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PACKARD BIOSCIENCE COMPANY and
THE SUBSIDIARY BORROWERS
FROM TIME TO TIME PARTIES HERETO
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$115,000,000
CREDIT AGREEMENT
Dated as of March 4, 1997
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BANCAMERICA SECURITIES, INC.
and
CIBC WOOD GUNDY SECURITIES CORP.,
AS CO-ARRANGERS
and
CO-SYNDICATION AGENTS
CANADIAN IMPERIAL BANK OF COMMERCE,
AS DOCUMENTATION AGENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 23
SECTION 2. AMOUNT AND TERMS OF TERM LOAN AND
REVOLVING CREDIT LOAN COMMITMENTS................... 23
2.1 Term Loan Commitments........................................... 23
2.2 Procedure for Term Loan Borrowing............................... 23
2.3 Repayment of Term Loans......................................... 24
2.4 Revolving Credit Commitments.................................... 24
2.5 Procedure for Revolving Credit Borrowing........................ 25
SECTION 3. LETTERS OF CREDIT.............................................. 25
3.1 L/C Commitment.................................................. 25
3.2 Procedure for Issuance of Letter of Credit...................... 26
3.3 Commissions, Fees and Other Charges............................. 26
3.4 L/C Participations.............................................. 27
3.5 Reimbursement Obligation of Packard............................. 28
3.6 Obligations Absolute............................................ 28
3.7 Letter of Credit Payments....................................... 28
3.8 Applications.................................................... 29
SECTION 4. AMOUNT AND TERMS OF FRONTED OFFSHORE REVOLVING CREDIT
LOANS................................................................ 29
4.1 Fronted Offshore Revolving Credit Subfacility................... 29
4.2 Procedure for Fronted Offshore Revolving Credit Loan Borrowings. 29
4.3 Fronted Offshore Revolving Credit Loans Fees, Commissions and
Other Charges................................................. 30
4.4 Participations.................................................. 30
4.5 Offshore Currency Spot Rate..................................... 31
4.6 Repayment of Fronted Offshore Revolving Credit Loans............ 32
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF
CREDIT............................................................... 32
5.1 Commitment Fees, etc. .......................................... 32
5.2 Termination or Reduction of Revolving Credit Commitments........ 32
5.3 Optional Prepayments............................................ 33
5.4 Mandatory Term Loan Prepayments................................. 33
5.5 Conversion and Continuation Options............................. 35
5.6 Minimum Amounts and Maximum Number of Eurodollar and Offshore
Currency Tranches............................................. 36
5.7 Interest Rates and Payment Dates................................ 36
5.8 Computation of Interest and Fees................................ 37
5.9 Inability to Determine Interest Rate............................ 37
5.10 Pro Rata Treatment and Payments................................ 38
5.11 Requirements of Law............................................ 39
5.12 Taxes.......................................................... 40
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5.13 Indemnity...................................................... 42
5.14 Change of Lending Office....................................... 42
5.15 Subsidiary Borrowers........................................... 42
5.16 Replacement of Lenders under Certain Circumstances............. 43
SECTION 6. REPRESENTATIONS AND WARRANTIES................................. 43
6.1 Financial Condition............................................. 43
6.2 No Change....................................................... 44
6.3 Corporate Existence; Compliance with Law........................ 44
6.4 Corporate Power; Authorization; Enforceable Obligations......... 44
6.5 No Legal Bar.................................................... 44
6.6 No Material Litigation.......................................... 45
6.7 No Default...................................................... 45
6.8 Ownership of Property; Liens.................................... 45
6.9 Intellectual Property........................................... 45
6.10 Taxes.......................................................... 45
6.11 Federal Regulations............................................ 45
6.12 Labor Matters.................................................. 45
6.13 ERISA.......................................................... 46
6.14 Investment Company Act; Other Regulations...................... 46
6.15 Subsidiaries................................................... 46
6.16 Restrictions on Distributions.................................. 46
6.17 Use of Proceeds................................................ 46
6.18 Environmental Matters.......................................... 47
6.19 Accuracy of Information, etc................................... 47
6.20 Security Documents............................................. 48
6.21 Solvency....................................................... 48
6.22 Senior Indebtedness............................................ 48
6.23 Regulation H................................................... 48
6.24 Inactive Subsidiaries.......................................... 49
SECTION 7. CONDITIONS PRECEDENT........................................... 49
7.1 Conditions to Initial Extension of Credit....................... 49
7.2 Conditions to Each Extension of Credit.......................... 53
7.3 Each Subsidiary Borrower Credit Event........................... 53
SECTION 8. AFFIRMATIVE COVENANTS.......................................... 54
8.1 Financial Statements............................................ 54
8.2 Certificates; Other Information................................. 55
8.3 Payment of Obligations.......................................... 56
8.4 Conduct of Business and Maintenance of Existence, etc. ......... 57
8.5 Maintenance of Property; Insurance.............................. 57
8.6 Inspection of Property; Books and Records; Discussions.......... 57
8.7 Notices......................................................... 57
8.8 Environmental Laws.............................................. 58
8.9 Additional Collateral, etc...................................... 58
8.10 Employment Agreements.......................................... 59
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SECTION 9. NEGATIVE COVENANTS............................................. 59
9.1 Financial Condition Covenants................................... 60
9.2 Limitation on Indebtedness...................................... 61
9.3 Limitation on Liens............................................. 62
9.4 Limitation on Fundamental Changes............................... 63
9.5 Limitation on Sale of Assets.................................... 63
9.6 Limitation on Dividends......................................... 64
9.7 Limitation on Capital Expenditures.............................. 64
9.8 Limitation on Investments, Loans and Advances................... 65
9.9 Limitation on Payments and Modifications of Debt Instruments,
etc.......................................................... 66
9.10 Limitation on Transactions with Affiliates..................... 66
9.11 Limitation on Sales and Leasebacks............................. 66
9.12 Limitation on Changes in Fiscal Periods........................ 66
9.13 Limitation on Negative Pledge Clauses.......................... 66
9.14 Limitation on Restrictions on Subsidiary Distributions......... 66
9.15 Limitation on Lines of Business................................ 67
9.16 Limitation on Amendments to Recapitalization Documents......... 67
9.17 Inactive Subsidiaries.......................................... 67
.............................................................. 67
SECTION 10. EVENTS OF DEFAULT............................................. 67
SECTION 11. THE AGENTS.................................................... 71
11.1 Appointment.................................................... 71
11.2 Delegation of Duties........................................... 71
11.3 Exculpatory Provisions......................................... 71
11.4 Reliance by Administrative Agent............................... 72
11.5 Notice of Default.............................................. 72
11.6 Non-Reliance on Administrative Agent and Other Lenders......... 72
11.7 Indemnification................................................ 73
11.8 Agent in Its Individual Capacity............................... 73
11.9 Successor Administrative Agent................................. 74
11.10 Authorization to Release Liens................................ 74
11.11 Documentation Agent, Co-Syndication Agents and Co-Arrangers... 74
SECTION 12. GUARANTEE..................................................... 74
12.1 Guarantee...................................................... 74
12.2 No Subrogation, Contribution, Reimbursement or Indemnity....... 75
12.3 Amendments, etc. with respect to the Subsidiary Borrower
Obligations.................................................. 75
12.4 Guarantee Absolute and Unconditional........................... 76
12.5 Reinstatement.................................................. 76
12.6 Payments....................................................... 77
SECTION 13. MISCELLANEOUS................................................. 77
13.1 Amendments and Waivers......................................... 77
13.2 Notices........................................................ 77
13.3 No Waiver; Cumulative Remedies................................. 78
13.4 Survival of Representations and Warranties..................... 78
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13.5 Payment of Expenses and Taxes.................................. 79
13.6 Successors and Assigns; Participations and Assignments......... 79
13.7 Adjustments; Set-off........................................... 81
13.8 Counterparts................................................... 82
13.9 Severability................................................... 82
13.10 Integration................................................... 82
13.11 GOVERNING LAW................................................. 82
13.12 Submission To Jurisdiction; Waivers........................... 82
13.13 Acknowledgements.............................................. 83
13.14 WAIVERS OF JURY TRIAL......................................... 83
13.15 Conversion of Currencies...................................... 83
13.16 Confidentiality............................................... 84
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SCHEDULES:
1.1A Commitments
1.1B Mortgaged Property
1.1C Offshore Currencies
6.4 Consents, Authorizations, Filings and Notices
6.9 Intellectual Property
6.15 Subsidiaries
6.16 Subsidiary Restrictions
6.18 Environmental Matters
6.20(a) UCC Filing Jurisdictions
6.20(b) Mortgage Filing Jurisdictions
6.24 Inactive Subsidiaries
9.2(j) Existing Indebtedness
9.3(f) Existing Liens
EXHIBITS:
A-1 Form of Term Loan Borrowing Notice
A-2 Form of Revolving Credit Loan Borrowing Notice
A-3 Form of Fronted Offshore Revolving Credit Loan Borrowing Notice
A-4 Form of Conversion/Continuation Notice
B Form of Borrowing Subsidiary Agreement
C Form of Borrowing Subsidiary Termination
D Form of Compliance Certificate
E Form of Fronting Lender Addendum
F Form of Guarantee and Collateral Agreement
G-1 Form of Mortgage (Illinois)
G-2 Form of Mortgage (Connecticut)
H Form of Prepayment Option Notice
I Form of Closing Certificate
J Form of Legal Opinion of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇
K Form of Legal Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇
L Form of Legal Opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
M Form of Legal Opinion of Counsel to Subsidiary Borrowers
N Form of Assignment and Assumption
O-1 Form of Term Loan Note
O-2 Form of Revolving Credit Loan Note
O-3 Form of Fronted Offshore Revolving Credit Loan Note
P Form of Subordination Language for the Management Notes
Q Form of Subordinated Intercompany Note
- v -
CREDIT AGREEMENT, dated as of March 4, 1997, among PACKARD
BIOSCIENCE COMPANY, a Delaware corporation ("Packard"), the Subsidiary Borrowers
(as hereinafter defined) from time to time parties to this Agreement, the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), CANADIAN IMPERIAL BANK OF COMMERCE, a
bank organized under the laws of Canada, as documentation agent (in such
capacity, the "Documentation Agent"), BANCAMERICA SECURITIES, INC. and CIBC WOOD
GUNDY SECURITIES CORP., each as a co-arranger and a co-syndication Agent (in
such capacities, the "Co-Arrangers" and the "Co-Syndication Agents",
respectively), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a
national banking association, as Administrative Agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Acquired Indebtedness": as defined in Section 9.2(h).
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": BofA, together with its affiliates, as the
administrative agent for the Lenders under this Agreement and the other
Loan Documents, together with any of its successors.
"Administrative Agent's Payment Office": the address for payments
set forth in Section 13.2 or such other address as the Administrative
Agent may from time to time specify in accordance with Section 13.2.
"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 5% 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": the collective reference to the Administrative Agent, the
Co-Syndication Agents, the Co-Arrangers and the Documentation Agent.
"Agent-Related Persons": BofA and any successor agent pursuant to
Section 11.9, together with their respective Affiliates (including, in the
case of BofA, BancAmerica Securities, Inc., as Co-Arranger and
Co-Syndication Agent), and the officers, directors, employees, agents,
advisors and attorneys-in-fact of such Persons and Affiliates.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Agreement Currency": as defined in Section 13.15(b).
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"Applicable Creditor": as defined in Section 13.15(b).
"Applicable Margin": for each Type of Loan (other than Fronted
Offshore Revolving Credit Loans), the rate per annum set forth under the
relevant column heading below:
Base Rate Loans Eurodollar Loans
--------------- ----------------
Revolving Credit Loans 1-3/8% 2-3/8%
Term Loans 1-3/4% 2-3/4%
; provided, that on and after the first Adjustment Date occurring after
the completion of four full fiscal quarters of Packard after the Closing
Date, the Applicable Margin with respect to Revolving Credit Loans will be
determined pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing Lender
may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
"Asset Sale": any Disposition of Property (including, without
limitation, any issuance or sale of Capital Stock of any Subsidiary),
other than (a) any Disposition of Property permitted by clause (a), (b),
(c), (d), (e) or (f) of Section 9.5, (b) any issuance or sale of Capital
Stock of Packard and (c) any Disposition of Property that, together with
any related Dispositions of Property, yields aggregate Net Cash Proceeds
of less than $25,000.
"Assignee": as defined in Section 13.6(c).
"Assignor": as defined in Section 13.6(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 at such time over (b) such Lender's
Utilized Commitment at such time.
"Banking Day": (a) with respect to any borrowings, disbursements and
payments in respect of and calculations and interest rates pertaining to
Base Rate Loans, any Business Day, (b) with respect to any borrowings,
disbursements and payments in respect of and calculations, interest rates
and Interest Periods pertaining to Eurodollar Loans, any Business Day
which is also a day on which dealings are carried on in the London
interbank market and (c) with respect to any borrowings, disbursements and
payments in and calculations, interest rates and Interest Periods
pertaining to any Fronted Offshore Revolving Credit Loan, any Business Day
which is also a day on which commercial banks are open for business in,
and on which dealings in the relevant Fronted Offshore Currency are
carried on in, the location of the relevant Fronting Lender's Payment
Office. Any reference to "Banking Day" herein, to the extent not
applicable to the matters described above, shall be deemed to be a
reference to "Business Day".
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the greater of (a) the
Reference Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason,
3
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, the Base Rate
shall be determined without regard to clause (b) of the first sentence of
this definition until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the Reference
Rate or the Federal Funds Effective Rate shall be effective on the
effective day of such change in the Reference Rate or the Federal Funds
Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"BofA": as applicable, Bank of America National Trust and Savings
Association, Bank of America Illinois and their respective subsidiaries.
"Borrowers": the collective reference to Packard and the Subsidiary
Borrowers.
"Borrowing Date": any Banking Day specified by a Borrower in a
notice pursuant to Section 2.2, 2.5, 3.2 or 4.2 as a date on which such
Borrower requests the relevant Lenders to make Loans hereunder.
"Borrowing Notice": the written notice to be given by Packard to the
Administrative Agent pursuant to Section 2.2, 2.5 or 4.2, substantially in
the form of Exhibit A-1 with respect to Term Loans, Exhibit A-2 with
respect to Revolving Credit Loans and Exhibit A-3 with respect to Fronted
Offshore Revolving Credit Loans.
"Borrowing Subsidiary Agreement": a Borrowing Subsidiary Agreement,
substantially in the form of Exhibit B.
"Borrowing Subsidiary Termination": a Borrowing Subsidiary
Termination, substantially in the form of Exhibit C.
"Business": as defined in Section 6.18(b).
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City, San Francisco or Chicago are
authorized or required by law to close.
"Calculation Date": two Banking Days prior to the last Banking Day
of each March, June, September and December; provided that the second
Banking Day preceding each Borrowing Date with respect to any Fronted
Offshore Revolving Credit Loans in an Offshore Currency shall also be a
"Calculation Date" with respect to such Offshore Currency; provided
further that the second Banking Day preceding each date on which any
Fronted Offshore Revolving Credit Loan in an Offshore Currency is extended
or rolled-over shall also be a "Calculation Date" with respect to such
Offshore Currency.
"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
4
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 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 of America
or any state thereof having combined capital and surplus of not less than
$500,000,000; and (c) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Ratings Services or P-1 by ▇▇▇▇▇'▇ Investors Service,
Inc., 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.
"CII Acquisition": CII Acquisition LLC, a Delaware limited liability
company, a Wholly Owned Subsidiary of a Control Investment Affiliate of
Stonington.
"Closing Date": the date on which the conditions precedent set forth
in Section 7.1 shall have been satisfied, which date is March 4, 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 Term Loan Commitment
and the Revolving Credit Commitment of such Lender; collectively as to all
Lenders, the "Commitments".
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on and
after the first Adjustment Date occurring after the completion of four
full fiscal quarters of Packard after the Closing Date, the Commitment Fee
Rate will be determined pursuant to the Pricing Grid.
5
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with Packard within the
meaning of Section 4001 of ERISA or is part of a group which includes
Packard 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 D.
"Confidential Information Memorandum": the Confidential Information
Memorandum of Packard dated January 1997 and furnished to the Lenders.
"Consolidated Current Assets": at a particular date, all amounts
(other than cash and Cash Equivalents) which would, in conformity with
GAAP, be set forth opposite the caption "total current assets" (or any
like caption) on a consolidated balance sheet of Packard and its
Subsidiaries at such date.
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be set forth opposite the
caption "total current liabilities" (or any like caption) on a
consolidated balance sheet of Packard and its Subsidiaries at such date,
but excluding (a) the current portion of any Funded Debt of Packard and
its Subsidiaries and (b) without duplication of clause (a) above, all
Indebtedness consisting of Revolving Credit Loans to the extent otherwise
included therein.
"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) total income tax expense (including withholding taxes), (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
expenses (including expenses incurred in connection with the
Recapitalization) or losses (including, 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 (including, without
limitation, minority interest expense), 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 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 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, (b) net
current provision for cash income taxes (less any tax benefits recorded
through shareholders' equity which reduce such cash income taxes payable)
made by Packard or any of its Subsidiaries on a consolidated basis in
respect of such period, (c) scheduled payments made during such period on
account of principal of
6
Indebtedness of Packard or any of its Subsidiaries (including the Term
Loans) and (d) the aggregate amount actually paid by Packard and its
Subsidiaries in cash during such period on account of Capital Expenditures
(excluding the principal amount of Indebtedness incurred in connection
with such expenditures).
"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 cash interest
expense (including that attributable to Capital Lease Obligations) of
Packard and its Subsidiaries for such period with respect to all
outstanding Indebtedness of Packard 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 under Interest Rate Protection Agreements to the extent such
net costs are allocable to such period in accordance with GAAP).
"Consolidated Leverage Ratio": as at the last day of any period, the
ratio of (a) Consolidated Total Debt on such day to (b) Consolidated
EBITDA for the period of four consecutive fiscal quarters ending on such
day.
"Consolidated Net Income": for any period, the consolidated net
income (or loss) of Packard and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from such calculation (a) the income (or deficit) of any Person
accrued prior to the date it becomes a Subsidiary of Packard or is merged
into or consolidated with Packard or any of its Subsidiaries, (b) the
income (or deficit) of any Person (other than a Subsidiary of Packard) in
which Packard or any of its Subsidiaries has an ownership interest, except
to the extent that any such income is actually received by Packard or such
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of Packard to the extent that the
declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law
(other than satisfaction of corporate formalities within the control of
the relevant Subsidiary) applicable to such Subsidiary (other than, in the
case of Packard Japan KK, for any period ending on or prior to December
31, 1997, such amounts as can be made as a subordinated loan to Packard).
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness of Packard and its Subsidiaries at such date
(other than the principal amount of the Japan Debt to the extent Packard
Japan KK has an equivalent amount of cash on hand on such date),
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": the excess of Consolidated Current
Assets over Consolidated Current Liabilities.
"Continuing Directors": the directors of Packard on the Closing
Date, after giving effect to the Recapitalization 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 Packard is recommended by at least 66-2/3% of the then
Continuing Directors or such other
7
director receives the vote of Stonington or any of its Control Investment
Affiliates in his or her election by the shareholders of Packard.
"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.
"Control Investment Affiliate": as to any Person, any other Person
which (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such
Person primarily for the purpose of making equity or debt investments in
one or more companies. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person whether by
contract or otherwise.
"Conversion/Continuation Notice": the written notice of the
conversion or continuation of a Loan to be given by Packard to the
Administrative Agent pursuant to Section 5.5, substantially in the form of
Exhibit A-4.
"Cost of Funds": with respect to any Offshore Currency, the rate of
interest determined by the Administrative Agent or the relevant Fronting
Lender, as the case may be, in respect thereof (which determination shall
be conclusive absent manifest error) to be the cost to the Administrative
Agent or such Fronting Lender, as the case may be, of obtaining funds
denominated in such Offshore Currency for the period or, if applicable,
the relevant Interest Period during which any relevant amount in such
Offshore Currency is outstanding; provided that, "Cost of Funds", with
respect to any eurocurrency, shall be the rate of interest per annum
(rounded upwards to the nearest 1/32 of 1%) determined by the
Administrative Agent or such Fronting Lender, as the case may be, as the
rate at which deposits in the applicable Offshore Currency in the
approximate amount of relevant Fronted Offshore Revolving Credit Loan for
such Interest Period would be offered by its applicable lending office to
major banks in the London interbank market at their request at
approximately 11:00 A.M. (London time) two Banking Days prior to the
commencement of such Interest Period.
"Default": any of the events specified in Section 10, 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.
"Dollar Equivalent": at any time as to any amount denominated in an
Offshore Currency, the equivalent amount in Dollars as determined by the
Administrative Agent at such time on the basis of the Spot Rate for the
purchase of Dollars with such Offshore Currency on the most recent
Calculation Date for such Offshore Currency.
"Dollars" and "$": dollars in lawful currency of the United States
of America.
"Domestic Subsidiary": any Subsidiary of Packard organized under the
laws of any jurisdiction within the United States of America.
8
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or
the environment, as now or may at any time hereafter be in effect.
"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, rounded upwards to the nearest 1/100 of
1%) 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
(rounded upwards to the nearest 1/32 of 1%) equal to the rate at which
BofA is offered Dollar deposits at or about 8:00 A.M., San Francisco time,
two Banking Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being
conducted for delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable to the amount
of its Eurodollar Loans to be outstanding during such Interest Period.
"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
The Eurodollar Rate shall be adjusted automatically as to all Eurodollar
Loans then outstanding as of the effective date of any change in the
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 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 Section 10,
provided that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"Excess Amount": as defined in Section 5.4(d).
9
"Excess Cash Flow": for any period, the excess, if any, of (a) the
sum, without duplication, of (i) Consolidated Net Income for such period,
(ii) an amount equal to the amount of all non-cash charges deducted in
arriving at such Consolidated Net Income, (iii) decreases in Consolidated
Working Capital for such period, and (iv) an amount equal to the aggregate
net non-cash loss on the Disposition of Property by Packard and its
Subsidiaries during such period (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income over (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
Packard and its Subsidiaries in cash during such period on account of
Capital Expenditures, Technology Acquisitions, investments made pursuant
to Section 9.8(g) and the Japan Acquisition (in each case, with respect to
this clause (ii), excluding the principal amount of any Indebtedness
incurred in connection therewith and any such payments financed with the
proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount
of all prepayments of Revolving Credit Loans during such period to the
extent accompanying permanent optional reductions of the Revolving Credit
Commitments and all optional prepayments of the Term Loans during such
period, (iv) the aggregate amount of all regularly scheduled principal
payments of Funded Debt (including, without limitation, the Term Loans) of
Packard and its Subsidiaries made during such period (other than (x) in
respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder and (y) any
amounts paid in respect of Management Notes), (v) increases in
Consolidated Working Capital for such period, and (vi) an amount equal to
the aggregate net non-cash gain on the Disposition of Property by Packard
and its Subsidiaries during such period (other than sales of inventory in
the ordinary course of business), to the extent included in arriving at
such Consolidated Net Income.
"Excess Cash Flow Application Date": as defined in Section 5.4(d).
"Excess Cash Flow Percentage": as of the last day of any fiscal year
of Packard, the percentage set forth below opposite the Consolidated
Leverage Ratio as of such day:
Consolidated Leverage Ratio Excess Cash Flow Percentage
--------------------------- ---------------------------
Greater than or equal to 4.0:1.0 50%
Less than 4.0:1.0 0%
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Facility": each of (a) the Term Loan Commitments and the Term Loans
made thereunder (the "Term Loan Facility") and (b) the Revolving Credit
Commitments and the Revolving Extensions of Credit made thereunder (the
"Revolving Credit Facility").
"Fee Payment Date": the last Banking Day of each March, June,
September and December.
"Federal Funds Effective Rate": for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)", or, if such rate is not so
published for any such preceding Business Day, the arithmetic mean as
determined by the
10
Administrative Agent of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 A.M. (New York City time) on that day
by each of three leading brokers of Federal funds transactions in New York
City selected by the Administrative Agent.
"Foreign Currency Protection Agreements": as to any Person, all
foreign exchange contracts, currency swap agreements or other similar
agreements or arrangements entered into in the ordinary course of business
(and not for speculative purposes) designed to protect such Person against
fluctuations in currency values.
"Foreign Subsidiary": any Subsidiary of Packard that is not a
Domestic Subsidiary.
"Fronted Offshore Currency": with respect to each Fronting Lender,
the Offshore Currency or Currencies specified in the applicable Fronting
Lender Addendum.
"Fronted Offshore Currency Sublimit": with respect to each Fronting
Lender and any Fronted Offshore Currency, the amount specified by such
Fronting Lender for such Fronted Offshore Currency in the applicable
Fronting Lender Addendum.
"Fronted Offshore Revolving Credit Commitment": as to any Fronting
Lender, the obligation of such Fronting Lender, if any, to make Fronted
Offshore Revolving Credit Loans to the relevant Subsidiary Borrower
hereunder in a principal amount not to exceed the amount set forth in the
relevant Fronting Lender Addendum.
"Fronted Offshore Revolving Credit Loan": as defined in Section 4.1.
"Fronted Offshore Revolving Credit Loan Sublimit": at any time, as
to all Fronted Offshore Revolving Credit Loans, the lesser of (a)
$35,000,000 and (b) the aggregate Revolving Credit Commitments then in
effect.
"Fronted Offshore Revolving Credit Subfacility": the lending
facility described in Section 4.1.
"Fronted Revolving Credit Loan Participants": with respect to each
Fronted Offshore Revolving Credit Loan, the collective reference to all
Revolving Credit Lenders.
"Fronting Lender": with respect to a particular Fronted Offshore
Currency, each Revolving Credit Lender (or an Affiliate thereof) which
executes and delivers a Fronting Lender Addendum with respect to such
Fronted Offshore Currency, provided that, unless the Administrative Agent
otherwise agrees, there shall be no more than one Fronting Lender for any
Fronted Offshore Currency.
"Fronting Lender Addendum": a Fronting Lender Addendum,
substantially in the form of Exhibit D.
"Fronting Lender's Payment Office": with respect to any Fronting
Lender, in the case of payments in a Fronted Offshore Currency, such
address as such Fronting Lender may from time to time specify for such
purpose pursuant to the applicable Fronting Lender Addendum.
11
"Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year from such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
from such date, including, without limitation, all current maturities and
current sinking fund payments in respect of such Indebtedness whether or
not required to be paid within one year from the date of its creation and,
in the case of Packard, Indebtedness in respect of the Loans.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions
and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board and the rules
and regulations of the Securities and Exchange Commission, or in such
other statements by such other entity as may be in general use by
significant segments of the United States accounting profession, which are
applicable to the circumstances of Packard as of the date of
determination, except that for purposes of Section 9 (including the
accounting terms used therein), 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 audited financial statements of Packard in
respect of the fiscal year ended December 31, 1995 delivered pursuant to
Section 6.1(b). In the event that any "Accounting Change" (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement,
then Packard and the Administrative Agent agree to enter into negotiations
in order to amend such provisions of this Agreement so as to equitably
reflect such Accounting Changes with the desired result that the criteria
for evaluating Packard's financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made. Until
such time as such an amendment shall have been executed and delivered by
Packard, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Accounting Changes had not occurred.
"Accounting Changes" refers to changes in accounting principles required
or permitted by the promulgation of any rule, regulation, pronouncement or
opinion by the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or, if applicable, the
Securities and Exchange Commission (or successors thereto or agencies with
similar functions).
"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 or
pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by Packard and each Subsidiary
Guarantor, substantially in the form of Exhibit F, 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
12
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 Packard in good faith.
"Hedging Agreement": any Foreign Currency Protection Agreement or
Interest Rate Protection Agreement.
"Inactive Subsidiary": each Domestic Subsidiary listed as an
Inactive Subsidiary on Schedule 6.24, which Domestic Subsidiaries (a)
individually and in the aggregate have no material net assets and (b) do
not engage in any operating activity; collectively, "Inactive
Subsidiaries".
"Incur": as defined in Section 9.2; and the term "Incurrence" shall
have a correlative meaning.
"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 (i) current trade payables incurred in the ordinary course of such
Person's business and (ii) contingent and other similar payment
arrangements entered into in the ordinary course of business relating to
licensing or other acquisitions of technology), (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, (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, (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
13
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 and (j) for the purposes of
Section 10(e) only, all obligations of such Person in respect of Hedging
Agreements.
"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.
"Intellectual Property": as defined in Section 6.9.
"Interest Payment Date": (a) as to any Base Rate Loan, the last
Banking Day in each of March, June, September and December to occur while
such Loan is outstanding, (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 Fronted Offshore Revolving Credit Loan, the date
or dates specified in the applicable Fronting Lender Addendum.
"Interest Period": (a) as to any Eurodollar Loan, (i) 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 or (if available to all Lenders under the relevant Facility) nine
or twelve months thereafter, as selected by Packard in its notice of
borrowing or notice of conversion, as the case may be, given with respect
thereto; and (ii) 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 months or (if available to all Lenders under
the relevant Facility) nine or twelve months thereafter, as selected by
Packard by irrevocable notice to the Administrative Agent not less than
three Banking 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:
(1) if any Interest Period would otherwise end on a day that
is not a Banking Day, such Interest Period shall be extended to the
next succeeding Banking 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 Banking Day;
(2) any Interest Period for Eurodollar Loans under the
applicable Facility that would otherwise extend beyond the Revolving
Credit Termination Date or beyond the date final payment is due on
the Term Loans, as the case may be, shall end on the Revolving
Credit Termination Date or such due date, as applicable;
(3) any Interest Period that begins on the last Banking 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 Banking Day of a calendar month; and
14
(4) Packard shall select Interest Periods so as not to require
a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan; and
(b) as to any Fronted Offshore Revolving Credit Loan, the interest
periods (if any) specified in the applicable Fronting Lender Addendum.
"Interest Rate Protection Agreements": as to any Person, all
interest rate swaps, caps or collar agreements or similar arrangements
entered into by such Person in the ordinary course of business (and not
for speculative purposes) providing for protection against fluctuations in
interest rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"Issuance Date": any Banking Day specified in a notice pursuant to
Section 3.4 as a date on which the Issuing Lender is requested to issue a
Letter of Credit hereunder.
"Issuing Lender": BofA, in its capacity as issuer of any Letter of
Credit.
"Japan Acquisition": the repurchase by Packard Japan KK, a
Subsidiary of Packard, of the outstanding 40% minority interest in its
Capital Stock from the Person holding such Capital Stock for aggregate
consideration of approximately $7,500,000 (subject to currency
fluctuations).
"Japan Debt": the note, in a principal amount not to exceed
$7,500,000 (subject to currency fluctuations), issued by Packard Japan KK
as payment in part for the Japan Acquisition.
"Judgment Currency": as defined in Section 13.15(b).
"L/C Commitment": at any time, the lesser of (a) $11,000,000 and (b)
the Revolving Credit Commitments then in effect.
"L/C Fee Payment Date": the last Banking Day of each March, June,
September and December and the last day of the Revolving Credit Commitment
Period.
"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": the collective reference to all the Revolving
Credit Lenders other than the Issuing Lender.
"Lender": as defined in the preamble to this Agreement, provided
that, (a) to the extent applicable (including, without limitation, for
purposes of Sections 5.11, 5.12, 5.14, 7.1, 7.2 and 7.3), all Fronting
Lenders and the Issuing Lender shall be deemed to be "Lenders" and (b)
unless the context otherwise requires, each Affiliate of a Lender that has
entered into a Hedging Agreement with any Borrower shall be deemed to be a
"Lender" for the purposes of Section 12.
15
"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).
"Loan": any loan made by any Lender (including any Fronting Lender)
pursuant to this Agreement.
"Loan Documents": this Agreement, the Applications, the Security
Documents, each Borrowing Subsidiary Agreement, each Borrowing Subsidiary
Termination, each Fronting Lender Addendum and the Notes.
"Loan Parties": Packard, each Subsidiary Borrower and each other
Subsidiary of Packard which is a party to a Loan Document.
"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 aggregate Revolving
Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"Management Notes": the subordinated notes issued by Packard to
employees, former employees, directors or former directors of Packard or
any of its Subsidiaries, in consideration for the repurchase of shares of,
or options to purchase shares of, common stock of Packard pursuant to the
terms of the agreements or plans approved by the Board of Directors of
Packard which notes (a) have no scheduled amortization or scheduled
maturities earlier than March 31, 2004 and (b) include subordination
provisions substantially in the form set forth on Exhibit P.
"Management Note Payment": as defined in Section 9.9(b).
"Management Stock Payments": as defined in Section 9.6.
"Management Stockholders": the collective reference to (a) ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, Staf van
Cauter, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (b) any other officer of Packard
or any of its Subsidiaries and (c) their respective estates and family
members and any trusts established for the benefit of any of the
foregoing.
"Material Adverse Effect": a material adverse effect on (a) the
Recapitalization, (b) the business, assets, property, condition (financial
or otherwise) or prospects of Packard and its
16
Subsidiaries taken as a whole or (c) the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"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 regulated
as such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Mortgaged Properties": the real properties listed on Schedule 1.1B,
as to which the Administrative Agent for the benefit of the Lenders shall
be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any
Loan Party in favor of, or for the benefit of, the Administrative Agent
for the benefit of the Lenders, substantially in the form of Exhibit G-1
or Exhibit G-2, as applicable (with such changes thereto as shall be
advisable under the law of the jurisdiction in which such mortgage or deed
of trust is to be recorded), as the same may be amended, supplemented or
otherwise modified from time to time.
"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 reasonably expected to be incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 5.12(a).
"Non-Facility Loans Dollar Equivalent": an amount, determined in
good faith by Packard on each date on which a Borrowing Notice or a
Conversion/Continuation Notice is delivered with respect to any Revolving
Credit Loan or Fronted Offshore Revolving Credit Loan, equal to the Dollar
equivalent of the aggregate then outstanding Non-Facility Offshore
Currency Loans (determined, in the case of any Borrowing Notice, after
giving effect to any repayment thereof on the relevant Borrowing Date) and
set forth in such Borrowing Notice or Conversion/Continuation Notice, as
the case may be, based on the exchange rate for such currency published in
The Wall Street Journal under the caption "World Value of the Dollar"
17
on the Business Day immediately preceding the day that the relevant
Borrowing Notice or Conversion/Continuation Notice, as the case may be, is
given. The Non-Facility Loans Dollar Equivalent set forth in any notice
referred to above shall remain in effect until the next such notice is
delivered pursuant to this Agreement.
"Non-Facility Offshore Currency Loans": as defined in Section
9.2(e).
"Non-U.S. Lender": as defined in Section 5.12(b).
"Notes": the collective reference to any promissory note of the
relevant Borrower evidencing Loans made to such Borrower.
"Offshore Currency": a currency that is listed on Schedule 1.1C
hereto or such other currency (other than Dollars) that is freely
tradeable or exchangeable into Dollars and has been approved as an
"Offshore Currency" for the purpose of this Agreement by the
Administrative Agent and the relevant Fronting Lender.
"Offshore Currency Equivalent": at any time as to any amount
denominated in Dollars, the equivalent amount in the relevant Offshore
Currency or Currencies as determined by the Administrative Agent at such
time on the basis of the Spot Rate for the purchase of such Offshore
Currency or Currencies with Dollars on the date of determination thereof.
"Offshore Tranche": the collective reference to Fronted Offshore
Revolving Credit Loans of the same currency the then current Interest
Periods with respect to all of which begin on the same date and end on the
same later date (whether or not such Loans shall originally have been made
on the same day).
"Packard": as defined in the preamble to this Agreement.
"Participant": as defined in Section 13.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"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 Packard 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.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Principal Business": each of (a) the business of supplying
bioanalytical instruments, and related biochemical supplies and services,
to the drug discovery and molecular biology markets and (b) the business
of manufacturing analytical instruments and systems used to detect,
identify and quantify radioactive materials for the nuclear industry and
related markets.
18
"Pro Forma Balance Sheet": as defined in Section 6.1(a).
"Projections": as defined in Section 8.2(c).
"Properties": as defined in Section 6.18(a).
"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.
"Qualified Foreign Subsidiary": (a) any Foreign Subsidiary listed on
Schedule 6.15 and (b) any other Foreign Subsidiary the designation of
which as a Subsidiary Borrower is accompanied by any amendments,
supplements or other modifications to the Security Documents (including,
without limitation, the Mortgages) deemed necessary or appropriate by the
Administrative Agent in connection with such designation.
"Recapitalization": the collective reference to the transactions
described in Section 7.1(b).
"Recapitalization and Stock Purchase Agreement": the
Recapitalization and Stock Purchase Agreement dated as of November 26,
1996 by and among Packard, CII Acquisition and the Management Stockholders
(as defined therein).
"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 Packard or any of its Subsidiaries.
"Reference Rate": the rate of interest in effect for such day as
publicly announced from time to time by BofA in San Francisco, California,
as its "reference rate". The "reference rate" is a rate set by BofA based
upon various factors including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such
announced rate. Any change in the reference rate announced by BofA shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of Packard 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 Packard or any of its
Subsidiaries in connection therewith which are not applied to prepay the
Term Loans pursuant to Section 5.4(c) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which Packard has delivered a Reinvestment Notice.
19
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing
and that Packard (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an
Asset Sale or Recovery Event to acquire assets useful in its business
(including to repair or restore any asset of Packard or any of its
Subsidiaries following casualty or condemnation).
"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 acquire
assets useful in Packard's business (including to repair or restore any
asset of Packard or any of its Subsidiaries following casualty or
condemnation).
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring nine months after such
Reinvestment Event and (b) the date on which Packard shall have determined
not to, or shall have otherwise ceased to, acquire assets useful in
Packard's business (including to repair or restore any asset of Packard or
any of its Subsidiaries following casualty or condemnation) 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
has been waived by the PBGC under PBGC Reg. ss. 4043 (or any successor).
"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 aggregate
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 or
chief financial officer of Packard, but in any event, with respect to
financial matters, the chief financial officer of Packard or any other
officer of Packard responsible for financial matters who is designated as
a "Responsible Officer" by the chief financial officer of Packard in a
written notice to the Administrative Agent.
"Restricted Payments": as defined in Section 9.6.
20
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Credit Loans, participate in
Letters of Credit and participate in Fronted Offshore Revolving Credit
Loans, 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, as the same may be changed from time
to time pursuant to the terms hereof. The original aggregate amount of the
Revolving Credit Commitments is $75,000,000.
"Revolving Credit Commitment Period": the period from and including
the Closing Date to the Revolving Credit Termination Date.
"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.
"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 aggregate 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 the
Revolving Extensions of Credit of such Lender then outstanding constitutes
of the Total Revolving Extensions of Credit then outstanding).
"Revolving Credit Termination Date": the earliest of (a) the
Scheduled Revolving Credit Termination Date and (b) the date on which the
Revolving Credit Commitments are terminated pursuant to Section 10.
"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 (i) the L/C
Obligations and (ii) the Dollar Equivalent of the aggregate outstanding
principal amount of Fronted Offshore Revolving Credit Loans.
"Scheduled Revolving Credit Termination Date": March 31, 2002 or, if
such day is not a Banking Day, the next preceding Banking Day.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages 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.
"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
21
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 Subordinated Note Indenture.
"Spot Rate": as to any Fronted Offshore Currency, the rate quoted by
the relevant Fronting Lender as the spot rate for the purchase by such
Fronting Lender of Dollars with such Fronted Offshore Currency or the
purchase by such Fronting Lender of such Fronted Offshore Currency with
Dollars, as the case may be, at the time specified in such Fronting
Lender's Fronting Lender Addendum and on such date as of which the foreign
exchange computation is made for delivery two Banking Days later.
"Stockholders Agreement": the Stockholders Agreement dated the
Closing Date among Packard, Stonington Capital Appreciation 1994 Fund,
L.P., the Management Stockholders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1994, KECALP
Inc. and certain other stockholders of Packard.
"Stonington": Stonington Partners Inc., a Delaware corporation.
"Subordinated Note Indenture": the Indenture entered into by Packard
and The Bank of New York, as trustee, in connection with the issuance of
the Subordinated Notes, together with all instruments and other agreements
entered into by Packard or any of its Subsidiaries in connection
therewith, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with Section 9.9.
"Subordinated Notes": the senior subordinated notes due 2007 of
Packard issued on the Closing Date.
"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 Packard.
22
"Subsidiary Borrower": at any time, any Qualified Foreign Subsidiary
of Packard designated as a Subsidiary Borrower by Packard pursuant to
Section 5.15 that has not ceased to be a Subsidiary Borrower pursuant to
such Section or Section 12.
"Subsidiary Borrower 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 relevant
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 any Subsidiary Borrower to the Administrative Agent or to
any Lender (or, in the case of any Hedging Agreements, any affiliate of
any Lender (including any Fronting 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 Hedging
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 any
Subsidiary Borrower pursuant hereto) or otherwise.
"Subsidiary Guarantor": each Subsidiary of Packard other than any
Foreign Subsidiary and any Inactive Subsidiary.
"Subsidiary Restrictions": as defined in Section 9.14.
"Technology Acquisition": to the extent not included in Capital
Expenditures, any expenditure by Packard or any of its Subsidiaries in
connection with the acquisition of licenses, trademarks, patents or
technology.
"Term Loan": as defined in Section 2.1.
"Term Loan Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to Packard hereunder in a principal
amount not to exceed the amount set forth under the heading "Term Loan
Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Term Loan Commitments is $40,000,000.
"Term Loan Lender": each Lender which has a Term Loan Commitment or
which has made a Term Loan.
"Term Loan Percentage": as to any Lender at any time, the percentage
which such Lender's Term Loan Commitment then constitutes of the aggregate
Term Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's Term
Loans then outstanding constitutes of the aggregate principal amount of
the Term Loans then outstanding).
"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.
23
"Total Utilized Commitments": at any time, the aggregate amount of
the Utilized Commitments of the Revolving Credit Lenders at such time.
"Transferee": as defined in Section 13.16.
"Type": as to any Loan, its nature as a Base Rate Loan, a Eurodollar
Loan or a Fronted Offshore Revolving Credit 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.
"Utilized Commitment": 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 (i) the L/C Obligations, (ii)
the Dollar Equivalent of the aggregate outstanding principal amount of
Fronted Offshore Revolving Credit Loans and (iii) the Non-Facility Loans
Dollar Equivalent.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than 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 Packard.
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 Packard and its Subsidiaries not defined in Section
1.1 and accounting terms partly defined in 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 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.
SECTION 2. AMOUNT AND TERMS OF TERM LOAN AND
REVOLVING CREDIT LOAN COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
hereof, each Term Loan Lender severally agrees to make a term loan denominated
in Dollars (a "Term Loan") to Packard on the Closing Date in an amount not to
exceed the amount of the Term Loan Commitment
24
of such Lender. The Term Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by Packard and notified to the Administrative Agent in
accordance with Sections 2.2 and 5.5.
2.2 Procedure for Term Loan Borrowing. Packard shall give the
Administrative Agent irrevocable telephonic notice (promptly confirmed in
writing in a Borrowing Notice), which notice must be received by the
Administrative Agent prior to 8:30 A.M., San Francisco time, one Banking Day
prior to the anticipated 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 Base Rate
Loans. Upon receipt of such notice the Administrative Agent shall promptly
notify each Term Loan Lender thereof. Not later than 10:00 A.M., San Francisco
time, on the Closing Date, each Term Loan Lender shall make available to the
Administrative Agent at the Administrative Agent's Payment Office an amount in
Dollars and in immediately available funds equal to the Term Loan to be made by
such Lender. The Administrative Agent shall credit the account of Packard on the
books of such office of the Administrative Agent with the aggregate of the
amounts made available to the Administrative Agent by the Term Loan Lenders in
immediately available funds (or, in the event that Packard specifies in the
relevant Borrowing Notice a different account to which such amounts should be
transferred, the Administrative Agent shall transfer, by wire transfer, to such
account the aggregate amount made available to the Administrative Agent by the
Term Loan Lenders in immediately available funds).
2.3 Repayment of Term Loans. The Term Loan of each Term Loan Lender
shall mature in 23 consecutive quarterly installments, commencing on September
30, 1997, each of which shall be in an amount equal to such Lender's Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
25
Installment Principal Amount
----------- ----------------
September 30, 1997 $100,000
December 31, 1997 100,000
March 31, 1998 100,000
June 30, 1998 100,000
September 30, 1998 100,000
December 31, 1998 100,000
March 31, 1999 100,000
June 30, 1999 100,000
September 30, 1999 100,000
December 31, 1999 100,000
March 31, 2000 100,000
June 30, 2000 100,000
September 30, 2000 100,000
December 31, 2000 100,000
March 31, 2001 100,000
June 30, 2001 100,000
September 30, 2001 100,000
December 31, 2001 100,000
March 31, 2002 100,000
June 30, 2002 100,000
September 30, 2002 9,500,000
December 31, 2002 9,500,000
March 31, 2003 19,000,000
2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans denominated in Dollars (each, a "Revolving Credit Loan")
to Packard 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 sum of (i) the L/C Obligations then
outstanding, (ii) the Dollar Equivalent of the then outstanding principal amount
of Fronted Offshore Revolving Credit Loans (after giving effect to the use of
proceeds of such Revolving Credit Loans) and (iii) the Non-Facility Loans Dollar
Equivalent, does not exceed the amount of such Revolving Credit Lender's
Revolving Credit Commitment. During the Revolving Credit Commitment Period,
Packard 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 Base Rate Loans, as determined by Packard and
notified to the Administrative Agent in accordance with Sections 2.5 and 5.5,
provided that no Revolving Credit Loan shall be made as a Eurodollar Loan after
the day that is one month prior to the Scheduled Revolving Credit Termination
Date.
(b) Packard hereby unconditionally promises to pay to the
Administrative Agent for the account of each Revolving Credit Lender the then
unpaid principal amount of each Revolving Credit Loan of such Lender on the
Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. Packard may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Banking Day, provided that Packard shall give the Administrative
Agent irrevocable telephonic notice (promptly
26
confirmed in writing in a Borrowing Notice) (which notice must be received by
the Administrative Agent prior to 8:30 A.M., San Francisco time, (a) three
Banking Days prior to the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) one Banking Day prior to the requested Borrowing Date, in the case
of Base Rate Loans), specifying (i) the amount and Type of Revolving Credit
Loans to be borrowed, (ii) the requested Borrowing Date, (iii) in the case of
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Period therefor and (iv) the
Non-Facility Loans Dollar Equivalent. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of Base Rate Loans,
$1,000,000 or a whole multiple of $500,000 in excess 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
Packard, 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 Packard at the Administrative Agent's Payment Office prior to 11:00
A.M., San Francisco time, on the Borrowing Date requested by Packard in Dollars
and in funds immediately available to the Administrative Agent. Such borrowing
will then be made available to Packard by the Administrative Agent crediting the
account of Packard on the books of such office with the aggregate of the amount
made available to the Administrative Agent by the Revolving Credit Lenders and
in like funds as received by the Administrative Agent (or, in the event that
Packard specifies in the relevant Borrowing Notice a different account into
which such amounts should be transferred, the Administrative Agent shall
transfer to such account the aggregate amount made available to the
Administrative Agent by the Revolving Credit Lenders in like funds as received
by the Administrative Agent).
SECTION 3. LETTERS OF CREDIT
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 Packard on any Banking 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 (i) after giving effect to such issuance, (A) the
L/C Obligations would exceed the L/C Commitment or (B) the aggregate amount of
the Available Revolving Credit Commitments would be less than zero or (ii) it
has not received notice from the Administrative Agent that the issuance of such
Letter of Credit will not violate clause (i) above. 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 30
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.
27
3.2 Procedure for Issuance of Letter of Credit. Packard may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering concurrently to each of the Administrative Agent and the Issuing
Lender at its address for notices specified herein an Application therefor
(including a written notice specifying the Non-Facility Loans Dollar
Equivalent), completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application and the approval of the
Administrative Agent as evidenced by the notice referred to in Section 3.1(a)
(ii), 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 Packard. The Issuing Lender shall furnish
a copy of each Letter of Credit to Packard and the Administrative Agent promptly
following the issuance thereof. The Administrative Agent shall promptly furnish
to the Revolving Credit Lenders notice of the issuance of each Letter of Credit.
3.3 Commissions, Fees and Other Charges. (a) Packard will pay to the
Administrative Agent, for the account of the Revolving Credit Lenders, a letter
of credit commission with respect to each Letter of Credit, computed for the
period from and including the date of issuance of such Letter of Credit to the
date such Letter of Credit is no longer outstanding, computed at a rate per
annum equal to the Applicable Margin from time to time applicable to Eurodollar
Loans under the Revolving Credit Facility on the average aggregate daily amount
available to be drawn under such Letter of Credit for the period as to which
payment of such commission is made, payable quarterly in arrears on each L/C Fee
Payment Date to occur while such Letter of Credit remains outstanding and on the
date such Letter of Credit expires or is cancelled. In addition, Packard shall
pay to the Issuing Lender for its own account a fronting fee of 1/2 of 1% per
annum on the average aggregate amount available to be drawn under Letters of
Credit outstanding during the period for which such fee is calculated, payable
quarterly in arrears on each L/C Fee Payment Date to occur while such Letter of
Credit remains outstanding and on the date such Letter of Credit expires or is
cancelled.
(b) In addition to the foregoing fees and commissions, Packard 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.
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 Packard 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
28
reimbursed. Each L/C Participant's obligation to make the payment referred to in
the immediately preceding sentence shall be absolute and unconditional and shall
not be affected by any circumstance, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right which such L/C
Participant or any Borrower may have against the Issuing Lender, any Borrower or
any other Person for any reason whatsoever, (ii) the occurrence or continuance
of a Default or an Event of Default, (iii) any adverse change in the condition
(financial or otherwise) of any Borrower, (iv) any breach of this Agreement by
any Loan Party or any other Lender or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
(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 not paid
to the Issuing Lender when due but is paid within three Business Days after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
(through the Administrative Agent) on demand (i) an amount equal to the product
of (x) such amount, times (y) 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
(z) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360 and (ii) a customary
administrative fee with respect thereto. 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 Base Rate Loans under the
Revolving Credit Facility. A certificate of the Issuing Lender submitted to any
L/C Participant (with a copy to be provided promptly to the Administrative
Agent) with respect to any amounts owing under this Section 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
Packard 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, however, 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.
3.5 Reimbursement Obligation of Packard. If any draft shall be
presented for payment under any Letter of Credit issued by the Issuing Lender,
the Issuing Lender shall promptly notify Packard of the date and amount thereof.
If the Issuing Lender notifies Packard prior to 8:30 A.M., San Francisco time,
on any Business Day, of any drawing under any Letter of Credit issued by it,
Packard shall reimburse the Issuing Lender with respect to such drawing on such
Business Day. If the Issuing Lender notifies Packard after 8:30 A.M., San
Francisco time, on any Business Day of any drawing under any Letter of Credit
issued by it, Packard shall reimburse the Issuing Lender with respect to such
drawing on the next succeeding Business Day and interest shall be payable on the
amount of such drawing for such period at the rate then applicable to Base Rate
Loans under the Revolving Credit Facility. In addition, Packard agrees to
reimburse the Issuing Lender for any taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with any payment under any
Letter of Credit. Each payment by Packard pursuant to this Section 3.5 shall be
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made to the Issuing Lender at its address for notices specified herein in
Dollars and in immediately available funds.
3.6 Obligations Absolute. Packard's obligations under this Section 3
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which Packard may
have or have had against the Issuing Lender, any beneficiary of a Letter of
Credit or any other Person. Packard also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and Packard's Reimbursement
Obligations under Section 3.5 shall not be affected by, 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 Packard 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 Packard 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. Packard 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
Packard and shall not result in any liability of the Issuing Lender to Packard.
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
Packard of the date and amount thereof. The responsibility of the Issuing Lender
to Packard 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 substantially in conformity with such Letter of Credit.
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 Section 3 or any other terms of this Agreement or any other Loan
Document, the provisions of this Section 3 or such other terms shall apply.
SECTION 4. AMOUNT AND TERMS OF FRONTED OFFSHORE REVOLVING CREDIT LOANS
4.1 Fronted Offshore Revolving Credit Subfacility. Subject to the
terms and conditions hereof, each Fronting Lender severally agrees to make
revolving credit loans (each, a "Fronted Offshore Revolving Credit Loan") to the
relevant Subsidiary Borrowers from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
the Dollar Equivalent of which shall not exceed, with respect to each Fronted
Offshore Currency, the related Fronted Offshore Currency Sublimit of such
Fronting Revolving Credit Lender, provided that, (a) after giving effect to any
such Fronted Offshore Revolving Credit Loan, the aggregate amount of the
Available Revolving Credit Commitments at such time would not be less than zero,
(b) after giving effect to such Fronted Offshore Revolving Credit Loan and the
use of proceeds thereof, the Dollar Equivalent of the aggregate outstanding
principal amount of Fronted Offshore
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Revolving Credit Loans does not exceed the Fronted Offshore Revolving Credit
Loan Sublimit for all Fronted Offshore Revolving Credit Loans and (c) no
Fronting Lender shall make any Fronted Offshore Revolving Credit Loan unless it
shall have received notice from the Administrative Agent that the making of such
Fronted Offshore Revolving Credit Loan will not violate clause (a) or (b) above.
During the Revolving Credit Commitment Period, the Subsidiary Borrowers may use
the Fronted Offshore Revolving Credit Subfacility by borrowing, prepaying
Fronted Offshore Revolving Credit Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof.
4.2 Procedure for Fronted Offshore Revolving Credit Loan Borrowings.
Any Subsidiary Borrower may borrow under the Fronted Offshore Revolving Credit
Subfacility during the Revolving Credit Commitment Period on any Banking Day,
provided that Packard or its authorized designee shall give the relevant
Fronting Lender and the Administrative Agent irrevocable written notice in the
form of a Borrowing Notice (which Borrowing Notice must be received by the
Fronting Lender and the Administrative Agent prior to the applicable time
specified therefor in such Fronting Lender's Fronting Lender Addendum)
specifying (a) the amount to be borrowed and the Fronted Offshore Currency with
respect thereto, (b) the requested Borrowing Date, (c) the Subsidiary Borrower
to which such Fronted Offshore Revolving Credit Loan is to be made, (d) the
Non-Facility Loans Dollar Equivalent and (e) the initial Interest Periods (if
any) with respect thereto; provided, further, that, notwithstanding anything to
the contrary in any Fronting Lender Addendum, no Fronting Lender shall make a
Fronted Offshore Revolving Credit Loan until it shall have received the notice
described in clause (c) of the proviso to the first sentence of Section 4.1,
upon receipt of which such Fronting Lender shall make the relevant Fronted
Offshore Revolving Credit Loan in accordance with the terms of the applicable
Fronting Lender Addendum or as soon thereafter as practicable. Each borrowing
under the Fronted Offshore Revolving Credit Subfacility from a Fronting Lender
shall be in such minimum amounts as shall be specified in the applicable
Fronting Lender's Fronting Lender Addendum. The proceeds of each Fronted
Offshore Revolving Credit Loan will be made available by the Fronting Lender in
respect thereof to the relevant Subsidiary Borrower at such Lender's Fronting
Lender's Payment Office at such time on the Borrowing Date and in such funds as
are specified in such Fronting Lender's Fronting Lender Addendum.
4.3 Fronted Offshore Revolving Credit Loans Fees, Commissions and
Other Charges. (a) Each Subsidiary Borrower shall pay to the relevant Fronting
Lender with respect to each Fronted Offshore Revolving Credit Loan made to it by
such Fronting Lender, for the account of such Fronting Lender, a fronting fee
with respect to the period from and including the date of such Fronted Offshore
Revolving Credit Loan to but excluding the date of repayment thereof computed at
a rate of 3/8% per annum on the average daily principal amount of such Fronted
Offshore Revolving Credit Loan outstanding during the period for which such fee
is calculated. Such fronting fee shall be payable in arrears on each Fee Payment
Date to occur after the making of such Fronted Offshore Revolving Credit Loan
and on the final maturity date in respect of such Fronted Offshore Revolving
Credit Loan (or on such earlier date as such Fronted Offshore Revolving Credit
Loan shall become due and payable as provided herein) and shall be
nonrefundable.
(b) Each Subsidiary Borrower shall pay to the relevant Fronting
Lender, for the account of the Fronted Revolving Credit Loan Participants, a
participation fee with respect to each Fronted Offshore Revolving Credit Loan
made by such Fronting Lender to such Subsidiary Borrower, with respect to the
period from and including the date of such Loan to but excluding the date of
repayment thereof, computed at a rate per annum equal to the Applicable Margin
in respect of Eurodollar Loans that are Revolving Credit Loans from time to time
in effect on the average daily principal amount of such Fronted Offshore
Revolving Credit Loan outstanding during the period for
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which such fee is calculated. Each such participation fee shall be shared
ratably among the relevant Fronted Revolving Credit Loan Participants in
accordance with their respective Revolving Credit Commitment Percentages. Each
such participation fee shall be payable in arrears on each Fee Payment Date to
occur after the making of the relevant Fronted Offshore Revolving Credit Loan
and on the final maturity date in respect of such Fronted Offshore Revolving
Credit Loan (or on such earlier date as such Fronted Offshore Revolving Credit
Loan shall become due and payable as provided herein) and shall be
nonrefundable. Upon receipt of any payment pursuant to this paragraph, each
Fronting Lender shall promptly convert such payment to Dollars at the Spot Rate
determined by the Fronting Lender to be in effect on the date of such conversion
and shall promptly forward such amount in Dollars to the Administrative Agent at
the Administrative Agent's Payment Office.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the relevant Fronted Revolving Credit Loan Participants
all fees received by the Administrative Agent for their respective accounts
pursuant to Section 4.3(b).
4.4 Participations. (a) Each Fronting Lender irrevocably agrees to
grant and hereby grants to each Fronted Revolving Credit Loan Participant (other
than such Fronting Lender), and, to induce such Fronting Lender to make Fronted
Offshore Revolving Credit Loans hereunder, each such Fronted Revolving Credit
Loan Participant irrevocably agrees to accept and purchase and hereby accepts
and purchases from such Fronting Lender, on the terms and conditions hereinafter
stated, for such Fronted Revolving Credit Loan Participant's own account and
risk an undivided interest equal to such Fronted Revolving Credit Loan
Participant's Revolving Credit Commitment Percentage in such Fronting Lender's
obligations and rights in respect of each Fronted Offshore Revolving Credit Loan
made by such Fronting Lender hereunder. Each such Fronted Revolving Credit Loan
Participant unconditionally and irrevocably agrees with each Fronting Revolving
Credit Lender that, if any amount in respect of the principal, interest or fees
owing to such Fronting Lender in respect of a Fronted Offshore Revolving Credit
Loan is not paid when due in accordance with the terms of this Agreement, such
Fronted Revolving Credit Loan Participant shall pay to the Fronting Lender
(through the Administrative Agent) upon demand an amount in the relevant
Offshore Currency equal to such Fronted Revolving Credit Loan Participant's
Revolving Credit Commitment Percentage of such unpaid amount.
(b) Each Fronted Revolving Credit Loan Participant's obligation to
make the payment referred to in Section 4.4(a) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which any Fronted Revolving Credit Loan Participant or any Subsidiary Borrower
may have against any Fronting Lender, any Subsidiary Borrower or any other
Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default or an Event of Default, (iii) any adverse change in the condition
(financial or otherwise) of any Borrower, (iv) any breach of this Agreement or
any other Loan Document by any Loan Party or any other Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
(c) If any amount required to be paid by any Fronted Revolving
Credit Loan Participant to any Fronting Lender pursuant to Section 4.4(a) is not
paid to such Fronting Lender when due but is paid within three Banking Days
after the date such payment is due, such Fronted Revolving Credit Loan
Participant shall pay to such Fronting Lender on demand an amount equal to the
product of (i) such amount, times (ii) the Cost of Funds in respect of the
related Offshore Currency determined by such Fronting Lender during the period
from and including the date such payment is required to the date on which such
payment is immediately available to such Fronting Lender, times (iii) a fraction
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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
Fronted Revolving Credit Loan Participant pursuant to Section 4.4(a) is not in
fact made available to any Fronting Lender by such Fronted Revolving Credit Loan
Participant within three Banking Days after the date such payment is due, such
Fronting Lender shall be entitled to recover from such Fronted Revolving Credit
Loan Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum equal to the rate applicable thereto in
accordance with the preceding sentence plus the Applicable Margin in respect of
Eurodollar Loans that are Revolving Credit Loans. A certificate of any Fronting
Lender submitted to any Fronted Revolving Credit Loan Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(d) Whenever, at any time after any Fronting Lender has received
from any Fronted Revolving Credit Loan Participant the full amount owing by such
Fronted Revolving Credit Loan Participant pursuant to and in accordance with
Section 4.4(a) in respect of any Fronted Offshore Revolving Credit Loan, such
Fronting Lender receives any payment related to such Fronted Offshore Revolving
Credit Loan (whether directly from the relevant Subsidiary Borrower or
otherwise, including proceeds of collateral applied thereto by such Fronting
Lender), or any payment of interest on account thereof, such Fronting Lender
will promptly distribute to such Fronted Revolving Credit Loan Participant its
pro rata share thereof.
(e) If any payment received by any Fronting Lender pursuant to
Section 4.4(c) with respect to any Fronted Offshore Revolving Credit Loan made
by it shall be required to be returned by such Fronting Lender, each Fronted
Revolving Credit Loan Participant shall pay to such Fronting Lender its pro rata
share thereof.
4.5 Offshore Currency Spot Rate. (a) (i) No later than the time
specified in the applicable Fronting Lender Addendum, on each Calculation Date
with respect to a Fronted Offshore Currency, the relevant Fronting Lender shall
determine the Spot Rate as of such Calculation Date with respect to such Fronted
Offshore Currency and shall promptly notify the Administrative Agent thereof,
provided that, upon receipt of a Borrowing Notice pursuant to Section 4.2 or a
Conversion/Continuation Notice pursuant to Section 5.5 with respect to the
continuation of a Fronted Offshore Revolving Credit Loan, the relevant Fronting
Lender shall determine the Spot Rate with respect to the relevant Fronted
Offshore Currency in accordance with the Fronting Lender Addendum and shall
promptly notify the Administrative Agent thereof (it being acknowledged and
agreed that the Administrative Agent shall use such Spot Rate for the purposes
of determining compliance with Section 4.1 with respect to such borrowing
request and issuing the notice described in clause (c) of the proviso to the
first sentence of Section 4.1). The Spot Rates so determined shall become
effective on the relevant Calculation Date and shall remain effective until the
next succeeding Calculation Date.
(b) The Administrative Agent shall promptly notify Packard of each
determination of a Spot Rate hereunder.
4.6 Repayment of Fronted Offshore Revolving Credit Loans. Each
Subsidiary Borrower hereby unconditionally promises to pay to the relevant
Fronting Revolving Credit Lender the then unpaid principal amount of each
Fronted Offshore Revolving Credit Loan made by such Fronting Lender to such
Subsidiary Borrower, in each case on the Revolving Credit Termination Date (or
such earlier date on which the Fronted Revolving Credit Loans become due and
payable pursuant to Section 10 or as may be specified in the Fronting Bank
Addendum of such Fronting Bank).
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SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
5.1 Commitment Fees, etc. (a) Packard 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
Banking Day of the Revolving Credit Commitment Period, computed at the
Commitment Fee Rate on the average daily amount of the Available Revolving
Credit Commitment (calculated without taking into account any outstanding
Non-Facility Offshore Currency Loans) of such Lender during the period for which
payment is made, payable quarterly in arrears on the last Banking 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) Packard agrees to pay to the Administrative Agent the fees in
the amounts and on the dates previously agreed to in writing by Packard and the
Administrative Agent.
5.2 Termination or Reduction of Revolving Credit Commitments.
Packard 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 and/or the Fronted Offshore Revolving Credit Loans made
on the effective date thereof, the Total Utilized Commitments would exceed the
Revolving Credit Commitments then in effect. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments then in effect.
5.3 Optional Prepayments. (a) Packard may at any time and from time
to time prepay the Base Rate Loans and the Eurodollar Loans, in whole or in
part, without premium or penalty except as specified in Section 5.13, upon
irrevocable notice delivered to the Administrative Agent (which notice must be
received by the Administrative Agent prior to 8:30 A.M., San Francisco time) at
least three Banking Days prior thereto in the case of Eurodollar Loans and at
least one Banking Day prior thereto in the case of Base Rate Loans, which notice
shall specify the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans or Base Rate Loans; provided, that if a Eurodollar Loan is
prepaid on any day other than the last day of the Interest Period applicable
thereto, Packard shall also pay any amounts owing pursuant to Section 5.13. 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 Base Rate 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 equal
to (i) in the case of Base Rate Loans, $1,000,000 or a whole multiple of
$500,000 in excess thereof and (ii) in the case of Eurodollar Loans, $1,000,000
or a whole multiple thereof.
(b) Each Subsidiary Borrower may at any time and from time to time
prepay Fronted Offshore Revolving Credit Loans, in whole or in part, without
premium or penalty except as specified in Section 5.13, upon at least four
Banking Days' irrevocable notice (or such other number of days as may be
specified in the Fronting Bank Addendum of such Fronting Lender in its
discretion) to the relevant Fronting Lender and the Administrative Agent,
specifying the date and amount of prepayment. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with any amounts payable pursuant to Section 5.13 and accrued
interest to such date on the amount prepaid. Partial prepayments of Fronted
Offshore Revolving Credit Loans
34
shall be in such minimum amounts as shall be specified in the Fronting Bank
Addendum of the relevant Fronting Lender.
(c) Prepayments made pursuant to this Section 5.3 shall be made in
accordance with Section 5.10.
5.4 Mandatory Term Loan Prepayments. (a) Unless the Required
Prepayment Lenders shall otherwise agree, if after the Closing Date any Capital
Stock of Packard shall be sold or issued by Packard (other than in connection
with any sale or issuance of Capital Stock of Packard, or options exercisable
for the purchase of such Capital Stock, made to the officers, employees or
directors of Packard or any of its Subsidiaries, to the extent the aggregate Net
Cash Proceeds thereof do not exceed $2,000,000 in any fiscal year of Packard),
an amount equal to 50% of the Net Cash Proceeds thereof shall be applied on the
date of such sale or issuance toward the prepayment of the Term Loans as set
forth in Section 5.4(e).
(b) Unless the Required Prepayment Lenders shall otherwise agree,
after the Closing Date if any Indebtedness shall be issued or Incurred by
Packard or any of its Subsidiaries (excluding any Indebtedness Incurred in
accordance with Section 9.2), 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 as set forth in Section 5.4(e).
(c) Unless the Required Prepayment Lenders shall otherwise agree, if
on any date Packard 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, an amount equal to 100% of such Net Cash
Proceeds shall be applied on such date toward the prepayment of the Term Loans
as set forth in Section 5.4(e); provided, that, notwithstanding the foregoing,
(i) the aggregate Net Cash Proceeds of Asset Sales that may be excluded from the
foregoing requirement pursuant to a Reinvestment Notice shall not exceed
$5,000,000 in any fiscal year of Packard 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 as set forth in Section 5.4(e). Notwithstanding the
foregoing, Packard may in each fiscal year exclude up to $200,000 of Net Cash
Proceeds of Asset Sales or Recovery Events from the requirements of this
paragraph (c).
(d) Unless the Required Prepayment Lenders shall otherwise agree, if
(i) for the period of three fiscal quarters of Packard ending December 31, 1997
or (ii) for any fiscal year of Packard commencing with the fiscal year ending
December 31, 1998, there shall be Excess Cash Flow, Packard shall, on the
relevant Excess Cash Flow Application Date, apply the Excess Cash Flow
Percentage of such Excess Cash Flow toward the prepayment of the Term Loans as
set forth in Section 5.4(e). Each such prepayment shall be made on a date (an
"Excess Cash Flow Application Date") no later than five days after the earlier
of (x) the date on which the financial statements of Packard referred to in
Section 8.1(a)(i), for the fiscal year with respect to which such prepayment is
made (or, in the case of clause (i) above, the 1997 fiscal year), are required
to be delivered to the Lenders and (y) the date such financial statements are
actually delivered.
(e) (i) The application of any prepayment pursuant to Section 5.4
shall be made first to Base Rate Loans and second to Eurodollar Loans. Each
prepayment of the Loans under Section 5.4 shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid. Prepayments made
pursuant to this Section 5.4 shall be made in accordance with Section 5.10.
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(ii) Notwithstanding the foregoing, in the event the amount of any
prepayment required to be made pursuant to Section 5.4(d) shall exceed the
aggregate principal amount of the Base Rate Loans outstanding under the
Facilities required to be prepaid (the amount of any such excess being called
the "Excess Amount"), Packard shall have right, in lieu of making such
prepayment in full, to prepay all the outstanding applicable Base Rate Loans and
to deposit an amount equal to the Excess Amount in a cash collateral account
maintained by and in the sole dominion and control of the Administrative Agent.
Any amounts so deposited shall be held by the Administrative Agent as collateral
for the repayment obligations of Packard under Section 5.4(d) and applied to the
prepayment of the applicable Eurodollar Loans at the end of the current Interest
Periods applicable thereto. On any Banking Day on which (x) collected amounts
remain on deposit in or to the credit of such cash collateral account after
giving effect to the payments made on such day pursuant to this paragraph
(e)(ii) and (y) Packard shall have delivered to the Administrative Agent a
written request or a telephonic request (which shall be promptly confirmed in
writing) that such remaining collected amounts be invested in Cash Equivalents
specified in such request, the Administrative Agent shall use its reasonable
efforts to invest such remaining collected amounts in such Cash Equivalents;
provided, however, that the Administrative Agent shall have continuous dominion
and full control over any such investments (and over any interest that accrues
thereon) to the same extent that it has dominion and control over such cash
collateral account and no Cash Equivalents shall mature after the end of the
Interest Period for which it is to be applied. Packard shall have the right to
withdraw any remaining amounts from such cash collateral account (including any
interest that accrues thereon) once the applicable Eurodollar Loans and accrued
interest thereon are paid in full, so long as no Default or Event of Default
then exists or would result therefrom.
(f) Notwithstanding anything to the contrary in Section 5.4(e) or
5.10, with respect to the amount of any mandatory prepayment described in
Section 5.4 (such amount, the "Term Loan Prepayment Amount"), Packard will, in
lieu of applying such amount to the prepayment of Term Loans as provided in
paragraph (e) above, on the date specified in Section 5.4 for such prepayment,
give the Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each Term Loan
Lender a notice (each, a "Prepayment Option Notice") as described below. As
promptly as practicable after receiving such notice from Packard, the
Administrative Agent will send to each Term Loan Lender a Prepayment Option
Notice, which shall be in the form of Exhibit H, and shall include an offer by
Packard to prepay on the date (each a "Mandatory Prepayment Date") that is 10
Business Days after the date of the Prepayment Option Notice, the 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
Term Loans. On the Mandatory Prepayment Date, (A) Packard shall pay to the
Administrative Agent the aggregate amount necessary to prepay that portion of
the outstanding Term Loans in respect of which Term Loan Lenders have accepted
prepayment as described above (such Lenders, the "Accepting Lenders"), and such
amount shall be applied to reduce the Term Loan Prepayment Amount with respect
to each Accepting Lender and (B) Packard shall be entitled to retain the portion
of the Term Loan Prepayment Amount not accepted by the Accepting Lenders.
(g) If, (i) on the last Banking Day of each March, June, September
and December, the Dollar Equivalent of the aggregate outstanding principal
amount of Fronted Offshore Revolving Credit Loans exceeds an amount equal to
103% of the Fronted Offshore Revolving Credit Loan Sublimit for all Fronted
Offshore Revolving Credit Loans or (ii) on any day, the Total Utilized
Commitments exceeds the aggregate Revolving Credit Commitments on such date,
Packard shall, without notice or demand, immediately repay (or cause the
relevant Subsidiary Borrower to repay) such of the outstanding Loans in an
aggregate principal amount such that, after giving effect thereto, (x) the
Dollar
36
Equivalent of the aggregate outstanding principal amount of Fronted Offshore
Revolving Credit Loans does not exceed the Fronted Offshore Revolving Credit
Loan Sublimit for all Fronted Offshore Revolving Credit Loans and (y) the Total
Utilized Commitments does not exceed the aggregate Revolving Credit Commitments,
together with interest accrued to the date of such payment or prepayment on the
principal so prepaid and any amounts payable under Section 5.13 in connection
therewith. Any prepayment of Fronted Revolving Credit Loans pursuant to the
immediately preceding sentence shall be applied to prepay such Fronted Offshore
Revolving Credit Loans as Packard may determine.
5.5 Conversion and Continuation Options. (a) Packard may elect from
time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least one Banking Day's prior irrevocable telephonic
notice (promptly confirmed in writing in a Conversion/Continuation Notice) of
such election (which notice must be received by the Administrative Agent prior
to 8:30 A.M., San Francisco time), provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. Packard may elect from time to time to convert Base Rate Loans
to Eurodollar Loans by giving the Administrative Agent at least three Banking
Days' prior irrevocable notice of such election specifying the length of the
initial Interest Period therefor (which notice must be received by the
Administrative Agent prior to 8:30 A.M., San Francisco time), provided that no
Base Rate Loan under a particular Facility may be converted into a Eurodollar
Loan (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
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 or Fronted Offshore Revolving Credit Loan
may be continued as such upon the expiration of the then current Interest Period
with respect thereto by Packard or the relevant Borrower giving irrevocable
telephonic notice (promptly confirmed in writing in a Conversion/Continuation
Notice) to the Administrative Agent and, in the case of a Fronted Offshore
Revolving Credit Loan, to the relevant Fronting Offshore Lender, 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 (x) in the case of Eurodollar Loans, if the relevant 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 Base Rate Loans on the last day of such then
expiring Interest Period and (y) in the case of Fronted Offshore Revolving
Credit Loans, if the relevant Borrower shall fail to give such notice of
continuation of a Fronted Offshore Revolving Credit Loan, such Loan shall be
automatically continued for an Interest Period of one month. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
(c) In no event shall a Eurodollar Loan or Fronted Offshore
Revolving Credit Loan be continued pursuant to Section 5.5(b) to the extent that
on the date of such continuation the Total Utilized Commitments then outstanding
exceed the aggregate Revolving Credit Commitments.
37
5.6 Minimum Amounts and Maximum Number of Eurodollar and Offshore
Currency 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 eight Eurodollar
Tranches shall be outstanding at any one time. In addition, in no event shall
there be more than two Offshore Tranches in any single Fronted Offshore Currency
outstanding at any time.
5.7 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 Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) Each Fronted Offshore Revolving Credit Loan shall bear interest
for each day during each Interest Period with respect thereto (or, if there is
no Interest Period with respect thereto, for each day such Loan is outstanding)
at a rate per annum equal to the applicable Cost of Funds determined for such
day.
(d) (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 principal of Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section 5.7 plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to Base Rate 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, participation 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 (x) in the case of amounts denominated in Dollars, the rate
applicable to Base Rate 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
Base Rate plus 3-3/4%) and (y) in the case of amounts denominated in an Offshore
Currency, the Cost of Funds determined by the Administrative Agent in respect of
such Offshore Currency plus the Applicable Margin applicable to Loans under the
Revolving Credit Facility plus 2%, 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).
(e) Interest shall be payable by the relevant Borrower in arrears on
each Interest Payment Date and on the Revolving Credit Termination Date (in the
case of the Revolving Credit Loans and the Fronted Offshore Revolving Credit
Loans) and the date of the final installment of principal of the Term Loans,
provided that interest accruing pursuant to paragraph (d) of this Section 5.7
shall be payable from time to time on demand.
5.8 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 Base Rate
Loans the rate of interest on which is calculated on the basis of the Reference
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case
38
may be) day year for the actual days elapsed. The Administrative Agent shall as
soon as practicable notify Packard 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 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 Packard 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 or a Fronting Lender pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrowers and the Lenders in the absence of
manifest error.
5.9 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 Borrowers) 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,
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined 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, or
(c) a Fronting Lender shall have determined (which determination
shall be conclusive and binding upon the Borrowers) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Cost of Funds for such Interest Period
in respect of any Fronted Offshore Currency (any such currency shall also
be an "affected Offshore Currency"),
the Administrative Agent (or the relevant Fronting Lender, in the case of clause
(c) above) shall give telecopy or telephonic notice thereof to the relevant
Borrower and the relevant Lenders (and, in the case of any notice by a Fronting
Lender, the Administrative Agent) as soon as practicable thereafter. If such
notice is given as provided in clause (a) or (b) above, (i) any Eurodollar Loans
under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (ii) 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 Base Rate Loans and
(iii) any outstanding Eurodollar Loans under the relevant Facility shall be
converted to Base Rate Loans on the last day of the Interest Period applicable
thereto. If such notice is given as provided in clause (c) above, (i) any
Foreign Offshore Loans in an affected Offshore Currency requested to be made on
the first day of such Interest Period shall not be made and (ii) any outstanding
Foreign Offshore Loans in an affected Offshore Currency shall be due and payable
on the first day of such Interest Period. Until such notice has been withdrawn
by the Administrative Agent, no further Eurodollar Loans or Fronted Offshore
Revolving Credit Loans in an affected Offshore Currency, as the case may be,
under the relevant Facility shall be made or continued as such, nor, in the case
of clause (a) or (b) above, shall the Borrower have the right to convert Loans
under the relevant Facility to Eurodollar Loans.
39
5.10 Pro Rata Treatment and Payments. (a) Each borrowing by Packard
from the Lenders hereunder (other than of Fronted Offshore Revolving Credit
Loans), each payment by Packard on account of any commitment fee and any
reduction of the Commitments of the Lenders shall be made, with regard to the
applicable Facility, pro rata according to the respective Term Loan Percentages
or Revolving Credit Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by Packard 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 5.4(f)). The
amount of each principal payment of the Term Loans shall be applied to reduce
the then remaining installments of the Term Loans pro rata based upon the then
remaining outstanding principal amount of such installments.
(c) Each payment (including each prepayment) by Packard 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) All payments (including prepayments) to be made by Packard
hereunder, in respect of Letters of Credit and Loans, whether on account of
principal, interest, fees or otherwise, shall be made without setoff or
counterclaim and shall be made prior to 11:00 A.M., San Francisco time, on the
due date thereof to the Administrative Agent, for the account of the Lenders, at
the Administrative Agent's 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 Banking Day, such payment shall be extended to the next
succeeding Banking Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Banking Day, the maturity thereof shall be
extended to the next succeeding Banking 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 Banking 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.
(e) All payments (including prepayments) to be made by a Subsidiary
Borrower hereunder in respect of Fronted Offshore Revolving Credit Loans, on
account of principal and interest thereon and fronting fees and participation
fees in respect thereof, shall be made without set off or counterclaim and shall
be made prior to 11:00 A.M., local time, on the due date thereof to the relevant
Fronting Lender, at the Fronting Lender's Payment Office in the currency in
which such Loans are denominated and in immediately available funds in such
currency. If any payment of principal or interest on a Fronted Offshore
Revolving Credit Loan becomes due and payable on a day other than a Banking Day,
such payment shall be extended to the next succeeding Banking Day, and, with
respect to payments of principal, 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 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 Packard a
corresponding amount. If such
40
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 5.10(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 Banking 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 Base Rate Loans under
the relevant Facility, on demand, from Packard. This paragraph shall not apply
to Loans made to Subsidiary Borrowers.
5.11 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 subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application, any
Eurodollar Loan or any Fronted Offshore Revolving Credit Loan made by it,
or change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 5.12 and changes
in the rate of tax on the overall net income of such Lender);
(ii) 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 or the Cost of Funds hereunder; or
(iii) shall impose on such Lender any other condition;
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 Fronted Offshore Revolving Credit
Loans or issuing or participating in Letters of Credit or Fronted Offshore
Revolving Credit Loans, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the relevant 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 5.11,
it shall promptly notify Packard (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.
(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 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
41
material, then from time to time, after submission by such Lender to Packard
(with a copy to the Administrative Agent) of a written request therefor, Packard
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section 5.11 submitted by any Lender to the relevant Borrower (with a copy
to the Administrative Agent) shall be conclusive in the absence of manifest
error. The obligations of the Borrowers pursuant to this Section 5.11 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
5.12 Taxes. (a) All payments made by the Borrowers 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 the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document), provided that
all payments to be made by the Fronting Lenders pursuant to Section 4.3(b)
shall, for purposes of this Section 5.12, be deemed to be a payment by the
relevant Borrower. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement; provided, however, that the Borrowers shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this Section. Whenever any
Non-Excluded Taxes are payable by any Borrower, as promptly as possible
thereafter such Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by such Borrower showing payment
thereof. If the relevant Borrower fails to pay any Non-Excluded Taxes when due
to the appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, Packard
shall indemnify the Administrative Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure. Packard shall make any payments
required pursuant to the immediately preceding sentence within 15 days after
receipt of written demand therefor from the Administration Agent or any Lender
as the case may be. The agreements in this Section 5.12 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder. Notwithstanding anything in this Section 5.12(a) to the
contrary, the Borrowers shall not be required to increase any such amounts
payable to a Non-U.S. Lender that becomes a Lender after the Closing Date or
Participant to the extent of any United States withholding taxes applicable at
the time such Non-U.S. Lender becomes a Lender (or in the case of any
Participant, at the time such Participant purchases the related participation)
to amounts payable to such Non-U.S. Lender or Participant, except to the extent
that such Non-U.S. Lender's assignor (or in the case of any Participant, the
Lender from which such Participant purchased the related participation) was
entitled, at
42
the time of assignment or participation to receive additional amounts from the
Borrower with respect to such withholding taxes pursuant to this Section
5.12(a).
(b) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (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 Packard 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 Form W-8, or any subsequent versions thereof
or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8, an
annual certificate representing that such Non-U.S. Lender is not a "bank" for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of Packard and is not a
controlled foreign corporation related to Packard (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrowers 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 Borrowers
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 5.12(b), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 5.12(b) that
such Non-U.S. Lender is not legally able to deliver.
5.13 Indemnity. Each 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 a Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans or Fronted Offshore
Revolving Credit Loans after such Borrower or Packard has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by a Borrower in making any prepayment after such Borrower or Packard
has given a notice thereof in accordance with the provisions of this Agreement
or (c) the making of a prepayment of Eurodollar Loans or Fronted Offshore
Revolving Credit 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 or, in the case of Fronted Offshore
Revolving Credit Loans, the relevant interbank eurocurrency market. A
certificate as to any amounts payable pursuant to this Section 5.13 submitted to
the relevant Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
43
5.14 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 5.11 or 5.12(a)
with respect to such Lender, it will, if requested by Packard, 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 5.14 shall affect or postpone
any of the obligations of any Borrower or the rights of any Lender pursuant to
Section 5.11 or 5.12(a).
5.15 Subsidiary Borrowers. Packard may designate any Foreign
Subsidiary of Packard as a Subsidiary Borrower by delivery to the Administrative
Agent of a Borrowing Subsidiary Agreement executed by such Subsidiary and
Packard and upon such delivery such Subsidiary shall for all purposes of this
Agreement be a Subsidiary Borrower and a party to this Agreement until Packard
shall have executed and delivered to the Administrative Agent a Borrowing
Subsidiary Termination with respect to such Subsidiary, whereupon such
Subsidiary shall cease to be a Subsidiary Borrower and a party to this
Agreement. Notwithstanding the preceding sentence, no Borrowing Subsidiary
Termination will become effective as to any Subsidiary Borrower at a time when
any principal of or interest on any Loan to such Subsidiary Borrower shall be
outstanding hereunder, provided that such Borrowing Subsidiary Termination shall
be effective to terminate such Subsidiary Borrower's right to make further
borrowings under this Agreement.
5.16 Replacement of Lenders under Certain Circumstances. Packard
shall be permitted to replace any Lender which (a) requests reimbursement for
amounts owing pursuant to Section 5.11 or 5.12 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 5.14 so as to eliminate the continued need for payment
of amounts owing pursuant to Section 5.11 or 5.12, (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 relevant
Borrowers shall be liable to such replaced Lender under Section 5.13 if any
Eurodollar Loan or Fronted Offshore Revolving Credit 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 13.6 (provided that Packard shall be obligated to pay
the registration and processing fee referred to therein), (viii) until such time
as such replacement shall be consummated, the relevant Borrowers shall pay all
additional amounts (if any) required pursuant to Section 5.11 or 5.12, as the
case may be, and (ix) in the case of clause (b) above, any such replacement
shall not be deemed to be a waiver of any rights which any Borrower, the
Administrative Agent or any other Lender shall have against the replaced Lender.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make, issue or participate in the Loans and the Letters of
Credit, each of Packard and each Subsidiary Borrower (to the extent applicable
to such Subsidiary Borrower) hereby represents and warrants to the
Administrative Agent and each Lender that:
44
6.1 Financial Condition. (a) The unaudited pro forma condensed
consolidated balance sheet of Packard and its consolidated Subsidiaries as at
September 30, 1996 (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 Recapitalization, (ii) the Loans to be made and the
Subordinated Notes to be issued on the Closing Date 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 Packard as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated condensed consolidated
financial position of Packard and its consolidated Subsidiaries as at September
30, 1996 assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) The audited consolidated balance sheets of Packard as at
December 31, 1993, December 31, 1994 and December 31, 1995, 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, present fairly the consolidated financial condition of
Packard as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. All such
financial statements, including the related notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the relevant firm of accountants and disclosed therein).
Packard does 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, which are not reflected in the most recent financial statements,
including the related notes thereto, referred to in this paragraph (b). During
the period from December 31, 1995 to and including the date hereof there has
been no Disposition by Packard or any of its Subsidiaries of any material part
of its business or Property.
6.2 No Change. Since December 31, 1995 there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.
6.3 Corporate Existence; Compliance with Law. Each of Packard 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
except where the failure to be so qualified or in good standing could not
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.4 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 Borrowers, 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 Borrowers, 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
45
required in connection with the Recapitalization 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 6.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and effect
and (ii) the filings referred to in Section 6.20. Each Loan Document has been
duly executed and delivered on behalf of each Loan Party 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 may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
6.5 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 Packard or any of its
Subsidiaries 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 or Contractual
Obligation applicable to Packard or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
6.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of Packard or such Subsidiary Borrower, threatened by or
against Packard 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.
6.7 No Default. None of Packard and 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.
6.8 Ownership of Property; Liens. Each of Packard and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other material property, and none of such property is subject to any Lien except
as permitted by Section 9.3.
6.9 Intellectual Property. Each of Packard and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes ("Intellectual Property") necessary for the conduct of
its business as currently conducted. Except as set forth on Schedule 6.9, 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 such party know of any
valid basis for any such claim. The use of Intellectual Property by Packard and
its Subsidiaries does not, to the best knowledge of Packard, infringe on the
rights of any Person in any material respect.
6.10 Taxes. Each of Packard and its Subsidiaries has filed or caused
to be filed all Federal, Connecticut, Delaware, Illinois 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
46
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 proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Packard or its Subsidiaries, as the case
may be); no tax Lien has been filed, and, to the knowledge of Packard and each
Subsidiary Borrower, no claim is being asserted, with respect to any such tax,
fee or other charge.
6.11 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 of the
Board as now and from time to time hereafter in effect or for any purpose which
violates the provisions of the Regulations of the Board.
6.12 Labor Matters. There are no strikes or other labor disputes
against Packard or any of its Subsidiaries pending or, to the knowledge of
Packard or any Subsidiary 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 Packard 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 Packard 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 Packard or the relevant
Subsidiary.
6.13 ERISA. Except where a breach of the following, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, (i) 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; (ii) 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;
(iii) 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; (iv) neither Packard nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan which has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither Packard nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
Packard 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; and (v) no such
Multiemployer Plan is in Reorganization or Insolvent.
6.14 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.
47
6.15 Subsidiaries. The Subsidiaries listed on Schedule 6.15
constitute all the Subsidiaries of Packard at the date hereof.
6.16 Restrictions on Distributions. On the date hereof, no
Subsidiary is subject to any Subsidiary Restrictions, except (a) Subsidiary
Restrictions contained in the Loan Documents and (b) Subsidiary Restrictions
described on Schedule 6.16.
6.17 Use of Proceeds. The proceeds of the Term Loans shall be used
to finance a portion of the Recapitalization and to pay related fees and
expenses. The proceeds of the Revolving Credit Loans shall be used to finance a
portion of the Recapitalization, the ongoing working capital needs of Packard
and its Subsidiaries in the ordinary course of business and acquisitions
permitted by Section 9.8(g). The proceeds of the Fronted Offshore Revolving
Credit Loans shall be used to finance a portion of the Recapitalization and fees
and expenses related thereto and to finance ongoing working capital needs of
Packard and its Subsidiaries. Notwithstanding anything herein to the contrary,
the sum of the aggregate principal amount of the Revolving Credit Loans and the
Dollar Equivalent of any Fronted Offshore Revolving Credit Loans borrowed on the
Closing Date shall not exceed $1,500,000.
6.18 Environmental Matters. Except as set forth on Schedule 6.18 or
as could not reasonably be expected to have a Material Adverse Effect:
(a) The facilities and properties owned, leased or operated by
Packard 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 constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with respect to
the Properties or the business operated by Packard or any of its
Subsidiaries (the "Business") which could interfere with the continued
operation of the Properties or impair the fair saleable value thereof.
None of Packard and its Subsidiaries has assumed any liability of any
other Person under Environmental Laws.
(c) None of Packard and its Subsidiaries has received or is aware of
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor does Packard or any Subsidiary 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 the
best knowledge of Packard and the Subsidiary Borrowers, to a location
which could 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 give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of Packard and the Subsidiary Borrowers,
threatened, under any Environmental
48
Law to which Packard or any Subsidiary is or will be named as a party with
respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of Packard or any Subsidiary in connection with
the Properties or, to the best knowledge of Packard and the Subsidiary
Borrowers, otherwise in connection with the Business, in violation of or
in amounts or in a manner that could give rise to liability under
Environmental Laws.
6.19 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 Closing Date), 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 such Loan Party 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 of Packard and, to the best knowledge of
Packard, the Management Stockholders in the Recapitalization and Stock Purchase
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.
6.20 Security Documents. (a) 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 and
Pledged Notes described in the Guarantee and Collateral Agreement, when stock
certificates or instruments representing such Pledged Stock or Pledged Notes,
respectively, are delivered to the Administrative Agent, and in the case of the
other Collateral described in the Guarantee and Collateral Agreement in which a
security interest can be perfected by the filing of a financing statement, when
financing statements in appropriate form are filed in the offices specified on
Schedule 6.20(a), 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.
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
6.20(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest
49
in, all right, title and interest of the Loan Parties in the Mortgaged
Properties and the proceeds thereof, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to any other
Person, except as disclosed on Schedule 9.3(f).
6.21 Solvency. Each Loan Party is, and after giving effect to the
Recapitalization and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
6.22 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of Packard under and as defined in the Subordinated Note
Indenture. The obligations of each Subsidiary Guarantor under the Guarantee and
Collateral Agreement constitute "Senior Guarantor Indebtedness" of such
Subsidiary Guarantor under and as defined in the Subordinated Note Indenture.
6.23 Regulation H. No Mortgage encumbers improved real property
which is located in an area that has been identified by the Secretary of Housing
and Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
6.24 Inactive Subsidiaries. Each of the Domestic Subsidiaries listed
on Schedule 6.24 has no material net assets and does not engage in any operating
activity; and such Domestic Subsidiaries in the aggregate have no material net
assets.
SECTION 7. CONDITIONS PRECEDENT
7.1 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
Packard, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of Packard and each Subsidiary
Guarantor (together with executed acknowledgements from each Foreign
Subsidiary), (iii) each of the Mortgages, executed and delivered by a duly
authorized officer of each party thereto, and (iv) for the account of each
relevant Lender, Notes conforming to the requirements hereof and executed
and delivered by a duly authorized officer of Packard.
(b) Recapitalization, Subordinated Notes, etc. (i) Packard shall
have consummated the recapitalization transaction contemplated by the
Recapitalization and Stock Purchase Agreement and Stonington or a Control
Investment Affiliate thereof shall own or control approximately 70% of the
common stock of Packard and the Management Stockholders and certain other
continuing stockholders of Packard shall own approximately 30% of such
common stock; in connection therewith, not more than $268,000,000 plus net
cash of Packard on hand (after repayment of Indebtedness) in an amount not
to exceed $25,000,000 shall have been expended to repurchase shares of
Packard's common stock from existing holders thereof and to pay fees and
expenses incurred in connection with the Recapitalization; Stonington or a
Control Investment Affiliate thereof shall have expended at least
$69,000,000 for the purchase of common stock of Packard; Packard shall
have received at least $150,000,000 in gross cash
50
proceeds from the issuance of the Subordinated Notes; and the fair market
value of the equity in Packard held by Management Stockholders and certain
other continuing stockholders (valued at a price per share of $22.25)
shall be at least $30,000,000.
(ii) The capital and legal structure of each Loan Party (including
the identity of the Management Stockholders and the respective amounts of
their ownership interests) after the Recapitalization shall be
satisfactory in all respects.
(iii) The Recapitalization and Stock Purchase Agreement shall not
have been waived, amended, supplemented or otherwise modified in any
material respect.
(iv) The aggregate amount of change of control bonuses and other
payments to the Supplemental Employee Retirement Program in connection
with the Recapitalization shall not exceed $3,900,000.
(v) The Administrative Agent shall have received satisfactory
evidence that the fees and expenses to be incurred in connection with the
Recapitalization and the financing thereof (including the closing costs of
the Management Stockholders and certain other continuing stockholders in
connection with the Recapitalization) shall not exceed $18,900,000
(excluding the costs described in the preceding clause).
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of Packard for the 1993, 1994 and 1995 fiscal years
and (iii) unaudited condensed consolidated financial statements of Packard
for the nine months ended September 30, 1996.
(d) Approvals. All governmental and material third party approvals
(including landlords' and other consents) necessary or advisable in
connection with the Recapitalization, the continuing operations of Packard
and its Subsidiaries and the transactions contemplated hereby shall have
been obtained 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 restrain, prevent or otherwise impose
adverse conditions on the Recapitalization or the financing thereof or any
other financing contemplated hereby.
(e) Business Plan. The Lenders shall have received a business plan
for Packard and its Subsidiaries for the 1997 fiscal year and a written
analysis of the business and prospects of Packard and its Subsidiaries for
the period from the Closing Date through the final maturity of the Term
Loans.
(f) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions in the United
States where assets of the Loan Parties are located, and such search shall
reveal no liens on any of the assets of Packard or its Subsidiaries except
for liens permitted by Section 9.3 or liens discharged on or prior to the
Closing Date pursuant to documentation satisfactory to the Administrative
Agent and the Co-Arrangers.
(g) Environmental Audit. The Administrative Agent shall have
received an environmental audit from IA Consulting with respect to the
real property of Packard and its Subsidiaries specified by the
Administrative Agent.
51
(h) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit H,
with appropriate insertions and attachments.
(i) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to
Packard and its Subsidiaries, substantially in the form of Exhibit
J;
(ii) the legal opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇, special Illinois
counsel to Packard and its Subsidiaries, substantially in the form
of Exhibit K;
(iii) the legal opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
special intellectual property counsel to Packard and its
Subsidiaries, substantially in the form of Exhibit L;
(iv) to the extent consented to by such counsel, each legal
opinion, if any, delivered in connection with the Recapitalization
and Stock Purchase Agreement, accompanied by a reliance letter in
favor of the Lenders; and
(v) the legal opinion of local counsel in each foreign
jurisdiction where any Subsidiary (if any) that is a Subsidiary
Borrower on the Closing Date is incorporated.
Each such legal opinion shall cover such matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(j) 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.
(k) 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 9.3), shall be in proper form for filing,
registration or recordation.
(l) Mortgages, etc. (i) The Administrative Agent shall have received
a Mortgage with respect to each Mortgaged Property, executed and delivered
by a duly authorized officer of each party thereto.
(ii) To the extent available, the Administrative Agent shall have
received, and the title insurance company issuing the policy referred to
in Section 7.1(l)(iii) (the "Title Insurance Company") shall have
received, maps or plats of an as-built survey of the sites of the
Mortgaged Properties certified to the Administrative Agent and the Title
Insurance Company
52
in a manner satisfactory to them, dated a date satisfactory to the
Administrative Agent and the Title Insurance Company by an independent
professional licensed land surveyor satisfactory to the Administrative
Agent and the Title Insurance Company, which maps or plats and the surveys
on which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established
and adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be surveyed and shown on such
maps, plats or surveys the following: (A) the locations on such sites of
all the buildings, structures and other improvements and the established
building setback lines; (B) the lines of streets abutting the sites and
width thereof; (C) all access and other easements appurtenant to the
sites; (D) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining
property by the building structures and improvements on the sites; (F) if
the site is described as being on a filed map, a legend relating the
survey to said map; and (G) the flood zone designations, if any, in which
the Mortgaged Properties are located; provided, that in the event that any
of the foregoing items are not delivered on the Closing Date, such items
shall be delivered within 45 days thereafter with, if necessary,
appropriate endorsements to the title insurance policies referred to in
clause (iii) below.
(iii) The Administrative Agent shall have received in respect of
each Mortgaged Property a mortgagee's title insurance policy (or policies)
or marked up unconditional binder for such insurance. Each such policy
shall (A) be in an amount specified in Schedule 1.1B; (B) be issued at
ordinary rates; (C) insure that the Mortgage insured thereby creates a
valid first Lien on such Mortgaged Property (or, in the case of the
Connecticut Mortgage, a Lien subject to the relevant Liens described on
Schedule 9.3(f)) free and clear of all defects and encumbrances, except as
disclosed therein; (D) name the Administrative Agent for the benefit of
the Lenders as the insured thereunder; (E) be in the form of ALTA Loan
Policy - 1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies);
(F) contain such endorsements and affirmative coverage as the
Administrative Agent may reasonably request and (G) be issued by Chicago
Title Insurance Company. The Administrative Agent shall have received
evidence satisfactory to it that all premiums in respect of each such
policy, all charges for mortgage recording tax, and all related expenses,
if any, have been paid.
(iv) For any property located in a designated flood zone, the
Administrative Agent shall have received (A) a policy of flood insurance
which (1) covers any parcel of improved real property which is encumbered
by any Mortgage (2) is written in an amount not less than the outstanding
principal amount of the Indebtedness secured by such Mortgage which is
reasonably allocable to such real property or the maximum limit of
coverage made available with respect to the particular type of property
under the National Flood Insurance Act of 1968, whichever is less, and (3)
has a term ending not later than the maturity of the Indebtedness secured
by such Mortgage and (B) confirmation that the mortgager under the
Mortgage has received the notice required pursuant to Section 208(e)(3) of
Regulation H of the Board.
(v) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in Section 7.1(l)(iii) and a copy of
all other material documents affecting the Mortgaged Properties.
53
(vi) Notwithstanding anything to the contrary in this Section 7.1,
in the event that Packard shall be unable to deliver any item described in
this Section 7.1 with respect to the Connecticut Mortgaged Property solely
as a result of its inability to obtain any requisite consent of any
Connecticut Governmental Authority, such items shall not be required to be
delivered on the Closing Date, provided, that, in each case, such items
(including, with respect to the Connecticut Mortgage, a legal opinion)
shall be delivered no later than 90 days after the Closing Date.
(m) Fees. Each of the Agents shall have received the fees required
to be paid to it and the Lenders on or prior to the Closing Date and any
invoices for expenses payable hereunder presented to Packard shall have
been paid by Packard.
(n) Material Licenses and Contracts. The Administrative Agent shall
have received evidence satisfactory to it that any material licenses and
other material contracts of Packard and its Subsidiaries having "change of
control" or similar provisions will remain in place and effect on
satisfactory terms after giving effect to the Recapitalization.
(o) Employment Agreements. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
shall have entered into employment agreements with Packard.
(p) Solvency Opinion. The Administrative Agent shall have received a
solvency opinion from Houlihan, Lokey, ▇▇▇▇▇▇ & Zukin.
(q) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of the Guarantee and
Collateral Agreement and the Mortgages.
7.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit (including the issuance of any Letter 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 in all material respects on and as of such date
as if made on and as of such date.
(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.
(c) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other documents and
legal opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
Each borrowing by any Borrower hereunder and the issuance of each Letter of
Credit issued hereunder shall constitute a representation and warranty by
Packard that the conditions contained in this Section 7.2 have been satisfied.
In addition, each borrowing by a Subsidiary Borrower hereunder shall
54
constitute a representation and warranty by such Subsidiary Borrower (insofar as
such conditions relate to representations and warranties or covenants or
agreements of such Subsidiary Borrower) as of the date thereof that the
conditions contained in this Section 7.2 have been satisfied.
7.3 Each Subsidiary Borrower Credit Event. The agreement of each
Lender to make the initial extension of credit requested to be made by it to any
Subsidiary Borrower on any date is subject to the satisfaction of the following
conditions precedent:
(a) Borrowing Subsidiary Agreement. The Administrative Agent shall
have received the Borrowing Subsidiary Agreement for such Subsidiary
Borrower executed and delivered by Packard and such Subsidiary Borrower.
(b) Opinions. The Administrative Agent shall have received a
satisfactory written opinion of reputable counsel for such Subsidiary
Borrower, substantially in the form of Exhibit M, and covering such other
matters (including matters of the type described in Sections 5.11 and
5.12) relating to such Subsidiary Borrower or its Borrowing Subsidiary
Agreement as the Administrative Agent shall reasonably request.
(c) Other Documents. The Administrative Agent shall have received
such documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of such Subsidiary Borrower, the authorization of the
transactions contemplated hereby relating to such Subsidiary Borrower and
any other legal matters relating to such Subsidiary Borrower, its
Borrowing Subsidiary Agreement or such transactions, all in form and
substance satisfactory to the Administrative Agent.
SECTION 8. AFFIRMATIVE COVENANTS
Packard hereby agrees, and each Subsidiary Borrower severally agrees
(to the extent specifically applicable to such Subsidiary Borrower) 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 the
Administrative Agent hereunder, each such party shall, and shall cause each of
its Subsidiaries to:
8.1 Financial Statements. Furnish, or cause to be furnished, to the
Administrative Agent and each Lender:
(a) (i) as soon as available, but in any event within 90 days after
the end of each fiscal year of Packard, commencing with the fiscal year
ending December 31, 1996, either (x) a copy of the audited consolidated
balance sheet of Packard and its consolidated 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 or (y) in the event that Packard is
subject to Section 13 or 15(b) of the Exchange Act, Packard's annual
report on Form 10-K, in each case reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified public
accountants of nationally recognized standing; and (ii) within 45 days
after the Closing Date, a copy of the audited pro forma condensed
consolidated balance sheet of Packard and its consolidated
55
Subsidiaries as at December 31, 1996, prepared in the same manner as the
Pro Forma Balance Sheet and reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP;
(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 Packard, commencing with the fiscal quarter ending March 31, 1997,
either (i) the unaudited condensed consolidated balance sheet of Packard
and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited condensed 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 (or, in the case of the balance sheet, the
audited consolidated balance sheet of Packard and its consolidated
Subsidiaries as at the end of the prior fiscal year) or (ii) in the event
that Packard is subject to Sections 13 or 15 of the Exchange Act,
Packard's quarterly report on Form 10-Q, in each case certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
(c) (i) as soon as available, but in any event not later than 30
days after the end of each of April, May, July and August in 1997, (A) the
unaudited condensed combined balance sheet of Packard and its Domestic
Subsidiaries as at the end of such month and the related unaudited
condensed combined statement of income and of cash flows for such month
and the portion of the fiscal year through the end of such month, setting
forth, in the case of the balance sheet, in comparative form the audited
consolidated balance sheet of Packard and its Subsidiaries as at the end
of the prior fiscal year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments); and (B) for each Foreign Subsidiary, a statement containing
(1) the amount of Consolidated EBITDA attributable to such Foreign
Subsidiary (on a stand-alone basis) for such month and the portion of the
fiscal year through the end of such month, (2) Capital Expenditures,
Technology Acquisitions and acquisitions (other than Technology
Acquisitions) permitted by Section 9.8(g) (each such category of
expenditures to be a separate line item) made by such Foreign Subsidiary
during such month, (3) the cash on hand of such Foreign Subsidiary as at
the end of such month and as at the end of the prior fiscal year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
(ii) as soon as available, but in any event not later than 30 days
after the end of each month (or 45 days in the case of the first and
second such month) occurring during each fiscal year of Packard (other
than the third, sixth, ninth and twelfth such month), commencing with
October 1997, the unaudited condensed consolidated balance sheet of
Packard and its Subsidiaries as at the end of such month and the related
unaudited condensed consolidated statement of income and of cash flows for
such month and the portion of the fiscal year through the end of such
month, setting forth in each case in comparative form the figures for the
previous year (or, in the case of the balance sheet, the audited
consolidated balance sheet of Packard and its consolidated Subsidiaries as
at the end of the prior fiscal year), certified by a Responsible Officer
as being fairly stated in all material respects (subject to normal
year-end audit adjustments); provided that, notwithstanding the foregoing,
Packard shall not be required to provide comparative figures with respect
to such unaudited condensed consolidated statements of income and of cash
flows delivered with respect to any month prior to October 31, 1998; and
56
(d) together with the delivery of any financial statements pursuant
to Section 8.1(a)(i), Section 8.1(b) (commencing with the fiscal quarter
ending September 30, 1997) or Section 8.1(c)(ii), unaudited condensed
consolidated statements of income for each Principal Business for the
relevant period and (except in the case of annual financial statements)
the portion of the fiscal year through the end of such period, setting
forth in each case (except in the case of statements delivered pursuant to
Section 8.1(c)(ii) with respect to each month prior to October 1998) in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject (except in the case of annual financial statements) 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).
8.2 Certificates; Other Information. Furnish, or cause to be
furnished, to the Administrative Agent and each Lender:
(a) concurrently with the delivery of the annual financial
statements referred to in Section 8.1(a)(i) commencing with the delivery
of such financial statements for the fiscal year ending December 31, 1997,
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 8.1(a)(i), 8.1(b) and 8.1(c) commencing with the
delivery of such financial statements for the fiscal quarter ending June
30, 1997, (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
necessary for determining compliance by Packard 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 Packard, as the case may be and (y)
to the extent not previously disclosed to the Administrative Agent, a
listing of any state within the United States where any Loan Party keeps
inventory or equipment (other than immaterial inventory or equipment and
inventory in transit in the ordinary course of business) and of any
Intellectual Property arising under the laws of the United States (or any
jurisdiction therein) 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 Packard, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of Packard and its Subsidiaries as of the end of the
following fiscal year, and the related consolidated statements of
projected cash flow and projected income), and, as soon as available,
significant revisions, if any, of such budget and
57
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 after the end of each fiscal quarter of Packard,
a narrative discussion and analysis of the financial condition and results
of operations of Packard 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
(or, if applicable, projections delivered prior to the Closing Date)
covering such periods and to the comparable periods of the previous year;
(e) within five days after the same are sent, copies of all
financial statements and reports which Packard sends to the holders of any
class of its debt securities or all of the holders of any class of public
equity securities and within five days after the same are filed, copies of
all financial statements and reports which Packard may make to, or file
with, the Securities and Exchange Commission or any successor or analogous
Governmental Authority; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
8.3 Payment of Obligations. 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 proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Packard or its Subsidiaries, as the case may be.
8.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
Continue to engage in business of the same general type as now conducted by it,
(ii) preserve, renew and keep in full force and effect its corporate existence
and (iii) 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 expressly permitted by Section 9.4; 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.
8.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted and (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.
8.6 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 the Administrative Agent or any Lender (coordinated through
the Administrative Agent) to visit and inspect any of its properties and examine
and make
58
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 Packard and its Subsidiaries with officers
and employees of Packard and its Subsidiaries and with its independent certified
public accountants.
8.7 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 Contractual
Obligation of Packard or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between Packard or
any of its Subsidiaries and any Governmental Authority and which has a
reasonable likelihood of being adversely determined, 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 non-frivolous litigation or proceeding affecting Packard or
any of its Subsidiaries in which the amount involved is $1,000,000 or more
and not covered by insurance or in which injunctive or similar relief is
sought;
(d) the following events, as soon as possible and in any event
within 30 days after any Responsible Officer knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation
of any Lien on the assets of Packard or any Commonly Controlled Entity 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 Packard or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan, provided, however, that no notice shall be
necessary with respect to any of the foregoing events if the aggregate
liability of Packard and its Subsidiaries with respect to such events
could not exceed $1,000,000; 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 8.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Packard or the relevant Subsidiary proposes to
take with respect thereto.
8.8 Environmental Laws. (a) Comply in all material respects with,
and 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 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, except to the extent that any such actions are being contested in good
faith by
59
appropriate proceedings and the outcome of such proceedings, if adversely
determined, could not reasonably be expected to have a Material Adverse Effect.
8.9 Additional Collateral, etc. (a) With respect to any Property
acquired after the Closing Date by Packard or any of its Domestic Subsidiaries
(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 9.3(g)) as to
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 advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in such Property, 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 estate having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Closing Date by Packard or any of its Domestic Subsidiaries (other than any
such real estate subject to a Lien expressly permitted by Section 9.3(g)),
promptly (i) execute and deliver a first priority mortgage or deed of trust, as
the case may be, in favor of the Administrative Agent, for the benefit of the
Lenders, covering such real estate, in form and substance reasonably
satisfactory to the Administrative Agent, (ii) if requested by the
Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real estate in an amount at least equal to the purchase
price of such real estate (or such other amount as shall be reasonably specified
by the Administrative Agent) 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) 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.
(c) With respect to any new Domestic Subsidiary created or acquired
after the Closing Date by Packard 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
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 Packard or any of its Domestic
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 Packard or such
Subsidiary, as the case may be, (iii) cause such new Domestic Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement and (B) to take such
actions necessary or 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 Domestic Subsidiary, 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) 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.
60
(d) With respect to any new Foreign Subsidiary created or acquired
after the Closing Date by Packard 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
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 Packard 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,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of Packard or such Subsidiary, as the case may be and (iii)
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.
8.10 Employment Agreements. Within 60 days after the Closing Date,
cause appropriate senior management of Packard, as determined by Stonington, to
enter into employment contracts, similar to those entered into on the Closing
Date by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
SECTION 9. NEGATIVE COVENANTS
Packard agrees, and each Subsidiary Borrower severally agrees (to
the extent specifically applicable to such Subsidiary Borrower) 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 the Administrative Agent
hereunder, each such party shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
9.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any fiscal quarter of Packard ending during any
period set forth below to exceed the ratio set forth below opposite such period:
Consolidated
Period Leverage Ratio
------ --------------
September 30, 1997 - December 30, 1997 5.85:1.00
December 31, 1997 - December 30, 1998 5.75:1.00
December 31, 1998 - December 30, 1999 5.50:1.00
December 31, 1999 - December 30, 2000 5.00:1.00
December 31, 2000 - December 30, 2001 4.50:1.00
December 31, 2001 - December 30, 2002 4.00:1.00
December 31, 2002 and thereafter 3.50:1.00
; provided, that if, during any period as at the end of which the Consolidated
Leverage Ratio is determined pursuant to this Section 9.1(a), Packard or any of
its Subsidiaries shall have made any investment pursuant to Section 9.8(g),
Consolidated EBITDA for such period shall be calculated on a pro forma basis
giving effect to such investment as if it had been made on the first day of such
period.
61
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
Packard ending during any period set forth below to be less than the ratio set
forth below opposite such period:
Consolidated Interest
Period Coverage Ratio
------ --------------
June 30, 1997 - December 30, 1998 1.50:1.00
December 31, 1998 - December 30, 1999 1.75:1.00
December 31, 1999 - December 30, 2000 2.00:1.00
December 31, 2000 and thereafter 2.25:1.00
; provided, that for the purposes of determining the ratio described above as at
the end of any fiscal quarter of Packard ending June 30, 1997, September 30,
1997 and December 31, 1997, Consolidated Interest Expense for the relevant
period shall be deemed to equal Consolidated Interest Expense 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.
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of Packard ending during any period set forth below to be less
than the ratio set forth below opposite such period:
Consolidated Fixed
Period Charge Coverage Ratio
------ ---------------------
June 30, 1997 - March 30, 2000 1.00:1.00
March 31, 2000 and thereafter 1.05:1.00
; provided, that for the purposes of determining the ratio described above as at
the end of any fiscal quarter of Packard ending June 30, 1997, September 30,
1997 and December 31, 1997, Consolidated Fixed Charges for the relevant period
shall be deemed to equal Consolidated Fixed Charges 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.
9.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist (in each case, to "Incur") any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of Packard to any Wholly Owned Subsidiary Guarantor
and of any Wholly Owned Subsidiary Guarantor to Packard or any other
Wholly Owned Subsidiary Guarantor;
(c) Indebtedness of Packard to any Wholly Owned Foreign Subsidiary,
provided that at all times such Indebtedness is evidenced by a note which
includes subordination terms substantially in the form set forth on
Exhibit Q;
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(d) Indebtedness of any Wholly Owned Foreign Subsidiary to Packard
or any Wholly Owned Subsidiary Guarantor in an aggregate amount not to
exceed $5,000,000 at any one time outstanding, provided that such
Indebtedness is evidenced by a note that is pledged as collateral under
the Guarantee and Collateral Agreement;
(e) (i) Indebtedness of Foreign Subsidiaries consisting of working
capital loans or overadvances ("Non-Facility Offshore Currency Loans") in
Dollars or currencies freely tradeable or exchangeable into Dollars so
long as the Non-Facility Loans Dollar Equivalent shall not exceed
$10,000,000 at any one time outstanding and (ii) any guarantees of such
Indebtedness issued by Packard;
(f) Indebtedness of Packard Japan KK in an aggregate amount not to
exceed $7,500,000, the proceeds of which are used to finance the Japan
Acquisition;
(g) Management Notes;
(h) Indebtedness of an entity (i) existing at the time such entity
becomes a Subsidiary of Packard or (ii) assumed in connection with the
acquisition of assets from such entity, in each case other than
Indebtedness incurred in connection with, or in contemplation of, such
entity becoming a Subsidiary or such acquisition (any such Indebtedness,
"Acquired Indebtedness"); provided, that the aggregate amount of Acquired
Indebtedness incurred pursuant to this paragraph (h) shall not exceed
$10,000,000 at any one time outstanding.
(i) Indebtedness secured by Liens permitted by Section 9.3(g),
Capital Lease Obligations and Acquired Indebtedness not otherwise
permitted by Section 9.2(h); provided, that the aggregate amount of all
Indebtedness incurred pursuant to this paragraph (i) shall not exceed
$5,000,000 at any one time outstanding;
(j) Indebtedness outstanding on the date hereof and listed on
Schedule 9.2(j) and any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof);
(k) guarantees made in the ordinary course of business by Packard or
any of its Subsidiaries of obligations of any Wholly Owned Subsidiary
Guarantor;
(l) (i) Indebtedness of Packard in respect of the Subordinated Notes
in an aggregate principal amount not to exceed $150,000,000 and (ii)
subordinated Guarantee Obligations of any Subsidiary Guarantor in respect
of such Indebtedness; and
(m) additional Indebtedness of Packard or any of its Subsidiaries in
an aggregate principal amount (for Packard and all Subsidiaries) not to
exceed $10,000,000 at any one time outstanding.
Notwithstanding anything to the contrary in this Section 9.2, the aggregate
principal amount of Indebtedness incurred pursuant to paragraphs (h), (i) and
(m) above shall not exceed $20,000,000 at any one time outstanding.
9.3 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:
63
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of Packard or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen'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;
(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 Packard
or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 9.3(f),
securing Indebtedness permitted by Section 9.2(j), 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;
provided, further, that all such Liens listed on part one of Schedule
9.3(f) (UCC-1 Filings) shall be released within 10 days of the Closing
Date;
(g) Liens securing Indebtedness of Packard or any other Subsidiary
incurred pursuant to Section 9.2(i) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other
than the Property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens securing any Indebtedness permitted to exist or be
acquired pursuant to Section 9.2(h), which were created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by Packard or any of its Subsidiaries, so long as such Liens
do not at any time encumber any Property other than the Property
encumbered by such Liens at the time such Indebtedness was incurred;
(i) Liens created pursuant to the Security Documents; and
(j) any interest or title of a lessor under any lease entered into
by Packard or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased.
9.4 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 convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except
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to the extent necessary to effect any Disposition or acquisition of a Subsidiary
expressly permitted by this Agreement and except:
(a) any Subsidiary of Packard may be merged or consolidated with or
into Packard (provided that Packard 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); and
(b) any Subsidiary of Packard may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to Packard or any Wholly Owned Subsidiary Guarantor.
9.5 Limitation on Sale of Assets. Dispose of any of its property,
business or assets (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 (including,
without limitation, obsolete general intangibles having a fair market
value of less than $100,000) in the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 9.4(b);
(d) the sale or issuance of the Capital Stock of any Subsidiary to
Packard or any Wholly Owned Subsidiary Guarantor;
(e) the sale or issuance of the Capital Stock of any Foreign
Subsidiary to any Wholly Owned Subsidiary of Packard; and
(f) the sale of other assets having a fair market value not to
exceed $5,000,000 in the aggregate in any fiscal year of Packard;
provided, that (x) at least 75% of the consideration from any such asset
sale is received in cash or Acceptable Consideration, (y) Packard or the
relevant Subsidiary receives consideration at the time of such asset sale
at least equal to the fair market value of the shares or assets subject of
such asset sale (as determined by the board of directors of Packard and
evidenced in a board resolution in the case of any sale or series of
related sales resulting in Net Cash Proceeds in excess of $500,000) and
(z) the aggregate fair market value of assets sold pursuant to this
Section 9.5(f) shall not exceed $15,000,000 during the term of this
Agreement. For the purposes of this paragraph (f), "Acceptable
Consideration" means (1) the assumption of Indebtedness of Packard or any
Subsidiary and the release of Packard or such Subsidiary from all
liability on such Indebtedness in connection with the relevant asset sale,
(2) Cash Equivalents and (3) securities received by Packard or any
Subsidiary from the transferee that are promptly converted by Packard or
such Subsidiary into cash.
9.6 Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption,
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defeasance, retirement or other acquisition of, any shares of any class of
Capital Stock of Packard 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 Packard or any Subsidiary
(collectively, "Restricted Payments"), except that (i) any Subsidiary may make
Restricted Payments to Packard or any Wholly Owned Subsidiary Guarantor; (ii)
any Foreign Subsidiary may make Restricted Payments to any other Subsidiary; and
(iii) so long as no Default or Event of Default has occurred and is continuing,
Packard and any of its Subsidiaries may (A) repurchase shares of its Capital
Stock from employees, former employees, directors or former directors of Packard
or any of its Subsidiaries pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto) approved by the Board of
Directors of Packard under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such Capital Stock, provided
that the aggregate amount of such repurchases in any calendar year (excluding
any such repurchases made through the issuance of Management Notes)
(collectively, "Management Stock Payments"), when added to the amount of any
Management Note Payments made during such calendar year, shall not exceed
$2,000,000; and (B) repurchase, redeem or acquire or retire for value any shares
of Capital Stock of Packard which were owned immediately prior to the closing of
the Recapitalization by Non-Management Stockholders (as defined in the
Recapitalization Agreement) and which Packard made an offer to repurchase
pursuant to Section 2.2 of the Recapitalization Agreement but which were not
tendered to Packard, provided that the purchase price per share for such shares
of Capital Stock of Packard shall not exceed $22.25 per share and any such
shares of Capital Stock are purchased within 90 days of the Closing Date.
9.7 Limitation on Capital Expenditures and Technology Acquisitions.
Make or commit to make (by way of the acquisition of securities of a Person or
otherwise) any Capital Expenditure or Technology Acquisition, except Capital
Expenditures or Technology Acquisitions made by Packard and its Subsidiaries in
the ordinary course of business not exceeding $10,000,000 in any fiscal year of
Packard; provided, that (a) up to $3,000,000 of any such amount referred to
above, if not so expended in the fiscal year for which it is permitted, may be
carried over to make Capital Expenditures in the next succeeding fiscal year and
(b) Capital Expenditures made pursuant to this Section during any fiscal year
shall be deemed made, first, in respect of amounts carried over from the prior
fiscal year pursuant to clause (a) above and, second, in respect of amounts
permitted for such fiscal year as provided above.
9.8 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 significant 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) (i) investments in Cash Equivalents and (ii) investments
referred to in clause (3) of Section 9.5(f);
(c) Guarantee Obligations expressly permitted by Section 9.2;
(d) loans and advances to employees of Packard or its Subsidiaries
in the ordinary course of business (including, without limitation, for
travel, entertainment and relocation expenses) in an aggregate amount for
Packard and its Subsidiaries not to exceed $1,000,000 at any one time
outstanding;
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(e) the Recapitalization;
(f) investments by Packard or any of its Subsidiaries in Packard or
any Person that, prior to such investment, is a Wholly Owned Subsidiary
Guarantor; and
(g) in addition to investments otherwise expressly permitted by this
Section 9.8, investments by Packard or any of its Subsidiaries, in an
amount (valued at cost) not to exceed $20,000,000 (or, on a one-time basis
during the term of this Agreement, $40,000,000) in any single transaction
or series of related transactions; provided that (i) the aggregate amount
(valued at cost) of all such investments does not exceed $70,000,000
during the term of this Agreement, (ii) not more than $20,000,000 of such
investments shall be made during the term of this Agreement in Foreign
Subsidiaries or assets owned by Foreign Subsidiaries and (iii) the amount
of any Indebtedness acquired or assumed by Packard or any of its
Subsidiaries in connection with any such investment shall be included in
determining the cost of such investment, in each case so long as, after
giving pro forma effect thereto (as certified to the Administrative Agent
by a Responsible Officer prior to consummation of such investment), (1) no
Default or Event of Default shall have occurred and be continuing
(including, without limitation, pursuant to Section 9.1, with compliance
with Section 9.1 being determined on a pro forma basis as if such
investment (including the incurrence or assumption of any Indebtedness in
connection therewith) had been made on the first day of the most recent
period of four consecutive fiscal quarters for which the relevant
financial information is available) and (2) the sum of cash on hand held
by Packard and the aggregate Available Revolving Credit Commitments
exceeds $10,000,000.
9.9 Limitation on Payments and Modifications of Debt Instruments,
etc. (a) (i) Make or offer to make any payment, prepayment, repurchase or
redemption of or otherwise defease or segregate funds with respect to the
principal of Subordinated Notes, (ii) 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 Subordinated Notes (other than any such amendment,
modification, waiver or other change which (A) would extend the maturity or
reduce the amount of any payment of principal thereof or which would reduce the
rate or extend the date for payment of interest thereon and (B) does not involve
the payment of a consent fee), or (iii) designate any Indebtedness as
"Designated Senior Indebtedness" for the purposes of the Subordinated Note
Indenture.
(b) Make any payment, prepayment, repurchase or redemption of the
Management Notes (collectively, "Management Note Payments") other than
Management Note Payments in any fiscal year in an amount that, when added to the
amount of any Management Stock Payments made during such fiscal year, does not
exceed $2,000,000.
9.10 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 (other than a one-time structuring fee of
$2,500,000 payable to Stonington in connection with the Recapitalization), with
any Affiliate (other than Packard or any Wholly Owned Subsidiary Guarantor)
unless such transaction is (a) otherwise permitted under this Agreement, (b) in
the ordinary course of business of Packard or such Subsidiary, as the case may
be, and (c) upon fair and reasonable terms no less favorable to Packard 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.
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9.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by Packard or any Subsidiary of real
or personal property which has been or is to be sold or transferred by Packard
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 Packard or such Subsidiary.
9.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year
of Packard to end on a day other than December 31 or change Packard's method of
determining fiscal quarters.
9.13 Limitation on Negative Pledge Clauses. Enter into with any
Person, or suffer to exist, any agreement, other than (a) this Agreement and the
other Loan Documents, (b) the Subordinated Note Indenture and (c) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case any prohibition or limitation shall only be
effective against the assets financed thereby), which prohibits or limits the
ability of Packard or any of its Subsidiaries to create, incur, assume or suffer
to exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired.
9.14 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction (collectively, "Subsidiary Restrictions") on the ability of any
Subsidiary of Packard 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, Packard or any other Subsidiary of Packard, (b) make loans or advances
to Packard or any other Subsidiary of Packard or (c) transfer any of its assets
to Packard or any other Subsidiary of Packard (excluding, in the case of this
clause (c), any such encumbrances or restrictions created by any agreements
governing any purchase money liens or Capital Lease Obligations otherwise
permitted hereby, in which case any encumbrance or limitation shall only be
effective against the assets financed thereby), except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents or the Subordinated Note Indenture or any other agreements in
effect on the date hereof and listed on Schedule 6.16, (ii) any restrictions
with respect to a Subsidiary imposed pursuant to an agreement which has been
entered into in connection with the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary, or (iii) any restrictions
existing under any agreement that amends, refinances or replaces any agreement
containing the restrictions referred to in clause (i) or (ii) above, provided
that the terms and conditions of any such agreement are no less favorable to the
Lenders than those under the agreement so amended, refinanced or replaced.
9.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
Packard and its Subsidiaries are engaged on the date of this Agreement or which
are reasonably related thereto.
9.16 Limitation on Amendments to Recapitalization Documents. (a)
Amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the
terms and conditions of the indemnities furnished by the Management Stockholders
to Packard or any of its Subsidiaries pursuant to the Recapitalization and Stock
Purchase Agreement or any other document delivered by the Selling Shareholders
or any of their affiliates in connection therewith such that after giving effect
thereto such indemnities 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 Recapitalization
and Stock Purchase Agreement or any such other documents except to the extent
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that any such amendment, supplement or modification could not reasonably be
expected to have a Material Adverse Effect.
9.17 Inactive Subsidiaries. Permit any Inactive Subsidiary, at any
time, to fail to satisfy any of the criteria set forth in the definition of
Inactive Subsidiary in Section 1.1.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Any Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
any 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
(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) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
8.4(a) (with respect to Packard only), Section 8.7(a) or Section 9 of this
Agreement or Section 5.6 or 5.8(b) of the Guarantee and Collateral
Agreement or (ii) an "Event of Default" under and as defined in any
Mortgage shall have occurred and be continuing; 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 after
the earlier of (i) the date upon which written notice thereof is given to
Packard by the Administrative Agent or the Required Lenders or (ii) the
date upon which a Responsible Officer becomes aware of such default; or
(e) Packard 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, 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
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(e) shall not at any time constitute an Event of Default under this
Agreement 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 $2,500,000;
or
(f) (i) Packard or any of its Subsidiaries that is a Subsidiary
Borrower or that has assets (valued at book value) in excess of $500,000
(collectively, "Significant 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, or Packard or any of its Significant
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Packard or any of its
Significant 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 Packard or any of its Significant
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) Packard or any of its Significant 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) Packard or any of its Significant 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
Packard 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) Packard 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 event or condition 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
Packard or any of its Subsidiaries involving in the aggregate a liability
(not paid or to the extent not fully covered
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by insurance which Packard has determined in good faith to be available in
whole or in part with respect to such judgment or decree) of $2,500,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the entry
thereof; or
(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 shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) The guarantee contained in Section 12 hereof or 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) Stonington shall cease to have the power, directly or
indirectly, to vote or direct the voting of securities having a majority
of the ordinary voting power for the election of directors of Packard
(determined on a fully diluted basis); (ii) any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
excluding Stonington, any Control Investment Affiliate of Stonington and
any officer, employee or director of Packard or any of its Subsidiaries,
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
30% of the outstanding common stock of Packard; (iii) the board of
directors of Packard shall cease to consist of a majority of Continuing
Directors; or (iv) a Specified Change of Control shall occur; or
(l) The Subordinated Notes or the guarantees thereof shall cease,
for any reason, to be validly subordinated to the obligations of Packard
or the Subsidiary Guarantors, as the case may be, under the Loan
Documents, as provided in the Subordinated Note Indenture, or any Loan
Party or any Affiliate of any Loan Party shall so assert;
then, and in any such event, (A)(1) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to Packard,
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 (2) if such event is
an Event of Default specified in clause (i) or (ii) of paragraph (f) above with
respect to a Subsidiary Borrower, (i) the eligibility of such Subsidiary
Borrower to borrow shall thereupon terminate and (ii) the Loans of such
Subsidiary Borrower shall become immediately due and payable, together with
accrued interest thereon and all fees and other obligations of such Subsidiary
Borrower in respect thereof and (B) if such event is an Event of Default other
than an Event of Default described in clause (A)(1) above, 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 Packard 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 Packard, declare the Loans hereunder (with accrued interest
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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) 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 the preceding paragraph (other than pursuant to clause (A)(2)
thereof), Packard 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. Packard hereby grants to the
Administrative Agent, for the benefit of the Issuing Lender and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of the Borrowers under this Agreement and the other Loan Documents.
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 Borrowers 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 Borrowers 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 relevant Borrowers (or such other Person as may be lawfully entitled
thereto). Except as otherwise expressly provided above in this Section 10, the
Borrowers waive presentment, demand, protest or other notice of any kind.
SECTION 11. THE AGENTS
11.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative 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 Administrative 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 or any
other Loan Document, the Administrative Agent shall not 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 the
Administrative Agent. Without limiting the foregoing, the use of the term
"agent" with respect to the Administrative Agent is used as a matter of market
custom and is intended to create or reflect only an administrative relationship
between independent contracting parties.
The Issuing Lender and the Fronting Lenders shall act on behalf of
the Lenders with respect to Letters of Credit and Fronted Offshore Revolving
Credit Loans, respectively, issued or made under this Agreement and the
documents associated therewith. It is understood and agreed that the Issuing
Lender and the Fronting Lenders (a) shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Section 11 with
respect to acts taken or omissions suffered by the Issuing Lender or any
Fronting Lender in connection with Letters of Credit and Fronted Offshore
Revolving Credit Loans issued or made under this Agreement and the documents
associated therewith as fully as if the term "Administrative Agent", as used in
this Section 11, included such Issuing Lender
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and the Fronting Lenders with respect to such acts or omissions and (ii) as
additionally provided in this Agreement and (b) shall, with respect to the
Revolving Credit Lenders, have all of the benefits of the provisions of Section
11.7 as fully as if the term "Administrative Agent", as used in Section 11.7,
included the Issuing Lender and the Fronting Lenders.
11.2 Delegation of Duties. The Administrative 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. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
11.3 Exculpatory Provisions. None of the Agent-Related Persons shall
be (i) liable for any action lawfully taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (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 such Person's own gross negligence
or willful 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 any Agent-Related Person 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 to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
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. The Administrative Agent shall maintain a
record of the principal amount of the Loans and L/C Obligations from time to
time outstanding and the respective amounts thereof owing to each Lender. Any
records maintained by any Agent-Related Person setting forth the names and
addresses of the Lenders and the Commitments of, and the principal amount of the
Loans owing to, each Lender from time to time shall be conclusive, in the
absence of manifest error.
11.4 Reliance by Administrative Agent. (a) The Administrative 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 telephone 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
Borrowers), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent 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. The Administrative 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 and, if it so requests, 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. The
Administrative 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
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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.
(b) For purposes of determining compliance with the conditions
specified in Section 7.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent or Packard to
such Lender prior to the Closing Date, or required thereunder to be consented to
or approved by or acceptable or satisfactory to such Lender.
11.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
Packard 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 respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
11.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that none of the Agent-Related Persons has made
any representations or warranties to it and that no act by any Agent-Related
Person hereafter 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-Related Person to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person 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 all
applicable bank regulatory laws relating to the transactions contemplated hereby
and made its own decision to enter into this Agreement and to extend credit to
the Borrowers hereunder. Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person 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-Related Person 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 any of the Agent-Related
Persons.
11.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders agree to indemnify the Administrative Agent
and its officers, directors, trustees, professional advisors, employees,
affiliates, agents and controlling persons (each, a "Section 11.7 indemnitee")
(to the extent not reimbursed by the Borrowers and without limiting the
obligation of the Borrowers to do so), ratably according to their respective
Revolving Credit Percentages and
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Term Loan Percentages in effect on the date on which indemnification is sought
under this Section 11.7 (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 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 Section 11.7 indemnitee 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 Section
11.7 indemnittee 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 nonappealable decision
of a court of competent jurisdiction to have resulted from the relevant Section
11.7 indemnitee's gross negligence or willful misconduct. The agreements in this
Section 11.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
11.8 Agent in Its Individual Capacity. The Administrative Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrowers as though the Administrative Agent were
not the Administrative Agent hereunder and under the other Loan Documents and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, the Administrative Agent and its Affiliates may
receive information regarding the Borrowers or their Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Borrowers or their Affiliates) and acknowledge that neither the Administrative
Agent nor its Affiliates shall be under an obligation to provide such
information to them. 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.
11.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders. 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 be
approved by Packard (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 hereunder. If no successor agent is appointed
prior to the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrowers, a successor agent from among the Lenders. Effective upon such
appointment by the Required Lenders or by 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. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 11 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents. If no successor agent has accepted appointment as
Administrative Agent by the date which 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
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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.
11.10 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 Packard or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 13.1.
11.11 Documentation Agent, Co-Syndication Agents and Co-Arrangers.
None of the Documentation Agent, the Co-Syndication Agents and the Co-Arrangers
shall have any duties or responsibilities hereunder in its capacity as such.
SECTION 12. GUARANTEE
12.1 Guarantee. In order to induce the Administrative Agent and the
Lenders to execute and deliver this Agreement and to make or maintain the Loans
to the Subsidiary Borrowers hereunder, and in consideration thereof, Packard
hereby unconditionally and irrevocably guarantees to the Administrative Agent,
for the ratable benefit of the Lenders, the prompt and complete payment and
performance by the Subsidiary Borrowers when due (whether at stated maturity, by
acceleration or otherwise) of the Subsidiary Borrower Obligations, and Packard
further agrees to pay any and all expenses (including, without limitation, all
reasonable fees, charges and disbursements of counsel) which may be paid or
incurred by the Administrative Agent or by the Lenders in enforcing, or
obtaining advice of counsel in respect of, any of their rights under the
guarantee contained in this Section 12. The guarantee contained in this Section
12, subject to Section 12.5, shall remain in full force and effect until the
Subsidiary Borrower Obligations are paid in full, the Commitments are terminated
and no Letters of Credit are outstanding, notwithstanding that from time to time
prior thereto the Subsidiary Borrowers may be free from any Obligations.
Packard agrees that whenever, at any time, or from time to time, it
shall make any payment to the Administrative Agent or any Lender on account of
its liability under this Section 12, it will notify the Administrative Agent and
such Lender in writing that such payment is made under the guarantee contained
in this Section 12 for such purpose. No payment or payments made by the
Subsidiary Borrowers or any other Person or received or collected by the
Administrative Agent or any Lender from the Subsidiary Borrowers or any other
Person by virtue of any action or proceeding or any setoff or appropriation or
application, at any time or from time to time, in reduction of or in payment of
the Subsidiary Borrower Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of Packard under this Section 12 which,
notwithstanding any such payment or payments, shall remain liable for the
Subsidiary Borrower Obligations until, subject to Section 12.5, the Obligations
are paid in full, the Commitments are terminated and no Letters of Credit are
outstanding.
12.2 No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Section 12, Packard hereby
irrevocably waives all rights which may have arisen in connection with the
guarantee contained in this Section 12 to be subrogated to any of the rights
(whether contractual, under the United States Bankruptcy Code (or similar action
under any successor law or under any comparable law), including Section 509
thereof, under common law or otherwise) of the Administrative Agent or any
Lender against the Subsidiary Borrowers or against the Administrative Agent or
any Lender for the payment of the Subsidiary Borrower Obligations, until all
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such Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have been terminated. Packard hereby
further irrevocably waives all contractual, common law, statutory and other
rights of reimbursement, contribution, exoneration or indemnity (or any similar
right) from or against the Subsidiary Borrowers or any other Person which may
have arisen in connection with the guarantee contained in this Section 12, until
the Subsidiary Borrower Obligations shall have been paid in full, no Letters of
Credit shall be outstanding and the Commitments shall have been terminated. So
long as the Subsidiary Borrower Obligations remain outstanding, if any amount
shall be paid by or on behalf of the Subsidiary Borrowers to Packard on account
of any of the rights waived in this Section 12.2, such amount shall be held by
Packard in trust, segregated from other funds of Packard, and shall, forthwith
upon receipt by Packard, be turned over to the Administrative Agent in the exact
form received by Packard (duly indorsed by Packard to the Administrative Agent,
if required), to be applied against the Subsidiary Borrower Obligations, whether
matured or unmatured, in such order as the Administrative Agent may determine.
The provisions of this Section 12.2 shall survive the term of the guarantee
contained in this Section 12 and the payment in full of the Subsidiary Borrower
Obligations and the termination of the Commitments.
12.3 Amendments, etc. with respect to the Subsidiary Borrower
Obligations. Packard shall remain obligated under this Section 12
notwithstanding that, without any reservation of rights against Packard, and
without notice to or further assent by Packard, any demand for payment of or
reduction in the principal amount of any of the Subsidiary Borrower Obligations
made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender, and any of such Obligations continued, and
such Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Lender, and this Agreement, any
other Loan Document, and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Lenders (or the Required Lenders, as the case may be)
may deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the Subsidiary Borrower Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Subsidiary Borrower Obligations or for the
guarantee contained in this Section 12 or any property subject thereto.
12.4 Guarantee Absolute and Unconditional. Packard waives any and
all notice of the creation, renewal, extension or accrual of any of the
Subsidiary Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
12 or acceptance of the guarantee contained in this Section 12; the Subsidiary
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 12; and all dealings
between the Subsidiary Borrowers or Packard, on the one hand, and the
Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 12. Packard waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Subsidiary Borrowers or Packard with respect to the Subsidiary Borrower
Obligations. The guarantee contained in this Section 12 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity or enforceability of this Agreement or any other Loan Document,
any of the Subsidiary Borrower Obligations or any collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time to
time held by the
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Administrative Agent or any Lender, (b) any defense, setoff or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrowers against the Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of the Subsidiary Borrowers or Packard) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Subsidiary
Borrowers for the Subsidiary Borrower Obligations, or of Packard under the
guarantee contained in this Section 12, in bankruptcy or in any other instance.
When the Administrative Agent or any Lender is pursuing its rights and remedies
under this Section 12 against Packard, the Administrative Agent or any Lender
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against the Subsidiary Borrowers or any other Person or against any
collateral security or guarantee for the Subsidiary Borrowers Obligations or any
right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from the Subsidiary Borrowers or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of any Subsidiary Borrower or any such other Person or of
any such collateral security, guarantee or right of offset, shall not relieve
Packard of any liability under this Section 12, and shall not impair or affect
the rights and remedies, whether express, implied or available as a matter of
law, of the Administrative Agent and the Lenders against Packard.
12.5 Reinstatement. The guarantee contained in this Section 12 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Subsidiary Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Subsidiary Borrower or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Subsidiary Borrower or any substantial part of its property, or
otherwise, all as though such payments had not been made.
12.6 Payments. Packard hereby agrees that any payments in respect of
the Subsidiary Borrower Obligations pursuant to this Section 12 will be paid to
the Administrative Agent without setoff or counterclaim in Dollars or the
relevant Offshore Currency, as applicable, at the office of the Administrative
Agent specified in Section 13.6.
SECTION 13. MISCELLANEOUS
13.1 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 13.1. The
Required Lenders and each Loan Party party to the relevant Loan Documents 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, however, 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 or Reimbursement Obligation (or, in
each case, any portion thereof), extend the scheduled date of any amortization
payment in respect of any Term Loan, reduce
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the stated rate of any interest, fee or letter of credit commission payable
hereunder or extend the scheduled date of any payment thereof, amend, modify or
waive any provision of Section 5.10(a), (b) or (c), or increase the amount or
extend the expiration date of any Lender's Revolving Credit Commitment, in each
case without the consent of each Lender (including, in the case of Fronted
Offshore Revolving Credit Loans, each relevant Fronted Revolving Credit Loan
Participant) directly affected thereby; (ii) amend, modify or waive any
provision of this Section 13.1 or reduce any percentage specified in the
definition of Required Lenders or Required Prepayment Lenders, consent to the
assignment or transfer by Packard of any of its rights and obligations under
this Agreement and the other Loan Documents, release the guarantee of Packard
contained in Section 12, release all or substantially all of the Collateral or
release all or substantially all of the Subsidiary Guarantors 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 Section 11 without the written consent of the Administrative Agent; or (v)
amend, modify or waive any provision of Section 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 Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent 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.
13.2 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 Banking 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 Borrowers and the
Administrative Agent, as set forth in an administrative questionnaire delivered
to the Administrative Agent in the case of the Lenders and, as set forth in
Schedule 1.1A or in the relevant Borrowing Subsidiary Agreement in the case of
the Subsidiary Borrowers, or to such other address as may be hereafter notified
by the respective parties hereto:
The Borrowers: Packard BioScience Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: For notices of borrowing, payments and other
administrative matters:
Bank of America National Trust & Savings Association
ABA No.: ▇▇▇▇-▇▇▇▇-▇
Bancontrol No.: 12335-15380
Ref: Packard BioScience Company
Agency Administrative Services #5596
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
For all other notices (including with respect to
amendments and waivers):
Bank of America National Trust and Savings
Association
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Management #10831
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
13.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative 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, 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.
13.4 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.
13.5 Payment of Expenses and Taxes. Packard agrees (and each
Subsidiary Borrower severally agrees, to the extent applicable to actions or
omissions by it under the Loan Documents or related documents to which it is a
party) (a) to pay or reimburse the Administrative Agent for all its
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 Administrative Agent 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 and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, 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 and the
Administrative Agent and their respective officers, directors, trustees,
professional advisors, employees, affiliates, agents and controlling persons
(each, an "indemnitee") harmless from and against any and all
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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 Packard any of its
Subsidiaries or any of the Properties (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), provided, that neither Packard nor
any Subsidiary Borrower shall have any 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. The agreements in this Section 13.5 shall survive
repayment of the Loans and all other amounts payable hereunder.
13.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrowers,
the Lenders, the Issuing Lender, the Fronting Lenders, the Administrative Agent,
all future holders of the Loans and their respective successors and assigns,
except that Packard may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrowers, 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
Borrowers and the Administrative Agent 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 Participant under any such participation have 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. Each 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 13.7(a) as
fully as if it were a Lender hereunder. Each Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 5.11, 5.12 and 5.13
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
5.12, 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.
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(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 Packard and the Administrative Agent (and in the
case of assignments of Revolving Credit Commitments, each Fronting Lender and
the Issuing Lender), which consent in each case will 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, substantially in the form of
Exhibit N executed by such Assignee and such Assignor (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof, by Packard and the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance; 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 Packard 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 13.6, the consent
of Packard shall not be required, and, unless requested by the Assignee and/or
the Assignor, new Notes shall not be required to be executed and delivered by
the Borrowers, for any assignment which occurs at any time when any of the
events described in Section 10(f) shall have occurred and be continuing with
respect to Packard.
(d) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in the case of an Assignee that is not then a
Lender or an affiliate thereof, by Packard and the Administrative Agent)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall promptly accept such
Assignment and Acceptance.
(e) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing Indebtedness of the Borrowers to such Lender
resulting from each Loan 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, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded, provided that the
failure to make any such recordation or any error in such recordation shall not
affect any Borrower's obligations hereunder or under any Note. At the request of
the Administrative Agent, each Fronting Lender will provide to the
Administrative Agent a copy of its records maintained pursuant to this Section.
(f) The Loans made by each Lender shall be evidenced by a Note
issued by the relevant Borrower, substantially in the form of Exhibit ▇-▇, ▇-▇
▇▇ ▇-▇, as the case may be, payable to the order of such Lender. Each Lender is
hereby authorized to record, on the schedule annexed to and constituting a part
of the relevant Note, information regarding the relevant Loans made by such
Lender, and any such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded, provided that the failure to make any
such recordation or any error in such recordation shall not affect any
Borrower's obligations hereunder or under any Note. On or prior to the effective
date of an Assignment and Acceptance, each relevant Borrower, at its own
expense, shall execute and deliver to the Administrative Agent, in exchange for
the relevant Notes, new Notes to the
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order of the Assignee and, if applicable, the Assignor. Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the Notes replaced
thereby.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 13.6 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.
13.7 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 10(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 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 Borrowers,
any such notice being expressly waived by each of the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrowers 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 Borrowers. Each Lender agrees
promptly to notify the Borrowers 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.
13.8 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 Packard and the Administrative
Agent.
13.9 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.
83
13.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
13.11 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.
13.12 Submission To Jurisdiction; Waivers. Each of the Borrowers
hereby irrevocably and unconditionally:
(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 of America 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, to Packard
at its address set forth in Section 13.2 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 13.12 any special, exemplary, punitive or consequential
damages.
13.13 Acknowledgements. Each of the Borrowers 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 the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to such Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and
such Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
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(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 Borrowers and the Lenders.
13.14 WAIVERS OF JURY TRIAL. THE BORROWERS, THE ADMINISTRATIVE AGENT
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.
13.15 Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder in one
currency into another currency, each party hereto (including any Subsidiary
Borrower) agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Banking Day immediately preceding the day on
which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that,
on the Banking Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 13.15 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
13.16 Confidentiality. Each of the Administrative Agent 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 the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any Lender, (b) to
any Participant or Assignee (each, a "Transferee") or prospective Transferee
which agrees to comply with the provisions of this Section 13.16, (c) to the
employees, directors, agents, attorneys, accountants and other professional
advisors of the Administrative Agent or such Lender or their respective
affiliates, (d) upon the request or demand of any Governmental Authority having
jurisdiction over the Administrative 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 requested or required to do
so in connection with any litigation or similar proceeding, (g) which has been
publicly disclosed other than in breach of this Section 13.16, (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.
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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.
PACKARD BIOSCIENCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE, as
Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Authorized Signatory
BANCAMERICA SECURITIES, INC., as a Co-
Arranger and a Co-Syndication Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
CIBC WOOD GUNDY SECURITIES CORP., as a
Co-Arranger and a Co-Syndication Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
86
BANK OF AMERICA ILLINOIS, as a Lender
By: /s/ [ILLEGIBLE]
-----------------------------------------
Name:
Title:
ABN AMRO BANK N.V., as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Group Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Group Vice President
BANK OF BOSTON CONNECTICUT, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
BANK OF SCOTLAND, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF TOKYO MITSUBISHI TRUST
COMPANY, as a Lender
By: /s/ [ILLEGIBLE]
-----------------------------------------
Name:
Title:
FLEET NATIONAL BANK, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
87
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY, as a
Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Deputy General Manager
THE NIPPON CREDIT BANK, LTD., as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
STATE STREET BANK AND TRUST COMPANY,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ALLSTATE LIFE INSURANCE COMPANY, as a
Lender
By: /s/ {ILLEGIBLE]
-----------------------------------------
Name:
Title:
By: /s/ {ILLEGIBLE]
-----------------------------------------
Name:
Title:
88
THE ING CAPITAL SENIOR SECURED HIGH
INCOME FUND, L.P., as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Portfolio
Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE
FUND, INC., as a Lender
By: /s/ [ILLEGIBLE]
-----------------------------------------
Name:
Title:
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PILGRIM AMERICAN PRIME RATE TRUST, as a
Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President