subsidiaries or Joint Ventures; provided that the aggregate
fair market value of all Investments by the Borrower and its Consolidated
Subsidiaries in, or in Persons that as a result of such Investment will
become, Joint Ventures and Subsidiaries of the Borrower that are not, or
will not as a result of such Investment become, Wholly-Owned Consolidated
Subsidiaries of the Borrower, shall at no time (when taken together with the
aggregate value of assets sold, transferred or otherwise disposed of to such
Subsidiary or Joint Venture pursuant to Section 6.03(b)(vi) and net of any
cash consideration received by the Borrower or a Wholly-Owned Consolidated
Subsidiary in respect of and at the time of or substantially
contemporaneously with any such sale, transfer or disposition or Investment)
exceed $25,000,000 (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value);
(b) Investments acquired in the form of consideration received from
the sale of assets consummated in accordance with Section 6.03(b);
(c) Investments acquired as part of the settlement of litigation or
claims or in satisfaction of claims made pursuant to a reorganization,
bankruptcy or liquidation of a Person, or as a good faith settlement of Debt
owed by a Person to the Borrower or any of its Subsidiaries;
(d) Temporary Cash Investments; and
(e) Aggregate Net Investments in Unrestricted Subsidiaries in an
aggregate amount not to exceed $100,000.
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SECTION 6.05. Transactions with Affiliates. No Loan Party will, or
will permit any of its Subsidiaries to, directly or indirectly, pay any funds to
or for the account of, make any Investment in, lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to, or participate in,
or effect any transaction in connection with any joint enterprise or other joint
arrangement with, any of their Affiliates; provided, however, that the foregoing
provisions of this Section shall not prohibit any Loan Party or any of its
Subsidiaries from (i) declaring or paying any lawful dividend (subject to
Section 6.08) so long as, after giving effect to any such declaration, no
Default shall have occurred and be continuing, (ii) making sales to or purchases
from any of their Affiliates and, in connection therewith, extending credit or
making payments, or making payments for services rendered by any of their
Affiliates, if such sales or purchases are made or such services are rendered in
the ordinary course of business and on terms and conditions at least as
favorable to such Loan Party or such Subsidiary as the terms and conditions
which would apply in a similar transaction with a Person not an Affiliate, (iii)
making payments of principal, interest and premium on any Indebtedness of such
Loan Party or such Subsidiary held by any of its Affiliates if the terms of such
Indebtedness are substantially as favorable to such Loan Party or such
Subsidiary as the terms which could have been obtained at the time of the
creation of such Indebtedness from a lender which was not an Affiliate, (iv)
performing its obligations pursuant to any Acquisition Document, (v)
consummating any disposition of assets to an Affiliate not prohibited by Section
6.03, (vi) participating in, making Investments in, or effecting any other
transaction with or in connection with, any Joint Venture or other joint
enterprise or joint arrangement that is an Affiliate (regardless of whether the
other party participating in such Joint Venture or other joint enterprise or
joint arrangement is an Affiliate) if such Loan Party or such Subsidiary
participates in the ordinary course of its business and on a basis no less
advantageous than the basis on which any other venturer participates (taking
into account the respective interests of such Loan Party or Subsidiary and such
other venturer or venturers) or (vii) to the extent approved by the board of
directors of such Loan Party or Subsidiary, making payments of money or
issuances of securities pursuant to employment agreements and arrangements and
employee benefit plans and making payments for services rendered by non-employee
directors of the Borrower and their Affiliates.
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SECTION 6.06. Constitutional Documents. No Loan Party will, or will
permit any Subsidiary to, amend its Constitutional Documents in any manner which
could adversely affect the rights of the Lenders under the Loan Documents or
their ability to enforce the same.
SECTION 6.07. Waivers and Amendments of Related Documents. The
Borrower shall not and shall not permit its Subsidiaries to, without the prior
written consent of the Required Lenders, modify or amend, or waive any provision
or condition contained in, any of the Acquisition Documents or the Subordinated
Note Indenture or the Subordinated Notes from the forms of each of the foregoing
heretofore delivered to the Lenders in any manner that could reasonably be
expected to be adverse to the Lenders.
SECTION 6.08. Restricted Payments. The Borrower will not declare or
make any Restricted Payment other than:
(i) any Restricted Payments made by Subsidiaries to the Borrower or a
Wholly-Owned Consolidated Subsidiary (or with respect to a Subsidiary other
than a Wholly-Owned Consolidated Subsidiary, Restricted Payments made
ratably with respect to each class of such Subsidiary's Equity Interests in
respect of which such Restricted Payment is being made);
(ii) any Restricted Payments required to be made by the Borrower
pursuant to the terms of employee benefit plans and stock options (including
stock ownership plans (including 401K plans, restricted stock plans,
employee stock purchase plans, performance sharing plans and incentive
plans)), in each case as in effect on September 30, 1998, and as modified
thereafter, provided that the aggregate amount of Restricted Payments
permitted by this clause (i) shall not exceed $25,000,000;
(iii) repurchases of common stock of the Borrower pursuant to the
Stock Buyback;
(iv) any Restricted Payment by the Borrower payable solely in
additional Equity Interests of the Borrower;
(v) any other Restricted Payments in addition to those permitted above
(and whether of the same or a different type, or in addition to amounts for
any type, provided above) made or declared after the Closing Date
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to the extent that immediately after giving effect thereto (x) no Default
shall have occurred and be continuing and (y) the aggregate amounts of all
such Restricted Payments made or declared pursuant to this clause (v) after
the Closing Date does not exceed $50,000,000.
SECTION 6.09. Foreign Subsidiaries. Notwithstanding any other
provision of this Agreement, the aggregate amount of Investments made in any
Foreign Subsidiary and of sales, transfers and other dispositions to any Foreign
Subsidiary under Section 6.03(b)(vi), in each case by the Borrower and its
Subsidiaries (other than the Foreign Subsidiaries) after the Closing Date in all
Foreign Subsidiaries shall not at any time exceed $10,000,000 (valued as
provided in Section 6.04(a) and determined without duplication).
SECTION 6.10. Minimum Consolidated Net Worth. Consolidated Net Worth
shall at no time be less than the sum of (i) $175,000,000 plus (ii) 50% of
cumulative Consolidated Net Income for each fiscal quarter beginning after
September 27, 1998 and ending on or prior to the relevant date of determination
hereof, but in each case in this clause (ii), only to the extent that
Consolidated Net Income for each such fiscal quarter or other period is positive
plus (iii) 50% of the increase in consolidated stockholders' equity of the
Borrower from any Equity Issuances by the Borrower after September 27, 1998.
SECTION 6.11. Leverage Ratio. As of the last day of each fiscal period
of the Borrower ending most closely to the dates set forth below, the Leverage
Ratio as of such day shall not exceed the ratio set forth below opposite such
date:
<TABLE>
<CAPTION>
Date Ratio Date Ratio
<S> <C> <C> <C>
December 31, 1998 3.75:1 March 31, 2002 3.00:1
March 31, 1999 3.75:1 June 30, 2002 3.00:1
June 30, 1999 3.50:1 September 30, 2002 3.00:1
September 30, 1999 3.50:1 December 31, 2002 3.00:1
December 31, 1999 3.25:1 March 31, 2003 3.00:1
March 31, 2000 3.25:1 June 30, 2003 3.00:1
June 30, 2000 3.00:1 September 30, 2003 3.00:1
September 30, 2000 3.00:1 December 31, 2003 3.00:1
December 31, 2000 3.00:1 March 31, 2004 3.00:1
March 31, 2001 3.00:1 June 30, 2004 3.00:1
</TABLE>
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<TABLE>
<S> <C> <C> <C>
June 30, 2001 3.00:1 September 30, 2004 3.00:1
September 30, 2001 3.00:1
December 31, 2001 3.00:1
</TABLE>
SECTION 6.12. Interest Coverage. As of the last day of each fiscal
quarter of the Borrower ending most nearly on the dates set forth below, the
ratio of aggregate Consolidated EBITDA to aggregate Consolidated Interest
Charges, in each case for the four consecutive fiscal quarters ending on such
day, shall not be less than 3.50:1.
SECTION 6.13. Outside Letters of Credit. Neither the Borrower nor any
of its Subsidiaries shall at any time have any letters of credit issued or
outstanding for its account other than (i) letters of credit under the New
Credit Agreement and (ii) other letters of credit issued to secure the
performance of the Borrower and its Subsidiaries under trade or government
contracts (other than for borrowed money); provided that (x) the aggregate
amount available for drawing and (without duplication) unpaid amount of all
reimbursement obligations under all such letters of credit at no time exceeds
$15,000,000, (y) neither the Borrower nor any of its Subsidiaries will create,
assume or suffer to exist any Lien on any of its assets with respect to their
obligations under such letters of credit, and (z) such letters of credit are
supported by letters of credit issued under the New Credit Agreement in stated
amount equal to the stated amount of such other letters of credit.
SECTION 6.14. Designated Senior Debt. Without the consent of the
Required Lenders, the Borrower shall not designate any Indebtedness, other than
Indebtedness under the Loan Documents, as "Designated Senior Debt", as such term
is defined in the Subordinated Note Indenture as in effect on the Closing Date,
or any comparable designation that confers upon the holders of such Indebtedness
(or any Person acting on their behalf) the right to initiate blockage periods
under the Subordinated Note Indenture (other than as a result of a payment
default), unless, prior to any such designation of such Indebtedness as
"Designated Senior Debt", the holders of such Indebtedness deliver a written
agreement to the Administrative Agent providing for the express benefit of the
Lenders that neither such holders nor any Person acting on their behalf will
initiate any such blockage period under the Subordinated Note Indenture without
the prior written consent of the Required Lenders.
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SECTION 6.15. Derivatives Obligations. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any Derivatives Obligations,
other than Derivatives Obligations entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Subsidiary is
exposed in the conduct of its business or the management of its liabilities.
SECTION 6.16. Additional Debt Incurrence. No Indebtedness that
constituted a Prepayment Event when incurred (other than Indebtedness referred
to in clause (vii) of the definition of "Indebtedness") shall mature, or provide
for any amortization or other mandatory payment of principal, or other repayment
(in the absence of default) or right of redemption at the option of the holder
thereof, prior to the Final Maturity Date.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay (i) when due any principal of any
Loan when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise, or (ii)
within five Business Days after the same shall become due, any interest on
any Loan or any fee or any other amount (other than an amount referred to in
clause (i) of this paragraph (a)) payable under this Agreement or any other
Loan Document;
(b) any Loan Party shall fail to observe or perform any covenant
contained in Sections 5.01(e), 5.04 or 5.07 or in Article VI;
(c) any Loan Party shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those covered by clause
(a) or (b) above) for 30 days after a Responsible Officer of such Loan Party
shall have become aware of such failure;
(d) any representation, warranty, certification or statement made or
deemed made by any Loan Party in
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any Loan Document or in any certificate, financial statement or other
document delivered pursuant thereto shall prove to have been incorrect in
any material respect when made (or deemed made);
(e) any Loan Party or any of its Subsidiaries shall fail to make any
payment in respect of any Material Financial Obligation when due or within
any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Indebtedness or enables (or,
with the giving of notice or lapse of time or both, would enable) the holder
of such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) any Loan Party or any of its Subsidiaries (other than any
Abandoned Subsidiary) shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against
a Loan Party or any Subsidiary of a Loan Party (other than an Abandoned
Subsidiary) seeking liquidation, reorganization or other relief with respect
to it or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against a Loan Party or any Subsidiary of a Loan
Party under the federal bankruptcy laws as now or hereafter in effect;
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(i) a Loan Party or any of its Subsidiaries (other than an Abandoned
Subsidiary) shall admit its inability to pay its debts as and when they fall
due or becomes or is deemed to be unable to pay its debts or insolvent, or
convenes a meeting for the purpose of proposing, or otherwise proposes or
enters into, any composition or arrangement with its creditors or any group
or class thereof, or anything analogous to, or having a substantially
similar effect to, any of the events specified in this paragraph or in
paragraph (g) or (h) above occurs in any jurisdiction;
(j) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $1,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate any
Plan which is then a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed
to administer any Plan which is then a Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Plan which is then a Material Plan must be terminated;
or there shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation, that is, an obligation or
series of obligations payable within 12 months, in excess of $1,000,000;
(k) a judgment or order for the payment of money in excess of
$2,000,000 shall be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied and unstayed for a period of 30
days;
(l) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended), other than any
employee stock ownership plan maintained for the benefit of the employees of
the Borrower and other than Hercules Incorporated as described in the proxy
statement dated
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July 3, 1996 regarding the annual meeting of stockholders of the Borrower,
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of 35%
or more of the outstanding shares of common stock of the Borrower; or,
during any period of 12 consecutive calendar months, individuals (i) who
were directors of the Borrower on the first day of such period or (ii) whose
nomination for election to the board of directors of the Borrower was
recommended or approved by a vote of at least a majority of the directors
then still in office who were directors of the Borrower on the first day of
such period, shall cease to constitute a majority of the board of directors
of the Borrower;
(m) any levy, seizure or attachment of or on any material portion of
the Collateral shall be made, or the loss, theft, substantial damage to or
destruction of a material portion of any Collateral shall occur, the value
of which not fully payable through insurance or compensated for pursuant to
a condemnation award shall equal or exceed $5,000,000 in the aggregate;
(n) any Lien created by any of the Security Documents shall at any
time fail to constitute a valid and (to the extent required by the Security
Documents) perfected Lien on any material portion of the Collateral
purported to be subject thereto, securing the obligations purported to be
secured thereby, with the priority required by the Loan Documents, or the
Borrower or any other Loan Party shall so assert in writing; or
(o) the Subsidiary Guaranty Agreement shall at any time cease to be a
valid and binding obligation of any Subsidiary Loan Party, or the Borrower
or any Subsidiary Loan Party shall so assert in writing;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent at the request of
Lenders representing at least 50.01% of the sum of (a) the aggregate principal
amount of outstanding Loans and (b) the aggregate principal amount of
outstanding loans under the New Credit Agreement at such time, declare the Loans
then outstanding to be due and payable in whole (or in
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part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (g) or (h)
of this Article, the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly
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contemplated by the Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall not be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken
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or not taken by it in accordance with the advice of any such counsel,
accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, with the consent of the
Borrower (which consent shall not unreasonably be withheld and may not be
withheld if an Event of Default is continuing, but which may in any event be
withheld (regardless of whether an Event of Default is continuing) if (a) such
proposed successor Administrative Agent fails to deliver evidence reasonably
satisfactory to the Borrower that such proposed successor Administrative Agent
is not a Foreign Person and (b) the Borrower in good faith concludes that the
appointment of such proposed successor Administrative Agent could result in a
violation of any law, rule guideline or regulation, or a violation of,
revocation of, failure to renew or modification of any, order, facility security
clearance or permit), to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank, and which shall
not be a Foreign Person. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
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Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
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
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 600 Second Street NE, Hopkins, MN
55343-8384, Attention of Scott S. Meyers (Telecopy No. (612) 931-5920);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Loan
and Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New York,
New York 10081, Attention of Doris Mesa (Telecopy No. (212) 552-5650), with
a copy to The Chase Manhattan Bank, 270 Park Avenue, New York, New York
10017,
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Attention of James Treger and Anne Schuler(Telecopy No. (212) 270-5100); and
(c) if to any Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders; provided
that no such agreement shall (i) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (ii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest
thereon, or any fees
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payable hereunder, or reduce the amount of, waive or excuse any such payment,
without the written consent of each Lender affected thereby, (iii) change
Section 2.12(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (iv)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision of any Loan Document specifying the number or
percentage of Lenders or lenders under the New Credit Agreement required to
waive, amend or modify any rights thereunder or make any determination or grant
any consent thereunder, without the written consent of each Lender and each
lender under the New Credit Agreement, (v) release all or substantially all of
the Subsidiary Loan Parties from their Guarantees under the Subsidiary Guaranty
Agreement (except as expressly provided in the Agreement), or limit their
liability in respect of such Guarantee, without the written consent of each
Lender, (vi) release all or substantially all of the Collateral from the Liens
of the Security Documents, without the written consent of each Lender or (vii)
adversely affect the rights, obligations or protections of lenders under the New
Credit Agreement without having a similar and ratable adverse affect on the
Loans, without the written consent of lenders under the New Credit Agreement
holding a majority of the total Revolving Exposure (as defined in the New Credit
Agreement), the outstanding Term Loans (as defined in the New Credit Agreement,
and the unused Commitments (as defined in the New Credit Agreement); provided
further that (A) no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent without the prior written consent
of the Administrative Agent and (B) any waiver, amendment or modification of
this Agreement that by its terms affects the rights or duties of the lenders
under the New Credit Agreement (but not the Lenders) may be effected by an
agreement or agreements in writing entered into by the Borrower and the
requisite percentage in interest of the Lenders or the lenders under the New
Credit Agreement, as the case may be.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the
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transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with, or as
a result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or the use of the proceeds therefrom, (iii) any Environmental
Liability related in any way to the Borrower or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee or any officer, director, employee, affiliate, agent or controlling
person of such Indemnitee (or of an institution of which such Indemnitee is an
officer, director, employee, affiliate, agent or controlling person).
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent such
Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is
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sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent in its capacity
as such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the sum of the total Revolving Exposures (as defined in
the New Credit Agreement), outstanding Term Loans (as defined in the New Credit
Agreement), unused Commitments (as defined in the New Credit Agreement) and
Loans at the time.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and except that no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except in compliance with the remaining
paragraphs of this Section 9.04. Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
the Loans at the time owing to it); provided that (i) except in the case of an
assignment to a Lender or an Affiliate of a Lender, each of the Borrower and the
Administrative Agent
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must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld and, in the case of the Borrower, may not be
withheld if an Event of Default is continuing, but which may in any event be
withheld by the Borrower (regardless of whether an Event of Default is
continuing) if (x) such proposed assignee fails to deliver evidence reasonably
satisfactory to the Borrower that such assignee is not a Foreign Person and (y)
the Borrower in good faith concludes that such assignment could result in a
violation of any law, rule or regulation, or a violation of, revocation of,
failure to renew or modification of any order, facility security clearance or
permit), (ii)except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender's Loans, the amount of the Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, except that this clause (iii) shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of Loans, (iv)
simultaneously with each assignment of rights and obligations in respect of
Loans, the assigning Lender shall assign to the same assignee a proportionate
part of all such Lender's rights and obligations as a lender in respect of
Closing Date Term Loans (as defined in the New Credit Agreement) under the New
Credit Agreement, (v) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and (vi) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent and the Borrower an
Administrative Questionnaire; and provided further that any consent of the
Borrower otherwise required under this paragraph shall not be required if an
Event of Default has occurred and is continuing, but which may in any event be
withheld (regardless of whether an Event of Default is continuing) if (x) such
proposed assignee fails to deliver evidence reasonably satisfactory to the
Borrower that such assignee is not a Foreign Person and (y) the Borrower in
good faith concludes that such assignment could result in a violation of any
law, rule or regulation, or a violation of, revocation of, failure to
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renew or modification of any order, facility security clearance or permit.
Subject to acceptance and recording thereof pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and Acceptance, be released from its obliga tions under this Agreement (and,
in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease
to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.09, 2.10, 2.11 and 9.03). Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and principal amount of
the Loans owing to each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in
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the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other
institutions (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of the Loans owing
to it); provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents (and shall not
grant such Participant any direct or indirect vote on or veto power with respect
to any of the foregoing) and shall contain an agreement by the Participant to be
bound by the provisions of Section 9.12; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in clause
(i), (ii), (iii), (v), (vi) or (vii) of the first proviso to Section 9.02(b)
that affects such Participant. Subject to paragraph (f) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.09, 2.10 and 2.11 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.09, 2.10 or 2.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to
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a Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid. The provisions of
Sections 2.09, 2.10, 2.11 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an
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executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates 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 obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) Pursuant to NYGOL Section.5-1401, this Agreement shall be construed
in accordance with and governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York
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State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against the Borrower or its properties in
the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
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Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than a Loan Party. For the
purposes of this Section, "Information" means all information received from any
Loan Party relating to any Loan Party or its business, operations, assets,
liabilities, financial condition or position or results of operations or
prospects other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the
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"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan in accordance with applicable law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.14. Information Concerning Foreign Persons. Each Lender that
is or becomes a Foreign Person after the Closing Date, shall deliver to each of
the Borrower and the Administrative Agent promptly after becoming a Foreign
Person, written notice that such Lender is or has become a Foreign Person and
such other information concerning the ownership, jurisdiction of organization or
citizenship of such Lender or any Person directly or indirectly controlling such
Lender as the Borrower may reasonably request to comply with any applicable
laws, rules, regulations and orders (including any applicable laws, rules,
regulations and orders relating to national security). If, upon receipt of any
such notice, the Borrower in good faith concludes that, as a consequence of such
Lender's being or becoming a Foreign Person, there could result a violation of
any law, rule or regulation, or a violation of, revocation of, failure to renew
or modification of any order, facility security clearance or permit, the
Borrower shall have the right, with the assistance of the Administrative Agent,
to seek a substitute lender or lenders reasonably satisfactory to the
Administrative Agent and the Borrower (which may be one or more of the Lenders)
to purchase the Loans of such Lender, and the Borrower, the Administrative
Agent, such Lender and substitute lender or lenders shall execute and deliver an
appropriately completed Assignment and Acceptance pursuant to Section 9.04(b)
hereof to effect the assignment of rights
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to and assumption of obligations by such substitute lender or lenders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
ALLIANT TECHSYSTEMS INC.,
by
-------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by
-------------------------
Name:
Title:
[OTHER BANKS],
by
-------------------------
Name:
Title:
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Exhibit 9.(b)(3)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of
November 23, 1998
among
ALLIANT TECHSYSTEMS INC.
The Lenders Party Hereto
The Issuing Banks Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
---------------------------
CHASE SECURITIES INC.
as Lead Arranger and Book Manager
BANK OF AMERICA NT&SA
as Syndication Agent
CREDIT LYONNAIS CHICAGO BRANCH
as Documentation Agent
and
BANK OF AMERICA NT&SA,
CREDIT LYONNAIS CHICAGO BRANCH,
THE BANK OF NEW YORK
as Co-Arrangers
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
Definitions
<S> <C>
SECTION 1.01. Defined Terms........................................................... 2
SECTION 1.02. Classification of Loans and
Borrowings............................................................ 27
SECTION 1.03. Terms Generally ........................................................ 27
SECTION 1.04. Accounting Terms; GAAP.................................................. 28
ARTICLE II
The Credits
SECTION 2.01. Commitments............................................................. 28
SECTION 2.02. Loans and Borrowings.................................................... 29
SECTION 2.03. Requests for Borrowings................................................. 30
SECTION 2.04. Swingline Loans......................................................... 31
SECTION 2.05. Letters of Credit....................................................... 32
SECTION 2.06. Funding of Borrowings................................................... 39
SECTION 2.07. Interest Elections...................................................... 40
SECTION 2.08. Termination and Reduction of
Commitments............................................................ 42
SECTION 2.09. Repayment of Loans; Evidence of Debt.................................... 43
SECTION 2.10. Amortization of Term Loans.............................................. 44
SECTION 2.11. Prepayment of Loans..................................................... 45
SECTION 2.12. Fees.................................................................... 47
SECTION 2.13. Interest................................................................ 49
SECTION 2.14. Alternate Rate of Interest.............................................. 50
SECTION 2.15. Increased Costs......................................................... 50
SECTION 2.16. Break Funding Payments.................................................. 52
SECTION 2.17. Taxes................................................................... 53
SECTION 2.18. Payments Generally; Pro Rata Treatment;
Sharing of Set-Offs.................................................... 54
SECTION 2.19. Mitigation Obligations; Replacement
of Lenders............................................................. 57
SECTION 2.20. Obligations Constitute Designated Senior
Indebtedness . . . . . . . . . . . ................................... 58
</TABLE>
<PAGE>
<TABLE>
ARTICLE III
Representations and Warranties
<S> <C>
SECTION 3.01. Corporate Existence and Power........................................... 58
SECTION 3.02. Corporate and Governmental
Authorization; No Contravention....................................... 58
SECTION 3.03. Binding Effect.......................................................... 59
SECTION 3.04. Financial Information................................................... 59
SECTION 3.05. Litigation and Environmental Matters.................................... 59
SECTION 3.06. Compliance with ERISA ................................ 59
SECTION 3.07. Environmental Matters................................................... 60
SECTION 3.08. Taxes................................................................... 60
SECTION 3.09. Subsidiaries............................................................ 61
SECTION 3.10. Not an Investment Company............................................... 61
SECTION 3.11. Full Disclosure......................................................... 61
SECTION 3.12 Compliance with Laws.................................................... 62
SECTION 3.13. Solvency................................................................ 62
SECTION 3.14. Senior Indebtedness..................................................... 62
SECTION 3.15. Year 2000............................................................... 62
ARTICLE IV
Conditions
SECTION 4.01. Closing Date............................................................ 63
SECTION 4.02. Each Credit Event....................................................... 66
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other
Information............................................................ 67
SECTION 5.02. Payment of Obligations.................................................. 70
SECTION 5.03. Maintenance of Property; Insurance...................................... 70
SECTION 5.04. Conduct of Business and Maintenance 72
of Existence........................................................... 72
SECTION 5.05. Compliance with Laws.................................................... 73
SECTION 5.06. Inspection of Property, Books and
Records................................................................ 73
SECTION 5.07. Use of Proceeds and Letters of Credit................................... 73
SECTION 5.08. Additional Subsidiaries................................................. 73
SECTION 5.09. Further Assurances...................................................... 74
SECTION 5.10. Maintenance of Collateral;
Alterations............................................................ 75
</TABLE>
2
<PAGE>
<TABLE>
ARTICLE VI
Negative Covenants
<S> <C>
SECTION 6.01. Limitation on Subsidiary Debt........................................... 76
SECTION 6.02. Negative Pledged........................................................ 76
SECTION 6.03. Consolidation; Mergers and Sales of
Assets................................................................. 79
SECTION 6.04. Investments in Subsidiaries............................................. 80
SECTION 6.05 Transactions with Affiliates............................................ 81
SECTION 6.06. Constitutional Documents................................................ 82
SECTION 6.07. Waivers and Amendments of Related
Documents.............................................................. 82
SECTION 6.08. Restricted Payments..................................................... 82
SECTION 6.09. Foreign Subsidiaries.................................................... 83
SECTION 6.10. Minimum Consolidated Net Worth.......................................... 83
SECTION 6.11. Leverage Ratio.......................................................... 83
SECTION 6.12. Interest Coverage....................................................... 84
SECTION 6.13. Outside Letters of Credit............................................... 84
SECTION 6.14. Designated Senior Debt.................................................. 84
SECTION 6.15. Derivatives Obligations................................................. 84
SECTION 6.16. Additional Debt Incurrence.............................................. 85
ARTICLE VII
Events of Default......................................... 85
ARTICLE VIII
The Administrative Agent...................................... 89
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices................................................................ 92
SECTION 9.02. Waivers; Amendments.................................................... 92
SECTION 9.03. Expenses; Indemnity; Damage Waiver..................................... 94
SECTION 9.04. Successors and Assigns................................................. 96
SECTION 9.05. Survival............................................................... 100
SECTION 9.06. Counterparts; Integration;
Effectiveness......................................................... 101
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
SECTION 9.07. Severability.......................................................... 101
SECTION 9.08. Right of Setoff....................................................... 101
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process................................................ 102
SECTION 9.10. WAIVER OF JURY TRIAL.................................................. 102
SECTION 9.11. Headings.............................................................. 102
SECTION 9.12. Confidentiality....................................................... 102
SECTION 9.13. Interest Rate Limitation.............................................. 103
SECTION 9.14. Information Concerning Foreign Persons................................ 104
SECTION 9.15. Failure of Lender to Satisfy Minimum
Rating Condition..................................................... 105
</TABLE>
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 5.03 -- Insurance
Schedule 5.10 -- Mortgaged Property
Schedule 6.02 -- Existing Liens
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Perfection Certificate
Exhibit C -- Form of Pledge Agreement
Exhibit D -- Form of Security Agreement
Exhibit E -- Form of Subsidiary Guaranty Agreement
Exhibit F-1 -- Form of Opinion of Jones, Day, Reavis &
Pogue
Exhibit F-2 -- Form of Opinion of Daryl L. Zimmer
Exhibit F-3 -- Form of Opinion of Local Counsel to the Borrower
Exhibit G -- Continuing Credit Agreement
Exhibit H -- Solvency Certificate
4
<PAGE>
CREDIT AGREEMENT dated as of November 23, 1998, among
ALLIANT TECHSYSTEMS INC., the LENDERS party hereto, and THE CHASE
MANHATTAN BANK, as Administrative Agent.
The Borrower has requested (a) the Lenders to extend credit to the
Borrower in the form of (i) Closing Date Term Loans on the Closing Date, in an
aggregate principal amount not in excess of $165,000,000, (ii) Delayed Draw Term
Loans at any time and from time to time prior to June 30, 1999, in an aggregate
principal amount not in excess of $200,000,000, and (iii) Revolving Loans and
Swingline Loans at any time and from time to time prior to the Final Maturity
Date, in an aggregate principal amount at any time outstanding not in excess of
$250,000,000, of which not more than $20,000,000 may be in the form of Swingline
Loans, and (b) the Issuing Banks to extend credit to the Borrower in the form of
Letters of Credit at any time and from time to time prior to the Final Maturity
Date, in an aggregate stated amount at any time outstanding not in excess of
$150,000,000.
All the proceeds of the Term Loans and the proceeds of up to
$85,000,000 of the Revolving Loans will be used by the Borrower (a) on the
Closing Date, in connection with the amendment and restatement of the Continuing
Credit Agreement in the form set forth in Exhibit G, to repay outstanding loans
under the Continuing Credit Agreement in an aggregate amount sufficient so that
not more than $35,000,000 shall remain outstanding thereunder, (b) at any time
and from time to time on or prior to June 30, 1999, to repurchase common stock
of the Borrower pursuant to the Stock Buyback and (c) to pay related fees and
expenses. The proceeds of Revolving Loans and Swingline Loans made after the
Closing Date will be used for general corporate purposes, including to finance
acquisitions and to pay related fees and expenses. The Letters of Credit will be
used for general corporate purposes.
The Lenders are willing to extend such credit to the Borrower, and the
Issuing Banks are willing to issue Letters of Credit for the account of the
Borrower, on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
<PAGE>
ARTICLE I
Definitions
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Abandoned Subsidiary" means any Subsidiary of any Loan Party (a) (i)
as to which a determination shall have been made in accordance with Section 5.04
to terminate its corporate existence and (ii) the fair market value of the
assets of which, prior to such termination, shall not exceed $5,000,000 or (b)
the assets of which consist solely of surplus, discontinued or worn-out
equipment or other assets (including leasehold interests) no longer used in the
on-going business of the Borrower and the Subsidiaries.
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acquisition Documents" means the Hercules Purchase Agreement and all
agreements, documents and instruments executed and delivered pursuant thereto or
in connection with the foregoing, each as amended from time to time in
accordance with the terms hereof and thereof.
"Acquired Indebtedness" means any Indebtedness (i) of any Subsidiary
existing at the time of acquisition of such Subsidiary or (ii) assumed by a
Subsidiary in connection with the acquisition of assets, or the business of
another Person, whether by purchase, merger, consolidation or otherwise, in each
case in clause (i) or (ii) above, which Indebtedness is not incurred by the
selling, transferring, merging or consolidating Person in contemplation of such
acquisition, purchase, merger, consolidation or other event.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity
as administrative agent for the Lenders hereunder.
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"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent, duly completed by each Lender
and submitted to the Administrative Agent (with a copy to the Borrower).
"Affiliate" means, with respect to any Person, (i) any Person that
directly, or indirectly through one or more intermediaries, controls such former
Person (a "Controlling Person") and (ii) any Person (other than a Subsidiary of
such former Person) which is controlled by or is under common control with a
Controlling Person; provided that, no officer or director of a Person, who is
not otherwise an Affiliate of such Person, will be considered an Affiliate of
such Person solely because of their position as an officer or director of such
Person. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. For purposes of Section 6.05, "Affiliate" shall include
any person that, by itself or as a member of a group of persons (in each case
within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934,
as amended), other than any employee benefit plan (including any stock ownership
plan (including 401K plans, restricted stock plans, employee stock purchase
plans, performance sharing planing and incentive plans)) maintained for the
benefit of the employees of the Borrower, owns 10% or more of the outstanding
shares of common stock of the Borrower (including any Affiliates of such
person).
"Aggregate Net Investment in Unrestricted Subsidiaries" means, at any
date of determination, the excess of (x) all Investments (valued at the fair
market value of the consideration paid or given in respect of such Investments)
after the Closing Date by the Borrower or any Subsidiary in all Unrestricted
Subsidiaries (including all designations of a Subsidiary as an Unrestricted
Subsidiary, which shall be deemed to constitute an Investment in an amount equal
to the shareholders equity in such Subsidiary at the time of such designation)
over (y) the sum, without duplication, of (i) net proceeds of the disposition of
the Equity Interests and other Investments in Unrestricted Subsidiaries received
by the Borrower or any Subsidiary, plus (ii) principal payments and returns of
capital received on or in respect of Investments in Unrestricted Subsidiaries by
the Borrower or any Subsidiary, in each case since the Closing Date.
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<PAGE>
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Revolving Lender,
the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect to any Loan, or
with respect to the commitment fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption "ABR Spread",
"Eurodollar Spread" or "Commitment Fee Rate", as the case may be, based upon the
Leverage Ratio as of the most recent determination date; provided that until
June 30, 1999, or, if later, the date on which the financial statements with
respect to the Borrower's fiscal quarter ended March 31, 1999, have been
delivered, the "Applicable Rate" shall be the applicable rate per annum set
forth below in Category 5:
<TABLE>
<CAPTION>
ABR Eurodollar Commitment Fee
Leverage Ratio: Spread Spread Rate
--------------- ------ ------ ----
<S> <C> <C> <C>
Category 1
Less Than 1.5 0 1.25 0.300
Category 2
Greater Than equal 1.5 but
Less Than 2.0 0.25 1.50 0.375
Category 3
Greater Than equal 2.0 but
Less Than 2.5 0.50 1.75 0.375
Category 4
Greater Than equal 2.5 but
Less Than 3.0 0.75 2.00 0.500
Category 5
Greater Than equal3.0 but
Less Than 3.5 1.00 2.25 0.500
Category 6 1.25 2.50 0.500
Greater Than Equal 3.5
</TABLE>
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower's fiscal year
based upon the
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<PAGE>
Borrower's consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the third Business Day after the date of delivery to the
Administrative Agent of such consolidated financial statements indicating such
change and ending on the date immediately preceding the effective date of the
next such change; provided that the Leverage Ratio shall be deemed to be in
Category 6 (A) at any time that an Event of Default has occurred and is
continuing or (B) at the option of the Agent or at the request of the Required
Lenders if the Borrower fails to deliver the consolidated financial statements
required to be delivered by it pursuant to Section 5.01(a) or (b), during the
period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.
At any time that the rating assigned to the Borrower's senior
unsecured, non-credit-enhanced long-term indebtedness for borrowed money by each
of S&P and Moody's is lower than the respective rating assigned thereto by such
rating agency on September 30, 1998, each ABR Spread and Eurodollar Spread
specified on the chart above shall be increased by 0.25.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
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<PAGE>
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means Alliant Techsystems Inc., a Delaware corporation and
its successors permitted under Section 5.04 or 6.03.
"Borrowing" means Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Lease" means a lease that would be capitalized on a balance
sheet of the lessee prepared in accordance with GAAP.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or any Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
making or maintaining Loans or by such Lender's or such Issuing Bank's holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of
this Agreement.
6
<PAGE>
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Closing Date Term Loans, Delayed Draw Term Loans or Swingline Loans and, when
used in reference to any Commitment, refers to whether such Commitment is a
Revolving Commitment, Closing Date Term Loan Commitment or Delayed Draw
Commitment.
"Closing Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Closing Date Term Loan" means a Loan made pursuant to clause (a) of
Section 2.01.
"Closing Date Term Loan Commitment" means, with respect to each
Lender, the commitment, if any, of such Lender to make a Closing Date Term Loan
hereunder on the Closing Date, expressed as an amount representing the maximum
principal amount of the Closing Date Term Loan to be made by such Lender
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Closing Date Term Loan Commitment is set forth on Schedule 2.01,
or in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Closing Date Term Loan Commitment, as applicable. The initial
aggregate amount of the Lenders' Closing Date Term Loan Commitments is
$165,000,000.
"Closing Date Term Loan Lender" means a Lender with a Closing Date
Term Loan Commitment or an outstanding Closing Date Term Loan.
"Closing Date Term Loan Maturity Date" means March 31, 2004.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Commitment" means a Revolving Commitment, Closing Date Term Loan
Commitment or Delayed Draw Commitment, or any combination thereof (as the
context requires).
"Consolidated EBITDA" means, for any fiscal period, Consolidated Net
Income for such period plus, to the extent deducted in determining Consolidated
Net Income for
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<PAGE>
such period (i) the aggregate amount of Consolidated Interest
Charges, income tax expense, depreciation, amortization and other similar
non-cash charges and (ii) the net effect of the aggregate amount of charges (not
to exceed $20,000,000) attributable to early extinguishment of up to
$150,000,000 aggregate stated principal amount of Subordinated Notes (including
premium over par value plus unamortized debt issuance costs).
"Consolidated Interest Charges" means for any period the aggregate
interest charges incurred by the Borrower and its Consolidated Subsidiaries for
such period, whether expensed or capitalized, including (a) the portion of any
obligation under Capital Leases allocable to interest expense in accordance with
GAAP and (b) the portion of any debt discount (but not expenses of issuance)
that shall be amortized in such period.
"Consolidated Net Income" means for any period the consolidated net
income of the Borrower and its Consolidated Subsidiaries for such period.
"Consolidated Net Worth" means at any date the sum of consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries plus the
amount (if any) deducted in determining such consolidated stockholders' equity
as a result of the aggregate gross payments made by the Borrower to effect the
Stock Buyback.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"Constitutional Documents" in relation to any corporate Person means
the Certificate of Incorporation and By-Laws or other constitutional documents
of such corporate Person.
"Continuing Credit Agreement" means the Borrower's Amended and
Restated Credit Agreement dated as of November 14, 1996, and after the Closing
Date means such agreement as amended and restated as of the Closing Date.
"Default" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
8
<PAGE>
"Delayed Draw Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Delayed Draw Term Loans hereunder,
expressed as an amount representing the maximum aggregate principal amount of
the Delayed Draw Term Loans to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Delayed
Draw Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Closing Date
Term Loan Commitment, as applicable. The initial aggregate amount of the
Lenders' Delayed Draw Commitments is $200,000,000.
"Delayed Draw Lender" means a Lender with a Delayed Draw Commitment or
an outstanding Delayed Draw Term Loan.
"Delayed Draw Term Loan" means a Loan made pursuant to clause (b) of
Section 2.01.
"Demil Assets" means, collectively, all the assets of the Borrower and
the Subsidiaries that are located in either the Ukraine or Belarus prior to the
Closing Date and are used or useful in the treatment, dismantling, and disposal
of non-nuclear and non-biological weapons and the components and by-products
thereof and any Investment made prior to the Closing Date of the Borrower or any
Subsidiary in any Joint Venture or other Person that has controlled or owned
such assets, and any recovery in respect of insurance proceeds or otherwise of,
or in respect of, any of the foregoing.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"dollars" or "$" refers to lawful money of the United States of
America.
9
<PAGE>
"Eligible Collateral" has the meaning set forth in Section 9.15.
"Eligible Lender" has the meaning set forth in Section 9.15.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"Environmental Liabilities" means any and all liabilities of or
related to the Borrower and its Subsidiaries, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to Environmental Laws.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"Equity Issuance" means any sale or issuance by the Borrower of its
capital stock other than (i) any Preference Stock to the extent of the Maturing
Amounts thereof, (ii) capital stock issued pursuant to employee stock options or
director stock options issued by the Borrower in the ordinary course of
business, or in connection with employee benefit plans (including stock
ownership plans (including 401K plans, restricted stock plans, employee stock
purchase plans, performance sharing plans and incentive plans)) and (iii)
capital stock issued as consideration for the acquisition of operating assets or
business operations of any Person (whether through an acquisition of stock or
assets).
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<PAGE>
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Existing Letters of Credit" means the letters of credit issued before
the Closing Date pursuant to the Continuing Credit Agreement.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Final Maturity Date" means the sixth anniversary of the Closing Date.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Financing Transactions" means the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, including
the amendment and restatement as of the Closing Date of the Continuing Credit
Agreement, the borrowing of Loans hereunder and under the Continuing Credit
Agreement on the Closing Date, the use of the proceeds thereof and the
11
<PAGE>
issuance of Letters of Credit hereunder, and the payment of related fees and
expenses.
"Fiscal Year" means a fiscal year of the Borrower, and "Fiscal
Year"for any particular year means the fiscal year of the Borrower ended or
ending during the specified calendar year (for example, "Fiscal Year 1998" means
the fiscal year of the Borrower ending on March 31, 1998).
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Person" means (a) any government (a "Foreign Government")
other than the United States government or the government of any political
subdivision thereof, (b) any agency of a Foreign Government, (c) any form of
business enterprise organized under the laws of any country other than the
United States or its possessions or any political subdivision thereof or (d) any
form of business enterprise owned or controlled by any of the persons described
in clauses (a), (b) or (c).
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia. The Borrower will promptly notify the
Administrative Agent if any additional Foreign Subsidiaries are formed or
acquired after the Closing Date.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect,
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<PAGE>
contingent or otherwise, of such Person (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (b) entered into
for the purpose of assuring in any other manner the obligee of such Indebtedness
or other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part); provided that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary course
of business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hercules Purchase Agreement" means the Purchase and Sale Agreement
dated as of October 28, 1994 between the Borrower and Hercules Incorporated,
including the exhibits and schedules thereto, as amended from time to time in
accordance with the terms hereof and thereof.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with GAAP, (v) all Indebtedness of others secured by a
Lien on any asset of such Person, whether or not such Indebtedness is assumed by
such Person (to the extent of the lesser of the amount of such Indebtedness and
the book value of any assets subject to such Lien), (vi) all non-contingent
obligations (and, for purposes of Section 6.02 and the definitions of Material
Indebtedness and Material Financial Obligations, all contingent obligations) of
such Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, including all obligations to
reimburse LC Disbursements, (vii) to the extent of any Maturing Amount thereof,
any Preference Stock, and (viii) all Indebtedness of others Guaranteed by such
Person (to the extent of the lesser of the amount of such Indebtedness
Guaranteed or the amount of such Guarantee).
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<PAGE>
"Information Memorandum" means the Confidential Information Memorandum
dated October 1998 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to convert
or continue a Revolving Borrowing or Term Borrowing in accordance with Section
2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan (other
than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes of this definition only, the date of
a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise, except,
in the case of the Borrower, for any investment to the extent made utilizing
common stock of the Borrower.
"Issuing Bank" means The Chase Manhattan Bank, Chase Manhattan Bank
Delaware and each other Lender that shall agree to issue any Letter of Credit,
each in its
14
<PAGE>
capacity as the issuer of any Letter of Credit hereunder and its successors in
such capacity as provided in Section 2.05(i). Each Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of such Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"Joint Venture" means at any time (i) any corporation of which not
less than 20% nor more than 50% of each class of capital stock having ordinary
voting power to elect the board of directors of such corporation or other
persons performing similar functions are at the time directly or indirectly
owned by the Borrower and (ii) any partnership, association or joint venture not
less than 20% nor more than 50% of the Equity Interests of which are at the time
directly or indirectly owned by the Borrower, but excluding in any event any
Subsidiary of the Borrower.
"LC Disbursement" means a payment made by an Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Revolving Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto in accordance with Section 9.04 and
pursuant to an Assignment and Acceptance, other than any such Person that ceases
to be a party hereto pursuant to an Assignment and Acceptance. Unless the
context otherwise requires, the term "Lenders" includes the Swingline Lenders.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Leverage Ratio" means, as of any date, the ratio of (i) consolidated
Indebtedness of the Borrower and its Consolidated Subsidiaries on such date to
(ii) Consolidated EBITDA for the four consecutive fiscal quarters ending on or
most recently prior to such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the average (rounded upwards, if necessary, to the next 1/100
of %) of the
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respective rates per annum at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered to the principal London
offices of the Reference Lenders in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period. If any Reference Lender does
not furnish a timely quotation, the Administrative Agent shall determine the
relevant rate on the basis of the quotation or quotations furnished by the
remaining Reference Lender or Reference Lenders. In the event that no timely
quotation is available from any of the Reference Lenders at such time for any
reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Loan Party or any Subsidiary of a Loan
Party shall be deemed to own subject to a Lien any asset which it has acquired
or holds subject to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement relating to
such asset.
"Loan Documents" means this Agreement, the Continuing Credit Agreement
and the Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan
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Document or (c) the rights of or benefits available to the Lenders under any
Loan Document.
"Material Financial Obligations" means a principal or face amount of
Indebtedness and/or payment obligations in respect of Derivatives Obligations of
the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, exceeding in the aggregate $10,000,000.
"Material Indebtedness" means Indebtedness (other than the
Indebtedness under the Loan Documents) of the Borrower and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate principal or face amount exceeding $10,000,000.
"Material Plan" means a Plan or Plans having aggregate Unfunded
Liabilities in excess of $5,000,000.
"Maturing Amount" means, with respect to any Preference Stock, an
amount equal to the lesser of (i) the aggregate amount of cash proceeds received
by the issuer of such Preference Stock from or in respect of such Preference
Stock less any expenses reasonably incurred by such Person in respect of such
Preference Stock and (ii) the aggregate amount of Preference Stock thereby
issued that will or may become due before the Final Maturity Date as a result of
any scheduled maturity, amortization or mandatory redemption or any right on the
part of any holder thereof to require any repayment or prepayment of any portion
thereof.
"Minimum Rating Condition" has the meaning set forth in Section 9.15.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property
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to secure the Obligations or any part thereof. Each Mortgage shall be
satisfactory in form and substance to the Administrative Agent.
"Mortgaged Property" means, initially, each parcel of real property
and the improvements thereto owned by a Loan Party and identified on Schedule
6.09, and includes each other parcel of real property and improvements thereto
with respect to which a Mortgage is granted pursuant to Section 5.08 or 5.09.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) or statutory or other obligations secured by or
subject to any Lien on such asset or otherwise subject to mandatory prepayment
(or other application of such proceeds) as a result of such event, whether
pursuant to any contractual obligation, law, rule or regulation and (iii) the
amount of all taxes paid (or reasonably estimated to be payable) by the Borrower
and the Subsidiaries, and the amount of any reserves established by the Borrower
and the Subsidiaries to fund contingent liabilities reasonably estimated to be
payable, in each case during the year that such event occurred or the next
succeeding year and that are directly attributable to such event (as determined
reasonably and in good faith by the treasurer or chief financial officer of the
Borrower).
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document (but excluding
in any event income taxes, taxes
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determined by reference to income, franchise taxes, branch profits taxes,
withholding taxes and other similar taxes).
"Parent" means, with respect to any Lender, any Person as to which
such Lender is a subsidiary.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Perfection Certificate" means a certificate in the form of Exhibit B
or any other form approved by the Administrative Agent.
"Permitted Lines of Business" means the business of government-owned
contractor-operated facilities management or research and development for, or
the development, manufacture, acquisition and distribution, sale, treatment,
dismantling and disposal of, and other businesses related to, non-nuclear and
non-biological weapons, defense, aerospace, navigation, control and marine
systems, and providing insurance or self-insurance coverage for, or liability
management or sales or marketing services and activities with respect to, the
foregoing (including that described in Part I, Item 1 of the Borrower's Form
10-K for the Fiscal Year ended March 31, 1998).
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means at any time an employee pension benefit plan as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Pledge Agreement" means the Pledge Agreement among the Borrower, the
Subsidiary Loan Parties and the Administrative Agent, substantially in the form
of Exhibit C.
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"Preference Stock" means, with respect to any issuer, an Equity
Interest in such issuer which under the Constitutional Documents of such issuer
is entitled to a preference over any other Equity Interest in such issuer as to
payment of dividends and/or distributions upon the voluntary or involuntary
liquidation of such issuer.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of the Borrower or
any Subsidiary (other than dispositions described in clauses (i)-(ix) of
Section 6.03(b)); provided that no sale, transfer, or other disposition
made in any fiscal year and subject to this paragraph (a) shall constitute
a "Prepayment Event" until the aggregate Net Proceeds from all such sales,
transfers and other dispositions not otherwise applied in accordance with
Section 2.11(c) in respect of Net Proceeds received in respect of sales,
transfers and other dispositions during such fiscal year exceeds $5,000,000
(the amount of the first prepayment after exceeding $5,000,000 being equal
to the aggregate Net Proceeds received in respect of sales, transfers and
other dispositions from all such sales, transfers and dispositions during
such fiscal year) and thereafter in such fiscal year no such sale, transfer
or other disposition shall constitute a "Prepayment Event" until the
aggregate Net Proceeds therefrom not otherwise applied in accordance with
Section 2.11(c) in respect of Net Proceeds received in respect of sales,
transfers and other dispositions during such fiscal year exceeds $500,000
(the amount of each subsequent prepayment being equal to the aggregate of
such Net Proceeds not previously applied in accordance with Section 2.11(c)
in respect of Net Proceeds received in respect of sales, transfers and
other dispositions during such fiscal year); or
(b) any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property
or assets, but only to the extent that an amount equal to the amount of the
Net Proceeds therefrom has not been applied to repair, restore or replace
such property or assets, or to acquire other property or assets as
contemplated in Section 2.11(c), within 270 days after such event; or
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(c) the incurrence by the Borrower of any Indebtedness of the type
referred to in clauses (i) or (ii) of the definition of "Indebtedness" or
to the extent of any Maturing Amount thereof, the issuance by the Borrower
of any Preference Stock, other than
(i) Indebtedness under the Loan Documents,
(ii) up to $11,000,000 of Subordinated Indebtedness the proceeds
of which are applied to repay principal, interest or premium in
respect of the Subordinated Notes,
(iii) Indebtedness incurred or assumed for the purpose of
financing all or part of the costs (including purchase or construction
costs, design, engineering, transportation, installation, testing and
analogous costs, and all related professional costs and expenses) of
acquiring, constructing or improving assets or services; provided that
such Indebtedness is incurred no later than 180 days after such
acquisition or completion of such construction or improvement, and
(iv) Acquired Indebtedness.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Reference Lenders" means the principal London offices of The Chase
Manhattan Bank and any other Lenders agreed to by the Borrower and the
Administrative Agent.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments and lenders under the Continuing
Credit Agreement, voting as a single class, representing at least 50.01% of the
sum of (a) the total Revolving Exposures, outstanding Term Loans and unused
Commitments and (b) the
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aggregate principal amount of outstanding loans under the Continuing Credit
Agreement at such time.
"Responsible Officers" means the chief executive officer, chief
financial officer, president, treasurer, controller, secretary and any executive
or senior vice president of the Borrower.
"Restricted Payment" means (i) any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or (ii) any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Equity Interests in the Borrower or any
Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in the Borrower or any Subsidiary.
"Revolving Availability Period" means the period from and including
the Closing Date to but excluding the earlier of the Final Maturity Date and the
date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The initial aggregate amount of the
Lenders' Revolving Commitments is $250,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans and
its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
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"Revolving Loan" means a Loan made pursuant to clause (c) of Section
2.01.
"Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by a Loan Party or any Subsidiary of a Loan Party of
any property that, or of any property similar to and used for substantially the
same purposes as any other property that, has been or is to be sold, assigned,
transferred or otherwise disposed of by a Loan Party or any of its Subsidiaries
to such Person with the intention of entering into such a lease.
"S&P" means Standard & Poor's.
"Security Agreement" means the Security Agreement among the Borrower,
the Subsidiary Loan Parties and the Administrative Agent, substantially in the
form of Exhibit D.
"Security Documents" means the Pledge Agreement, the Security
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.08 or 5.09 to secure
any of the Obligations.
"September 1998 10-Q" means the Borrower's report on Form 10-Q for the
period ended September 27, 1998, as filed with the Securities and Exchange
Commission.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
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"Stock Buyback" means the repurchase by the Borrower of up to
3,000,000 shares of its common stock (such number to be adjusted to give effect
to stock splits, stock dividends and analogous events occurring after the
Closing Date) at an aggregate purchase price not in excess of $220,000,000 plus
the payment of related fees and expenses.
"Subordinated Indebtedness" means Indebtedness of the Borrower
subordinated to the payment of the Loans having terms no less favorable to the
Lenders (including subordination terms) than the Subordinated Notes, in an
aggregate principal amount not to exceed $250,000,000 incurred after the Closing
Date, provided that no scheduled principal amortization or payment date in
respect of such Indebtedness shall occur prior to the Final Maturity Date.
"Subordinated Notes" means, at any time, the remaining outstanding
subordinated notes, in an aggregate principal amount not to exceed $10,100,000,
issued pursuant to the Subordinated Note Indenture; and "Subordinated Note"
means any of the foregoing.
"Subordinated Note Indenture" means the Subordinated Note Indenture
dated as of March 1, 1995 between the Borrower and U.S. Bank National
Association (formerly First Bank National Association), as Trustee, with regard
to the issuance of $150,000,000 aggregate principal amount of subordinated notes
of the Borrower, substantially in the form delivered to the Lenders prior to the
date hereof, and as amended from time to time in accordance with the terms
thereof and hereof.
"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty
Agreement among the Subsidiary Loan Parties and the Administrative Agent,
substantially in the form of Exhibit E.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
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controlled or held, or (b) that is, as of such date, otherwise controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower (other than an
Unrestricted Subsidiary).
"Subsidiary Loan Party" means any Subsidiary that is not a Foreign
Subsidiary.
"Swingline Commitment" means, with respect to each Swingline Lender,
the commitment, if any, of such Swingline Lender to make Swingline Loans,
expressed as an amount representing the maximum aggregate amount of such
Swingline Lender's Swingline Loans, as such commitment may from time to time be
reduced or increased by agreement with the Borrower and the Administrative
Agent. The initial amount of each Swingline Lender's Swingline Commitment is set
forth on Schedule 2.01, or in the written agreement pursuant to which such
Swingline Lender shall have assumed its Swingline Commitment, as applicable. The
initial aggregate amount of the Swingline Lenders' Swingline Commitments is
$20,000,000.
"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender" means The Chase Manhattan Bank, each other Lender
that shall have executed this Agreement as a Swingline Lender and each other
Lender agreed to by each of the Borrower and the Administrative Agent that shall
have agreed after the date hereof in a writing satisfactory to the Borrower and
the Administrative Agent to serve as a Swingline Lender, each in its capacity as
a lender of Swingline Loans hereunder. Any Swingline Lender may be replaced or
removed or have its Swingline Commitment reduced or assigned in whole or part to
other Lenders upon three Business Days' prior written notice executed by the
Borrower and the Administrative Agent, provided that after giving effect
thereto, and to any repayment of Swingline Loans made in connection therewith,
the aggregate outstanding Swingline Loans of such Swingline Lender shall not
exceed its Swingline Percentage of the total aggregate principal amount of
Swingline Loans outstanding.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
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"Swingline Percentage" means, with respect to any Swingline Lender,
the percentage of the total Swingline Commitments represented by such Swingline
Lender's Swingline Commitment. If the Swingline Commitments have terminated or
expired, the Swingline Percentages shall be determined based upon the Swingline
Commitments most recently in effect, giving effect to any assignments or
replacements.
"Temporary Cash Investment" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by S&P and P-1 by Moody's, (iii) time deposits with,
including certificates of deposit issued by, any office located in the United
States of any bank or trust company which is organized under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $1,000,000,000, (iv) shares of any money market or
mutual fund not less than 90% of the assets of which are invested solely in
securities or obligations of the type described in clauses (i) through (iii)
above and not more than 10% of the assets of which are invested in securities or
other obligations rated at least A-2 by S&P and P-2 by Moody's, and (v)
repurchase agreements with respect to securities described in clause (i) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (iii) above, provided in each case that such Investment
matures within one year from the date of acquisition thereof by the Borrower or
a Subsidiary.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans" means Closing Date Term Loans and Delayed Draw Term
Loans.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month
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certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transactions" means the Stock Buyback and the Financing Transactions.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the ERISA Group to
the PBGC or any other Person under Title IV of ERISA.
"Unrestricted Subsidiary" means any subsidiary of the Borrower or any
other Person in which the Borrower or any Subsidiary shall have a direct or
indirect Investment so long as (i) the Borrower shall have notified the
Administrative Agent of its acquisition or creation of such subsidiary or such
other Investment and its ownership interest therein or of its designation of an
existing Subsidiary as an Unrestricted Subsidiary concurrently with such
acquisition, creation, designation or Investment and of the intended purposes of
such subsidiary or Investment, (ii) any such subsidiary (unless it is a foreign
subsidiary) shall have entered into a tax sharing agreement containing terms
which, in the reasonable judgment of the Administrative Agent, are customary in
similar circumstances to provide an appropriate allocation of tax liabilities
and benefits, (iii) except as permitted in the proviso below,
none of the Borrower and the Subsidiaries shall have any contingent liability in
respect of such subsidiary or Investment and (iv)
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any such subsidiary or Investment shall be capitalized solely from the following
sources: (A) any Investment by any Person other than the Borrower and the
Subsidiaries; (B) Indebtedness issued by such subsidiary or any of its
subsidiaries that is nonrecourse to the Borrower and the Subsidiaries (except as
otherwise permitted by the proviso below), or proceeds thereof; and (C)
Investments permitted to be made in Unrestricted Subsidiaries pursuant to
Section 6.04; provided that the Borrower may incur a contingent liability or
Indebtedness in a specified and limited amount in respect of such a subsidiary
or Investment if it would at the time of such incurrence be permitted to make an
additional Investment in such subsidiary or Investment in the amount of such
incurrence and the amount so incurred shall thereafter constitute an Investment
in such subsidiary or Investment in such amount for purposes of calculating
compliance with Section 6.04. Any subsidiary of an Unrestricted Subsidiary is an
Unrestricted Subsidiary.
"Wholly-Owned Consolidated Subsidiary" means, with respect to any
Person, any Consolidated Subsidiary of such Person all of the shares of capital
stock or other ownership interests of which (except directors qualifying shares)
are at the time directly or indirectly owned by such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding mascu line,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to
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any restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees (a) to make a Closing Date Term Loan to the
Borrower on the Closing Date in a principal amount not exceeding its Closing
Date Term Loan Commitment, (b) to make Delayed Draw Term Loans to the Borrower
from time to time during the period from and including the Closing Date to and
including June 30, 1999 in an aggregate principal amount not exceeding its
Delayed Draw Commitment and (c) to make Revolving Loans to the Borrower from
time to time during the Revolving Availability Period in an aggregate principal
amount that will not result in such Lender's Revolving Exposure exceeding such
Lender's
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Revolving Commitment. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans. Amounts repaid in respect of Term Loans may not be
reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith; provided that all Borrowings made
on the Closing Date must be made as ABR Borrowings. Each Swingline Loan shall be
an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, and at the time that each ABR Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $10,000,000; provided that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e). Each
Swingline Borrowing shall be in an amount that is an integral multiple of
$1,000,000. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of
thirteen Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Final Maturity Date or the Closing Date Term Loan Maturity Date, as
applicable.
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SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 12:00 noon, New York City time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than
11:30 a.m., New York City time, on the date of the proposed Borrowing; provided
that any such notice of an ABR Revolving Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.05(e) may be given not later
than 11:00 a.m., New York City time, on the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Borrowing,
Closing Date Term Borrowing or Delayed Draw Term Borrowing;
(ii) the aggregate amount of such Borrowing, which in the case of each
Delayed Draw Term Borrowing shall be not less than $20,000,000;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
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Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and conditions
set forth herein, each Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of such Swingline Lender's Swingline Loans
exceeding such Swingline Lender's Swingline Commitment, (ii) the aggregate
principal amount of outstanding Swingline Loans exceeding $20,000,000 or (iii)
the sum of the total Revolving Exposures exceeding the total Revolving
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Borrowing, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 1:00 p.m., New York City time, on the day of a proposed Swingline
Borrowing. Each such notice shall be irrevocable and shall specify the requested
date (which shall be a Business Day) and amount of the requested Swingline
Borrowing. The Administrative Agent will promptly advise the Swingline Lenders
of any such notice received from the Borrower. Each Swingline Lender shall make
its Swingline Percentage of each Swingline Borrowing available to the Borrower
by means of a credit to the general deposit account of the Borrower with such
Swingline Lender (or, in the case of a Swingline Borrowing made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e), by
remittance to the applicable Issuing Bank) by 3:00 p.m., New York City time, on
the requested date of such Swingline Borrowing.
(c) Any Swingline Lender may by written notice given to the
Administrative Agent not later than 1:30 p.m., New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such
participations shall be made on a pro rata basis in the Swingline Loans of the
Swingline Lenders based upon their respective Swingline Percentages. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender's Applicable Percentage of such Swingline
Loan or
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Loans. Each Revolving Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of each Swingline Lender, such Lender's Applicable
Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to each Swingline Lender its Swingline Percentage of the amounts so
received from the Revolving Lenders. The Administrative Agent shall notify the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lenders. Any amounts
received by any Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by such Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lenders, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein and to a separate agreement among the Borrower and
the Administrative Agent regarding the beneficiaries of the Letters of Credit,
the Borrower may request the issuance of Letters of Credit for its own account,
in a form reasonably acceptable to the Administrative Agent and the applicable
Issuing Bank, at any time and from time to time during the Revolving
Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, any
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Issuing Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control. On the Closing Date, each Issuing Bank that has issued
an Existing Letter of Credit shall be deemed, without further action by any
party hereto, to have granted to each Revolving Lender and each Revolving Lender
shall have been deemed to have purchased from such Issuing Bank a participation
in such Letter of Credit in accordance with Section 2.05(d). The Borrower and
the Lenders that are also party to the Continuing Credit Agreement agree that
concurrently with such grant, the participations in the Existing Letters of
Credit granted to such lenders under the Continuing Credit Agreement shall be
automatically canceled without further action by any of the parties thereto. On
and after the Closing Date each Existing Letter of Credit shall constitute a
Letter of Credit for all purposes hereof.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank) to
the applicable Issuing Bank and the Administrative Agent (three Business Days'
in advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire and whether such Letter of
Credit is to be an "evergreen" Letter of Credit and the relevant terms of such
"evergreen" feature (which in each case shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof, the proposed Issuing Bank for such Letter of Credit and
such other information as shall be necessary to prepare, amend, renew or extend
such Letter of Credit. If requested by the applicable Issuing Bank, the Borrower
also shall submit a letter of credit application on such Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed
$150,000,000 and (ii) the total Revolving Exposures shall not exceed the total
Revolving Commitments.
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(c) Expiration Date. No Letter of Credit shall have a term of more
than two years; provided that a Letter of Credit may contain a provision
pursuant to which it is deemed to be extended on an annual basis for (in each
case) a period of not more than one year unless notice of termination is given
by the Issuing Bank; provided further that no Letter of Credit shall have a term
extending or be so extendible beyond the fifth Business Day prior to the Final
Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the applicable Issuing Bank or the Lenders, such
Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender
hereby acquires from such Issuing Bank, a participation in such Letter of Credit
equal to such Lender's Applicable Percentage of the aggregate amount available
to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of such Issuing Bank,
such Lender's Applicable Percentage of each LC Disbursement made by such Issuing
Bank and not reimbursed by the Borrower on the date due as provided in paragraph
(e) of this Section, or of any reimbursement payment required to be refunded to
the Borrower for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If any Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 11:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
11:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the
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day that the Borrower receives such notice, if such notice is not received prior
to such time on the day of receipt; provided that the Borrower may (x) subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.04 that such payment be financed with an ABR Revolving
Borrowing or Swingline Borrowing in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Borrowing or (y)
give the Administrative Agent written notice electing to make such payment at a
subsequent time on or prior to the second Business Day after the date on which
such LC Disbursement is made. If the Borrower fails to make such payment on or
before the time specified or shall give the Administrative Agent written notice
in accordance with clause (y) of the immediately preceding sentence, the
Administrative Agent shall notify each Revolving Lender of the applicable LC
Disbursement, the payment then required to be made to the applicable Issuing
Bank in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice, each Revolving Lender shall pay to
the Administrative Agent its Applicable Percentage of such payment, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of
the Revolving Lenders), and the Administrative Agent shall promptly pay to the
applicable Issuing Bank the amounts so received by it from the Revolving
Lenders. Promptly following receipt by the Administrative Agent of any payment
from the Borrower pursuant to this paragraph, the Administrative Agent shall
distribute such payment to the applicable Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse
such Issuing Bank, then to such Lenders and such Issuing Bank as their interests
may appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR
Revolving Loans or a Swingline Borrowing as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed
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strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by an
Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit, or (iv)
any other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder. Neither the Administrative Agent, the Lenders
nor any Issuing Bank, nor any of their Related Parties, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the applicable Issuing Bank; provided that the
foregoing shall not be construed to excuse any Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
such Issuing Bank's failure to (i) exercise care when determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof or (ii) pay under any Letter of Credit after the presentment to it of a
request strictly complying with the terms and conditions of the Letter of
Credit; provided that this clause (ii) shall not apply to any failure by the
Issuing Bank to pay under such Letter of Credit to the extent that such payment
is prevented by an injunction or other legal requirement. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct on
the part of an Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial
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compliance with the terms of a Letter of Credit, an Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit issued by it. Such Issuing Bank
shall promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing Bank
has made or will make an LC Disbursement thereunder and the proposed LC
Disbursement date; provided that any failure to give or delay in giving such
notice shall not relieve the Borrower of its obligation to reimburse such
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply with
respect to the overdue amount for each day overdue. Interest accrued pursuant to
this paragraph shall be for the account of the applicable Issuing Bank, except
that interest accrued on and after the date of payment by any Revolving Lender
pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall
be for the account of such Lender to the extent of such payment.
(i) Replacement of Issuing Banks. Any Issuing Bank may be replaced or
removed at any time by written agreement among the Borrower and the
Administrative Agent. The Administrative Agent shall notify the Lenders of any
such replacement or removal of an Issuing Bank. At the time any such replacement
or removal shall become effective, the Borrower shall pay all unpaid fees, costs
or expenses accrued for the account of the replaced or removed Issuing Bank
pursuant to Section 2.12(b). From and after the effective date of any such
replacement, (i) in the case of any replacement, the successor Issuing Bank
shall have all the rights and obligations of an Issuing Bank under this
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Agreement with respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require. After the replacement or removal of
an Issuing Bank hereunder, the replaced or removed Issuing Bank shall remain a
party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement or removal, but shall not be required to issue
additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent upon instruction of the Required Lenders (or, if the
maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure
representing greater than 50.01% of the total LC Exposure) demanding the deposit
of cash collateral pursuant to this paragraph, the Borrower shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to the LC Exposure
as of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (g) or (h) of Article VII. The
Borrower also shall deposit cash collateral pursuant to this paragraph as and to
the extent required by Section 2.11(b). Each such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be in Temporary Cash Investments made
at the option and sole discretion of the Administrative Agent and at the
Borrower's risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to reimburse the
Issuing Banks for LC Disbursements which have not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Revolving
Lenders with LC Exposure
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representing greater than 50.01% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived. If the Borrower is required to
provide an amount of cash collateral hereunder pursuant to Section 2.11(b), such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower as and to the extent that, after giving effect to such return, the
Borrower would remain in compliance with Section 2.11(b) and no Default shall
have occurred and be continuing.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by (x) in the case of an ABR Borrowing, 1:00 p.m.,
New York City time, and (y) in the case of a Eurodollar Borrowing, 11:00 a.m.,
New York City time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders; provided that
Swingline Loans shall be made as provided in Section 2.04. The Administrative
Agent will make such Loans available to the Borrower by promptly crediting the
amounts so received, in like funds, to an account of the Borrower maintained
with the Administrative Agent in New York City and designated by the Borrower in
the applicable Borrowing Request; provided that ABR Revolving Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.05(e)
shall be remitted by the Administrative Agent to the applicable Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date (or in the case of an ABR Borrowing, prior to
1:00 p.m., New York City time, on the date) of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the
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Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing and
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
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<PAGE>
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or continued as a
Eurodollar Borrowing if after giving effect thereto (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid and (ii) the sum of the
aggregate principal amount of outstanding Eurodollar Borrowings of such Class
with Interest Periods ending on or prior to such scheduled repayment date plus
the aggregate principal amount of outstanding ABR Borrowings of such Class would
be less than the aggregate principal amount of Loans of such Class required to
be repaid on such scheduled repayment date.
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<PAGE>
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated, (i) the Closing Date Term Loan Commitments shall
terminate at 5:00 p.m., New York City time, on the Closing Date, (ii) the
Delayed Draw Commitments shall terminate at 5:00 p.m., New York City time, on
June 30, 1999, and (iii) the Revolving Commitments and the Swingline Commitments
shall terminate on the Final Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Revolving Commitments, the Closing Date Term Loan Commitments or the
Delayed Draw Commitments; provided that (i) each reduction of the Commitments of
any Class shall be in an amount that is an integral multiple of $1,000,000 and
not less than $10,000,000 and (ii) the Borrower shall not terminate or reduce
the Revolving Commitments if, after giving effect to any concurrent prepayment
of the Revolving Loans in accordance with Section 2.11, the sum of the Revolving
Exposures would exceed the total Revolving Commitments.
(c) If any prepayment of Term Borrowings is required pursuant to
Section 2.11 but cannot be made because there are no Term Borrowings
outstanding, or because the amount of the required prepayment exceeds the
outstanding amount of Term Borrowings, then, on the date that such prepayment is
required, the Revolving Commitments shall be reduced by an aggregate amount
equal to the amount of the required prepayment, or the excess of such amount
over the outstanding amount of Term Borrowings, as the case may be.
(d) The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section, or
any required reduction of the Revolving Commitments under paragraph (c) of this
Section, at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made
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<PAGE>
ratably among the Lenders in accordance with their respective Commitments of
such Class.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
of such Lender on the Final Maturity Date, (ii) to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Term Loan of
such Lender as provided in Section 2.10 and (iii) to the Swingline Lenders the
then unpaid principal amount of each Swingline Loan on the earlier of the Final
Maturity Date and the first date after such Swingline Loan is made that is the
15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan is made; provided that on each date that a Revolving
Borrowing is made, the Borrower shall repay all Swingline Loans then
outstanding.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the
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Administrative Agent. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
SECTION 2.10. Amortization of Term Loans. (a) Subject to adjustment
pursuant to paragraph (d) of this Section, the Borrower shall repay Closing Date
Term Borrowings in the aggregate annual principal amounts set forth below in
consecutive equal quarterly installments on each June 30, September 30, December
31 and March 31, commencing on June 30, 1999:
<TABLE>
<CAPTION>
Fiscal Year Annual
Ended Amount
- -------------- ------------
<S> <C>
March 31, 2000 $30,000,000
March 31, 2001 $30,000,000
March 31, 2002 $35,000,000
March 31, 2003 $35,000,000
March 31, 2004 $35,000,000
</TABLE>
(b) Subject to adjustment pursuant to paragraph (d) of this Section,
the Borrower shall repay Delayed Draw Term Borrowings in the aggregate annual
principal amounts represented by the percentage set forth below of the Delayed
Draw Term Borrowings outstanding at the close of business on June 30, 1999, in
consecutive equal quarterly installments on each June 30, September 30, December
31 and March 31, commencing on December 31, 1999:
<TABLE>
<CAPTION>
Fiscal Year Annual
Ended Percentage
- -------------- ------------
<S> <C>
March 31, 2000 5%
March 31, 2001 15%
March 31, 2002 20%
March 31, 2003 20%
March 31, 2004 20%
Final Maturity Date 20%
</TABLE>
(c) To the extent not previously paid, (i) all Closing Date Term Loans
shall be due and payable on the Closing Date Term Loan Maturity Date and (ii)
all Delayed Draw Term Loans shall be due and payable on the Final Maturity Date.
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<PAGE>
(d) If the initial aggregate amount of the Lenders' Closing Date Term
Loan Commitments exceeds the aggregate principal amount of Closing Date Term
Loans that are made on the Closing Date, then the scheduled repayments of
Closing Date Term Borrowings to be made pursuant to this Section shall be
reduced ratably by an aggregate amount equal to such excess. Any prepayment of a
Term Borrowing of either Class shall be applied to reduce the subsequent
scheduled repayments of the Term Borrowings of such Class to be made pursuant to
this Section ratably.
(e) Prior to any repayment of any Term Borrowings of either Class
hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date of such
repayment. Each repayment of a Borrowing shall be applied ratably to the Loans
included in the repaid Borrowing. Repayments of Term Borrowings shall be
accompanied by accrued interest on the amount repaid.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.
(b) In the event and on such occasion that the sum of the Revolving
Exposures exceeds the total Revolving Commitments, the Borrower shall prepay
Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings are
outstanding, deposit cash collateral in an account with the Administrative Agent
pursuant to Section 2.05(j)) in an aggregate amount equal to such excess.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, within three Business Days after such Net
Proceeds are received, prepay Term Borrowings and Borrowings (as defined in the
Continuing Credit Agreement) in accordance with paragraph (d) of this Section
2.11 in an aggregate amount equal to such Net Proceeds; provided that to the
extent any such repayment or reduction would otherwise require repayment or
prepayment of Eurodollar Loans or portions thereof prior to the last day of the
related Interest Period, such portion of such repayment or reduction shall,
unless a Default or Event of Default exists, be deferred to such last day;
provided further that, in the case of any event described in clause (a) or (b)
of the definition of the term Prepayment Event, if the
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<PAGE>
Borrower shall deliver to the Administrative Agent a certificate of a Financial
Officer to the effect that the Borrower and the Subsidiaries intend to apply an
amount equal to the Net Proceeds from such event, within 270 days after receipt
of such Net Proceeds, to acquire real property, equipment or other tangible
assets to be used in the business of the Borrower and the Subsidiaries, and
certifying that no Default has occurred and is continuing, then no prepayment
shall be required pursuant to this paragraph in respect of such event except to
the extent an amount equal to any Net Proceeds therefrom that have not been so
applied by the end of such 270-day period, at which time a prepayment shall be
required in an amount equal to the Net Proceeds that have not been so applied.
(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder and Borrowings (as defined in the Continuing Credit Agreement) under
the Continuing Credit Agreement, the Borrower shall select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to paragraph (e) of this Section. In the event of any
optional or mandatory prepayment of Term Borrowings made at a time when Term
Borrowings of both Classes remain outstanding, the Borrower shall select Term
Borrowings to be prepaid so that the aggregate amount of such prepayment is
allocated between the Closing Date Term Borrowings and Delayed Draw Term
Borrowings pro rata based on the aggregate principal amount of outstanding
Borrowings of each such Class. In the event of any optional or mandatory
prepayment of Term Borrowings made at a time when any loans remain outstanding
under the Continuing Credit Agreement, such loans shall be deemed for purposes
of this paragraph to consist of Term Borrowings, and the Borrower shall select
Term Borrowings and loans under the Continuing Credit Agreement so that the
aggregate amount of such prepayment is allocated among Closing Date Term
Borrowings, Delayed Draw Term Borrowings and loans under the Continuing Credit
Agreement pro rata based on the aggregate principal amount of the outstanding
Borrowings of each of these. The lenders under the Continuing Credit Agreement
shall be third party beneficiaries of the agreements contained in this paragraph
(d).
(e) The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lenders) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 2:00 p.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
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<PAGE>
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing; provided however, that any optional
prepayment of Term Loans pursuant to Section 2.11(a) shall be applied to reduce
the amount of subsequent scheduled repayments of Term Loans required by Section
2.10 if such payment is made within 10 days prior to any date on which a
repayment is required under Section 2.10, first to such repayment and then
ratably to all remaining repayments and (ii) otherwise, ratably to all the
remaining repayments. Prepayments shall be accompanied by accrued interest to
the extent required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily unused amount of each
Commitment (other than any Swingline Commitment) of such Lender during the
period from and including the Closing Date to but excluding the date on which
such Commitment terminates. Accrued commitment fees shall be payable in arrears
on the last day of March, June, September and December of each year and, in
respect of any Class of Commitments, on the date on which such class of
Commitments terminates, commencing on the first such date to occur after the
date hereof. All commitment fees shall be computed on the basis of a year of 365
days (or 366 days in a leap year) and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). For purposes
of computing commitment fees with respect to Revolving Commitments, a Revolving
Commitment of a Lender
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<PAGE>
shall be deemed to be used to the extent of the outstanding Revolving Loans and
LC Exposure of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as interest on Eurodollar Revolving Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the Closing
Date to but excluding the later of the date on which such Lender's Revolving
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue at
the rate of 0.25% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements) in
respect of Letters of Credit of such Issuing Bank during the period from and
including the Closing Date to but excluding the later of the date of termination
of the Revolving Commitments and the date on which there ceases to be any LC
Exposure, as well as such Issuing Bank's standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit issued by it
or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Closing Date;
provided that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand. Any other fees
payable to any Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to an Issuing Bank,
in the case of
49
<PAGE>
fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Revolving Loan prior to the end of the Revolving Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day
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<PAGE>
but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any
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<PAGE>
Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or such Issuing Bank of participating in,
issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or such Issuing Bank hereunder (whether of
principal, interest or otherwise), in each case by an amount deemed by such
Lender or Issuing Bank to be material, then the Borrower will pay to such Lender
or such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.
(b) If any Lender or any Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or such Issuing Bank's capital or on the capital
of such Lender's or such Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by such Issuing
Bank, to a level below that which such Lender or such Issuing Bank or such
Lender's or such Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or such Issuing Bank's
policies and the policies of such Lender's or such Issuing Bank's holding
company with respect to capital adequacy), and by an amount deemed by such
Lender or Issuing Bank to be material, then from time to time the Borrower will
pay to such Lender or such Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or such Issuing Bank or such
Lender's or such Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or such Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or such Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 15 days
after receipt thereof.
(d) Each Lender and each Issuing Bank will promptly notify the
Borrower and the Administrative Agent of any event of which it has knowledge,
occurring after the Closing Date, which will entitle such Lender or Issuing Bank
to compensation pursuant to Section 2.15.
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<PAGE>
Notwithstanding the foregoing subsections (a) and (b) of this Section
2.15, the Borrower shall only be obligated to compensate any Lender or Issuing
Bank for any amount arising or accruing during (i) any time or period commencing
not more than (x) in the case of subsection (a), six months and (y) in the case
of subsection (b), three months, prior to the date on which such Lender or
Issuing Bank notifies the Administrative Agent and the Borrower that it proposes
to demand such compensation and identifies to the Administrative Agent and the
Borrower the statute, regulation or other basis upon which the claimed
compensation is or will be based and (ii) any time or period during which,
because of the retroactive application of such statute, regulation or other
basis, such Lender or Issuing Bank did not know that such amount would arise or
accrue.
SECTION 2.16. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(e) and is revoked in accordance therewith), or (d)
the assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market increased by Statutory Reserves at the same rate as utilized in computing
such Adjusted LIBO Rate. A certificate of any Lender setting forth any amount or
amounts that such Lender
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<PAGE>
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 15 days after
receipt thereof.
SECTION 2.17. Withholding Tax Exemption; Other Taxes. (a) At least
five Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Lender or Issuing Bank, each Lender or Issuing
Bank that is not incorporated or organized under the laws of the United States
of America or a state thereof agrees that it will deliver to each of the
Borrower and the Administrative Agent two duly and properly completed copies of
(i) United States Internal Revenue Service Form 1001 or 4224 (or any successor
form, in either case), certifying in either case that such Lender or Issuing
Bank is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes or (ii) solely if such
Lender or Issuing Bank is claiming exemption from United States withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a Form W-8, or any successor form prescribed by the
Internal Revenue Service, a certificate representing that such Lender or Issuing
Bank is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code) and such other
documentation as the Borrower may reasonably require to permit it to determine
that such Lender or Issuing Bank is entitled to the exemption. Each Lender or
Issuing Bank which so delivers a Form 1001 or 4224, or Form W-8 (or any
successor form, in either case) further undertakes to deliver to each of the
Borrower and the Administrative Agent two additional copies of such form (or a
successor form) on or before the date that such form expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent form
so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Administrative
Agent, in each case certifying that such Lender or Issuing Bank is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on
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which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender or Issuing Bank from
duly completing and delivering any such form with respect to it and such Lender
or Issuing Bank advises the Borrower and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(b) The Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender
and each Issuing Bank, within 10 days after written demand therefor, for the
full amount of any Other Taxes paid by the Administrative Agent, such Lender or
such Issuing Bank, as the case may be, on or with respect to any payment by or
on account of any obligation of the Borrower hereunder or under any other Loan
Document (including Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such Other
Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or an Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or an Issuing Bank, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of the receipt, if any,
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no
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such time is expressly required, prior to 12:00 noon, New York City time), on
the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 270
Park Avenue, New York, New York, except payments to be made directly to any
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly
to the Persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the Persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
under any Loan Document shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments under each Loan Document shall be
made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans, Term Loans
and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in
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LC Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation. For purposes of this paragraph (c)
references to "Lenders" shall include the lenders under the Continuing Credit
Agreement, references to "Loans" shall include the loans under the Continuing
Credit Agreement and the lenders under the Continuing Credit Agreement shall be
third party beneficiaries of the agreements contained in this paragraph (c).
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or any Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or any Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or Issuing Banks, as the case
may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate
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determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation.
(e) Subject to Section 2.06(a), if any Lender shall fail to make any
payment required to be made by it pursuant to Section 2.04(c), 2.05(d) or (e),
2.06(b), 2.18(d) or 9.03(c), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) if the
assignment is not to another Lender, the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Revolving Commitment is
being assigned, the Issuing Banks and Swingline Lenders), which consent shall
not unreasonably be withheld, (ii) such Lender shall have received payment of an
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amount equal to the outstanding principal of its Loans and participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.15 or
payments required to be made pursuant to Section 2.17, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 2.20. Obligations Constitute Designated Senior Indebtedness.
The Obligations constitute "Designated Senior Indebtedness" under and as defined
in the Subordinated Note Indenture.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Corporate Existence and Power. Each Loan Party is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
SECTION 3.02. Corporate and Governmental Authorization; No
Contravention. The execution and delivery by each Loan Party of each of the Loan
Documents to which it is a party and the performance by each such Loan Party of
its obligations thereunder are within the corporate power of such Loan Party,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
(except for any such action or filing that has been taken and is in full force
and effect) and do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the Constitutional Documents of any Loan
Party or of any material agreement, judgment, injunction, order, decree or other
material instrument binding upon such
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Loan Party or result in the creation or imposition of any Lien on any asset of
any Loan Party other than Liens created pursuant to the Loan Documents.
SECTION 3.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower, and the other Loan Documents, when executed
and delivered as contemplated by this Agreement, will constitute valid and
binding obligations of each Loan Party that is a party thereto, in each case
enforceable in accordance with its terms.
SECTION 3.04. Financial Information. (a) The consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of March 31, 1998 and
the related consolidated statements of income and of cash flows for the Fiscal
Year then ended, reported on by Deloitte & Touche and set forth in the
Borrower's Form 10-K for Fiscal Year 1998, a copy of which has been delivered to
each of the Lenders, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such Fiscal Year.
(b) The unaudited consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of September 27, 1998, and the related unaudited
consolidated statements of income and cash flow for the six months then ended,
set forth in the September 1998 10-Q, copies of which have been delivered to
each of the Lenders, fairly present, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in Section 4.04(a), the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six-month period (subject to normal year-end adjustments).
(c) Since March 31, 1998, there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries considered as a whole.
SECTION 3.05. Litigation. Except as described in the September 1998
10-Q, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, any Loan Party or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which would materially adversely affect the business, consolidated
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financial position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries, or which in any manner draws into question the
validity of any Loan Document.
SECTION 3.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations in all material aspects under the minimum funding
standards of ERISA and the Code with respect to each Plan and is in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code with respect to each Plan. No member of the ERISA Group has (i) sought
a waiver of the minimum funding standard under Section 412 of the Code in
respect of any Plan, (ii) failed to make any contribution or payment to any Plan
or Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which in either event has resulted
or could reasonably be expected to result in the imposition of a Lien or the
posting of a bond or other security under ERISA or the Code or (iii) incurred
any liability under Title IV of ERISA other than a liability to the PBGC for
premiums or similar items under Section 4007 of ERISA.
SECTION 3.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any capital
or operating expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted thereat and any actual
or potential liabilities to third parties, including employees, and any related
costs and expenses). On the basis of this review, and as set forth in the
September 1998 10-Q, the Borrower anticipates that Environmental Laws are
unlikely to have a Material Adverse Effect.
SECTION 3.08. Taxes. The Borrower and each of its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by any of them and have paid all taxes
due pursuant to such returns or pursuant to any assessment received by any of
them, except for any such taxes which are
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being contested in good faith and for which adequate reserves have been made on
the books of the Borrower and its Subsidiaries in accordance with GAAP. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of income taxes are, in the opinion of the Borrower, adequate in
accordance with GAAP.
SECTION 3.09. Subsidiaries. Each corporate Subsidiary of each Loan
Party is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 3.10. Not an Investment Company. Neither Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 3.11. Full Disclosure (a) As of the Closing Date, the
information contained in the Information Memorandum, the Borrower's Form 10-K
for the period ended March 31, 1998 and the September 1998 10-Q, taken together,
does not and will not contain any untrue statement of a material fact and does
not or will not omit to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances under which they
are made, not misleading. All information hereafter furnished in writing by any
Loan Party to any Agent or any Lender will be, taken as a whole and considered
together with all information previously so furnished, true and accurate in all
material respects on the date as of which such information is stated or
furnished.
(b) The Loan Parties have disclosed to each of the Lenders in writing
any and all facts which currently do or may have a Material Adverse Effect (to
the extent the Loan Parties can now reasonably foresee).
(c) Each of the representations and warranties of the Borrower made in
or pursuant to the Loan Documents other than this Agreement is true and correct.
(d) It is understood that the representations and warranties set forth
in clauses (a) and (b) above are limited to the extent that (i) any projections
or forecasts are represented to be based upon reasonable estimates believed by
the Loan Parties to be accurate, but are not warranted to be obtained and (ii)
no representation is made as to disclosure of matters of a general economic
nature or
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matters of public knowledge that generally affect any of the industry
segments included in the business of the Borrower and its Consolidated
Subsidiaries.
SECTION 3.12. Compliance with Laws. Each Loan Party and each of its
Subsidiaries is in compliance in all material respects with all applicable laws,
rules and regulations, and is not in violation of, or in default under, any term
or provision of any charter, bylaw, mortgage, indenture, agreement, instrument,
statute, rule, regulation, judgment, decree, order, writ or injunction
applicable to it, except for any such violations, defaults or failures to comply
which would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
SECTION 3.13. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan made on the Closing Date and on each date on which Delayed Draw
Term Loans are made and after giving effect to the application of the proceeds
of such Loans, (a) the fair value of the assets of each Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of each Loan
Party will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Closing Date.
SECTION 3.14. Senior Indebtedness. The Obligations constitute
"Designated Senior Indebtedness" under and as defined in the Subordinated Note
Indenture.
SECTION 3.15. Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the computer systems
of the Borrower and its Subsidiaries and (b) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Borrower's systems interface) and the testing of all such systems and equipment,
as so reprogrammed, will be completed by August 31, 1999, except with respect to
the failure to complete such reprogramming or testing of systems or equipment
that are not critical to
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the Borrower's business. The cost to the Borrower and its Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Borrower and its Subsidiaries (including reprogramming errors and
the failure of others' systems or equipment) will not result in a Default or a
Material Adverse Effect. Except for such of the reprogramming referred to in the
preceding sentence as may be necessary, the computer and management information
systems of the Borrower and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Borrower to conduct its businesses without Material
Adverse Effect.
ARTICLE IV
Conditions
SECTION 4.01. Closing Date. The obligations of the Lenders to make
Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated
the Closing Date) of each of (i) Jones, Day, Reavis & Pogue, special
counsel for the Borrower, substantially in the form of Exhibit F-1, (ii)
Daryl L. Zimmer, Vice President and General Counsel of the Borrower,
substantially in the form of Exhibit F-2, and (iii) local counsel in each
jurisdiction where a Mortgaged Property is located, substantially in the
form of Exhibit F-3, and, in the case of each such opinion required by this
paragraph, covering such other matters relating to the Loan Parties, the
Loan Documents or the Transactions as the Required Lenders shall reasonably
request. The Borrower hereby requests such counsel to deliver such
opinions.
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(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each
Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Administrative
Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated
the Closing Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.
(f) The Administrative Agent shall have received counterparts of the
Subsidiary Guaranty Agreement signed on behalf of each Subsidiary Loan
Party and counterparts of each of the Pledge Agreement and the Security
Agreement signed on behalf of the Borrower and each Subsidiary Loan Party
that is a party thereto, together with the following:
(i) stock certificates representing all the outstanding shares of
capital stock of each Subsidiary owned by or on behalf of any Loan
Party as of the Closing Date after giving effect to the Transactions
(except that stock certificates representing shares of common stock of
a Foreign Subsidiary may be limited to 65% of the outstanding shares
of common stock of such Foreign Subsidiary), promissory notes
evidencing all intercompany Indebtedness owed to any Loan Party by the
Borrower or any Subsidiary as of the Closing Date after giving effect
to the Transactions and stock powers and instruments of transfer,
endorsed in blank, with respect to such stock certificates and
promissory notes;
(ii) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by
the
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Administrative Agent to be filed, registered or recorded to
continue, create or perfect the Liens intended to be continued or
created under the Security Documents; and
(iii) a completed Perfection Certificate dated the Closing Date
and signed by an executive officer or Financial Officer of the
Borrower, together with all attachments contemplated thereby,
including, to the extent returns have been received, the results of a
search of the Uniform Commercial Code (or equivalent) filings made
with respect to the Loan Parties in the jurisdictions contemplated by
the Perfection Certificate and copies of the financing statements (or
similar documents) disclosed by such search and evidence reasonably
satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by
Section 6.02 or have been released.
(g) The Administrative Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property signed on behalf of the
record owner of such Mortgaged Property and (ii) a policy or policies of
title insurance issued by a nationally recognized title insurance company,
insuring the Lien of each such Mortgage as a valid first Lien on the
Mortgaged Property described therein, free of any other Liens except as
permitted by Section 6.02, together with such endorsements, coinsurance and
reinsurance as the Administrative Agent or the Required Lenders may
reasonably request.
(h) The Administrative Agent shall have received evidence that the
insurance required by Section 5.03 and the Security Documents is in effect.
(i) The Administrative Agent shall have received a certificate of the
chief financial officer of the Borrower, substantially in the form of
Exhibit H, with respect to the solvency of the Loan Parties after giving
effect to the Transactions on the Closing Date.
(j) All consents and approvals necessary or advisable to be obtained
from any Governmental Authority or other Person in connection with the
Transactions shall have been obtained, and all applicable waiting periods
and appeal periods shall
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have expired, in each case without the imposition of any burdensome
conditions.
(k) The Continuing Credit Agreement shall have been, or substantially
simultaneously with the initial funding of Loans on the Closing Date shall
be, amended and restated in the form set forth in Exhibit G and loans
thereunder shall have been repaid in an aggregate amount sufficient that no
more than $35,000,000 shall remain outstanding thereunder.
(l) The Lenders shall have received a pro forma consolidated balance
sheet of the Borrower as of September 27, 1998, reflecting all pro forma
adjustments as if the Transactions had been consummated on such date, and
such pro forma consolidated balance sheet shall be consistent in all
material respects with the forecasts and other information previously
provided to the Lenders.
The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Banks to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
9.02) at or prior to 3:00 p.m., New York City time, on December 4, 1998 (and, in
the event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, and of any Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
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Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 100 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and of cash flows
for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on in a manner
acceptable to the Securities and Exchange Commission by Deloitte & Touche
or other independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 50 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of income and of cash flows for such quarter and for the portion
of the Borrower's fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of the Borrower's previous fiscal
year, all certified (subject to normal year-end adjustments) as to fairness
of presentation, GAAP and consistency by the chief
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financial officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in subsections (a) and (b) of this Section, a
certificate of the treasurer, controller or chief financial officer of the
Borrower (i) setting forth in reasonable detail such calculations as are
required to establish whether the Borrower was in compliance with the
requirements of Sections 6.10 through 6.12, inclusive on the date of such
financial statements, (ii) stating whether, to the best of such person's
knowledge after due inquiry, there exists on the date of such certificate
any Default and, if any Default then exists, setting forth the details
thereof and the action that the Borrower is taking or proposes to take with
respect thereto and (iii) stating whether, since the date of the most
recent financial statements previously delivered pursuant to subsection (a)
or (b) of this Section, there has been a change in the generally accepted
accounting principles applied in preparing the financial statements then
being delivered from those applied in preparing the most recent audited
financial statements so delivered which is material to the financial
statements then being delivered;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe that
any Default existed on the date of such statements and (ii) confirming the
calculations set forth in the officer's certificate delivered
simultaneously therewith pursuant to clause (c) above;
(e) within five Business Days after any Responsible Officer of the
Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the treasurer, controller or chief financial
officer of the Borrower setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of
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all financial statements, reports and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of the incurrence
of complete or partial withdrawal liability with respect to any
Multiemployer Plan under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of
such notice; (iii) receives notice from the PBGC under Title IV of ERISA of
its intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to administer
any Plan, a copy of such notice; (iv) applies for a waiver of the minimum
funding standard under Section 412 of the Code, a copy of such application;
(v) gives notice of intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with the PBGC;
(vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which
has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code, a
certificate of the chief financial officer or the chief accounting officer
of the Borrower setting forth details as to such occurrence and action, if
any, which the Borrower
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or applicable member of the ERISA Group is required or proposes to take;
(i) as soon as reasonably practicable after any Responsible Officer of
the Borrower obtains knowledge of the commencement of, or of a material
threat of the commencement of, an action, suit or proceeding against the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
likelihood of an adverse decision which would materially and adversely
affect the business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, in each case considered
as a whole, or which in any manner questions the validity of any Loan
Document, a written report informing the Lenders in reasonable detail of
the nature of such pending or threatened action, suit or proceeding and
will provide such additional information as may be reasonably requested by
the Administrative Agent at the request of any Lender; and
(j) except to the extent prohibited by applicable law, rule,
regulations or orders, from time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Administrative Agent, at the request of any Lender, may
reasonably request.
SECTION 5.02. Payment of Obligations. Each Loan Party will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, at or
before maturity, all their respective obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and except where the failure to pay or
discharge such obligations and liabilities could not in the aggregate reasonably
be expected to have a Material Adverse Effect, and will maintain, and will cause
each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for
the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. (a) Each Loan Party
will keep, and will cause each of its Subsidiaries to keep, all property
materially useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
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(b) The Borrower will maintain, and will cause each of its
Subsidiaries to maintain, insurance in responsible companies in such amounts and
against such risks as is usually carried by owners of similar businesses and
properties in the same general areas in which the Borrower and its Subsidiaries
operate, provided that in any event the Borrower will maintain, and will cause
each of its Subsidiaries to maintain, (i) property and casualty insurance on all
real and personal property on an all risks basis (including the perils of flood
and quake), covering the repair or replacement cost of all such property and
consequential loss coverage for business interruption and extra expense (which
shall be limited to fixed continuing expenses and such other business
interruption expenses as are otherwise generally available to similar
businesses), covering such risks, for such amounts not less than those, and with
deductible and self-insurance amounts not greater than those, set forth in Part
I of Schedule 5.03, (ii) public liability insurance (including products
liability coverage) covering such risks, for such amounts not less than those,
and with deductible amounts not greater than those, set forth in Part II of
Schedule 5.03 and (iii) such other insurance coverage in such amounts and with
respect to such risks as the Required Lenders may reasonably request. All such
insurance shall be provided by insurers or reinsurers which (x) in the case of
United States insurers and reinsurers have an A.M. Best policyholders rating of
not less than A- with respect to primary insurance, and B+ with respect to
excess insurance, and (y) in the case of non-United States insurers or
reinsurers, the providers of at least 80% of such insurance have either an ISI
policyholders rating of not less than A, an A.M. Best policyholders rating of
not less than A-, or a surplus of not less than $500,000,000 with respect to
primary insurance, and an ISI policyholders rating of not less than BBB with
respect to excess insurance, or such other insurers as the Required Lenders may
approve in writing. Such insurers may include a Subsidiary of the Borrower;
provided that such Subsidiary need not satisfy the foregoing requirements if all
but $15,000,000 of the insurance provided by such Subsidiary is reinsured by one
or more reinsurers which satisfy such requirements.
(c) The Borrower will deliver to the Administrative Agent on behalf of
the Lenders, (i) on the Closing Date, a certificate dated such date showing the
amount of coverage as of such date, (ii) upon request of any Lender through the
Administrative Agent from time to time full information as to the insurance
carried, (iii) within five days of receipt of notice from any insurer, a copy of
any notice of cancelation or material change in coverage
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from that existing on the Closing Date, (iv) forthwith, notice of any
cancelation or nonrenewal of coverage by the Borrower or any Subsidiary, and (v)
within five days of filing, full information as to any claim for an amount in
excess of $2,500,000 with respect to any property and casualty insurance policy
maintained by the Borrower or any Subsidiary. The Administrative Agent shall be
named as additional insured on all property and casualty insurance policies and
a loss payee on all property insurance policies. Any proceeds from any such
insurance policy in respect of any claim, or any condemnation award or other
compensation in respect of a condemnation (or any transfer or disposition of
property in lieu of condemnation) for which the Borrower or any of its
Subsidiaries receives a condemnation award or other compensation shall be paid
to the Borrower or the Subsidiary; provided that, (A) the Borrower or the
Subsidiary will use such proceeds, condemnation award or other compensation in
accordance with Section 2.11(c) or (B) if, at the time of the receipt of such
proceeds, condemnation award or other compensation, a Default has occurred and
is continuing, the aggregate amount of all such proceeds, condemnation award or
other compensation shall be paid to the Administrative Agent and held as
collateral for application in accordance with the Security Documents.
SECTION 5.04. Conduct of Business and Maintenance of Existence. Each
Loan Party will continue, and will cause each Subsidiary to continue, to engage
in business of the same general type as now conducted by the Borrower and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each of its Subsidiaries to preserve, renew and keep in full force
and effect their respective corporate existence and, except for any such rights,
privileges and franchises the failure to preserve which would not in the
aggregate have a Material Adverse Effect, their respective rights, privileges
and franchises necessary or desirable in the normal conduct of business;
provided that nothing in this Section 5.04 shall prohibit (i) the merger of a
Subsidiary of the Borrower into the Borrower or the merger or consolidation of
the Borrower or any Subsidiary of the Borrower with or into another Person if
the corporation surviving such consolidation or merger is, in the case of any
merger or consolidation involving the Borrower, the Borrower, and in the case of
any merger or consolidation involving any Subsidiary of the Borrower, a
Wholly-Owned Consolidated Subsidiary of the Borrower and if, in each case, after
giving effect thereto, no Default shall have occurred and be continuing or (ii)
the termination of the corporate existence of any Subsidiary of the Borrower or
the discontinuation of any line of business of the Borrower
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or any of its Subsidiaries if the board of directors of the Borrower in good
faith determines that such termination is in the best interest of the Borrower
and is not materially disadvantageous to the Lenders; and provided further that
the parties agree that this Section 5.04 shall not prohibit the Borrower and its
Subsidiaries from engaging in the business of (or acquiring other businesses and
assets not otherwise prohibited by this Agreement if such businesses are engaged
in, or such assets are used to conduct the business of) any Permitted Lines of
Business.
SECTION 5.05. Compliance with Laws. Each Loan Party will comply, and
cause each of its Subsidiaries to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including Environmental Laws and ERISA and the rules
and regulations thereunder) the failure to comply with which would reasonably be
expected to have a Material Adverse Effect, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. Each Loan
Party will keep, and will cause each of its Subsidiaries to keep, proper books
of record and account in which full, true and correct entries shall be made of
all dealings and transactions in relation to its business and activities; and,
except to the extent prohibited by applicable law, rule, regulations or orders,
will permit, and will cause each of its Subsidiaries to permit, representatives
of any Lender at such Lender's expense to visit and inspect any of their
respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all at such reasonable times and as often as may reasonably be
desired.
SECTION 5.07. Use of Proceeds and Letters of Credit. Subject to the
immediately succeeding sentence, the proceeds of the Loans and the Letters of
Credit will be used only for the purposes set forth in the preamble to this
Agreement. Only up to $125,000,000 in the aggregate of principal amount of
Revolving Loans may be used to purchase, invest in or otherwise acquire (i)
stock or other equity interests in an entity the principal business of which is
one or more Permitted Lines of Business or (ii) assets to be used in Permitted
Lines of Business. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and
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X. Not more than 25% of the assets subject under the Loan Documents to any
negative pledge or restriction on deposition shall at any time consist of
"margin stock" within the meaning of such regulations.
SECTION 5.08. Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Closing Date, the Borrower will notify the
Administrative Agent and the Lenders thereof and (a) if such Subsidiary is a
Subsidiary Loan Party, the Borrower will cause such Subsidiary to become a party
to the Subsidiary Guaranty Agreement and the Security Agreement within five
Business Days after such Subsidiary is formed or acquired and promptly take such
actions to create and perfect Liens on such Subsidiary's assets to secure the
Obligations as the Administrative Agent or the Required Lenders shall reasonably
request and (b) if any Equity Interest in or Indebtedness of such Subsidiary are
owned by or on behalf of any Loan Party, the Borrower will cause such Equity
Interests and promissory notes evidencing such Indebtedness to be pledged
pursuant to the Pledge Agreement within five Business Days after such Subsidiary
is formed or acquired (except that, if such Subsidiary is a Foreign Subsidiary,
shares of common stock of such Subsidiary to be pledged pursuant to the Pledge
Agreement may be limited to 65% of the outstanding shares of common stock of
such Subsidiary).
SECTION 5.09. Further Assurances. (a) The Borrower will, and will
cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents or to grant, preserve, protect or perfect the Liens created
or intended to be created by the Security Documents or the validity or priority
of any such Lien, all at the expense of the Loan Parties. The Borrower also
agrees to provide to the Administrative Agent (i) from time to time upon
request, evidence reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents and (ii) upon request, survey updates in connection with the
Mortgaged Property; provided that the Borrower shall not be required to provide
such a survey update with respect to a Mortgaged Property more than once in any
24-month period.
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(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Closing Date (other than assets constituting
Collateral under the Security Agreement that become subject to the Lien of the
Security Agreement upon acquisition thereof), the Borrower will notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties.
SECTION 5.10. Maintenance of Collateral; Alterations. No Loan Party
shall commit any waste of any Collateral, or, except in the ordinary course of
its business, make any material change in the use of any Collateral, provided
that any Loan Party may lease to any other Person all or any portion of any item
of Collateral that the Borrower has determined in good faith is not used or
useful in such Loan Party's operating business. Each Loan Party granting a
security interest in any Mortgaged Property represents and warrants that, to the
best of its knowledge: (i) such Mortgaged Property is served by all utilities
required or necessary for the current use thereof; (ii) all streets necessary to
serve such Mortgaged Property are completed and serviceable and have been
dedicated and accepted as such by the appropriate governmental entities; and
(iii) such Loan Party has access to such Mortgaged Property from public roads
sufficient to allow such Loan Party to conduct its business at such Mortgaged
Property in accordance with sound commercial and industrial practices. The Loan
Parties shall, at all times, maintain all Collateral that is materially useful
or necessary in their respective businesses, in good operating order, condition
and repair, ordinary wear and tear excepted, and in compliance with all
applicable laws, rules and regulations, (including Environmental Laws) the
failure to comply with which would have a material adverse effect on the value
or usefulness of such Collateral, except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings. Each Loan Party
shall (a) not, except in the ordinary course of business or as provided in the
proviso to the first sentence of this Section, alter the occupancy or use of all
or any part of any Mortgaged Property without the prior written consent of the
Required Lenders, which consent shall not be unreasonably withheld
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and (b) do what is deemed commercially reasonable to maintain and preserve the
value of the Collateral.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders
that:
SECTION 6.01. Limitation on Subsidiary Debt. Except for any
Indebtedness to the Borrower or any Wholly-Owned Consolidated Subsidiary of the
Borrower, and except for Acquired Indebtedness, the Borrower will not permit any
of its Subsidiaries to incur or at any time be liable with respect to any
Indebtedness in an aggregate amount at any one time outstanding in excess of
$20,000,000.
SECTION 6.02. Negative Pledge. Neither the Borrower nor any of its
Subsidiaries will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens (i) existing on the Closing Date securing Indebtedness or
other obligations or liabilities outstanding on such date and identified or
referred to on Schedule 6.02 or (ii) disclosed in title insurance policies
delivered to the Administrative Agent prior to the Closing Date relating to
the Mortgaged Properties;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Consolidated Subsidiary of such Loan Party and not created
in contemplation of such event;
(c) any Lien on any asset securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the costs (including
purchase or construction costs, design, engineering, transportation,
installation, testing and analogous costs, and all related professional
costs and expenses) of acquiring, constructing or
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improving such asset; provided that such Lien attaches to such asset
concurrently with or within 180 days after the acquisition thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into such Loan Party or any of its
Consolidated Subsidiaries and not created in contemplation of such event;
(e) any Lien existing on any asset, or on any asset of any Person,
prior to the acquisition of such asset or such Person, as the case may be,
by such Loan Party or any of its Consolidated Subsidiaries and not created
in contemplation of such acquisition;
(f) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
and which are not overdue for a period of more than 30 days or which are
being contested in good faith by appropriate proceedings;
(g) Liens for taxes, assessments or other governmental charges not yet
overdue or which are being contested in good faith and by appropriate
proceedings;
(h) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(i) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(j) easements, right-of-way, zoning and similar restrictions and other
encumbrances or title defects incurred, or leases or subleases granted to
others, in the ordinary course of business which do not in any material
respect interfere with or adversely affect the use or value of any
Mortgaged Property or the ordinary
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conduct of the business of the Borrower or such Subsidiary and the matters
listed in the policies of title insurance referred to in Section
4.01(g)(ii);
(k) Liens on the property of the Borrower or any of its Subsidiaries
in favor of the Borrower or such Subsidiary, as the case may be;
(l) Liens created by the Loan Documents;
(m) Liens arising under documentary letters of credit; provided that
such Liens attach only to the assets purchased thereunder and documents
relating thereto;
(n) Liens arising in the ordinary course of its business which (i) do
not secure Indebtedness or Derivatives Obligations, (ii) do not secure any
obligation in an amount exceeding $500,000 and (iii) do not in the
aggregate materially detract from the value of its assets or materially
impair the use thereof in the operation of its business;
(o) any interest or title of a lessor in assets or property subject to
a Capital Lease of the Borrower or any Subsidiary; provided that the
aggregate capitalized value on the consolidated balance sheet of the
Borrower of all the Capital Leases at any time does not exceed $25,000,000;
(p) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness or obligation secured by any Lien permitted
by any of the foregoing clauses of this Section; provided that such
Indebtedness or obligation is not increased and is not secured by any
additional assets;
(q) Liens arising from filing Uniform Commercial Code or personal
property security financing statements (or substantially equivalent filings
outside the United States) regarding leases;
(r) Liens encumbering property or assets under construction (and
proceeds and products thereof) arising from progress or partial payments by
a customer of the Borrower or the Subsidiaries relating to such property or
assets;
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(s) Liens not otherwise permitted by this Section 6.02 securing
obligations in an aggregate principal, stated or face amount at any date
not to exceed $10,000,000; and
(t) Liens on any proceeds (including insurance, condemnation and
eminent domain proceeds) or products of any collateral a Lien over which is
otherwise permitted by the foregoing clauses of this Section, and on
general intangibles relating to or embodied in such collateral.
SECTION 6.03. Consolidations, Mergers and Sales of Assets. (a) No Loan
Party will, and no Loan Party will permit any of its Subsidiaries to,
consolidate or merge with or into any other Person except as permitted in
accordance with Section 5.04.
(b) No Loan Party will, and will not permit any of its Subsidiaries
to, sell, transfer, lease or otherwise dispose of any asset, including any
Equity Interest owned by it, nor will any Loan Party permit any of it
Subsidiaries to issue any additional Equity Interest in such Subsidiary, except:
(i) sales of inventory in the ordinary course of business;
(ii) any disposition of surplus, discontinued or worn-out equipment or
other assets (including leasehold interests) no longer used in the on-going
business of the Borrower and the Subsidiaries (including any Abandoned
Subsidiaries and the assets thereof);
(iii) any disposition of cash or Temporary Cash Investments;
(iv) any sale or other disposition of readily marketable securities in
the ordinary course of business;
(v) any disposition of the Demil Assets;
(vi) any sale, transfer or other disposition not otherwise permitted
by this Section 6.03 (x) to the Borrower or any Wholly-Owned Consolidated
Subsidiary or (y) to any other Subsidiary or Joint Venture that would not
be prohibited by Section 6.04 if it were an Investment; provided that any
such sale, transfer or
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other disposition involving a Subsidiary or Joint Venture that is not a
Loan Party shall be made in compliance with Section 6.05;
(vii) the grant of any Lien permitted under Section 6.02;
(viii) sales, transfer and other dispositions of Equity Interests in
Subsidiaries which are solely engaged in the business of providing
insurance or self-insurance coverage for the businesses of the Borrower and
the Subsidiaries permitted by Section 5.04, or the issuance of Equity
Interests in such Subsidiaries to non-Affiliated third Persons in an
aggregate value (as determined by the Borrower in good faith) in case of
issuance, or aggregate book value in the case of sales, transfers or other
dispositions, not to exceed in the aggregate $10,000,000 for all such
Subsidiaries;
(ix) any disposition of assets with a fair market value of $50,000 or
less;
(x) sales, transfers and dispositions to Joint Ventures of assets with
an aggregate fair market value in any fiscal year not in excess of
$5,000,000; and
(xi) sales, transfers and other dispositions of assets (other than
Equity Interests in a Subsidiary) that are not permitted by any other
clause of this Section; provided that the aggregate fair market value of
all assets sold, transferred or otherwise disposed of in reliance upon this
clause (xi) shall not exceed $10,000,000 during any fiscal year of the
Borrower;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clauses (iii), (vi) and (vii) above) shall
be made for fair value and for at least 80% cash consideration.
SECTION 6.04. Investments in Subsidiaries. Neither the Borrower nor
any Subsidiary will hold, make or acquire any Investment in any Person other
than:
(a) Investments in Persons that are, or as a result of such Investment
will become, Subsidiaries or Joint Ventures; provided that the aggregate
fair market value of all Investments by the Borrower and its Consolidated
Subsidiaries in, or in Persons that as a
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result of such Investment will become, Joint Ventures and Subsidiaries of
the Borrower that are not, or will not as a result of such Investment
become, Wholly-Owned Consolidated Subsidiaries of the Borrower, shall at no
time (when taken together with the aggregate value of assets sold,
transferred or otherwise disposed of to such Subsidiary or Joint Venture
pursuant to Section 6.03(b)(vi) and net of any cash consideration received
by the Borrower or a Wholly-Owned Consolidated Subsidiary in respect of and
at the time of or substantially contemporaneously with any such sale,
transfer or disposition or Investment) exceed $25,000,000 (with the fair
market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value);
(b) Investments acquired in the form of consideration received from
the sale of assets consummated in accordance with Section 6.03(b);
(c) Investments acquired as part of the settlement of litigation or
claims or in satisfaction of claims made pursuant to a reorganization,
bankruptcy or liquidation of a Person, or as a good faith settlement of
Debt owed by a Person to the Borrower or any of its Subsidiaries;
(d) Temporary Cash Investments; and
(e) Aggregate Net Investments in Unrestricted Subsidiaries in an
aggregate amount not to exceed $100,000.
SECTION 6.05. Transactions with Affiliates. No Loan Party will, or
will permit any of its Subsidiaries to, directly or indirectly, pay any funds to
or for the account of, make any Investment in, lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to, or participate in,
or effect any transaction in connection with any joint enterprise or other joint
arrangement with, any of their Affiliates; provided, however, that the foregoing
provisions of this Section shall not prohibit any Loan Party or any of its
Subsidiaries from (i) declaring or paying any lawful dividend (subject to
Section 6.08) so long as, after giving effect to any such declaration, no
Default shall have occurred and be continuing, (ii) making sales to or purchases
from any of their Affiliates and, in connection therewith, extending credit or
making payments, or making payments for services rendered by any of their
Affiliates, if such sales or purchases are made or such services are rendered in
the ordinary course of business and on terms and
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conditions at least as favorable to such Loan Party or such Subsidiary as the
terms and conditions which would apply in a similar transaction with a Person
not an Affiliate, (iii) making payments of principal, interest and premium on
any Indebtedness of such Loan Party or such Subsidiary held by any of its
Affiliates if the terms of such Indebtedness are substantially as favorable to
such Loan Party or such Subsidiary as the terms which could have been obtained
at the time of the creation of such Indebtedness from a lender which was not an
Affiliate, (iv) performing its obligations pursuant to any Acquisition Document,
(v) consummating any disposition of assets to an Affiliate not prohibited by
Section 6.03, (vi) participating in, making Investments in, or effecting any
other transaction with or in connection with, any Joint Venture or other joint
enterprise or joint arrangement that is an Affiliate (regardless of whether the
other party participating in such Joint Venture or other joint enterprise or
joint arrangement is an Affiliate) if such Loan Party or such Subsidiary
participates in the ordinary course of its business and on a basis no less
advantageous than the basis on which any other venturer participates (taking
into account the respective interests of such Loan Party or Subsidiary and such
other venturer or venturers) or (vii) to the extent approved by the board of
directors of such Loan Party or Subsidiary, making payments of money or
issuances of securities pursuant to employment agreements and arrangements and
employee benefit plans and making payments for services rendered by non-employee
directors of the Borrower and their Affiliates.
SECTION 6.06. Constitutional Documents. No Loan Party will, or will
permit any Subsidiary to, amend its Constitutional Documents in any manner which
could adversely affect the rights of the Lenders under the Loan Documents or
their ability to enforce the same.
SECTION 6.07. Waivers and Amendments of Related Documents. The
Borrower shall not and shall not permit its Subsidiaries to, without the prior
written consent of the Required Lenders, modify or amend, or waive any provision
or condition contained in, any of the Acquisition Documents or the Subordinated
Note Indenture or the Subordinated Notes from the forms of each of the foregoing
heretofore delivered to the Lenders in any manner that could reasonably be
expected to be adverse to the Lenders.
SECTION 6.08. Restricted Payments. The Borrower will not declare or
make any Restricted Payment other than:
(i) any Restricted Payments made by Subsidiaries to the Borrower or a
Wholly-Owned Consolidated
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Subsidiary (or with respect to a Subsidiary other than a Wholly-Owned
Consolidated Subsidiary, Restricted Payments made ratably with respect to
each class of such Subsidiary's Equity Interests in respect of which such
Restricted Payment is being made);
(ii) any Restricted Payments required to be made by the Borrower
pursuant to the terms of employee benefit plans and stock options
(including stock ownership plans (including 401K plans, restricted stock
plans, employee stock purchase plans, performance sharing plans and
incentive plans)), in each case as in effect on September 30, 1998, and as
modified thereafter, provided that the aggregate amount of Restricted
Payments permitted by this clause (i) shall not exceed $25,000,000;
(iii) repurchases of common stock of the Borrower pursuant to the
Stock Buyback;
(iv) any Restricted Payment by the Borrower payable solely in
additional Equity Interests of the Borrower;
(v) any other Restricted Payments in addition to those permitted above
(and whether of the same or a different type, or in addition to amounts for
any type, provided above) made or declared after the Closing Date to the
extent that immediately after giving effect thereto (x) no Default shall
have occurred and be continuing and (y) the aggregate amounts of all such
Restricted Payments made or declared pursuant to this clause (v) after the
Closing Date does not exceed $50,000,000.
SECTION 6.09. Foreign Subsidiaries. Notwithstanding any other
provision of this Agreement, the aggregate amount of Investments made in any
Foreign Subsidiary and of sales, transfers and other dispositions to any Foreign
Subsidiary under Section 6.03(b)(vi), in each case by the Borrower and its
Subsidiaries (other than the Foreign Subsidiaries) after the Closing Date in all
Foreign Subsidiaries shall not at any time exceed $10,000,000 (valued as
provided in Section 6.04(a) and determined without duplication).
SECTION 6.10. Minimum Consolidated Net Worth. Consolidated Net Worth
shall at no time be less than the sum of (i) $175,000,000 plus (ii) 50% of
cumulative Consolidated Net Income for each fiscal quarter beginning after
September 27, 1998 and ending on or prior to the relevant date of determination
hereof, but in each case in this
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clause (ii), only to the extent that Consolidated Net Income for each such
fiscal quarter or other period is positive plus (iii) 50% of the increase in
consolidated stockholders' equity of the Borrower from any Equity Issuances by
the Borrower after September 27, 1998.
SECTION 6.11. Leverage Ratio. As of the last day of each fiscal period
of the Borrower ending most closely to the dates set forth below, the Leverage
Ratio as of such day shall not exceed the ratio set forth below opposite such
date:
<TABLE>
<CAPTION>
Date Ratio Date Ratio
- ---- ----- ---- -----
<S> <C> <C> <C>
December 31, 1998 3.75:1 March 31, 2002 3.00:1
March 31, 1999 3.75:1 June 30, 2002 3.00:1
June 30, 1999 3.50:1 September 30, 2002 3.00:1
September 30, 1999 3.50:1 December 31, 2002 3.00:1
December 31, 1999 3.25:1 March 31, 2003 3.00:1
March 31, 2000 3.25:1 June 30, 2003 3.00:1
June 30, 2000 3.00:1 September 30, 2003 3.00:1
September 30, 2000 3.00:1 December 31, 2003 3.00:1
December 31, 2000 3.00:1 March 31, 2004 3.00:1
March 31, 2001 3.00:1 June 30, 2004 3.00:1
June 30, 2001 3.00:1 September 30, 2004 3.00:1
September 30, 2001 3.00:1
December 31, 2001 3.00:1
</TABLE>
SECTION 6.12. Interest Coverage. As of the last day of each fiscal
quarter of the Borrower ending most nearly on the dates set forth below, the
ratio of aggregate Consolidated EBITDA to aggregate Consolidated Interest
Charges, in each case for the four consecutive fiscal quarters ending on such
day, shall not be less than 3.50:1.
SECTION 6.13. Outside Letters of Credit. Neither the Borrower nor any
of its Subsidiaries shall at any time have any letters of credit issued or
outstanding for its account other than (i) Letters of Credit hereunder and (ii)
other letters of credit issued to secure the performance of the Borrower and its
Subsidiaries under trade or government contracts (other than for borrowed
money); provided that (x) the aggregate amount available for drawing and
(without duplication) unpaid amount of all reimbursement obligations under all
such letters of credit at no time exceeds $15,000,000, (y) neither the Borrower
nor any of its Subsidiaries will create, assume or suffer to exist any Lien on
any of its assets with respect to their obligations under such letters of
credit, and (z) such letters of credit are supported by Letters of Credit issued
by an Issuing Bank
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hereunder in stated amount equal to the stated amount of such other letters of
credit.
SECTION 6.14. Designated Senior Debt. Without the consent of the
Required Lenders, the Borrower shall not designate any Indebtedness, other than
Indebtedness under the Loan Documents, as "Designated Senior Debt", as such term
is defined in the Subordinated Note Indenture as in effect on the Closing Date,
or any comparable designation that confers upon the holders of such Indebtedness
(or any Person acting on their behalf) the right to initiate blockage periods
under the Subordinated Note Indenture (other than as a result of a payment
default), unless, prior to any such designation of such Indebtedness as
"Designated Senior Debt", the holders of such Indebtedness deliver a written
agreement to the Administrative Agent providing for the express benefit of the
Lenders that neither such holders nor any Person acting on their behalf will
initiate any such blockage period under the Subordinated Note Indenture without
the prior written consent of the Required Lenders.
SECTION 6.15. Derivatives Obligations. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any Derivatives Obligations,
other than Derivatives Obligations entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Subsidiary is
exposed in the conduct of its business or the management of its liabilities.
SECTION 6.16. Additional Debt Incurrence. No Indebtedness that
constituted a Prepayment Event when incurred (other than Indebtedness referred
to in clause (vii) of the definition of "Indebtedness") shall mature, or provide
for any amortization or other mandatory payment of principal, or other repayment
(in the absence of default) or right of redemption at the option of the holder
thereof, prior to the Final Maturity Date.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay (i) when due any principal of any
Loan or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at
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the due date thereof or at a date fixed for prepayment thereof or
otherwise, or (ii) within five Business Days after the same shall become
due, any interest on any Loan or any fee or any other amount (other than an
amount referred to in clause (i) of this paragraph (a)) payable under this
Agreement or any other Loan Document;
(b) any Loan Party shall fail to observe or perform any covenant
contained in Sections 5.01(e), 5.04 or 5.07 or in Article VI;
(c) any Loan Party shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those covered by
clause (a) or (b) above) for 30 days after a Responsible Officer of such
Loan Party shall have become aware of such failure;
(d) any representation, warranty, certification or statement made or
deemed made by any Loan Party in any Loan Document or in any certificate,
financial statement or other document delivered pursuant thereto shall
prove to have been incorrect in any material respect when made (or deemed
made);
(e) any Loan Party or any of its Subsidiaries shall fail to make any
payment in respect of any Material Financial Obligation when due or within
any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Indebtedness or enables (or,
with the giving of notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(g) any Loan Party or any of its Subsidiaries (other than any
Abandoned Subsidiary) shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become
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due, or shall take any corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against
a Loan Party or any Subsidiary of a Loan Party (other than an Abandoned
Subsidiary) seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;
or an order for relief shall be entered against a Loan Party or any
Subsidiary of a Loan Party under the federal bankruptcy laws as now or
hereafter in effect;
(i) a Loan Party or any of its Subsidiaries (other than an Abandoned
Subsidiary) shall admit its inability to pay its debts as and when they
fall due or becomes or is deemed to be unable to pay its debts or
insolvent, or convenes a meeting for the purpose of proposing, or otherwise
proposes or enters into, any composition or arrangement with its creditors
or any group or class thereof, or anything analogous to, or having a
substantially similar effect to, any of the events specified in this
paragraph or in paragraph (g) or (h) above occurs in any jurisdiction;
(j) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $1,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate any
Plan which is then a Material Plan shall be filed under Title IV of ERISA
by any member of the ERISA Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed
to administer any Plan which is then a Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Plan which is then a Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from, or
a default, within the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which could cause one or more members
of the ERISA Group to incur a current payment obligation, that is, an
obligation or
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series of obligations payable within 12 months, in excess of $1,000,000;
(k) a judgment or order for the payment of money in excess of
$2,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and unstayed for a period
of 30 days;
(l) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended), other than any
employee stock ownership plan maintained for the benefit of the employees
of the Borrower and other than Hercules Incorporated as described in the
proxy statement dated July 3, 1996 regarding the annual meeting of
stockholders of the Borrower, shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of 35% or more of the outstanding
shares of common stock of the Borrower; or, during any period of 12
consecutive calendar months, individuals (i) who were directors of the
Borrower on the first day of such period or (ii) whose nomination for
election to the board of directors of the Borrower was recommended or
approved by a vote of at least a majority of the directors then still in
office who were directors of the Borrower on the first day of such period,
shall cease to constitute a majority of the board of directors of the
Borrower;
(m) any levy, seizure or attachment of or on any material portion of
the Collateral shall be made, or the loss, theft, substantial damage to or
destruction of a material portion of any Collateral shall occur, the value
of which not fully payable through insurance or compensated for pursuant to
a condemnation award shall equal or exceed $5,000,000 in the aggregate;
(n) any Lien created by any of the Security Documents shall at any
time fail to constitute a valid and (to the extent required by the Security
Documents) perfected Lien on any material portion of the Collateral
purported to be subject thereto, securing the obligations purported to be
secured thereby, with the priority required by the Loan Documents, or the
Borrower or any other Loan Party shall so assert in writing; or
(o) the Subsidiary Guaranty Agreement shall at any time cease to be a
valid and binding obligation of
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any Subsidiary Loan Party, or the Borrower or any Subsidiary Loan Party
shall so assert in writing;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent (i) at the
request of the Required Lenders, shall, by notice to the Borrower, terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
at the request of Lenders representing at least 50.01% of the sum of (a) the
aggregate principal amount of outstanding Loans and (b) the aggregate principal
amount of outstanding loans under the Continuing Credit Agreement at such time,
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (g) or (h) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Banks hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend
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money to and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the Administrative Agent
hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall not be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement,
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instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Banks and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, with the
consent of the Borrower (which consent shall not unreasonably be withheld and
may not be withheld if an Event of Default is continuing, but which may in any
event be withheld (regardless of whether an Event of Default is continuing) if
(a) such proposed successor Administrative Agent fails to deliver evidence
reasonably satisfactory to the Borrower that such proposed successor
Administrative Agent is not a Foreign Person and (b) the Borrower in good faith
concludes that the appointment of such proposed successor Administrative Agent
could result in a violation of any law, rule guideline or regulation, or a
violation of, revocation of, failure to renew or modification of any, order,
facility security clearance or permit), to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on behalf
of the Lenders and the Issuing Banks, appoint a successor Administrative Agent
which shall be a bank with
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an office in New York, New York, or an Affiliate of any such bank, and which
shall not be a Foreign Person. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
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
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 600 Second Street NE, Hopkins, MN
55343-8384, Attention of Scott S. Meyers (Telecopy No. (612) 931-5920);
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(b) if to the Administrative Agent, to The Chase Manhattan Bank, Loan
and Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New York,
New York 10081, Attention of Doris Mesa (Telecopy No. (212) 552-5650), with
a copy to The Chase Manhattan Bank, 270 Park Avenue, New York, New York
10017, Attention of James Treger and Anne Schuler(Telecopy No. (212)
270-5100), and to Chase Manhattan Bank Delaware, Corporate Banking
Department, 8th Floor, 1201 Market Street, Wilmington, Delaware 19801; and
(c) if to an Issuing Bank, a Swingline Lender or any other Lender, to
it at its address (or telecopy number) set forth in its Administrative
Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, any Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Banks and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any
Lender or any Issuing Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived,
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amended or modified except, in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders or, in the case of any other Loan Document, pursuant to an agreement or
agreements in writing entered into by the Administrative Agent and the Loan
Party or Loan Parties that are parties thereto, in each case with the consent of
the Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision of any Loan Document specifying the number or
percentage of Lenders (or Lenders of any Class) or lenders under the Continuing
Credit Agreement required to waive, amend or modify any rights thereunder or
make any determination or grant any consent thereunder, without the written
consent of each Lender and each lender under the Continuing Credit Agreement (or
each Lender of such Class, as the case may be), (vi) release all or
substantially all of the Subsidiary Loan Parties from their Guarantees under the
Subsidiary Guaranty Agreement (except as expressly provided in the Agreement),
or limit their liability in respect of such Guarantee, without the written
consent of each Lender, (vii) release all or substantially all of the Collateral
from the Liens of the Security Documents, without the written consent of each
Lender, (viii) change any provisions of any Loan Document in a manner that by
its terms adversely affects the rights in respect of payments due to Lenders
holding Loans of any Class differently than those holding Loans of any other
Class, without the written consent of Lenders holding a majority in interest of
the outstanding Loans and unused Commitments of each adversely affected Class or
(ix) adversely affect the rights, obligations or protections of lenders under
the Continuing Credit Agreement without having a similar and ratable adverse
affect on each Class of Loans or Commitments
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hereunder, without the written consent of lenders under the Continuing Credit
Agreement holding a majority of the outstanding loans thereunder; provided
further that (A) no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent, any Issuing Bank or any Swingline
Lender without the prior written consent of the Administrative Agent, such
Issuing Bank or such Swingline Lender, as the case may be, and (B) any waiver,
amendment or modification of this Agreement that by its terms affects the rights
or duties under this Agreement of the Revolving Lenders (but not the Closing
Date Term Loan Lenders, Delayed Draw Lenders and lenders under the Continuing
Credit Agreement), the Closing Date Term Loan Lenders (but not the Revolving
Lenders, Delayed Draw Lenders and lenders under the Continuing Credit
Agreement), the Delayed Draw Lenders (but not the Revolving Lenders, Closing
Date Term Loan Lenders and lenders under the Continuing Credit Agreement) or the
lenders under the Continuing Credit Agreement (but not the Lenders) may be
effected by an agreement or agreements in writing entered into by the Borrower
and the requisite percentage in interest of the affected Class of Lenders or the
lenders under the Continuing Credit Agreement, as the case may be.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by each Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, any Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
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(b) The Borrower shall indemnify the Administrative Agent, each
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by any Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any Environmental Liability related in any way to the Borrower or
any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee or any officer, director, employee, affiliate,
agent or controlling person of such Indemnitee (or of an institution of which
such Indemnitee is an officer, director, employee, affiliate, agent or
controlling person).
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent, any Issuing Bank or any Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, such Issuing Bank or such Swingline Lender,
as the case may be, such Lender's pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, such Issuing Bank or such
Swingline Lender in its capacity
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as such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the sum of the total Revolving Exposures, outstanding
Term Loans, unused Commitments and loans outstanding under the Continuing Credit
Agreement at the time.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of any Issuing Bank that issues any Letter of Credit), except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and except that no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except in compliance with the remaining
paragraphs of this Section 9.04. Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of any Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it); provided that (i) except
in the case of an assignment to a Lender or an Affiliate of a Lender, each of
the Borrower and the
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Administrative Agent (and, in the case of an assignment of all or a portion of a
Revolving Commitment or any Lender's obligations in respect of its LC Exposure
or Swingline Exposure, each Issuing Bank and each Swingline Lender) must give
their prior written consent to such assignment (which consent shall not be
unreasonably withheld and, in the case of the Borrower, may not be withheld if
an Event of Default is continuing, but which may in any event be withheld by the
Borrower (regardless of whether an Event of Default is continuing) if (x) such
proposed assignee fails to deliver evidence reasonably satisfactory to the
Borrower that such assignee is not a Foreign Person and (y) the Borrower in good
faith concludes that such assignment could
result in a violation of any law, rule or regulation, or a violation of,
revocation of, failure to renew or modification of any order, facility security
clearance or permit), (ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that this
clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) simultaneously with each
assignment of rights and obligations in respect of Closing Date Term Loans, the
assigning Lender shall assign to the same assignee a proportionate part of all
such Lender's rights and obligations as a lender under the Continuing Credit
Agreement, (v) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and (vi) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent and the Borrower an
Administrative Questionnaire; and provided further that any consent of the
Borrower otherwise required under this paragraph shall not be required if an
Event of Default has occurred and is continuing, but which may in any event be
withheld (regardless of whether an Event of Default is continuing) if (x) such
proposed assignee fails to deliver evidence reasonably satisfactory to the
Borrower that such assignee is not a Foreign Person and (y) the Borrower in good
faith concludes that such assignment could
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result in a violation of any law, rule or regulation, or a violation of,
revocation of, failure to renew or modification of any order, facility security
clearance or permit. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obliga tions under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
the Issuing Banks and the Lenders may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, the Issuing Banks and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the
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Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Banks or the Swingline Lenders, sell
participations to one or more banks or other institutions (a "Participant") in
all or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Issuing Banks and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents
(and shall not grant such Participant any direct or indirect vote on or veto
power with respect to any of the foregoing) and shall contain an agreement by
the Participant to be bound by the provisions of Section 9.12; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in clause (i), (ii), (iii), (iv), (vi), (vii), (viii) or (ix) of the
first proviso to Section 9.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.15, 2.16 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to
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any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, any Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an
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executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates 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 obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) Pursuant to NYGOL Sections 5-1401, this Agreement shall be
construed in accordance with and governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be
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conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, any Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against the Borrower or its properties
in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
Issuing Banks and the Lenders agrees to maintain the confidentiality of the
Information
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(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, any Issuing
Bank or any Lender on a nonconfidential basis from a source other than a Loan
Party. For the purposes of this Section, "Information" means all information
received from any Loan Party relating to any Loan Party or its business,
operations, assets, liabilities, financial condition or position or results of
operations or prospects other than any such information that is available to the
Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by any Loan Party. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this
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Section shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
SECTION 9.14. Information Concerning Foreign Persons. Each Lender that
is or becomes a Foreign Person after the Closing Date, shall deliver to each of
the Borrower and the Administrative Agent promptly after becoming a Foreign
Person, written notice that such Lender is or has become a Foreign Person and
such other information concerning the ownership, jurisdiction of organization or
citizenship of such Lender or any Person directly or indirectly controlling such
Lender as the Borrower may reasonably request to comply with any applicable
laws, rules, regulations and orders (including any applicable laws, rules,
regulations and orders relating to national security). If, upon receipt of any
such notice, the Borrower in good faith concludes that, as a consequence of such
Lender's being or becoming a Foreign Person, there could result a violation of
any law, rule or regulation, or a violation of, revocation of, failure to renew
or modification of any order, facility security clearance or permit, the
Borrower shall have the right, with the assistance of the Administrative Agent,
to seek a substitute lender or lenders reasonably satisfactory to the
Administrative Agent, the Issuing Banks, the Swingline Lenders and the Borrower
(which may be one or more of the Lenders) to purchase the Loans and assume the
Commitments of such Lender, and the Borrower, the Administrative Agent, such
Lender and substitute lender or lenders shall execute and deliver an
appropriately completed Assignment and Acceptance pursuant to Section 9.04(b)
hereof to effect the assignment of rights to and assumption of obligations by
such substitute lender or lenders.
SECTION 9.15. Failure of Lender to Satisfy Minimum Rating Condition.
As a result of any Lender with a Revolving Commitment failing to satisfy the
Minimum Rating Condition, the Borrower, the Administrative Agent and each
Issuing Bank shall have the right, but not the obligation, upon notice to such
Lender and the Administrative Agent to replace such Lender with one or more
Eligible Lenders in order to purchase such Lender's Revolving Loans and its
participation in any outstanding LC Disbursements and to assume its Revolving
Commitments and its participation in the LC Exposure, and such Lender hereby
agrees to transfer
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and assign without recourse (in accordance with and subject
to the restrictions contained in Section 9.04(b)) all its interests, rights and
obligations in respect of its Revolving Loans, participation in any outstanding
LC Disbursements, Revolving Commitments and participation in any LC Exposure.
For purposes of this Section 9.15:
(i) the "Minimum Rating Condition" is satisfied by a Lender at any
time if (A) the issuer rating of such Lender or its Parent is then at least
"C" by Thompson BankWatch, Inc. (or its successors) (or, in the case of any
Lender organized under the laws of any jurisdiction outside the United
States, the individual rating of the Lender or its Parent is then at least
"C" by IBCA Limited (or its successors)) or (B) long-term unsecured public
debt of such Lender or its Parent is then rated at least "BBB" by S&P and
at least "Baa2" by Moody's;
(ii) "Eligible Lender" means any lender or other financial institution
whose (or whose Parent's) long-term unsecured public debt is rated at least
"A-" by S&P or at least "A3" by Moody's; and
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
ALLIANT TECHSYSTEMS INC.,
by
-------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent and
Swingline Lender,
by
-------------------------
Name:
Title:
CHASE MANHATTAN BANK DELAWARE,
as an Issuing Bank,
by
-------------------------
Name:
Title:
[OTHER BANKS, ISSUING BANKS
AND SWINGLINE LENDERS],
by
-------------------------
Name:
Title:
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