EXECUTION COPY
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$450,000,000
CREDIT AGREEMENT
AMONG
CONMED CORPORATION,
AS BORROWER
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
CHASE SECURITIES INC.,
AS ARRANGER AND AS SYNDICATION AGENT
SALOMON BROTHERS HOLDING COMPANY, INC,
AS DOCUMENTATION AGENT
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF DECEMBER 29, 1997
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS.................................................................................... 1
SECTION 1.1 Defined Terms............................................................................ 1
SECTION 1.2 Other Definitional Provisions............................................................ 23
ARTICLE II. AMOUNT AND TERMS OF COMMITMENTS............................................................... 23
SECTION 2.1 Term Loan Commitments.................................................................... 23
SECTION 2.2 Procedure for Term Loan Borrowing........................................................ 23
SECTION 2.3 Repayment of Term Loans.................................................................. 24
SECTION 2.4 Revolving Credit Commitments............................................................. 25
SECTION 2.5 Procedure for Revolving Credit Borrowing................................................. 26
SECTION 2.6 Repayment of Loans; Evidence of Debt..................................................... 26
SECTION 2.7 Commitment Fees, etc. ................................................................... 27
SECTION 2.8 Termination or Reduction of Revolving Credit Commitments................................. 27
SECTION 2.9 Optional Prepayments..................................................................... 27
SECTION 2.10 Mandatory Prepayments and Commitment Reductions.......................................... 28
SECTION 2.11 Conversion and Continuation Options...................................................... 29
SECTION 2.12 Minimum Amounts and Maximum Number of Eurodollar
Tranches................................................................................. 30
SECTION 2.13 Interest Rates and Payment Dates......................................................... 30
SECTION 2.14 Computation of Interest and Fees......................................................... 30
SECTION 2.15 Inability to Determine Interest Rate..................................................... 31
SECTION 2.16 Pro Rata Treatment and Payments.......................................................... 31
SECTION 2.17 Requirements of Law...................................................................... 34
SECTION 2.18 Taxes.................................................................................... 35
SECTION 2.19 Indemnity................................................................................ 36
SECTION 2.20 Illegality............................................................................... 37
SECTION 2.21 Change of Lending Office................................................................. 37
SECTION 2.22 Replacement of Lenders under Certain Circumstances....................................... 37
ARTICLE III. LETTERS OF CREDIT............................................................................ 38
SECTION 3.1 L/C Commitment........................................................................... 38
SECTION 3.2 Procedure for Issuance of Letter of Credit............................................... 38
SECTION 3.3 Commissions, Fees and Other Charges...................................................... 39
SECTION 3.4 L/C Participations....................................................................... 39
SECTION 3.5 Reimbursement Obligation of the Borrower................................................. 40
SECTION 3.6 Obligations Absolute..................................................................... 40
SECTION 3.7 Letter of Credit Payments................................................................ 41
SECTION 3.8 Applications............................................................................. 41
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES................................................................ 41
SECTION 4.1 Financial Condition...................................................................... 41
SECTION 4.2 No Change................................................................................ 43
SECTION 4.3 Corporate Existence; Compliance with Law................................................. 43
SECTION 4.4 Corporate Power; Authorization; Enforceable Obligations.................................. 43
SECTION 4.5 No Legal Bar............................................................................. 43
SECTION 4.6 No Material Litigation................................................................... 44
SECTION 4.7 No Default............................................................................... 44
SECTION 4.8 Ownership of Property; Liens............................................................. 44
SECTION 4.9 Intellectual Property.................................................................... 44
SECTION 4.10 Taxes.................................................................................... 44
SECTION 4.11 Federal Regulations...................................................................... 44
SECTION 4.12 Labor Matters............................................................................ 45
SECTION 4.13 ERISA.................................................................................... 45
SECTION 4.14 Investment Company Act; Other Regulations................................................ 45
SECTION 4.15 Subsidiaries............................................................................. 46
SECTION 4.16 Use of Proceeds.......................................................................... 46
SECTION 4.17 Environmental Matters.................................................................... 46
SECTION 4.18 Accuracy of Information, etc............................................................. 47
SECTION 4.19 Security Documents....................................................................... 47
SECTION 4.20 Solvency................................................................................. 48
ARTICLE V. CONDITIONS PRECEDENT........................................................................... 48
SECTION 5.1 Conditions to Initial Extension of Credit................................................ 48
SECTION 5.2 Conditions to Each Extension of Credit................................................... 51
ARTICLE VI. AFFIRMATIVE COVENANTS......................................................................... 51
SECTION 6.1 Financial Statements..................................................................... 51
SECTION 6.2 Certificates; Other Information.......................................................... 52
SECTION 6.3 Payment of Obligations................................................................... 53
SECTION 6.4 Conduct of Business and Maintenance of Existence, etc. .................................. 53
SECTION 6.5 Maintenance of Property; Insurance....................................................... 54
SECTION 6.6 Inspection of Property; Books and Records; Discussions................................... 54
SECTION 6.7 Notices.................................................................................. 54
SECTION 6.8 Environmental Laws....................................................................... 55
SECTION 6.9 Interest Rate Protection................................................................. 55
SECTION 6.10 Additional Collateral, etc............................................................... 56
SECTION 6.11 Issuance of High-Yield Senior Subordinated Securities.................................... 57
SECTION 6.12 Senior Indebtedness...................................................................... 57
SECTION 6.13 Additional Covenants Relating to Collateral.............................................. 57
ARTICLE VII. NEGATIVE COVENANTS........................................................................... 58
SECTION 7.1 Financial Condition Covenants............................................................ 58
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SECTION 7.2 Limitation on Indebtedness............................................................... 60
SECTION 7.3 Limitation on Liens...................................................................... 62
SECTION 7.4 Limitation on Fundamental Changes........................................................ 63
SECTION 7.5 Limitation on Sale of Assets............................................................. 64
SECTION 7.6 Limitation on Dividends.................................................................. 65
SECTION 7.7 Limitation on Capital Expenditures....................................................... 66
SECTION 7.8 Limitation on Investments, Loans and Advances............................................ 66
SECTION 7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. ....................................................................... 67
SECTION 7.10 Limitation on Transactions with Affiliates............................................... 67
SECTION 7.11 Limitation on Sales and Leasebacks....................................................... 68
SECTION 7.12 Limitation on Changes in Fiscal Periods.................................................. 68
SECTION 7.13 Limitation on Negative Pledge Clauses.................................................... 68
SECTION 7.14 Limitation on Restrictions on Subsidiary Distributions................................... 68
SECTION 7.15 Limitation on Lines of Business.......................................................... 68
SECTION 7.16 Limitation on Amendments to Acquisition Documentation.................................... 68
ARTICLE VIII. EVENTS OF DEFAULT........................................................................... 69
ARTICLE IX. THE AGENTS.................................................................................... 72
SECTION 9.1 Appointment.............................................................................. 72
SECTION 9.2 Delegation of Duties..................................................................... 72
SECTION 9.3 Exculpatory Provisions................................................................... 73
SECTION 9.4 Reliance by Agents....................................................................... 73
SECTION 9.5 Notice of Default........................................................................ 73
SECTION 9.6 Non-Reliance on Agents and Other Lenders................................................. 74
SECTION 9.7 Indemnification.......................................................................... 74
SECTION 9.8 Agent in Its Individual Capacity......................................................... 75
SECTION 9.9 Successor Agents......................................................................... 75
SECTION 9.10 Authorization to Release Liens........................................................... 75
SECTION 9.11 The Syndication Agent.................................................................... 75
ARTICLE X. MISCELLANEOUS.................................................................................. 76
SECTION 10.1 Amendments and Waivers.................................................................. 76
SECTION 10.2 Notices................................................................................. 76
SECTION 10.3 No Waiver; Cumulative Remedies.......................................................... 77
SECTION 10.4 Survival of Representations and Warranties.............................................. 77
SECTION 10.5 Payment of Expenses..................................................................... 77
SECTION 10.6 Successors and Assigns; Participations and Assignments.................................. 78
SECTION 10.7 Adjustments; Set-off.................................................................... 81
SECTION 10.8 Counterparts............................................................................ 81
SECTION 10.9 Severability............................................................................ 82
SECTION 10.10 Integration............................................................................. 82
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SECTION 10.11 GOVERNING LAW........................................................................... 82
SECTION 10.12 Submission To Jurisdiction; Waivers..................................................... 82
SECTION 10.13 Acknowledgements........................................................................ 83
SECTION 10.14 WAIVERS OF JURY TRIAL................................................................... 83
SECTION 10.15 Confidentiality......................................................................... 83
SECTION 10.16 Releases................................................................................ 84
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ANNEX:
A Pricing Grid
SCHEDULES
:
1.1A Commitments; Lending Offices and Addresses
4.1 Disposition of Assets
4.1(b) Guarantee Obligations of CONMED
4.1(c) Guarantee Obligations of Linvatec
4.4 Consents, Authorizations, Filings and Notices
4.9 Intellectual Property
4.15 Subsidiaries
4.19 UCC Filing Jurisdictions
7.2(e) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E-1 Form of Legal Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
E-2 Form of Legal Opinion of General Counsel
E-3 Form of Legal Opinion of Holland & Knight
F-1 Form of Term Note
F-2 Form of Revolving Credit Note
G Form of Prepayment Option Notice
H Form of Exemption Certificate
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CREDIT AGREEMENT, dated as of December 29, 1997, among CONMED
CORPORATION, a New York corporation (the "Borrower"), the several banks and
other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), CHASE SECURITIES INC., as arranger and syndication
agent (in such capacity, the "Syndication Agent"), SALOMON BROTHERS HOLDING
COMPANY, INC, as documentation agent (in such capacity, the "Documentation
Agent"), and THE CHASE MANHATTAN BANK, as administrative agent (in such
capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower intends to acquire 100% of the capital stock of
Linvatec Corporation, a Florida corporation ("Linvatec"), and a wholly owned
subsidiary of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company ("BMS"), and certain assets of
affiliates of Linvatec related to the sale of Linvatec's products, for a cash
purchase price of approximately $370,000,000 (the "Acquisition"). References
herein to the "Acquisition" shall include the financings described herein and
all other transactions related to the Acquisition;
WHEREAS, to finance the Acquisition and the working capital needs of
the Borrower and its subsidiaries, the Lenders are willing to make credit
facilities available to the Borrower upon and subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the Alternate Base Rate.
"Acquisition": as defined in the recitals hereto.
"Acquisition Agreement": the Stock and Asset Purchase Agreement between
BMS and the Borrower dated as of November 26, 1997, as amended,
supplemented or otherwise modified from time to time.
"Acquisition Documentation": collectively, the Acquisition Agreement,
the Warrant and all schedules, exhibits, annexes and amendments thereto and
all side letters
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and agreements affecting the terms thereof or entered into in connection
therewith, in each case, as amended, supplemented or otherwise modified
from time to time.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b) direct or
cause the direction of the management and policies of such Person, whether
by contract or otherwise.
"Agents": collectively, the Documentation Agent and the Administrative
Agent.
"Aggregate Exposure": with respect to any Lender, an amount equal to
(a) until the Closing Date, the aggregate amount of such Lender's
Commitments and (b) thereafter, the sum of (i) the aggregate unpaid
principal amount of such Lender's Term Loans and (ii) the amount of such
Lender's Revolving Credit Commitment or, if the Revolving Credit
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit.
"Aggregate Exposure Percentage": with respect to any Lender, the ratio
(expressed as a percentage) of such Lender's Aggregate Exposure to the
Aggregate Exposure of all Lenders.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof, "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate
in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the
Administrative Agent in connection with extensions of credit to debtors).
Any change in the Alternate Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
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"Applicable Margin": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Alternate Base
Rate Eurodollar
Loans Loans
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Revolving Credit Loans .75% 2.00%
Tranche A Term Loans .75% 2.00%
Tranche B Term Loans 1.00% 2.25%
provided, that (i) until such time as the Borrower shall have issued the
Senior Subordinated Notes in accordance with the terms of this Agreement
the Applicable Margins provided above with respect to the Revolving Credit
Loans, the Tranche A Term Loans and the Tranche B Term Loans shall be
increased by 25 basis points and (ii) on and after the first Adjustment
Date occurring after the completion of four full fiscal quarters of the
Borrower after the Closing Date, the Applicable Margin with respect to
Revolving Credit Loans, Tranche A Term Loans and Tranche B Term Loans will
be determined pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing Lender may
reasonably specify from time to time, requesting the Issuing Lender to
issue a Letter of Credit.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c), (d), (e), (g), (h), (i), (j), (k) or (l) of Section
7.5) which yields net proceeds to the Borrower or any of its Subsidiaries
(valued at the initial principal amount thereof in the case of non-cash
proceeds consisting of notes or other debt securities and valued at fair
market value in the case of other non-cash proceeds) in excess of $50,000.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Revolving Credit
Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment over (b) such Lender's Revolving
Extensions of Credit.
"Benefitted Lender": as defined in Section 10.7(a).
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"BMS": as defined in the recitals hereto.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business": as defined in Section 4.17(b).
"Business Day": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the London interbank
eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized
repairs and improvements during such period) which should be capitalized
under GAAP on a consolidated balance sheet of such Person and its
Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP, and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and
all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the
foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case
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maturing within one year from the date of acquisition; (b) certificates of
deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of six months or less from the date of acquisition issued
by any Lender or by any commercial bank organized under the laws of the
United States or any state thereof having combined capital and surplus of
not less than $500,000,000; (c) commercial paper of an issuer rated at
least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally,
and maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more
than 30 days with respect to securities issued or fully guaranteed or
insured by the United States government; (e) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by
Moody's; (f) securities with maturities of six months or less from the date
of acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a)
through (f) of this definition.
"Chattel Paper": as defined in the Guarantee and Collateral Agreement.
"Closing Date": the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied, which date is December 31, 1997.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": as to any Lender, the sum of the Tranche A Term Loan
Commitment, the Tranche B Term Loan Commitment and the Revolving Credit
Commitment of such Lender.
"Commitment Fee Rate": .50% per annum; provided, that on and after the
first Adjustment Date occurring after the completion of four full fiscal
quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be determined pursuant to the Pricing Grid.
6
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated December 1997 and furnished to the Lenders.
"Consolidated EBITDA": for any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) interest expense, amortization or writeoff of
debt discount and debt issuance costs and commissions, discounts and other
fees and charges associated with Indebtedness (including the Loans), (c)
depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary, unusual or non-recurring expenses or losses (including the
extraordinary facility consolidation charge of approximately $2,300,000 for
the 1997 fiscal year end and, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such
period, losses on sales of assets outside of the ordinary course of
business) and (f) any other non-cash charges, and minus, to the extent
included in the statement of such Consolidated Net Income for such period,
the sum of (a) interest income, (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net
Income for such period, gains on the sales of assets outside of the
ordinary course of business) and (c) any other non-cash income, all as
determined on a consolidated basis.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDA for such period less the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such
period on account of Capital Expenditures to (b) Consolidated Fixed Charges
for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period and (b)
scheduled payments made during such period on account of principal of
Funded Debt of the Borrower or any of its Subsidiaries (including scheduled
principal payments in respect of the Term Loans and excluding any
prepayment as a result of the issuance of the Senior Subordinated Notes).
7
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense": for any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower
and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net
costs (or gains) under Interest Rate Protection Agreements to the extent
such net costs (or gains) are allocable to such period in accordance with
GAAP).
"Consolidated Leverage Ratio": as at the last day of any period of four
consecutive fiscal quarters, the ratio of (a) Consolidated Total Debt on
such day to (b) Consolidated EBITDA for such period; provided that for
purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period, the Consolidated EBITDA of any Person acquired
by the Borrower or its Subsidiaries during such period shall be included on
a pro forma basis for such period (assuming the consummation of each such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period) if the
consolidated balance sheet of such acquired Person and its consolidated
Subsidiaries as at the end of the period preceding the acquisition of such
Person and the related consolidated statements of income and stockholders'
equity and of cash flows for the period in respect of which Consolidated
EBITDA is to be calculated (i) have been previously provided to the
Administrative Agent and the Lenders and (ii) either (A) have been reported
on without a qualification arising out of the scope of the audit by
independent certified public accountants of nationally recognized standing
or (B) have been found acceptable by the Administrative Agent.
"Consolidated Net Income": for any period, the consolidated net income
(or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries, (b) the income
(or deficit) of any Person (other than a Subsidiary of the Borrower) in
which the Borrower or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is prohibited by the terms of any
Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.
8
"Consolidated Net Worth": at any date, all amounts which would, in
accordance with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date;
provided that any net non-cash adjustments to such amounts after the
Closing Date resulting from foreign currency transactions, unfunded pension
liabilities or unrealized gains or losses in respect of securities shall be
included to the extent such adjustments exceed $2,000,000 as of the end of
any fiscal quarter.
"Consolidated Total Debt": at any date, the aggregate principal amount
of all Funded Debt of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Continuing Directors": the directors of the Borrower on the Closing
Date, after giving effect to the Acquisition and the other transactions
contemplated hereby, and each other director, if, in each case, such other
director's nomination for election to the board of directors of the
Borrower is recommended by at least 66-2/3% of the then Continuing
Directors.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Default": any of the events specified in Article 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agent": as defined in the preamble hereto.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, legally binding requirements of any Governmental Authority or
other Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning the protection of
human health or the environment, as now or may at any time hereafter be in
effect.
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"Equipment": as defined in the Guarantee and Collateral Agreement.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
Service (or otherwise on such service), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on
10
the same later date (whether or not such Loans shall originally have been
made on the same day).
"Event of Default": any of the events specified in Article 8, provided
that any requirement for the giving of notice, the lapse of time, or both,
has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess, if
any, of (a) the sum, without duplication, of (i) Consolidated Net Income
for such fiscal year, (ii) an amount equal to the amount of all non-cash
charges (including depreciation and amortization, in each case on an
after-tax basis) deducted in arriving at such Consolidated Net Income,
(iii) an amount equal to the aggregate net non-cash loss (on an after-tax
basis) on the Disposition of Property by the Borrower and its Subsidiaries
during such fiscal year (other than sales of inventory in the ordinary
course of business), to the extent deducted in arriving at such
Consolidated Net Income and (iv) the increase during such fiscal year (if
any) in deferred tax liabilities and the decrease during such fiscal year
(if any) in deferred tax assets, in each case, of the Borrower and its
Subsidiaries (including non-cash charges in the deferred tax account of the
Borrower as a result of purchase accounting) less (b) the sum, without
duplication, of (i) an amount equal to the amount of all non-cash credits
included in arriving at such Consolidated Net Income, (ii) the aggregate
amount actually paid by the Borrower and its Subsidiaries in cash during
such fiscal year on account of Capital Expenditures (excluding the
principal amount of Indebtedness incurred in connection with such
expenditures and any such expenditures financed with the proceeds of any
Reinvestment Deferred Amount), (iii) the aggregate amount of all
prepayments of Revolving Credit Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Credit
Commitments and all optional prepayments of the Term Loans during such
fiscal year, (iv) the aggregate amount of all regularly scheduled principal
payments of Funded Debt (including, without limitation, the Term Loans) of
the Borrower and its Subsidiaries made during such fiscal year (other than
in respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (v) an amount
equal to the aggregate net non-cash gain on the Disposition of Property by
the Borrower and its Subsidiaries during such fiscal year (other than sales
of inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income, (vi) an amount equal to the
aggregate net cash gain on any Asset Sale or Recovery Event by the Borrower
and its Subsidiaries during such fiscal year to the extent the Net Cash
Proceeds thereof are applied pursuant to Section 2.10(b), (vii) the
decrease during such fiscal year (if any) in deferred tax liabilities and
the increase during such fiscal year (if any) in deferred tax assets, in
each case, of the Borrower and its Subsidiaries (including non-cash charges
in the deferred tax account of the Borrower as a result of purchase
accounting), and (viii) the consolidated net income for such fiscal year of
any Foreign Subsidiary to the extent repatriating such consolidated net
income to the United States would, in the reasonable
11
judgment of the Borrower, result in material adverse tax consequences to
the Borrower and its Subsidiaries.
"Excess Cash Flow Application Date": as defined in Section 2.10(c).
"Exchange Offer": the exchange offer in respect of the Senior
Subordinated Notes permitted by the definition thereof.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in respect of
which either (i) the pledge of all of the Capital Stock of such Subsidiary
as Collateral or (ii) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower.
"Facility": each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Loan Facility"),
(b) the Tranche B Term Loan Commitments and the Tranche B Term Loans made
thereunder (the "Tranche B Term Loan Facility") and (c) the Revolving
Credit Commitments and the extensions of credit made thereunder (the
"Revolving Credit Facility").
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published 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 which is a Business Day,
the average of the quotations for the day of such transactions received by
the Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person of the
types described in clauses (a)-(e) of the definition of Indebtedness.
"Funding Office": the office of the Administrative Agent set forth in
Section 10.2.
"GAAP": generally accepted accounting principles applicable in the
United States for reporting entities domiciled in the United States as in
effect from time to time, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements delivered pursuant to Section 4.1(b).
12
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government
(including, without limitation, any securities exchange or self-regulatory
organization).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than
current trade payables incurred in the ordinary course of such Person's
business, and overdue trade payables incurred in the ordinary course of
such Person's business to the extent the amount or
13
validity thereof is currently being contested in good faith by appropriate
procedures and reserves in conformity with GAAP with respect thereto have
been provided on the books of the Borrower or its Subsidiaries, as the case
may be), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such Property), (e) all
Capital Lease Obligations of such Person (the amount of which shall be
calculated without regard to imputed interest), (f) all obligations of such
Person, contingent or otherwise, as an account party under acceptance,
letter of credit or similar facilities, (g) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise acquire
for value any Capital Stock (other than common stock) of such Person, (h)
all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above to the extent quantified
as liabilities, contingent obligations or like term in accordance with GAAP
on the balance sheet (including notes thereto) of such Person; (i) all
obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the
payment of such obligation, (but only to the extent of the fair market
value of such Property) (j) for purposes of Article 8(e), all obligations
of such Person in respect of Interest Rate Protection Agreements and (k)
the liquidation value of any preferred Capital Stock of such Person or its
Subsidiaries held by any Person other than such Person and its Wholly Owned
Subsidiaries.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Instrument": as defined in the Guarantee and Collateral Agreement.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to ▇▇▇ at law or in equity for any infringement
or other impairment thereof, including the right to receive all proceeds
and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding
and the final
14
maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day which is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such
Interest Period and (d) as to any Loan (other than any Revolving Credit
Loan that is a ABR Loan), the date of any repayment or prepayment made in
respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six, as selected by the Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto; provided
that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date or beyond the date final payment is
due on the Tranche A Term Loans or the Tranche B Term Loans, as the
case may be, shall end on the Revolving Credit Termination Date or such
due date, as applicable;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall use reasonable efforts to select
Interest Periods so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan.
"Interest Rate Protection Agreement": any interest rate protection
agreement, interest rate futures contract, interest rate option, interest
rate cap or other interest rate hedge arrangement, to or under which the
Borrower or any of its Subsidiaries is a party
15
or a beneficiary on the date hereof or becomes a party or a beneficiary
after the date hereof.
"Inventory": as defined in the Guarantee and Collateral Agreement.
"Issuing Lender": The Chase Manhattan Bank, in its capacity as issuer
of any Letter of Credit.
"L/C Commitment": $10,000,000.
"L/C Fee Payment Date": the last day of each March, June, September and
December and the Revolving Credit Termination Date.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": collectively, all the Revolving Credit Lenders
other than the Issuing Lender.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect as any
of the foregoing).
"Linvatec": as defined in the recitals hereto.
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Applications and the Notes.
"Loan Parties": the Borrower and each Subsidiary of the Borrower which
is a party to a Loan Document.
16
"Majority Facility Lenders": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Term Loans
or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a) the
Acquisition, (b) the business, results of operations, assets or financial
position of the Borrower and its Subsidiaries (including, without
limitation, Linvatec and its Subsidiaries) taken as a whole, (c) the
validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Agents or the Lenders hereunder
or thereunder or (d) the ability of the Borrower to perform any of its
obligations under this Agreement.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or to the
extent regulated as such in or under any applicable Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied
to the repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset which is the subject of such Asset Sale or Recovery
Event (other than any Lien pursuant to a Security Document) and other
customary fees and expenses actually incurred in connection therewith and
net of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any
tax sharing arrangements) and (b) in connection with any issuance or sale
of equity securities or debt securities or instruments or the incurrence of
loans, the cash proceeds received from such issuance or incurrence, net of
attorneys' fees, investment banking fees, accountants' fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith.
17
"Non-Excluded Taxes": as defined in Section 2.18(a).
"Non-U.S. Lender": as defined in Section 2.18(d).
"Notes": collectively, any promissory note evidencing Loans.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender (or, in the case of
Interest Rate Protection Agreements, any affiliate of any Lender), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, the Letters of
Credit, any Interest Rate Protection Agreement entered into with any Lender
or any affiliate of any Lender or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to
be paid by the Borrower pursuant hereto) or otherwise.
"Other Taxes": 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 hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement.
"Participant": as defined in Section 10.6(b).
"Payment Office": the office of the Administrative Agent set forth in
Section 10.2.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Business Acquisition": any acquisition of all or
substantially all the assets of, or shares or other equity interests in, a
Person or division or line of business of a Person (or any subsequent
investment made in a previously acquired Permitted Business Acquisition) if
immediately after giving effect thereto: (a) no Default or Event of Default
shall have occurred and be continuing or would result therefrom, (b) all
transactions related thereto shall be consummated in accordance with
applicable
18
laws in all material respects, (c) any acquired or newly formed
corporation, partnership, association or other business entity shall be a
domestic Wholly Owned Subsidiary and all actions required to be taken, if
any, with respect to such acquired or newly formed Subsidiary under Section
6.10 shall have been taken and (d)(i) the Borrower and the Subsidiaries
shall be in compliance, on a pro forma basis after giving effect to such
acquisition or formation, with the covenants contained in Section 7.1
recomputed as at the last day of the most recently ended fiscal quarter of
the Borrower and the Subsidiaries as if such acquisition and related
financings or other transactions had occurred on the first day of each
relevant period for testing such compliance, and, if the amount of such
investment of series of related investments exceeds $10,000,000, then the
Borrower shall have delivered to the Administrative Agent an officers'
certificate to such effect, together with all relevant financial
information for such Subsidiary or assets, and (ii) any acquired or newly
formed Subsidiary shall not be liable for any Indebtedness (except for
Indebtedness permitted by Section 7.2).
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Prepayment Option Notice": as defined in Section 2.16(d).
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate
in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the
Administrative Agent in connection with extensions of credit to debtors).
Any change in the Alternate Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17(a).
19
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Borrower or any of its Subsidiaries
(excluding, for the avoidance of doubt, the proceeds of business
interruption insurance for lost revenues).
"Register": as defined in Section 10.6(d).
"Regulation G": Regulation G of the Board as in effect from time to
time.
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to reimburse
the Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters
of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment Event,
the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith which are not applied to prepay the
Term Loans or reduce the Revolving Credit Commitments pursuant to Section
2.10(b) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a
Subsidiary), in good faith intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to make
an investment that is a reasonable substitute for the assets in respect of
which such Recovery Event occurred within twelve months from the date of
receipt of such Net Cash Proceeds (provided that if the affected assets
constituted Collateral such investment assets shall also constitute
Collateral).
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to make an
investment that is a reasonable substitute for the assets in respect of
which a Recovery Event has occurred.
"Reinvestment Prepayment Date": with respect to any Reinvestment Event,
the earlier of (a) the date occurring twelve months after such Reinvestment
Event and (b)
20
the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, acquire assets useful in the Borrower's business with
all or any portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of
ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under regulations promulgated under Title IV of ERISA.
"Required Lenders": the holders of more than 50% of (a) until the
Closing Date, the Commitments and (b) thereafter, the sum of (i) the
aggregate unpaid principal amount of the Term Loans and (ii) the Total
Revolving Credit Commitments or, if the Revolving Credit Commitments have
been terminated, the Total Revolving Extensions of Credit.
"Required Prepayment Lenders": the Majority Facility Lenders in respect
of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Officer": the chief executive officer, president, chief
financial officer, treasurer, controller (or other officer satisfactory to
the Lenders) of the Borrower, but in any event, with respect to financial
matters, the chief financial officer, treasurer, controller (or other
officer satisfactory to the Lenders) of the Borrower.
"Revolving Credit Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Credit Loans and participate in Letters
of Credit, in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading "Revolving Credit Commitment" opposite
such Lender's name on Schedule 1.1A or in the Assignment and Acceptance
pursuant to which such Revolving Credit Lender became a party hereto, as
the same may be changed from time to time pursuant to the terms hereof. The
original amount of the Total Revolving Credit Commitments is $100,000,000.
"Revolving Credit Commitment Period": the period from and including the
Closing Date to the Revolving Credit Termination Date.
21
"Revolving Credit Lender": each Lender which has a Revolving Credit
Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4(a).
"Revolving Credit Percentage": as to any Revolving Credit Lender at any
time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time
after the Revolving Credit Commitments shall have expired or terminated,
the percentage which the aggregate principal amount of such Lender's
Revolving Credit Loans then outstanding constitutes of the aggregate
principal amount of the Revolving Credit Loans then outstanding).
"Revolving Credit Termination Date": the earlier of (a) the Scheduled
Revolving Credit Termination Date and (b) the date on which the Tranche A
Term Loans shall be paid in full.
"Revolving Extensions of Credit": as to any Revolving Credit Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount
of all Revolving Credit Loans made by such Lender then outstanding, and (b)
such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding.
"Scheduled Revolving Credit Termination Date": December 30, 2002.
"SEC": the Securities and Exchange Commission (or successors thereto or
an analogous Governmental Authority).
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement and all other security documents hereafter delivered
to the Administrative Agent granting a Lien on any Property of any Person
to secure the obligations and liabilities of any Loan Party under any Loan
Document.
"Senior Subordinated Note Indenture": the Indenture or Indentures to be
entered into in connection with the issuance of the Senior Subordinated
Notes, together with all instruments and other agreements entered into by
the Borrower or such Subsidiaries in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with Section 7.9.
"Senior Subordinated Notes": collectively, (i) as defined in Section
6.11, (ii) unsecured senior subordinated notes of the Borrower registered
under the Securities Act of 1933, as amended, with terms identical in all
material respects to those initially issued and exchanged therefor, or
(iii) any refinancing of such senior subordinated notes of the Borrower on
terms and conditions which either (A) comply with the
22
requirements of Section 7.9(b) or (B) are otherwise reasonably satisfactory
to the Required Lenders.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date,
as such quoted terms are determined in accordance with applicable federal
and state laws governing determinations of the insolvency of debtors, (b)
the present fair saleable value of the assets of such Person will, as of
such date, be greater than the amount that will be required to pay the
liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim" means
any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right
to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as defined in the
Senior Subordinated Note Indenture.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than any
Excluded Foreign Subsidiary.
"Syndication Agent": as defined in the preamble hereto.
23
"Term Loan Lenders": collectively, the Tranche A Term Loan Lenders and
the Tranche B Term Loan Lenders.
"Term Loans": collectively, the Tranche A Term Loans and Tranche B Term
Loans.
"Total Revolving Credit Commitments": at any time, the aggregate amount
of the Revolving Credit Commitments at such time.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders at such time.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Tranche A Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth under
the heading "Tranche A Term Loan Commitment" opposite such Lender's name on
Schedule 1.1A or in the Assignment and Acceptance pursuant to which such
Tranche A Term Loan Lender became a party hereto. The original aggregate
amount of the Tranche A Term Loan Commitments is $210,000,000.
"Tranche A Term Loan Lender": each Lender which has a Tranche A Term
Loan Commitment or which has made a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to any Tranche A Term Loan Lender
at any time, the percentage which such Lender's Tranche A Term Loan
Commitment then constitutes of the aggregate Tranche A Term Loan
Commitments (or, at any time after the Closing Date, the percentage which
the aggregate principal amount of such Lender's Tranche A Term Loans then
outstanding constitutes of the aggregate principal amount of the Tranche A
Term Loans then outstanding).
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to Tranche B Term Loan Lender, the
obligation of such Lender, if any, to make a Tranche B Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche B Term Loan Commitment" opposite such Lender's
name on Schedule 1.1A or in the Assignment and Acceptance pursuant to which
such Tranche B Term Loan Lender became a party hereto. The original
aggregate amount of the Tranche B Term Loan Commitments is $140,000,000.
24
"Tranche B Term Loan Lender": each Lender which has a Tranche B Term
Loan Commitment or which has made a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time, the
percentage which such Lender's Tranche B Term Loan Commitment then
constitutes of the aggregate Tranche B Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Tranche B Term Loans then outstanding constitutes
of the aggregate principal amount of the Tranche B Term Loans then
outstanding).
"Transferee": as defined in Section 10.15.
"Type": as to any Loan, its nature as a ABR Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"United States": the United States of America.
"Warrant": as defined in the Acquisition Documentation.
"Wholly Owned Foreign Subsidiary": any Foreign Subsidiary that is a
Wholly Owned Subsidiary.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than (i) a nominal number of shares held
by foreign nationals to the extent required by local law or (ii) directors'
qualifying shares required by law) is owned by such Person directly and/or
through other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a
Wholly Owned Subsidiary of the Borrower.
SECTION 1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrower and its Subsidiaries not defined in Section 1.1 and
accounting terms partly defined in
25
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Article, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE II. AMOUNT AND TERMS OF COMMITMENTS
SECTION 2.1 Term Loan Commitments. Subject to the terms and conditions
hereof, (a) each Tranche A Term Loan Lender severally agrees to make a term loan
(a "Tranche A Term Loan") to the Borrower on the Closing Date in an amount not
to exceed the amount of the Tranche A Term Loan Commitment of such Lender, and
(b) each Tranche B Term Loan Lender severally agrees to make a term loan (a
"Tranche B Term Loan") to the Borrower on the Closing Date in an amount not to
exceed the amount of the Tranche B Term Loan Commitment of such Lender. The Term
Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by
the Borrower and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.11.
SECTION 2.2 Procedure for Term Loan Borrowing. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 10:00 A.M., New York City time, on the Closing
Date) requesting that the Term Loan Lenders make the Term Loans on the Closing
Date and specifying the amount to be borrowed. The Term Loans made on the
Closing Date shall initially be ABR Loans, and no Term Loan may be converted
into or continued as a Eurodollar Loan having an Interest Period in excess of
one month prior to the date which is 60 days after the Closing Date. Upon
receipt of such notice the Administrative Agent shall promptly notify each Term
Loan Lender thereof. Not later than 12:00 Noon, New York City time, on the
Closing Date each Term Loan Lender shall make available to the Administrative
Agent at the Funding Office an amount in immediately available funds equal to
the Term Loan or Term Loans to be made by such Lender. The Administrative Agent
shall make available to the Borrower the aggregate of the amounts made available
to the Administrative Agent by the Term Loan Lenders in immediately available
funds.
SECTION 2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of
each Tranche A Lender shall mature in 20 consecutive quarterly installments,
commencing on March 31, 1998, each of which shall be in an amount equal to such
Lender's Tranche A Term Loan Percentage multiplied by the amount set forth below
opposite such installment:
26
Installment Principal Amount
----------- ----------------
March 31, 1998 $ 2,500,000
June 30, 1998 2,500,000
September 30, 1998 2,500,000
December 30, 1998 2,500,000
March 31, 1999 8,750,000
June 30, 1999 8,750,000
September 30, 1999 8,750,000
December 30, 1999 8,750,000
March 31, 2000 12,500,000
June 30, 2000 12,500,000
September 30, 2000 12,500,000
December 30, 2000 12,500,000
March 31, 2001 13,750,000
June 30, 2001 13,750,000
September 30, 2001 13,750,000
December 30, 2001 13,750,000
March 31, 2002 15,000,000
June 30, 2002 15,000,000
September 30, 2002 15,000,000
December 30, 2002 15,000,000
(b) The Tranche B Term Loan of each Tranche B Lender shall mature in 28
consecutive quarterly installments, commencing on March 31, 1998, each of which
shall be in an amount equal to such Lender's Tranche B Term Loan Percentage
multiplied by the amount set forth below opposite such installment:
27
Installment Principal Amount
----------- ----------------
March 31, 1998 $ 250,000
June 30, 1998 250,000
September 30, 1998 250,000
December 30, 1998 250,000
March 31, 1999 250,000
June 30, 1999 250,000
September 30, 1999 250,000
December 30, 1999 250,000
March 31, 2000 250,000
June 30, 2000 250,000
September 30, 2000 250,000
December 30, 2000 250,000
March 31, 2001 250,000
June 30, 2001 250,000
September 30, 2001 250,000
December 30, 2001 250,000
March 31, 2002 250,000
June 30, 2002 250,000
September 30, 2002 250,000
December 30, 2002 250,000
March 31, 2003 16,250,000
June 30, 2003 16,250,000
September 30, 2003 16,250,000
December 30, 2003 16,250,000
March 31, 2004 17,500,000
June 30, 2004 17,500,000
September 30, 2004 17,500,000
December 30, 2004 17,500,000
SECTION 2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the L/C Obligations then outstanding does not exceed the
amount of such Lender's Revolving Credit Commitment. During the Revolving Credit
Commitment Period the Borrower may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Credit Loans may from time to time be Eurodollar Loans or ABR Loans,
as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.5 and 2.11,
28
provided that no Revolving Credit Loan shall be made as a Eurodollar Loan after
the day that is one month prior to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit Loans on
the Revolving Credit Termination Date.
SECTION 2.5 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent (a) prior to 12:00 Noon, New York City time, three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) prior to 10:00 A.M., New York City time, on the requested Borrowing Date, in
the case of ABR Loans), specifying (i) the amount and Type of Revolving Credit
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the length of the initial Interest Period therefor. Any
Revolving Credit Loans made on the Closing Date shall initially be ABR Loans.
Each borrowing under the Revolving Credit Commitments shall be in an amount
equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple thereof
(or, if the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Revolving Credit Lender thereof. Each Revolving Credit Lender will
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent in like funds as received by the Administrative Agent.
SECTION 2.6 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Term Loan Lender, as the
case may be, (i) the then unpaid principal amount of each Revolving Credit Loan
of such Revolving Credit Lender on the Revolving Credit Termination Date (or
such earlier date on which the Loans become due and payable pursuant to Article
8) and (ii) the principal amount of each Term Loan of such Term Loan Lender in
installments according to the amortization schedule set forth in Section 2.3 (or
on such earlier date on which the Loans become due and payable pursuant to
Article 8). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum and on the dates set forth
in Section 2.13.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan
29
of such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall maintain
the Register pursuant to Section 10.6(d), and a subaccount therein for each
Lender, in which shall be recorded (i) the amount of each Loan made hereunder
and any Note evidencing such Loan, the Type thereof and each 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) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.6(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loans or Revolving Credit
Loans, as the case may be, of such Lender, substantially in the forms of Exhibit
F-1 or F-2, respectively, with appropriate insertions as to date and principal
amount.
SECTION 2.7 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Agents the fees in the amounts
and on the dates previously agreed to in writing by the Borrower and the Agents.
SECTION 2.8 Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments; provided that no such termination or reduction of Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans made on the effective date thereof,
the
30
Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $5,000,000, or a
whole multiple of $1,000,000 in excess thereof, and shall reduce permanently the
Revolving Credit Commitments then in effect.
SECTION 2.9 Optional Prepayments. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; provided that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.19. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of Revolving Credit Loans which are ABR Loans) accrued interest to such
date on the amount prepaid. Partial prepayments of Term Loans and Revolving
Credit Loans shall be in an aggregate principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof.
SECTION 2.10 Mandatory Prepayments and Commitment Reductions. (a)
Unless the Required Prepayment Lenders shall otherwise agree with the Borrower
not to require such a prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments, if any Capital Stock shall be issued (other than
(i) the issuance of Capital Stock pursuant to the Warrant (as defined in the
Acquisition Agreement as in effect on the date hereof) and (ii) the issuance by
the Borrower of Capital Stock to outside directors, members of management or
employees of the Borrower or any Subsidiary in the ordinary course of business
the Net Cash Proceeds of which shall not exceed $5,000,000 in any fiscal year),
or Indebtedness incurred, by the Borrower or any of its Subsidiaries (excluding
any Indebtedness incurred in accordance with Section 7.2 (other than Section
7.2(g) in respect of the initial issuance of the Senior Subordinated Notes)) an
amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance or incurrence toward the prepayment of the Term Loans and
the reduction of the Revolving Credit Commitments as set forth in Section
2.10(d).
(b) Unless the Required Prepayment Lenders shall otherwise agree with
the Borrower not to require such a prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments, if on any date the Borrower or
any of its Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or
Recovery Event then, unless a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.10(d); provided that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales that may be
excluded from the foregoing
31
requirements pursuant to a Reinvestment Notice shall not exceed $5,000,000 in
any fiscal year of the Borrower and (ii) on each Reinvestment Prepayment Date,
an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the Term
Loans and the reduction of the Revolving Credit Commitments as set forth in
Section 2.10(d).
(c) Unless the Required Prepayment Lenders shall otherwise agree with
the Borrower not to require such a prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments, if, for any fiscal year of the
Borrower commencing with the fiscal year ending December 31, 1998, there shall
be Excess Cash Flow, the Borrower shall, on the relevant Excess Cash Flow
Application Date, apply 75% of such Excess Cash Flow toward the prepayment of
the Term Loans and the reduction of the Revolving Credit Commitments as set
forth in Section 2.10(d). Each such prepayment and commitment reduction shall be
made on a date (an "Excess Cash Flow Application Date") no later than five days
after the earlier of (i) the date on which the financial statements of the
Borrower referred to in Section 6.1(a) for the fiscal year with respect to which
such prepayment is made are required to be delivered to the Lenders and (ii) the
date such financial statements are actually delivered.
(d) Amounts to be applied in connection with prepayments and Commitment
reductions made pursuant to this Section 2.10 shall be applied, first, to the
prepayment of the Term Loans and, second, to reduce permanently the Revolving
Credit Commitments. Any such reduction of the Revolving Credit Commitments shall
be accompanied by prepayment of the Revolving Credit Loans to the extent, if
any, that the Total Revolving Extensions of Credit exceed the amount of the
Total Revolving Credit Commitments as so reduced, provided that if the aggregate
principal amount of Revolving Credit Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative Agent for the benefit of
the Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to Section 2.10 shall be made, first,
to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Loans
under Section 2.10 (except in the case of Revolving Credit Loans that are ABR
Loans) shall be accompanied by accrued interest to the date of such prepayment
on the amount prepaid.
SECTION 2.11 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
32
converted into a Eurodollar Loan (i) when any Event of Default has occurred and
is continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility. Upon receipt of
any such notice, the Administrative Agent shall promptly notify each relevant
Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility, and provided, further, that if the Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice, the Administrative
Agent shall promptly notify each relevant Lender thereof.
SECTION 2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall
be outstanding at any one time.
SECTION 2.13 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
which is equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section
33
2.13 plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to ABR Loans under the Revolving Credit Facility plus 2%, and (ii) if
all or a portion of any interest payable on any Loan or Reimbursement Obligation
or any commitment fee or other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate applicable to
ABR Loans under the relevant Facility plus 2% (or, in the case of any such other
amounts that do not relate to a particular Facility, the Alternate Base Rate
plus 4%), in each case, with respect to clauses (i) and (ii) above, from the
date of such non-payment until such amount is paid in full (as well after as
before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section 2.13
shall be payable from time to time on demand.
SECTION 2.14 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to ABR Loans
the rate of interest on which is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Alternate Base Rate or the Eurocurrency
Reserve Requirements shall become effective as of the opening of business on the
day on which such change becomes effective. The Administrative Agent shall as
soon as practicable notify the Borrower and the relevant Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.13(a) and the calculation of
any Eurocurrency Reserve Requirements.
SECTION 2.15 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for such Interest Period,
or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined
34
or to be determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such Interest
Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
SECTION 2.16 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Tranche A Term Loan Percentages,
Tranche B Term Loan Percentages or Revolving Credit Percentages, as the case may
be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Term Loans shall be made pro rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Term Loan Lenders (except as otherwise provided in Section 2.16(d)). The
amount of each principal prepayment of the Term Loans shall be applied to reduce
the then remaining installments of the Tranche A Term Loans and Tranche B Term
Loans as the case may be pro rata based upon the then remaining principal amount
thereof. Amounts prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Revolving Credit Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving
Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Sections 2.9, 2.10 or
2.16, so long as and to the extent any Tranche A Term Loans are outstanding,
except in the case of a mandatory prepayment of the Net Cash Proceeds of
Indebtedness incurred pursuant to Section 7.2(g) up to an aggregate principal
amount of $125,000,000, each Tranche B Term Loan Lender may, at its option,
decline up to 100% of the portion of any optional prepayment or mandatory
payment applicable to the Tranche B Term Loans of such Lender; accordingly, with
respect to the amount of any optional prepayment described in Section 2.9 or
mandatory prepayment described in Section 2.10, except in the case of a
mandatory prepayment of the Net
35
Cash Proceeds of Indebtedness incurred pursuant to Section 7.2(g) up to an
aggregate principal amount of $125,000,000, that is allocated to Tranche B Term
Loans (such amount, the "Prepayment Amount"), at any time when Tranche A Term
Loans remain outstanding, the Borrower will, (i) in the case of any optional
prepayment which the Borrower intends to make, not later than 20 Business Days
prior to the date on which the Borrower intends to make such optional
prepayment, and (ii) in the case of any mandatory prepayment required to be made
pursuant to Section 2.10, in lieu of applying such amount to the prepayment of
Tranche B Term Loans as provided in paragraph Section 2.10(d), on the date
specified in Section 2.10 for such prepayment, give the Administrative Agent
telephonic notice (promptly confirmed in writing) requesting that the
Administrative Agent prepare and provide to each Tranche B Lender a notice
(each, a "Prepayment Option Notice") as described below. As promptly as
practicable after receiving such notice from the Borrower, the Administrative
Agent will send to each Tranche B Lender a Prepayment Option Notice, which shall
be in the form of Exhibit G, and shall include an offer by the Borrower to
prepay on the date (each a "Prepayment Date") that is 10 Business Days after the
date of the Prepayment Option Notice, the relevant Term Loans of such Lender by
an amount equal to the portion of the Prepayment Amount indicated in such
Lender's Prepayment Option Notice as being applicable to such Lender's Tranche B
Term Loans. On the Prepayment Date, (i) the Borrower shall pay to the
Administrative Agent the aggregate amount necessary to prepay that portion of
the outstanding relevant Term Loans in respect of which Tranche B Lenders have
accepted prepayment as described above (such Lenders, the "Accepting Lenders"),
and such amount shall be applied to reduce the Prepayment Amount, as applicable,
with respect to each Accepting Lender and (ii) the Borrower shall pay to the
Administrative Agent an amount equal to the portion of the Prepayment Amount not
accepted by the Accepting Lenders, and such amount shall be applied to the
prepayment of the Tranche A Term Loans.
(e) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Payment Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(f) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute
36
its share of such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Lender is making such amount available
to the Administrative Agent, and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Administrative Agent by the required time on
the Borrowing Date therefor, such Lender shall pay to the Administrative Agent,
on demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this Section 2.16(f) shall be conclusive in the absence of manifest error.
If such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover such amount
with interest thereon at the rate per annum applicable to ABR Loans under the
relevant Facility, on demand, from the Borrower, and, if so recovered, such
amount shall no longer be deemed outstanding hereunder.
(g) Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment being made hereunder that the
Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
SECTION 2.17 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(ii) shall impose on such Lender any other condition;
37
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 2.17, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled (and any related calculations).
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations to lend hereunder or under or in respect of any
Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction provided that the Borrower shall not be required to
compensate a Lender pursuant to this paragraph for any amounts incurred more
than twelve months prior to the date that such Lender notifies the Borrower of
such Lender's intention to claim compensation therefor; and provided further
that, if the circumstances giving rise to such claim have a retroactive effect,
then such twelve-month period shall be extended to include the period of such
retroactive effect.
(c) A certificate as to any additional amounts payable pursuant to this
Section 2.17 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall contain reasonable supporting calculations and an
explanation in connection therewith and shall be conclusive in the absence of
manifest error. The obligations of the Borrower pursuant to this Section 2.17
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder, except to the extent provided for in
Section 2.17(b).
SECTION 2.18 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on any Agent or any Lender by any
38
jurisdiction under the laws of which the Agent or the Lender is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located. If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) or (e) of this Section,
(ii) that are United States withholding taxes that would be imposed on amounts
payable to such Lender at the time the Lender becomes a party to this Agreement,
except to the extent that such Lender's assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrower with respect
to such Non-Excluded Taxes pursuant to Section 2.18(a) or (iii) that are imposed
as a result of an action taken by the Lender.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Agents the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.18 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder for a period of twelve months
after the date hereof.
(d) Each Lender (or Transferee) that is not a citizen or resident of
the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States (or any jurisdiction
thereof), or any estate or trust that is subject to federal income taxation
regardless of the source of its income (a "Non-U.S. Lender") shall deliver to
the Borrower and the Administrative Agent (or, in the case of a Participant, to
the Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form 1001 or Form 4224, or, in
the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding
tax under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest" a statement substantially in the form of Exhibit H and a
Form W-8, or any subsequent versions thereof or successors thereto properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from U.S. federal
39
withholding tax on all payments by the Borrower under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this Section 2.18(d), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.18(d) that
such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
SECTION 2.19 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement (except as a result of a notice by the
Administrative Agent pursuant to Section 2.15), (b) default by the Borrower in
making any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. A certificate as to any amounts
payable pursuant to this Section 2.19 submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
40
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
SECTION 2.20 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.19.
SECTION 2.21 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.17 or
2.18(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.21 shall
affect or postpone any of the obligations of any Borrower or the rights of any
Lender pursuant to Section 2.17 or 2.18(a).
SECTION 2.22 Replacement of Lenders under Certain Circumstances. The
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Section 2.17 or 2.18 or (b) defaults
in its obligation to make Loans hereunder, with a replacement financial
institution; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.21 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.17 or 2.18,
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.19 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.17 or 2.18, as the case may be,
and (ix) any such replacement shall not be deemed
41
to be a waiver of any rights which the Borrower, the Administrative Agent or any
other Lender shall have against the replaced Lender.
ARTICLE III. LETTERS OF CREDIT
SECTION 3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Revolving
Credit Lenders set forth in Section 3.4(a), agrees to issue letters of credit
("Letters of Credit") for the account of the Borrower on any Business Day during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate amount of the Available Revolving Credit Commitments would be less
than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii)
expire no later than the earlier of (x) the first anniversary of its date of
issuance and (y) the date which is five Business Days prior to the Scheduled
Revolving Credit Termination Date, provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above).
(b) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(c) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
SECTION 3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of the Issuing Lender,
and such other certificates, documents and other papers and information as the
Issuing Lender may reasonably request. Upon receipt of any Application, the
Issuing Lender will process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).
42
SECTION 3.3 Commissions, Fees and Other Charges. (a) The Borrower will
pay a commission on all undrawn and unpaid Letters of Credit at a per annum rate
equal to the Applicable Margin then in effect with respect to Eurodollar Loans
under the Revolving Credit Facility, shared ratably among the Revolving Credit
Lenders and payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date. In addition, the Borrower shall pay to the Issuing Lender for its
own account a fronting fee of 1/4 of 1% per annum of the undrawn and unexpired
amount of the Letter of Credit, payable quarterly in arrears on each L/C Fee
Payment Date after the Issuance Date.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
SECTION 3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Revolving Credit Percentage of the amount of such draft,
or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to ABR Loans under the Revolving Credit Facility. A certificate of
the Issuing Lender submitted to any L/C
43
Participant with respect to any amounts owing under this Article shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant
shall return to the Issuing Lender the portion thereof previously distributed by
the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (a) such draft
so paid and (b) any taxes, fees, charges or other costs or expenses incurred by
the Issuing Lender in connection with such payment; provided that if the Issuing
Lender does not notify the Borrower as provided for above earlier than 9:30 A.M.
(New York City time) on the date such draft is paid then such reimbursement
payment may be made the Business Day immediately subsequent to the date such
draft is paid. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Article from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate set forth in Section 2.13(c); provided that if the
Issuing Lender does not notify the Borrower as provided for above earlier than
9:30 A.M. (New York City time) on the date such draft is paid, then for such day
(and until the next Business Day) all amounts remaining unpaid in respect of
such notice shall bear interest the rate set forth in Section 2.13(b). Each
drawing under any Letter of Credit shall (unless an event of the type described
in clause (i) or (ii) of Section 8(f) shall have occurred and be continuing with
respect to the Borrower, in which case the procedures specified in Section 3.4
for funding by L/C Participants shall apply) constitute a request by the
Borrower to the Administrative Agent for a borrowing pursuant to Section 2.5 of
ABR Loans in the amount of such drawing. The Borrowing Date with respect to such
borrowing shall be the date of such drawing.
SECTION 3.6 Obligations Absolute. The Borrower's obligations under this
Article 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by,
44
among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards or care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
SECTION 3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly notify
the Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
SECTION 3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Article 3, the provisions of this Article 3 shall apply.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to each Agent and each Lender that:
SECTION 4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at September 30, 1997 (including the notes thereto) (the "Pro Forma Balance
Sheet"), copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to (i) the
consummation of the Acquisition, (ii) the Loans to be made and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Borrower as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at
45
September 30, 1997, assuming that the events specified in the preceding sentence
had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as at
December 31, 1994, December 31, 1995 and December 31, 1996 and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
Price Waterhouse LLP, present fairly the consolidated financial position of the
Borrower as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of the Borrower as at September 30, 1997,
and the related unaudited consolidated statements of income and cash flows for
the nine-month period ended on such date, present fairly the consolidated
financial position of the Borrower as at such date, and the consolidated results
of its operations and its consolidated cash flows for the nine-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and any notes thereto (except in the
case of any notes to the financial statements dated as of September 30, 1997),
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). As of the date of the most recent financial statements
referred to in this paragraph (b), the Borrower and its Subsidiaries did not
have any material Guarantee Obligations, contingent liabilities and liabilities
for taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that were
not reflected in such financial statements, except as set forth on Schedule
4.1(b). During the period from December 31, 1996 to and including the date
hereof, there has been no Disposition by the Borrower of any material part of
its business or Property, except as set forth on Schedule 4.1.
(c) The audited U.S. Statement of Assets to be Acquired and Liabilities
to be Assumed of Linvatec as at December 31, 1995 and December 31, 1996 and the
related U.S. Statement of Net Sales and Direct Operating Expenses for the fiscal
years ended on such dates, reported on by and accompanied by an audit report
from Price Waterhouse LLP, present fairly the consolidated financial position of
Linvatec as at such dates, and the consolidated results of its operations for
the respective fiscal years then ended. The audited U.S. Statement of Assets to
be Acquired and Liabilities to be Assumed of Linvatec as at June 30, 1997 and
the related U.S. Statement of Net Sales and Direct Operating Expenses for the
six-month period ended on such date, reported on by and accompanied by an audit
report from Price Waterhouse LLP, present fairly the consolidated financial
position of Linvatec as at such date, and the consolidated results of its
operations for the six-month period then ended. The unaudited U.S. Statement of
Net Sales and Direct Operating Expenses of Linvatec for the nine-month period
ended September 30, 1997, present fairly the consolidated results of operations
of Linvatec for the nine-month period then ended (subject to normal year-end
audit adjustments). All such financial statements, including the related
schedules and any notes thereto (except in the case of any notes to the
financial statements dated as of June 30, 1997 and September 30, 1997), have
46
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). As of the date of the most recent financial statements
referred to in this paragraph (c), Linvatec and its Subsidiaries did not have
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that were
not reflected in such financial statements, except as set forth on Schedule
4.1(c). During the period from September 30, 1997, to and including the date
hereof, there has been no Disposition by Linvatec of any material part of its
business or Property, except as set forth on Schedule 4.1.
SECTION 4.2 No Change. Since December 31, 1996, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
SECTION 4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except in the case of clauses (c) and (d) to the extent that the failure to
so qualify and be in good standing or to so comply could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower,
to authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Acquisition and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4 and (ii) the filings referred to in Section
4.19. Each Loan Document has been duly executed and delivered on behalf of each
Loan Party thereto. This Agreement constitutes, and each other Loan Document
upon execution will constitute, a legal, valid and binding obligation of each
Loan Party party thereto, enforceable against each such Loan Party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting the enforcement of
47
creditors' rights and to general equity principles (whether enforcement is
sought by proceedings in equity or at law).
SECTION 4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any of
its Subsidiaries in any material respect and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents). No Requirement of Law
(excluding compliance in the ordinary course of business with the laws and
regulations enforced by the United States Food and Drug Administration and any
compliance with comparable health and safety requirements) or Contractual
Obligation applicable to the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby or (b) which could reasonably be expected to have
a Material Adverse Effect.
SECTION 4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
SECTION 4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and sufficient title to enjoy the benefits of, or a valid
leasehold interest in, all its other Property, and none of such Property is
subject to any Lien except as permitted by Section 7.3.
SECTION 4.9 Intellectual Property. Except as set forth on Schedule 4.9,
(a) the Borrower and each of its Subsidiaries owns, or is licensed to use or
otherwise possess a legally enforceable right to use, all Intellectual Property
necessary for the conduct of its business as currently conducted; (b) no
material claim has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim; and (c) to Borrower's knowledge, the use of
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person in any material respect.
48
SECTION 4.10 Taxes. Each of the Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns which are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
Property and all other taxes, fees or other charges imposed on it or any of its
Property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate procedures or
with respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Borrower, no material claim is being
asserted, with respect to any such tax, fee or other charge.
SECTION 4.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or Regulation
U as now and from time to time hereafter in effect without prior written notice
to the Administrative Agent or for any purpose which violates the provisions of
the Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G- 3 or FR Form U-1 referred to in Regulation G or Regulation U, as the case may
be.
SECTION 4.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Requirement
of Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect if not paid have been paid or accrued
as a liability on the books of the Borrower or the relevant Subsidiary.
SECTION 4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
49
Multiemployer Plan which has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
SECTION 4.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
SECTION 4.15 Subsidiaries. (a) Schedule 4.15 sets forth as of the
Closing Date the name and jurisdiction of incorporation of each Subsidiary and,
as to each such Subsidiary, the percentage of each class of Capital Stock owned
by any Loan Party.
(b) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of the Borrower or any Subsidiary, except under the Loan
Documents and the Warrant.
SECTION 4.16 Use of Proceeds. The proceeds of the Term Loans shall be
used to finance a portion of the Acquisition and to pay related fees and
expenses. No more than $40,000,000 (excluding any amounts paid pursuant to the
Acquisition Documentation for a working capital adjustment not in excess of
$10,000,000) of the Revolving Credit Loans shall be used to finance the
Acquisition on the Closing Date and the remainder of the Revolving Credit Loans
and the Letters of Credit shall be used in respect of working capital in the
ordinary course of business.
SECTION 4.17 Environmental Matters. Except as individually or in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect:
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain, and have
not previously contained, any Materials of Environmental Concern in amounts or
concentrations or under circumstances which (i) constitute or constituted a
violation of, or (ii) could reasonably be expected to have given rise to a
release or a threat of release, as regulated or defined, under any Environmental
Law.
(b) The Properties and all operations at the Properties are in material
compliance, and have in the last five years been in material compliance, with
all applicable Environmental Laws, and there is no contamination at, under or
about the Properties or
50
violation of any Environmental Law with respect to the Properties or the
business operated by the Borrower or any of its Subsidiaries (the "Business").
Neither the Borrower nor any of its Subsidiaries has contractually assumed any
liability of any other Person under Environmental Laws other than in the
ordinary course of business.
(c) Neither the Borrower nor any of its Subsidiaries has received or is
aware of any notice of violation, alleged violation, non-compliance, liability
or potential liability, judicial proceeding or governmental or administrative
action or consent decrees or other decrees, consent orders, administrative
orders or other orders, regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does the Borrower have knowledge or reason to believe that any such notice will
be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which could reasonably be expected to give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could reasonably be expected to give rise
to liability under, any applicable Environmental Law.
(e) There has been no release or threat of release of Materials of
Environmental Concern at or from the properties previously owned or operated by
the Borrower or any Subsidiary (the "Former Properties") during such period of
ownership or operation, or arising from or related to the operations of the
Borrower or any Subsidiary in connection with the Former Properties or otherwise
in connection with the Business, in violation of or in amounts or in a manner
that could reasonably be expected to give rise to liability under Environmental
Laws.
SECTION 4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Administrative Agent or the Lenders or any of them, by or on behalf of
any Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. As of the date hereof,
the representations and warranties contained in the
51
Acquisition Agreement are true and correct in all material respects. There is no
fact known to any Loan Party that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
SECTION 4.19 Security Documents. The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 4.19 and such other filings as are specified on
Schedule 3 to the Guarantee and Collateral Agreement, the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Guarantee and Collateral Agreement), in each case prior and superior in
right to any other Person (except, in the case of Collateral other than Pledged
Stock, Liens permitted by Section 7.3).
SECTION 4.20 Solvency. Each Loan Party is, and after giving effect to
the Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
ARTICLE V. CONDITIONS PRECEDENT
SECTION 5.1 Conditions to Initial Extension of Credit. The agreement of
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Borrower, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of the Borrower and each Subsidiary
Guarantor, and (iii) for the account of each requesting Lender, Notes
conforming to the requirements hereof and executed and delivered by a duly
authorized officer of the Borrower.
(b) Acquisition. The Acquisition shall have been consummated on terms
and conditions reasonably satisfactory and in accordance with applicable
law, and no material provision of the Acquisition Documentation shall have
been waived, amended,
52
supplemented or otherwise modified in any material respect. The
capitalization and structure of each Loan Party after the Acquisition and
the borrowings hereunder on the Closing Date shall not have a material and
adverse effect on the financial position or projected financial results of
the Borrower and its Subsidiaries (as presented in the Confidential
Information Memorandum).
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the Borrower for its 1994, 1995 and 1996 fiscal
years and of Linvatec for the 1995 and 1996 fiscal years and for the six
month period ended June 30, 1997 and (iii) unaudited interim consolidated
financial statements of each of the Borrower and Linvatec for each fiscal
quarter ended subsequent to the date of the latest applicable financial
statements delivered pursuant to clause (ii) of this paragraph as to which
such financial statements are available, and such financial statements
shall not, in the reasonable judgment of the Lenders, reflect any material
adverse change in the consolidated financial condition of the Borrower and
its Subsidiaries or Linvatec and its Subsidiaries, as reflected in the
financial statements or projections contained in the Confidential
Information Memorandum.
(d) Approvals. All governmental approvals required to consummate the
Acquisition, the continuing operations of the Borrower and its Subsidiaries
and Linvatec and its Subsidiaries shall have been obtained on satisfactory
terms and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by any
competent authority which would prevent the Acquisition or the financing
contemplated hereby; provided that if any competent Governmental Authority
shall impose adverse conditions on all or part of the Acquisition or the
financing thereof, the Administrative Agent and the Borrower shall
negotiate in a reasonable manner to adjust the terms and amounts of the
Facilities accordingly.
(e) Related Agreements. The Administrative Agent shall have received in
a form reasonably satisfactory, with a copy for each Lender, true and
correct copies, certified as to authenticity by the Borrower, of the
Acquisition Documentation and such other documents or instruments as may be
reasonably requested by the Administrative Agent, including, without
limitation, a copy of any debt instrument, security agreement or other
material contract to which the Loan Parties may be a party.
(f) Termination of Existing Credit Facilities. The Administrative Agent
shall have received evidence satisfactory to the Administrative Agent that
the existing credit facilities (and any related security agreements) of the
Borrower and its Subsidiaries (other than as permitted by Section 7.2)
shall be simultaneously terminated, any amounts thereunder shall be
simultaneously paid in full and arrangements satisfactory to
53
the Administrative Agent shall have been made for the termination of Liens
and security interests granted in connection therewith.
(g) Fees. The Lenders and the Agents shall have received all fees
required to be paid, and all expenses for which invoices have been
presented, including, without limitation, the reasonable fees and expenses
of legal counsel, on or before the Closing Date.
(h) Business Plan. The Lenders shall have received a satisfactory
business plan for fiscal years 1998-2008 and a satisfactory written
analysis of the business and prospects of the Borrower and its Subsidiaries
for the period from the Closing Date through the final maturity of the Term
Loans.
(i) Solvency Analysis. The Lenders shall have received a reasonably
satisfactory solvency opinion certified by the chief financial officer of
the Borrower which shall document the solvency of the Borrower and its
Subsidiaries considered as a whole after giving effect to the Acquisition
and the other transactions contemplated hereby.
(j) Budget. The Lenders shall have received a budget for the Borrower
and its Subsidiaries for the 1998 fiscal year.
(k) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Loan Parties except for liens permitted by Section
7.3 or discharged on or prior to the Closing Date pursuant to documentation
satisfactory to the Administrative Agent.
(l) Environmental Due Diligence. The Administrative Agent and the
Documentation Agent shall be satisfied with the environmental condition of
the real property owned or leased by the Borrower and its Subsidiaries.
(m) Expenses. The Administrative Agent shall have received satisfactory
evidence that the fees and expenses to be incurred in connection with the
Acquisition and the Facilities shall not exceed $11,000,000.
(n) Closing Certificate. The Administrative Agent shall have received a
certificate of each Loan Party, dated the Closing Date, substantially in
the form of Exhibit C, with appropriate insertions and attachments.
(o) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
54
(i) the legal opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit
E-1;
(ii) the legal opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, general
counsel of the Borrower and its Subsidiaries, substantially in the form
of Exhibit E-2;
(iii) the legal opinion of Holland & Knight, special counsel
to the Borrower and its Subsidiaries, substantially in the form of
Exhibit E-3; and
(iv) each legal opinion delivered in connection with the
Acquisition Documentation, accompanied by a reliance letter in favor of
the Lenders, if reasonably available.
(p) Pledged Stock; Stock Powers. The Administrative Agent shall have
received the certificates representing the shares of Capital Stock pledged
pursuant to the Guarantee and Collateral Agreement, together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof.
(q) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation.
(r) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 6.5 and the Borrower
shall have obtained certain key man life insurance on certain officers of
the Borrower as heretofore determined by the Administrative Agent.
SECTION 5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is subject
to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date.
55
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
ARTICLE VI. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or any Agent hereunder, the Borrower shall and shall cause
each of its Subsidiaries to:
SECTION 6.1 Financial Statements. Furnish to each Agent and each
Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
year and the related audited consolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by Price Waterhouse LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days after
the end of each of the first three quarterly periods of each fiscal year of
the Borrower, the unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and
the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein, and provided that the financial statements referred to in
Section 6.1(b) need not contain footnotes).
SECTION 6.2 Certificates; Other Information. Furnish to each Agent and
each Lender, or, in the case of clause (g), to the Administrative Agent for the
relevant Lender:
56
(a) concurrently with the delivery of the financial statements referred
to in Section 6.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default
or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements pursuant
to Section 6.1, (i) a certificate of a Responsible Officer stating that, to
the best of each such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and
the other Loan Documents to which it is a party to be observed, performed
or satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate and (ii) in the case of quarterly or annual financial
statements, (x) a Compliance Certificate containing all information and
calculations necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein as
of the last day of the fiscal quarter or fiscal year of the Borrower, as
the case may be, and (y) to the extent not previously disclosed to the
Administrative Agent, a listing of any county or state within the United
States where any Loan Party keeps inventory or equipment and of any
Intellectual Property acquired by any Loan Party since the date of the most
recent list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year (including a projected consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the following
fiscal year, and the related consolidated statements of projected cash
flow, projected changes in financial position and projected income), and,
as soon as available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 45 days (and 90 days in the case of the end of a fiscal
year) after the end of each fiscal quarter of the Borrower, either (i) a
Form 10-Q or 10-K for the Borrower and its Subsidiaries for such fiscal
quarter, which contains a narrative discussion and analysis of the
financial condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, as
compared to the portion of the Projections covering such periods and to the
comparable periods of the previous year, or (ii) such narrative discussion
and analysis;
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(e) no later than 5 Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any Senior Subordinated Note
Indenture, any proposed amendment, supplement, waiver or other modification
with respect to the Senior Subordinated Note Indenture or the Acquisition
Agreement;
(f) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to the holders of any class
of its debt securities or public equity securities and within five days
after the same are filed, copies of all financial statements and reports
which the Borrower may make to, or file with, the SEC; and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request through the Administrative
Agent.
SECTION 6.3 Payment of Obligations. (a) Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
procedures or reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.
(b) Each of the Loan Parties will pay and discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all material taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate procedures or reserves in conformity with
GAAP with respect thereto have been provided on the books of such Loan Party and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
SECTION 6.4 Conduct of Business and Maintenance of Existence, etc. (a)
(i) Preserve, renew and keep in full force and effect its corporate existence
and (ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 7.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 6.5 Maintenance of Property; Insurance. (a) Keep all Property
useful and necessary in its business in good working order and condition,
ordinary wear and
58
tear excepted; (b) maintain with financially sound and reputable insurance
companies insurance on all its Property in at least such amounts and against at
least such risks (but including in any event public liability, product liability
and business interruption) as are usually insured against in the same general
area by companies engaged in the same or a similar business; (c) maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and
(ii) insuring such Loan Party against liability for personal injury and property
damage relating to such Inventory and Equipment, such policies to be in such
form and amounts and having such coverage as may be reasonably satisfactory to
the Administrative Agent and the Lenders (all such insurance shall (A) provide
that no cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (B) name the Administrative
Agent as loss payee, and (C) be reasonably satisfactory in all other respects to
the Administrative Agent); and (d) the Borrower shall deliver to the
Administrative Agent and the Lenders a report of a reputable insurance broker
with respect to such insurance during the month of November in each calendar
year and such supplemental reports with respect thereto as the Administrative
Agent may from time to time reasonably request.
SECTION 6.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
SECTION 6.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any material Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding directly affecting the Borrower or any
of its Subsidiaries in which the amount involved is $1,000,000 or more and
not covered by
59
insurance or in which injunctive or similar relief is sought as to which
the Borrower or any of its Subsidiaries has knowledge or reasonably should
have knowledge;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Single Employer
Plan, a failure to make any required contribution to a Single Employer or
Multiemployer Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal
from, or the termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
SECTION 6.8 Environmental Laws. (a) Comply in all material respects
with, and make all reasonable efforts to ensure compliance in all material
respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all material respects with and
maintain, and make all reasonable efforts to ensure that all tenants and
subtenants obtain and comply in all material respects with and maintain, any and
all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
SECTION 6.9 Interest Rate Protection. In the case of the Borrower,
within 180 days after the Closing Date, enter into Interest Rate Protection
Agreements with respect to floating rate obligations in respect of an aggregate
principal amount of Term Loans, and at market rates and on terms and conditions,
reasonably satisfactory to the Administrative Agent.
SECTION 6.10 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than an Excluded Foreign Subsidiary) (other than (x) any
Property described in paragraph (b), (c) or (d) below and (y) any Property
subject to a Lien expressly permitted by Section 7.3(g) or (m) (if such Lien was
granted in a transaction comparable to that permitted by Section 7.3(g)) as to
60
which the Administrative Agent, for the benefit of the Lenders, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such Property and (ii) take all actions necessary or reasonably
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in such Property, subject to no
Liens except as permitted by Section 7.3, including without limitation, the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent.
(b) With respect to any fee interest in any real property having a
purchase price (together with improvements thereof) of at least $5,000,000
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than any such real property owned by an Excluded Foreign Subsidiary or
subject to a Lien expressly permitted by Section 7.3(g)), promptly (i) execute
and deliver a first priority mortgage in a form reasonably satisfactory to the
Administrative Agent in favor of the Administrative Agent, for the benefit of
the Lenders, covering such real property, subject to no Liens except as
permitted by Section 7.3, (ii) if requested by the Administrative Agent, provide
the Lenders with (x) title and extended coverage insurance covering such real
property in an amount equal to the purchase price of such real estate as well as
a current ALTA survey thereof, together with a surveyor's certificate and (y)
any consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent a legal opinion relating to the enforceability of
such mortgage which opinion shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date by the Borrower (which,
for the purposes of this paragraph (c), shall include any existing Subsidiary
that ceases to be an Excluded Foreign Subsidiary) or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or reasonably advisable in order to grant to the Administrative Agent,
for the benefit of the Lenders, a perfected first priority security interest in
the Capital Stock of such new Subsidiary which is owned by the Borrower or any
of its Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement and (B) to take such actions
necessary or reasonably advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to
such new Subsidiary, subject to no
61
Liens except as permitted by Section 7.3, including, without limitation, the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or reasonably advisable in order to grant to the Administrative Agent,
for the benefit of the Lenders, a perfected first priority security interest in
the Capital Stock of such new Subsidiary which is owned by the Borrower or any
of its Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, if such Capital Stock is certificated, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
the Borrower or such Subsidiary, as the case may be, and take such other action
as may be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Lien of the Administrative Agent thereon, and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
SECTION 6.11 Issuance of High-Yield Senior Subordinated Securities. By
June 30, 1998, the Borrower shall issue senior subordinated securities (the
"Senior Subordinated Notes") on terms and conditions and through agents or
managers satisfactory to the Administrative Agent and the Documentation Agent
which will generate aggregate gross proceeds of at least $125,000,000.
SECTION 6.12 Senior Indebtedness. Insure that the Obligations
constitute "Senior Indebtedness" (or comparable defined term) of the Borrower
under and as defined in the Senior Subordinated Note Indenture, and the
obligations of each Subsidiary Guarantor under the Guarantee and Collateral
Agreement constitute "Guarantor Senior Indebtedness" (or comparable defined
term) of such Subsidiary Guarantor under and as defined in the Senior
Subordinated Note Indenture.
SECTION 6.13 Additional Covenants Relating to Collateral. (a) If any
amount in excess of $200,000 payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument or Chattel Paper,
deliver such Instrument or Chattel Paper immediately to the Administrative
Agent, duly indorsed in a manner satisfactory to the Administrative Agent, to be
held as Collateral pursuant to the Guarantee and Collateral Agreement.
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(b) Not, except upon 15 days' prior written notice to the
Administrative Agent and delivery to the Administrative Agent of (i) all
additional executed financing statements and other documents reasonably
requested by the Administrative Agent to maintain the validity, perfection and
priority of the security interests provided for in the Guarantee and Collateral
Agreement, and (ii) if applicable, a written supplement to Schedule 5 to the
Guarantee and Collateral Agreement showing any additional location at which
Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5 to the Guarantee and
Collateral Agreement (other than mobile goods and Inventory and Equipment
located temporarily in a UCC financing statement filing jurisdiction the
aggregate fair market value of which is less than $50,000);
(ii) change the location of its chief executive office or sole
place of business from that referred to in Section 4.4 of the Guarantee and
Collateral Agreement; or
(iii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Administrative Agent in
connection with the Guarantee and Collateral Agreement would become
misleading.
(c) Advise the Administrative Agent and the Lenders promptly, in
reasonable detail, of:
(i) any Lien (other than security interests created hereby or
Liens permitted under Section 7.3) on any material portion of the
Collateral which would adversely affect the ability of the Administrative
Agent to exercise any of its remedies hereunder in any material respect;
and
(ii) the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
ARTICLE VII. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or any Agent hereunder, the Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:
SECTION 7.1 Financial Condition Covenants.
63
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as at the last day of any period of four consecutive fiscal quarters of the
Borrower (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
March 31, 1998 5.25 to 1.00
June 30, 1998 5.25 to 1.00
September 30, 1998 5.00 to 1.00
December 31, 1998 4.75 to 1.00
March 31, 1999 4.50 to 1.00
June 30, 1999 4.25 to 1.00
September 30, 1999 4.25 to 1.00
December 31, 1999 4.25 to 1.00
March 31, 2000 4.00 to 1.00
June 30, 2000 3.75 to 1.00
September 30, 2000 3.75 to 1.00
December 31, 2001 3.75 to 1.00
March 31, 2001 3.50 to 1.00
Thereafter 3.50 to 1.00
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending March 31, 1998, June 30, 1998 and
September 30, 1998, Consolidated EBITDA for the relevant period shall be deemed
to equal Consolidated EBITDA for such fiscal quarter (and, in the case of the
latter two such determinations, each previous fiscal quarter commencing after
the Closing Date) multiplied by 4, 2 and 4/3, respectively.
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated
Interest
Fiscal Quarter Coverage Ratio
-------------- --------------
March 31, 1998 2.25 to 1.00
June 30, 1998 2.25 to 1.00
September 30, 1998 2.50 to 1.00
December 31, 1998 2.50 to 1.00
March 31, 1999 2.75 to 1.00
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June 30, 1999 2.75 to 1.00
September 30, 1999 2.75 to 1.00
December 31, 1999 2.75 to 1.00
March 31, 2000 3.00 to 1.00
Thereafter 3.00 to 1.00
(c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower (or, if less, the number of full fiscal quarters subsequent to
the Closing Date) ending with any fiscal quarter set forth below to be less than
the ratio set forth below opposite such fiscal quarter:
Consolidated
Fixed Charge
Fiscal Quarter Coverage Ratio
-------------- --------------
March 31, 1998 1.25 to 1.00
June 30, 1998 1.25 to 1.00
September 30, 1998 1.25 to 1.00
December 31, 1998 1.35 to 1.00
March 31, 1999 1.35 to 1.00
June 30, 1999 1.35 to 1.00
September 30, 1999 1.35 to 1.00
December 31, 1999 1.35 to 1.00
March 31, 2000 1.40 to 1.00
June 30, 2000 1.40 to 1.00
September 30, 2000 1.40 to 1.00
December 31, 2000 1.40 to 1.00
March 30, 2001 1.50 to 1.00
Thereafter 1.50 to 1.00
(d) Maintenance of Net Worth. Permit Consolidated Net Worth as of the
end of any fiscal quarter during any fiscal year of the Borrower to be less than
the sum of (i) Consolidated Net Worth on December 31, 1997 plus (ii) 75% of
Consolidated Net Income since December 31, 1997 plus (iii) Net Cash Proceeds
from the sale of Capital Stock of the Borrower on a cumulative basis since the
Closing Date.
SECTION 7.2 Limitation on Indebtedness. Create, incur, assume or suffer
to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
65
(b) Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness secured by Liens permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $5,000,000 at any one time
outstanding;
(d) Capital Lease Obligations in an aggregate principal amount not to
exceed $5,000,000 at any one time outstanding;
(e) Indebtedness outstanding on the date hereof and listed on Schedule
7.2(e) and any refinancings, refundings, renewals or extensions thereof
(without any increase in the principal amount thereof);
(f) guarantees made in the ordinary course of business by the Borrower
or any of its Subsidiaries of obligations of any Wholly Owned Subsidiary
Guarantor;
(g) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes and (ii) Guarantee Obligations of any Subsidiary
Guarantor in respect of such Indebtedness; provided that such Guarantee
Obligations are subordinated to the same extent as the obligations of the
Borrower in respect of the Senior Subordinated Notes; provided that the Net
Cash Proceeds of such Indebtedness (other than in connection with an
Exchange Offer or other refinancing permitted by the Required Lenders)
shall be applied to prepay the Term Loans and reduce the Revolving Credit
Commitments in accordance with Sections 2.10(a) and (d);
(h) Indebtedness in an aggregate amount not to exceed $900,000 owed to
the Empire State Development Authority, and any refinancings, refundings,
renewals or extensions thereof (without any increase in the principal
amount thereof);
(i) Indebtedness of the Borrower or its Subsidiaries on account of
industrial revenue bonds in an aggregate principal amount not to exceed
$10,000,000 at any one time outstanding;
(j) guarantees made in the ordinary course of business by the Borrower
or any of its Subsidiaries of lease obligations of their customers in
respect of equipment sold by the Borrower or any of its Subsidiaries to a
third party and then leased to such customer in an aggregate amount
outstanding at any time not to exceed $5,000,000;
(k) Indebtedness in respect of letters of credit outstanding in the
ordinary course of business in an aggregate face amount not to exceed
$1,000,000;
(l) Indebtedness of any Wholly Owned Foreign Subsidiary to the Borrower
or any other Subsidiary (so long as no Default or Event of Default shall
have occurred and
66
be continuing at the time of the incurrence of such Indebtedness), provided
that (x) the requirements of Section 6.10 are satisfied and (y) the
aggregate principal amount of such Indebtedness at any time outstanding
shall not exceed $10,000,000 less the sum of (A) the aggregate fair market
value of any Property Disposed of to a Wholly Owned Foreign Subsidiary
pursuant to Section 7.5(e) and (B) the aggregate amount of all investments
made in such Foreign Subsidiaries pursuant to Section 7.8(i);
(m) additional Indebtedness of the Borrower or any of its Subsidiaries
in an aggregate principal amount (for the Borrower and all Subsidiaries)
not to exceed $10,000,000 at any one time outstanding.
SECTION 7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes, assessments or charges not yet due or which are
being contested in good faith by appropriate procedures, provided that
adequate reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
supplier's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or which are being
contested in good faith by appropriate proceedings and Liens securing
judgments to the extent not constituting an Event of Default pursuant to
Section 8(h);
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f)
(and any replacements or extensions thereof), securing Indebtedness
permitted by Section 7.2(e), provided that no such Lien is spread to cover
any additional Property after the Closing Date and that the amount of
Indebtedness secured thereby is not increased;
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(g) Liens upon real and/or tangible personal Property acquired after
the date hereof (by purchase, construction or otherwise) by the Borrower or
any of its Subsidiaries, each of which Liens either (i) existed on such
Property before the time of its acquisition and was not created in
anticipation thereof or (ii) was created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the
cost (including the cost of construction) of such Property and permitted by
Section 7.2; provided that (A) no such Lien shall extend to or cover any
Property of the Borrower or such Subsidiary other than the Property so
acquired or financed, and (B) the principal amount of Indebtedness secured
by any such Lien shall at no time exceed 80% of the fair market value (as
determined in good faith by a Responsible Officer of the Borrower) of such
Property at the time it was acquired (by purchase, construction or
otherwise);
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
the Borrower or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased;
(j) Liens securing Indebtedness permitted by Section 7.2(h) in respect
of a leasehold interest of the Borrower or its Subsidiaries in a facility
located in Rome, New York;
(k) Liens arising from precautionary UCC financing statement filings
regarding operating leases or consignment arrangements entered into by the
Borrower or its Subsidiaries in the ordinary course of business;
(l) Liens in favor of banking institutions encumbering the deposits
(including the right of setoff) held by such banking institutions in the
ordinary course of business and which are within the general parameters
customary in the banking industry;
(m) Liens on the property or assets of a corporation which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by Section
7.2, provided that (i) such Liens existed at the time such corporation
became a Subsidiary and were not created in anticipation thereof, (ii) any
such Lien is not spread to cover any additional property or assets of such
corporation after the time such corporation becomes a Subsidiary, and (iii)
the amount of Indebtedness secured thereby is not increased; and
(n) Liens not otherwise permitted by this Section 7.3 so long as
neither (i) the aggregate outstanding principal amount of the obligations
secured thereby nor (ii) the aggregate fair market value (determined as of
the date such Lien is incurred) of the
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assets subject thereto exceeds (as to the Borrower and all Subsidiaries)
$5,000,000 at any one time.
SECTION 7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or a substantial part
of its Property or business except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Wholly Owned Subsidiary
Guarantor (provided that the Wholly Owned Subsidiary Guarantor shall be the
continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Wholly Owned Subsidiary Guarantor;
(c) any Foreign Subsidiary of the Borrower may be merged or
consolidated with or into any other Foreign Subsidiary;
(d) any Foreign Subsidiary of the Borrower may dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to any other Foreign
Subsidiary of the Borrower; and
(e) to the extent permitted by Section 7.5.
SECTION 7.5 Limitation on Sale of Assets. Dispose of any of its
Property or business (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale or other Disposition of inventory in the ordinary course
of business;
(c) Dispositions permitted by Section 7.4(b) and 7.4(d);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(e) so long as no Default or Event of Default shall have occurred and
be continuing, Dispositions of Property from the Borrower or any Subsidiary
Guarantor to
69
any Wholly Owned Foreign Subsidiary, provided that (x) the requirements of
Section 6.10 are satisfied and (y) the aggregate fair market value of such
Property does not exceed (I) $10,000,000 minus (II) the sum of (A) the
aggregate principal amount of any Indebtedness of any Foreign Subsidiary at
any time outstanding in accordance with Section 7.2(l) and (B) the
aggregate amount of all investments in any Foreign Subsidiary made pursuant
to Section 7.8(i);
(f) any Asset Sale (including any sale and leaseback transactions
permitted by Section 7.11 ) or Recovery Event, provided that the
requirements of Section 2.10(b) are complied with in connection therewith;
(g) monetary payments made in the ordinary course of business;
(h) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business of the Borrower and its
Subsidiaries in connection with the compromise or collection thereof;
(i) the sale of inventory located outside the United States to an
affiliate of BMS pursuant to the Acquisition Documentation;
(j) the sale or issuance of a minimal number of any Foreign
Subsidiary's Capital Stock to a foreign national to the extent required by
local law in a jurisdiction outside the United States;
(k) any Disposition of Property or series of related Dispositions of
Property which yields net proceeds to the Borrower or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued
at fair market value in the case of other non-cash proceeds) of less than
$100,000; and
(l) the sale by the Borrower of its facility located in Dayton, Ohio
and all property and equipment contained therein, the aggregate value of
which is not greater than $5,000,000.
Any Collateral which is sold, transferred or otherwise conveyed pursuant to this
Section 7.5 to a Person other than the Borrower and its Subsidiaries shall, upon
the consummation of such sale in accordance with the terms of this Agreement and
the other Loan Documents, be released from the Liens granted pursuant to the
Security Documents and each Lender hereby authorizes and instructs the
Administrative Agent to take such action as the Borrower reasonably may request
to evidence such release.
SECTION 7.6 Limitation on Dividends. Declare or pay any dividend (other
than dividends payable solely in Capital Stock) of the Person making such
dividend) on, or
70
make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of the Borrower or any
Subsidiary or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary (collectively, "Restricted
Payments"), except
(i) that any Subsidiary may make Restricted Payments to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(ii) (A) repurchases of Capital Stock made in order to fulfill
the obligations of the Borrower or any Subsidiary under an employee or
director stock purchase plan or similar plan covering employees of the
Borrower or any Subsidiary as from time to time in effect and (B) cash
payments made in lieu of issuing fractional shares of Borrower's Capital
Stock, in an aggregate amount for purposes of clauses (A) and (B) not to
exceed $2,250,000 per year; and
(iii) (A) redemptions of Capital Stock in connection with a
rights plan adopted by the Board of Directors of the Borrower, or (B)
Restricted Payments in respect of the Warrant, in an aggregate amount in
respect of clauses (A) and (B) equal to $5,000,000 in total during the term
of this Agreement.
SECTION 7.7 Limitation on Capital Expenditures. Make or commit to make
(by way of the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding $20,000,000 per
annum; provided that (i) up to $5,000,000 of any such amount referred to above,
if not so expended in the fiscal year for which it is permitted, may be carried
over for expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this clause (a) during any fiscal year shall be
deemed made, first, in respect of amounts carried over from the prior fiscal
year pursuant to subclause (i) above and, second, in respect of amounts
permitted for such fiscal year as provided above and (b) Capital Expenditures
made with the proceeds of any Reinvestment Deferred Amount.
SECTION 7.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting all or a material part of a business
unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
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(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees or directors of the Borrower or its
Subsidiaries in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and its Subsidiaries not to exceed
$1,000,000 at any one time outstanding;
(e) the Acquisition;
(f) investments made by the Borrower or any of its Subsidiaries with
the proceeds of any Reinvestment Deferred Amount;
(g) investments by the Borrower or any of its Subsidiaries in the
Borrower or any Subsidiary Guarantor in the ordinary course of business;
(h) investments (including debt obligations and Capital Stock) by the
Borrower and its Subsidiaries received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(i) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower and any Subsidiary may make investments in, or
create, any Wholly-Owned Foreign Subsidiary (by way of capital contribution
or otherwise), provided that (x) the requirements of Section 6.10 are
satisfied and (y) the aggregate amount of all investments in such Foreign
Subsidiaries shall not exceed (I) $10,000,000 minus (II) the sum of (A) the
aggregate principal amount of any Indebtedness of any Foreign Subsidiary at
any such time outstanding in accordance with Section 7.2(l) and (B) the
aggregate fair market value of any Dispositions of Property from the
Borrower or any Subsidiary Guarantor to any Foreign Subsidiary in
accordance with Section 7.5(e);
(j) in addition to investments otherwise expressly permitted by this
Section 7.8, so long as no Default or Event of Default shall have occurred
and be continuing, investments by the Borrower or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $10,000,000 during
the term of this Agreement; and
(k) other investments constituting Permitted Business Acquisitions for
aggregate consideration not to exceed $30,000,000, unless the Borrower
shall have obtained the prior written consent of the Required Lenders.
SECTION 7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any payment, prepayment, repurchase
or redemption of or otherwise defease or segregate funds with respect to the
Senior Subordinated
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Notes (other than scheduled interest payments required to be made in cash or
pursuant to the Exchange Offer or any refinancing of the Senior Subordinated
Notes permitted hereunder), (b) amend, modify, waive or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any
of the terms of the Senior Subordinated Notes (i) which amends or modifies the
subordination provisions contained therein; (ii) which shortens the fixed
maturity, or increases the rate or shortens the time of payment of interest on,
or increases the amount or shortens the time of payment of any principal or
premium payable whether at maturity, at a date fixed for prepayment or by
acceleration or otherwise of such Indebtedness, or increases the amount of, or
accelerates the time of payment of, any fees payable in connection therewith;
(iii) which relates to the affirmative or negative covenants, events of default
or remedies under the documents or instruments evidencing such Indebtedness and
the effect of which is to subject the Borrower or any of its Subsidiaries, to
any more onerous or more restrictive provisions; or (iv) which otherwise
adversely affects the interests of the Lenders as senior creditors or the
interests of the Lenders under this Agreement or any other Loan Document in any
respect, (c) designate any Indebtedness (other than the Obligations) as
"Designated Senior Indebtedness" (or similar defined term) for the purposes of
the Senior Subordinated Note Indenture or (d) amend its certificate of
incorporation in any manner adverse to the Lenders without the prior written
consent of the Required Lenders.
SECTION 7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Wholly Owned Subsidiary Guarantor) unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary course of
business of the Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate.
SECTION 7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary, except in respect of assets the aggregate fair market value of which
does not exceed $10,000,000.
SECTION 7.12 Limitation on Changes in Fiscal Periods. Change the
Borrower's method of determining fiscal quarters or fiscal years.
SECTION 7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its
73
Property or revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any guarantor, its obligations under the
Guarantee and Collateral Agreement, other than (a) this Agreement and the other
Loan Documents, (b) the Senior Subordinated Note Indenture, (c) any agreements
governing any purchase money Liens, Capital Lease Obligations otherwise
permitted hereby or Liens permitted by Sections 7.3(f) or (m) (in which case,
any prohibition or limitation shall only be effective against the assets
financed thereby).
SECTION 7.14 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) pay
dividends or make any other distributions in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any
other Subsidiary of the Borrower, (b) make loans or advances to the Borrower or
any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents or the Senior Subordinated Note Indenture and (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement which
has been entered into in connection with the Disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary.
SECTION 7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower or any of its Subsidiaries is engaged on the date of this Agreement
or which are reasonably related thereto.
SECTION 7.16 Limitation on Amendments to Acquisition Documentation. (a)
Amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the
terms and conditions of the indemnities and licenses furnished to the Borrower
or any of its Subsidiaries pursuant to the Acquisition Documentation such that
after giving effect thereto such indemnities or licenses shall be materially
less favorable to the interests of the Loan Parties or the Lenders with respect
thereto or (b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Acquisition Documentation except to the extent that any such
amendment, supplement or modification could not reasonably be expected to have a
Material Adverse Effect.
ARTICLE VIII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation or any other amount payable hereunder or under any other Loan
Document within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
74
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) Any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) of Section 6.4(a) (with respect to
the Borrower only), Section 6.7(a), Section 6.13(b) or Article 7; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in making
any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace (not to exceed 31 days), if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in
the observance or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided that a default, event or
condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default unless, at such time,
one or more defaults, events or conditions of the type described in clauses
(i), (ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $5,000,000; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets,
75
or the Borrower or any of its Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against
the Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other similar event or condition which is not in the
ordinary course shall occur or exist with respect to a Plan; and in each
case in clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $5,000,000 or more, and all such judgments or
decrees shall not have been paid, vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or
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(i) Any of the Security Documents shall cease, for any reason, to be in
full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents in
respect of material assets shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) (i) Any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), (A) shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the "beneficial owner" (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 15% of the outstanding common stock of the
Borrower or (B) shall obtain the power (whether or not exercised) to elect
a majority of the Borrower's directors; (ii) the board of directors of the
Borrower shall cease to consist of a majority of Continuing Directors; or
(iii) a Specified Change of Control shall occur; or
(l) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated Note
Indenture, or any Loan Party, any Affiliate of any Loan Party, the trustee
in respect of the Senior Subordinated Notes or the holders of at least 25%
in aggregate principal amount of the Senior Subordinated Notes shall so
assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and (ii)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement
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and the other Loan Documents (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto).
ARTICLE IX. THE AGENTS
SECTION 9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
SECTION 9.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
SECTION 9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful
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misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
SECTION 9.4 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by the Administrative Agent. The Agents may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Loans.
SECTION 9.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with
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respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
SECTION 9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party which may
come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
SECTION 9.7 Indemnification. The Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section 9.7 (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements which are found by a final and
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nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in this
Section 9.7 shall survive the payment of the Loans and all other amounts payable
hereunder.
SECTION 9.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
SECTION 9.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. The Documentation Agent may, at any time, by notice
to the Lenders and the Administrative Agent, resign as Documentation Agent
hereunder, whereupon the duties, rights, obligations and responsibilities
hereunder shall automatically be assumed by, and inure to the benefit of, the
Administrative Agent, without any further act by the Documentation Agent, the
Administrative Agent or any Lender. After any retiring Agent's resignation as
Agent, the provisions of this Article 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
SECTION 9.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement, which has been
consented to in accordance with Section 10.1 or in accordance with Section
10.16.
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SECTION 9.11 The Syndication Agent. The Syndication Agent, in its
capacity as such, shall have no duties or responsibilities, and shall incur no
liability, under this Agreement and the other Loan Documents.
ARTICLE X. MISCELLANEOUS
SECTION 10.1 Amendments and Waivers. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(with the written consent of the Required Lenders) the Administrative Agent and
each Loan Party party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders, or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest, fee or letter of credit commission payable hereunder or extend the
scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the consent of
each Lender directly affected thereby; (ii) amend, modify or waive any provision
of this Section 10.1 or reduce any percentage specified in the definition of
Required Lenders or Required Prepayment Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release a significant Subsidiary Guarantor from their obligations
under the Guarantee and Collateral Agreement, in each case without the written
consent of all Lenders; (iii) reduce the percentage specified in the definition
of Majority Facility Lenders without the written consent of all Lenders under
each affected Facility; (iv) amend, modify or waive any provision of Article 9
without the written consent of the applicable Agents; or (v) amend, modify or
waive any provision of Article 3 without the written consent of the Issuing
Lender. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
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SECTION 10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: CONMED Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President - Legal
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative The Chase Manhattan Bank,
Agent: Loan & Agency Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Chase Manhattan Bank
Bridgewater Place
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the either Agent or the
Lenders shall not be effective until received.
SECTION 10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the either Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right,
83
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
SECTION 10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
SECTION 10.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents and the Syndication Agent for all their reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Agents for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Administrative Agent, (c) to pay, indemnify, and hold each
Lender, the Agents and the Syndication Agent harmless from, any and all
recording and filing fees or any amendment, supplement or modification of, or
any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender, the Agents and the Syndication Agent and their respective officers,
directors, trustees, employees, affiliates, agents and controlling persons
(each, an "indemnitee") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower, any of its
Subsidiaries or any of the Properties and the reasonable fees and expenses of
legal counsel in connection with claims, actions or proceedings by any
indemnitee against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), provided, that the Borrower shall
have no obligation hereunder to any indemnitee with respect to indemnified
liabilities to the extent such indemnified liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such indemnitee. Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert, and
hereby waives and agrees to cause its Subsidiaries to so waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that
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any of them might have by statute or otherwise against any indemnitee. The
agreements in this Article shall survive repayment of the Loans and all other
amounts payable hereunder.
SECTION 10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and each Lender.
(b) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Lender grant to
any Participant under any such participation any right to approve any amendment
or waiver of any provision of any Loan Document, or any consent to any departure
by any Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Loans or any fees
payable hereunder, or postpone the date of the final maturity of the Loans, in
each case to the extent subject to such participation. The Borrower agrees that
if amounts outstanding under this Agreement and the Loans are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as
if it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.17, 2.18 and 2.19 with respect
to its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender; provided that, in the case of Section 2.18, such
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
85
(c) Any Lender (an "Assignor") may, in accordance with applicable law,
at any time and from time to time assign to any Lender or any affiliate thereof
or, with the consent of the Borrower, and the Administrative Agent (which, in
each case, shall not be unreasonably withheld or delayed), to an additional
bank, financial institution or other entity (an "Assignee") all or any part of
its rights and obligations under this Agreement pursuant to an Assignment and
Acceptance (an "Assignment and Acceptance"), substantially in the form of
Exhibit D, executed by such Assignee, such Assignor and the Administrative Agent
(and, where the consent of the Borrower is required pursuant to the foregoing
provisions, by the Borrower) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that no such assignment to an
Assignee (other than any Lender or any affiliate thereof) shall be in an
aggregate principal amount of less than $5,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). Notwithstanding any provision of this
Section 10.6, the consent of the Borrower shall not be required for any
assignment which occurs at any time when any Event of Default shall have
occurred and be continuing.
(d) The Administrative Agent shall maintain at its address referred to
in Section 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time and any Notes evidencing such Loans. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of the Loan and any Note
evidencing such Loan recorded therein for all purposes of this Agreement. Any
assignment of any Loan whether or not evidenced by a Note shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). Any assignment or transfer of all or
part of a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing such
Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the designated Assignee and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "cancelled". The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
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(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof by the Borrower and the Administrative
Agent) together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (except that no such registration and processing fee
shall be payable in the case of an Assignee which is already a Lender or is an
affiliate of a Lender), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders and the Borrower. On or prior
to such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the Revolving
Credit Note and/or Term Notes, as the case may be, of the assigning Lender) a
new Revolving Credit Note and/or Term Notes, as the case may be, to the order of
such Assignee in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, assumed or acquired by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Revolving Credit Commitment and/or Term Loans, as the case may be, upon request,
a new Revolving Credit Note and/or Term Notes, as the case may be, to the order
of the assigning Lender in an amount equal to the Revolving Credit Commitment
and/or applicable Term Loans, as the case may be, retained by it hereunder. Such
new Notes shall be dated the Closing Date and shall otherwise be in the form of
the Note replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Article concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law; provided that, for the avoidance of doubt, it
is understood that this Section 10.6(f) does not reduce the rights of the
Borrower pursuant to Sections 10.6(b) and (c) which must be satisfied in order
for a Person to become a Lender.
SECTION 10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement Obligations
owing to it, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans or the Reimbursement
Obligations owing to such other Lender, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan and/or of the Reimbursement
Obligations owing to each such other Lender, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or
87
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
SECTION 10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
SECTION 10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agents and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agents or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
SECTION 10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
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(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid at its address set
forth in Section 10.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to
▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 10.12 any special, exemplary, punitive or consequential
damages.
SECTION 10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither Agent nor any Lender has any fiduciary relationship with or
duty to the Borrower arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between Agents and
Lenders, on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
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SECTION 10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
SECTION 10.15 Confidentiality. Each of the Agents and each Lender
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Administrative Agent, any other
Lender or any affiliate of any Lender in each case which is bound by this
Section 10.15, (b) to any Participant or Assignee (each, a "Transferee") or
prospective Transferee which agrees to comply with the provisions of this
Section, (c) to the employees, directors, agents, attorneys, accountants and
other professional advisors of such Lender or its affiliates, (d) upon the
request or demand of any Governmental Authority having jurisdiction over the
such Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if required to do so under applicable law in connection
with any litigation or similar proceeding or in litigation to enforce this
Agreement, (g) which has been publicly disclosed other than in breach of this
Section 10.15, (h) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender's investment portfolio in connection with
ratings issued with respect to such Lender, or (i) in connection with the
exercise of any remedy hereunder or under any other Loan Document; provided
that, if reasonably requested by the Borrower, the Administrative Agent and the
Lenders shall make commercially reasonable efforts to determine, and inform the
Borrower of, the Persons who received such non-public information designated as
confidential.
SECTION 10.16 Releases. At such time as the Loans, the Reimbursement
Obligations and the other Obligations shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding,
the Collateral shall be released from the Liens created by the Security
Documents, and the Security Documents and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and
each Borrower or Subsidiary thereunder shall terminate, all without delivery of
any instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Borrower and Subsidiaries. At the request and
sole expense of any Borrower or Subsidiary following any such termination, the
Administrative Agent shall deliver to such Borrower or Subsidiary any Collateral
held by the Administrative Agent thereunder, and execute and deliver to such
Borrower or Subsidiary such documents as such Borrower or Subsidiary shall
reasonably request to evidence such termination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
CONMED CORPORATION
By:
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Name:
Title:
▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BANK, as
Administrative Agent and as a Lender
By:
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Name:
Title:
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SALOMON BROTHERS HOLDING
COMPANY, INC, as Documentation Agent and
as a Lender
By:
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Name:
Title:
