EXHIBIT 10.13
________________________________________________________________________________
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of September 29, 1995
among
SUNRISE MEDICAL, INC.,
THE SUBSIDIARY BORROWERS AND GUARANTORS
FROM TIME TO TIME PARTY HERETO
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged By
[LOGO APPEARS HERE] BA SECURITIES, INC.
________________________________________________________________________________
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS........................................ 1
1.01 Defined Terms................................................ 1
1.02 Use of Defined Terms......................................... 29
1.03 Accounting Terms............................................. 29
1.04 Exhibits and Schedules....................................... 29
1.05 Currency Equivalents Generally............................... 29
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES....................................... 30
2.01 The Advances................................................. 30
2.02 Making the Committed Advances................................ 31
2.03 Fees......................................................... 35
2.04 Repayment of Advances........................................ 36
2.05 Interest Rate Provisions, Etc................................ 36
2.06 Voluntary Conversions and Continuations of
Committed Advances........................................... 42
2.07 Bid Borrowings............................................... 44
2.08 Procedure for Bid Borrowings................................. 45
2.09 The Swing Line............................................... 49
2.10 Reduction of Commitments..................................... 51
2.11 Mandatory Prepayments........................................ 52
2.12 Optional Prepayments......................................... 52
2.13 Increased Costs.............................................. 53
2.14 Evidence of Debt............................................. 55
2.15 Payments and Computations.................................... 56
2.16 Taxes........................................................ 58
2.17 Payments on Business Days.................................... 61
2.18 Sharing of Payments, Etc..................................... 61
2.19 Currency Equivalents......................................... 62
2.20 Funding Losses............................................... 63
2.21 Use of Proceeds.............................................. 63
2.22 Funding Sources.............................................. 64
2.23 Borrower's Agent............................................. 64
ARTICLE III
AMOUNT AND TERMS OF LETTERS OF
CREDIT AND PARTICIPATIONS THEREIN....................................... 64
3.01 Letters of Credit............................................ 64
3.02 Issuing the Letters of Credit................................ 65
3.03 Reimbursement Obligations.................................... 65
3.04 Participations Purchased by the Lenders...................... 66
3.05 Letter of Credit Fees........................................ 67
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3.06 Indemnification: Nature of the Issuing Bank's
Duties....................................................... 68
3.07 Increased Costs.............................................. 69
3.08 Uniform Customs and Practice................................. 71
ARTICLE IV
CONDITIONS OF EFFECTIVENESS............................................. 71
4.01 Conditions to Initial Advances............................... 71
4.02 Conditions Precedent to All Borrowings and All
Issuances.................................................... 74
4.03 Conditions to Effectiveness of Subsidiary
Borrower Electing to Participate After the
Closing Date................................................. 74
ARTICLE V
REPRESENTATIONS AND WARRANTIES.......................................... 75
5.01 Existence and Qualification; Power; Compliance
With Laws.................................................... 75
5.02 Authority; Compliance with Other Agreements and
Instruments.................................................. 76
5.03 No Governmental Approvals Required........................... 76
5.04 Subsidiaries of Borrower..................................... 77
5.05 Financial Statements......................................... 77
5.06 No Other Liabilities; No Material Adverse Effect............. 77
5.07 Title to Property............................................ 77
5.08 Intangible Assets............................................ 77
5.09 Governmental Regulation...................................... 78
5.10 Litigation................................................... 78
5.11 Binding Obligations.......................................... 78
5.12 ERISA........................................................ 78
5.13 Regulations G and U.......................................... 79
5.14 Disclosure................................................... 79
5.15 Tax Liability................................................ 79
5.16 Hazardous Materials.......................................... 79
5.17 Employee Matters............................................. 79
5.18 Projections.................................................. 79
ARTICLE VI
AFFIRMATIVE COVENANTS................................................... 80
6.01 Financial and Business Information........................... 80
6.02 Payment of Taxes and Other Potential Liens................... 83
6.03 Preservation of Existence.................................... 83
6.04 Maintenance of Properties.................................... 83
6.05 Maintenance of Insurance..................................... 84
6.06 Compliance With Laws......................................... 84
6.07 Inspection Rights............................................ 84
6.08 Keeping of Records and Books of Account...................... 84
6.09 Compliance With Agreements................................... 84
6.10 Hazardous Materials Laws..................................... 84
6.11 Additional Guarantors After the Closing Date................. 85
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Section Page
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ARTICLE VII
NEGATIVE COVENANTS...................................................... 86
7.01 Disposition of Property...................................... 86
7.02 Mergers...................................................... 86
7.03 Investments and Acquisitions................................. 86
7.04 Hostile Tender Offers........................................ 87
7.05 ERISA........................................................ 87
7.06 Liens; Negative Pledges; Sales and Leasebacks................ 88
7.07 Indebtedness................................................. 88
7.08 Conduct of Business.......................................... 89
7.09 Leverage Ratio............................................... 89
7.10 Minimum Consolidated Tangible Net Worth...................... 89
7.11 Interest Coverage Ratio...................................... 90
7.12 Contingent Obligations....................................... 90
7.13 Limitations on Restrictions Affecting Dividends
and Other Payments by Subsidiaries........................... 90
7.14 Restricted Junior Payments................................... 91
7.15 Transactions with Affiliates................................. 91
7.16 Subsidiaries................................................. 91
ARTICLE VIII
GUARANTY................................................................ 92
8.01 Guaranty..................................................... 92
8.02 No Impairment of Guaranties.................................. 93
8.03 Continuation and Reinstatement, Etc.......................... 94
8.04 Guaranteed Amount............................................ 94
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
UPON EVENTS OF DEFAULT.................................................. 95
9.01 Events of Default............................................ 95
9.02 Remedies Upon Event of Default............................... 97
ARTICLE X
THE AGENT............................................................... 99
10.01 Appointment and Authorization............................... 99
10.02 Delegation of Duties........................................ 99
10.03 Liability of Agent..........................................100
10.04 Reliance by Agent...........................................100
10.05 Notice of Default...........................................101
10.06 Credit Decision.............................................101
10.07 Indemnification.............................................102
10.08 Agent in Individual Capacity................................102
10.09 Successor Agent.............................................103
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Section Page
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ARTICLE XI
MISCELLANEOUS...........................................................103
11.01 Cumulative Remedies; No Waiver...............................103
11.02 Amendments; Consents.........................................104
11.03 Costs, Expenses and Taxes....................................104
11.04 Nature of Lender's Obligations...............................105
11.05 Survival of Representations and Warranties...................106
11.06 Notices......................................................106
11.07 Execution in Counterparts....................................106
11.08 Binding Effect; Assignment...................................106
11.09 Indemnity by Loan Parties....................................110
11.10 Hazardous Materials Indemnity................................112
11.11 Nonliability of Lenders......................................113
11.12 Confidentiality..............................................114
11.13 No Third Parties Benefited...................................114
11.14 Right of Setoff..............................................114
11.15 Judgment Currency............................................115
11.16 Further Assurances...........................................115
11.17 Integration..................................................115
11.18 Governing Law................................................116
11.19 Severability of Provisions...................................116
11.20 Headings.....................................................116
11.21 Conflict in Loan Documents...................................116
11.22 WAIVER OF TRIAL BY JURY......................................116
11.23 PURPORTED ORAL AMENDMENTS....................................116
11.24 Amendment and Restatement of Existing Credit
Agreement....................................................117
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SCHEDULES
1.01(a) Alternative Currency Accounts
1.01(b) Commitments
1.01(c) Subsidiary Borrower Sublimits
5.04 Subsidiaries and Minority Interests
5.10 Litigation
7.03(a) Investments
11.06 Lending Offices, Addresses for Notices
EXHIBITS
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A Committed Advance Note
B Bid Advance Note
C Commitment Assignment and Acceptance
D Certificate of Extension
E Notice of Borrowing
F Notice of Conversion/Continuation
G Election to Participate
H Request for Extension
I Compliance Certificate
J Competitive Bid Request
K Invitation for Competitive Bids
L Competitive Bid
M Form of Subordination Provisions
N Form of Designated Bidder Agreement
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SECOND AMENDED AND RESTATED
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CREDIT AGREEMENT
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THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement") is
entered into as of September 29, 1995 by and among Sunrise Medical, Inc., a
Delaware corporation ("Sunrise" or "Borrower"), the subsidiaries of Borrower
from time to time signatory to this Agreement as "Subsidiary Borrowers" or
"Guarantors," Bank of America National Trust and Savings Association, a national
banking association, and the other banks signatory to this Agreement together
with each bank which may hereafter execute and deliver the Commitment Assignment
and Acceptance herein described (collectively, the "Lenders"), and Bank of
America National Trust and Savings Association, as agent for the Lenders (in
such capacity, "Agent").
RECITALS
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A. The Borrower, the lenders party thereto, the subsidiary borrowers
and guarantors thereunder and Agent entered into a Credit Agreement dated as of
December 12, 1991, as amended, which agreement was amended and restated by a
First Amended and Restated Credit Agreement dated as of August 17, 1994, among
the Borrower, the subsidiary borrowers and guarantors thereunder, the lenders
parties thereto and Agent (the "Existing Credit Agreement").
B. By this Agreement the parties desire to amend and restate the
Existing Credit Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
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SECTION 1.01 Defined Terms. As used in this Agreement, the following
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terms shall have the meanings set forth respectively after each:
"Absolute Rate" has the meaning specified in Section 2.08(c).
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"Absolute Rate Auction" means a solicitation of Competitive Bids
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setting forth Absolute Rates pursuant to Section 2.08.
"Absolute Rate Bid Advance" means a Bid Advance that bears interest at
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a rate determined with reference to the Absolute Rate.
"Accumulated Funding Deficiency" shall mean an accumulated funding
------------------------------
deficiency as defined in Section 302 of ERISA and Section 412 of the Code.
"Acquisition" means any transaction, or any series of related
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transactions, by which a Person directly or indirectly (a) acquires any ongoing
business or all or substantially all of the assets of any firm, partnership,
joint venture, corporation or division thereof engaged in an ongoing business,
whether through purchase of assets, merger or otherwise, (b) acquires control of
at least a majority of the securities which have ordinary voting power for the
election of directors of a corporation engaged in an ongoing business or (c)
acquires control of a 50% or more ownership interest in any partnership or joint
venture engaged in an ongoing business.
"Adjusted Cash Flow" means, as of the last day of any Fiscal Quarter,
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Consolidated Net Income for the four Fiscal Quarters then ending plus (a)
----
depreciation, amortization, deferred taxes and other non-Cash expenses,
including non-Cash amounts relating to non-recurring items to the extent that
they will not result in a future cash outflow, of Borrower and its Subsidiaries
for that fiscal period, plus (b) Interest Charges expensed during that fiscal
----
period, minus (c) Capital Expenditures made by Borrower or any Subsidiary during
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that fiscal period, and minus (d) the aggregate dividends made by Borrower to
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its shareholders and by any Subsidiary which is not a Wholly-Owned Subsidiary to
its minority shareholders, during that fiscal period. Each of the foregoing
components of Adjusted Cash Flow shall be computed without duplication and, in
the case of clauses (a) and (b), only to the extent included in determining
Consolidated Net Income for such fiscal period.
"Advance" means a Committed Advance, a Swing Line Advance or a Bid
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Advance.
"Affiliate" means, as to any Person, any other Person which directly
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or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (including, with its
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correlative meanings, "controlled by" and "under common control with") shall
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mean possession, directly or indirectly, of power to direct or cause
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the direction of management or policies (whether through ownership of securities
or partnership or other ownership interests, by contract or otherwise); provided
that, in any event, any Person which owns directly or indirectly 5% or more of
the securities having ordinary voting power for the election of directors or
other governing body of a corporation that has more than 300 record holders of
such securities or 5% or more of the partnership or other ownership interests of
any other Person that has more than 300 record holders of such interests will be
deemed to control such corporation or other Person.
"Agent" means Bank of America National Trust and Savings Association,
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as agent for the Lenders hereunder and under the other Loan Documents, and each
successor agent.
"Agent's Account" means, with respect to any payments to be made in
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Dollars, the Agent's account maintained at the office of the Agent at Bank of
America, San Francisco, California, ABA ▇▇▇-▇▇▇-▇▇▇, Attention: Agency
Management Services #5596, Account No. 12339-15444 Ref.: Sunrise Medical, Inc.,
or such other account (located in the United States) as the Agent may from time
to time specify in writing to the Borrower and the Lenders and, with respect to
any payments to be made in any Alternative Currency, those accounts indicated on
Schedule 1.01(a) hereto, or, in each case, such other account as the Agent may
from time to time specify in writing to the Borrowers and the Lenders.
"Agent's Office" means the office of Bank of America National Trust
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and Savings Association set forth on Schedule 11.06 under Agent or such other
office as Agent may designate in writing to the Borrower and the Lenders.
"Agent-Related Persons" means Bank of America and any successor agent
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arising under Section 10.09, together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agreement" means this Second Amended and Restated Credit Agreement,
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either as originally executed or as it may from time to time be supplemented,
modified, amended, renewed, extended or supplanted.
"Alternative Currencies" means Pounds Sterling, Canadian Dollars,
----------------------
Danish Krone, Deutsche Marks, Dutch Guilders, Spanish Pesetas, Swiss Francs,
French Francs, Belgian Francs, Italian Lira, ECU, Swedish Krona, Norwegian
Krone, Portuguese Escudo, Australian Dollars, Japanese Yen and any other freely
available currency notified to Agent upon not less than 10 Business Days'
notice.
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"Alternative Currency Sublimit" means $150,000,000.
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"Amortization Amount" means for each Amortization Date, $20,000,000;
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provided, however, if the Final Maturity Date is extended pursuant to Section
2.10(c), the Amortization Amount otherwise applicable for each year between the
date of the effectiveness of such extension and the Final Maturity Date shall
similarly be extended one year.
"Amortization Date" means January 15 of each year commencing with,
-----------------
subject to Section 2.10(b), January 15, 1998.
"Applicable Lending Office" means, with respect to each Lender, such
-------------------------
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurocurrency Lending Office in the case of a Eurocurrency Rate Advance.
"Applicable Margin" means, (a) with respect to each Committed Advance,
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the incremental percentage to be added to the quoted interest rate based on the
then applicable Leverage Ratio in accordance with the following schedule, (b)
with respect to the Letter of Credit fees referred to in Section 3.05(a), the
fee based on the then applicable Leverage Ratio in accordance with the following
schedule and (c) with respect to the commitment fee referred to in Section
2.03(b), the fee based on the then applicable Leverage Ratio in accordance with
the following schedule:
Eurocurrency
Rate Advance Base Rate Commit-
Margin and LC Advance ment
Leverage Ratio Fee Margin Fee
-------------- ----------- --------- -------
less than 1.00:1 0.250% -0.250% 0.100%
more than or equal to 1.00:1 but less than 1.75:1 0.300 -0.250 0.125
more than or equal to 1.75:1 but less than 2.25:1 0.350 -0.250 0.125
more than or equal to 2.25:1 but less than 2.75:1 0.425 0.000 0.150
more than or equal to 2.75:1 but less than 3.25:1 0.500 0.000 0.200
more than or equal to 3.25:1 but less than 3.50:1 0.625 0.000 0.250
Any change in the "Applicable Margin" shall be effective upon receipt by the
Agent from a Senior Officer of the Borrower of a Compliance Certificate
demonstrating such fact; provided that, with respect to Advances other than Base
Rate Advances, the new Applicable Margin with respect to each such Advance shall
be effective upon the earlier of (i) the termination of the then existing
Interest Period with respect thereto and (ii) the next interest payment date for
such Advance; and with respect to Base
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Rate Advances, Letters of Credit and the commitment fee, such change in the
Applicable Margin shall be effective immediately.
"Arranger" means BA Securities, Inc.
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"Bank of America" means Bank of America National Trust and Savings
---------------
Association in its capacity as a Lender.
"Base Rate" means a fluctuating rate per annum equal to the higher of
---------
(a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest publicly
announced from time to time by Bank of America in San Francisco, California, as
its reference rate. It is a rate set by Bank of America based upon various
factors including Bank of America'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.
"Base Rate Advance" means an Advance denominated in Dollars which
-----------------
bears interest as provided in Section 2.05(a).
"Bid Advance" means an Advance by a Lender to the Borrower under
-----------
Section 2.07, which may be a Eurocurrency Rate Bid Advance or an Absolute Rate
Bid Advance.
"Bid Advance Note" means each promissory note, substantially in the
----------------
form of Exhibit B, executed and delivered by the Borrower to a Lender pursuant
to Section 2.14(c).
"Bid Borrowing" means a Borrowing consisting of one or more Bid
-------------
Advances made to the Borrower on the same day by one or more Lenders.
"Borrower" means Sunrise and its successors and permitted assigns;
--------
provided, however, as used in Article II (other than in Sections 2.07, 2.08 and
2.09), Article III and Section 11.24, "Borrowers" or a reference to "a Borrower"
shall be deemed to mean and include, collectively, Sunrise and each Subsidiary
Borrower.
"Borrowing" means a borrowing consisting of Advances of the same
---------
Interest Type made to the Borrower on the same day by the Lenders under Article
II, and may be a Committed Borrowing, a Bid Borrowing or a Swing Line Advance.
"Business Day" means a day of the year on which banks are not required
------------
or authorized to close in the City of New York, the City of San Francisco or the
City of Los Angeles and, with respect to Eurocurrency Rate Advances, a day on
which dealings are carried on in the London interbank market and banks are open
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for business in London and in the country of issue of the currency of such
Eurocurrency Rate Advance.
"Capital Expenditure" means any expenditure that is considered a
-------------------
capital expenditure under Generally Accepted Accounting Principles, including
any amount which is required to be treated as an asset subject to a Capital
Lease.
"Capital Lease" means, as to any Person, a lease of any property by
-------------
that Person as lessee that is, or should be in accordance with Generally
Accepted Accounting Principles (including Financial Accounting Standards Board
Statement No. 13, as amended or superseded from time to time), recorded as a
"capital lease" on a balance sheet of that Person prepared in accordance with
Generally Accepted Accounting Principles.
"Cash" means all monetary items (including currency, coin and bank
----
demand deposits) that are treated as cash under Generally Accepted Accounting
Principles.
"Cash Equivalents" means, when used in connection with any Person,
----------------
that Person's Investments in:
(a) Government Securities due within one year of the making of
the Investment;
(b) direct obligations of any State of the United States of
America or any political subdivision of any such State given on the date of
such investment a credit rating of at least A by ▇▇▇▇▇'▇ or A by S&P, in
each case due within one year from the making of the Investment;
(c) certificates of deposit issued by, deposits in, eurodollar
deposits through, bankers' acceptances of, and repurchase and reverse
repurchase agreements covering Government Securities executed by, (i) any
Lender or (ii) any bank doing business in and incorporated under the laws
of the United States of America or any State thereof whose deposits are
insured through the Federal Deposit Insurance Corporation, or any successor
thereto, and having on the date of such Investment combined capital,
surplus and undivided profits of at least $1,000,000,000 and having a
credit rating of at least A by ▇▇▇▇▇'▇ or A by S&P, in each case due within
one year after the date of the making of the Investment;
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, banker's acceptances of and repurchase and
reverse repurchase agreements covering Government Securities executed by,
any
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branch or office located in the United States of America of (i) any Lender
or (ii) any bank incorporated under the laws of any jurisdiction outside
the United States of America whose deposits in the United States of America
are insured through the Federal Deposit Insurance Corporation, or any
successor thereto, and having on the date of such Investment combined
capital, surplus and undivided profits of at least $2,000,000,000 and
having a credit rating of at least A by ▇▇▇▇▇'▇ or A by S&P, in each case
due within one year after the date of the making of the Investment;
(e) commercial paper of corporations doing business in and
incorporated under the laws of the United States of America or any State
thereof given on the date of such Investment a credit rating of at least A-
1 by ▇▇▇▇▇'▇, P-1 by S&P or the highest available rating of any other
national rating agency acceptable to the Agent, in each case due within 270
days after the making of the Investment;
(f) in the case of Investments made by a Foreign Subsidiary,
investment grade securities of the highest rating available in the
jurisdiction in which such Investment is made; and
(g) domestic money market funds as defined in rule 2a-7 under
the Investment Company Act of 1940, as amended, advised and managed by an
organization managing assets valued in excess of $500,000,000 and
registered with the Securities and Exchange Commission as an investment
advisor under the Investment Advisors Act of 1940 and investing primarily
in other types of permitted Cash Equivalents; provided that any such
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investment requires or permits such Person, at its option, to require
repayment on an overnight basis.
"Certificate of Extension" means a certificate with respect to the
------------------------
extension of the Final Maturity Date substantially in the form of Exhibit D,
signed by each Lender, and properly completed to provide all information
required to be included therein.
"Change of Control" means the occurrence, after the date of this
-----------------
Agreement, of any Person or two or more Persons acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) (a "13D Group")
but excluding ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or a 13D Group of which ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is a
member, directly or indirectly, of securities of the Borrower (or other
securities convertible into such securities) representing, together with the
securities already
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held by such Person or Persons, 25% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors.
"Change of Ownership" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (together with the 13D
-------------------
Group of which ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is a member) selling or transferring securities
of the Borrower representing (in the aggregate for all such sales or transfers
after the Closing Date) 25% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors owned
by such 13D Group as of the Closing Date; provided however, transfers among
members of such affiliated group shall be excluded for purposes of any such
determination, and provided, further, that no Change of Ownership will be deemed
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to occur on or after the death of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Closing Date" means the time and Business Day on which the conditions
------------
set forth in Section 4.01 are satisfied or waived pursuant to Section 11.01.
"Code" means the Internal Revenue Code of 1986, as amended or replaced
----
and as in effect from time to time.
"Commercial Letter of Credit" means a commercial letter of credit in
---------------------------
the customary form used by the Issuing Bank, issued by the Issuing Bank pursuant
to Section 3.01, either as originally issued or as the same from time to time
may be supplemented, modified, amended, renewed or extended.
"Commitment" means, at any time for any Lender, the amount set forth
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opposite such Lender's name on Schedule 1.01(b) hereto, as such amount may be
reduced or reinstated from time to time pursuant to the terms of this Agreement.
"Commitment Assignment and Acceptance" means a Commitment Assignment
------------------------------------
and Acceptance executed by a Lender and an Eligible Assignee substantially in
the form of Exhibit C and registered with the Agent pursuant to Section
11.08(e).
"Committed Advance" means an advance by a Lender to the Borrower
-----------------
pursuant to Section 2.01(a), which advance may be a Base Rate Advance or a
Eurocurrency Rate Committed Advance.
"Committed Advance Note" means each promissory note, substantially in
----------------------
the form of Exhibit A, executed and delivered by the Borrower or a Subsidiary
Borrower to a Lender at the request of such Lender pursuant to Section 2.14(b).
"Committed Borrowing" means a borrowing consisting of Committed
-------------------
Advances of the same Interest Type made on the same
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Business Day pursuant to the provisions of Section 2.02(a). The number of
Borrowings that may be outstanding at any one time is limited by Section 2.05(b)
hereof.
"Competitive Bid" means an offer by a Lender to make a Bid Advance in
---------------
accordance with Section 2.08(c).
"Competitive Bid Request" has the meaning specified in Section
-----------------------
2.08(a).
"Compliance Certificate" means a compliance certificate in the form of
----------------------
Exhibit I signed, on behalf of Borrower, by a Senior Officer of Borrower.
"Consolidated EBITDA" means, for any period for the Borrower and its
-------------------
Subsidiaries, an amount equal to the sum of (a) Consolidated Net Income, (b)
Interest Charges, (c) the amount of taxes, based on or measured by income, used
or included in the determination of Consolidated Net Income and (d) the amount
of depreciation and amortization expense deducted in determining Consolidated
Net Income, all determined in conformity with Generally Accepted Accounting
Principles.
"Consolidated Funded Indebtedness" means, for the Borrower and its
--------------------------------
Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal
amount of all obligations and liabilities, whether current or long-term, for
borrowed money (including extensions of credit hereunder), (b) that portion of
obligations with respect to capital leases which is capitalized in the
consolidated balance sheet of the Borrower and its Subsidiaries and (c) all
Contingent Obligations of the Borrower and its Subsidiaries with respect to
Indebtedness of Persons other than the Borrower or any of its Subsidiaries
(without duplication), all determined in conformity with Generally Accepted
Accounting Principles.
"Consolidated Net Income" means, with respect to any fiscal period,
-----------------------
the consolidated net income of the Borrower and its Subsidiaries from continuing
operations after extraordinary items (excluding gains or losses from
Dispositions of assets) for that period, determined in accordance with Generally
Accepted Accounting Principles consistently applied.
"Consolidated Tangible Net Worth" means, as of any date of
-------------------------------
determination, (a) Shareholders' Equity of the Borrower and its Subsidiaries on
that date, minus (b) any Intangible Assets of Borrower and its Subsidiaries on
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that date, deducting from such Intangible Assets $72,000,000.
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"Consolidated Total Assets" means, as of any date of determination,
-------------------------
the consolidated total assets of the Borrower and its Subsidiaries determined in
accordance with Generally Accepted Accounting Principles.
"Contingent Obligation" means, as to any Person, any (a) direct or
---------------------
indirect guarantee of Indebtedness of, or other obligation performable by, any
other Person, including any endorsement (other than for collection or deposit in
the ordinary course of business), co-making or sale with recourse of the
obligations of any other Person or (b) assurance given to an obligee with
respect to the performance of an obligation by, or the financial condition of,
any other Person, whether direct, indirect or contingent, including any purchase
or repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item of such other Person, or any "keep-
well" or similar arrangement of whatever nature having the effect of assuring or
holding harmless any obligee against loss with respect to any obligation of such
other Person. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the related primary
obligation (unless the Contingent Obligation is limited by its terms to a lesser
amount, in which case to the extent of such amount) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the Person in good faith.
"Continue," "Continuation" and "Continued" each refer to a
-------- ------------ ---------
continuation of Committed Advances of Dollars or an Alternative Currency, as the
case may be, comprising the same Committed Borrowing, as Committed Advances
denominated in the same currency for a specified Interest Period.
"Continuing Letters of Credit" has the meaning set forth in Section
----------------------------
3.01.
"Contractual Obligation" means, as to any Person, any obligation under
----------------------
any outstanding securities issued by that Person or any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its property is bound.
"Convert," "Conversion" and "Converted" each refers to a conversion of
------- ---------- ---------
Committed Advances of one Interest Type into Committed Advances of another
Interest Type pursuant to Section 2.06(a).
- 10 -
"Current Maturities of Long-Term Debt" means, as of any date of
------------------------------------
determination, all payments of principal due under the terms of any long-term
Indebtedness within 12 calendar months after such date, determined in accordance
with Generally Accepted Accounting Principles as reported in the Borrower's SEC
filing for the period of determination; provided, however, that the current
maturity of Indebtedness incurred hereunder shall, for purposes of calculating
the Interest Coverage Ratio, be deemed to be $5,000,000 during the twelve months
preceding the Final Maturity Date.
"Debt Service" means, as of the last day of each Fiscal Quarter,
------------
Interest Charges during the four Fiscal Quarters then ending plus the Current
Maturities of Long-Term Debt.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
------------------
America, as amended from time to time, and all other applicable dissolution,
liquidation, conservatorship, bankruptcy, moratorium, readjustment of debt,
compromise, rearrangement, receivership, insolvency, reorganization or similar
debtor relief laws from time to time in effect affecting the rights of creditors
generally.
"Default" means any event that, with the giving of any applicable
-------
notice or passage of time specified in Section 9.01, or both, would be an Event
of Default.
"Default Rate" means the Base Rate plus the Applicable Margin plus 2%.
------------
"Designated Bidder" means (a) an Eligible Assignee or (b) a special
-----------------
purpose corporation that is engaged in making, purchasing or otherwise investing
in commercial loans in the ordinary course of its business and that issues (or
the parent of which issues) commercial paper rated at least "Prime-1" (or the
then equivalent grade) by Moody's or "A-1" (or the equivalent grade) by S&P
that, in either case, (x) is organized under the laws of the United States or
any state thereof, (y) shall have been designated as such pursuant to Section
2.07(b) and (z) is not otherwise a Lender.
"Disposition" means the sale, transfer or other disposition in any
-----------
single transaction or series of related transactions of any asset, or group of
related assets, of Borrower or any of its Subsidiaries, other than (a) the
disposition of Cash and (b) the disposition of equipment (i) that has become
obsolete or (ii) that is replaced by equipment performing substantially the same
function not later than 90 days after such sale or disposition.
- 11 -
"Dollars" or "$" means United States of America dollars.
-------
"Domestic Lending Office" means, with respect to any Lender, the
-----------------------
office of such Lender specified as its "Domestic Lending Office" under its name
on Schedule 11.06 hereto or on Schedule I to the Commitment Assignment and
Acceptance pursuant to which it became a Lender, or such other office or
Affiliate of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Domestic Subsidiaries" means those Subsidiaries of any Borrower which
---------------------
are incorporated under the laws of any State of the United States and which are
engaged in business primarily in the United States, other than Subsidiaries
which are Subsidiaries of a Foreign Subsidiary.
"Election to Participate" means a certificate of election, in the form
-----------------------
of Exhibit G, to be executed by a Foreign Subsidiary which is to become a
Subsidiary Borrower.
"Eligible Assignee" means, as of the date of any Commitment Assignment
-----------------
and Acceptance, (a) a commercial bank organized under the laws of the United
States of America, or any State thereof, and having at that date total assets in
excess of $1,000,000,000, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having at that date total assets in excess of $2,000,000,000 provided that such
bank is acting through a branch, subsidiary or agency located in the United
States of America, (c) the central bank of any country which is a member of the
OECD, and (d) any Affiliate (other than an individual) of a bank described in
any of the foregoing clauses which is engaged in the business of commercial
banking.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
-----
any regulations issued pursuant thereto, as amended or replaced and as in effect
from time to time.
"ERISA Affiliate" means, with respect to any Person, any Person (or
---------------
any trade or business, whether or not incorporated) that is under common control
with that Person within the meaning of Sections 414(b) and (c) of the Code.
"Eurocurrency Auction" means a solicitation of Competitive Bids
--------------------
setting forth a Eurocurrency Rate Bid Margin pursuant to Section 2.08.
- 12 -
"Eurocurrency Lending Office" means, with respect to any Lender, the
---------------------------
office of such Lender specified as its "Eurocurrency Lending Office" on Schedule
11. 06 hereto or on Schedule I to the Commitment Assignment and Acceptance
pursuant to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office or Affiliate of such Lender as
such Lender may from time to time specify to the Borrower and the Agent.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
------------------------
promulgated by the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurocurrency Rate" means, for each Interest Period for each
-----------------
Eurocurrency Rate Advance comprising part of the same Borrowing, a rate of
interest per annum equal at all times during such Interest Period to the rate
per annum obtained by dividing (i) the rate of interest determined solely by the
Agent to be equal to the average (rounded upward to the nearest whole multiple
of 1/16 of 1% per annum, if such average is not such a multiple) of the rates
per annum at which deposits in Dollars (in the case of a Eurocurrency Rate
Advance denominated in Dollars) or the relevant Alternative Currency (in the
case of a Eurocurrency Rate Advance denominated in an Alternative Currency) are
offered by Bank of America to prime banks in the London interbank market at or
about 11:00 A.M. (London time) two Business Days before the first day of such
Interest Period for a period equal to such Interest Period and, (A) in the case
of a Committed Borrowing, in an amount approximately equal to Bank of America's
Eurocurrency Rate Advance comprising part of such Committed Borrowing, and (B)
in the case of a Bid Borrowing, in an amount substantially equal to the
aggregate amount of such Bid Borrowing requested by the Borrower, by (ii) a
percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage for such
Interest Period. The determination by the Agent of the Eurocurrency Rate shall
be conclusive in the absence of manifest error.
"Eurocurrency Rate Advance" means an Advance denominated in Dollars
-------------------------
which bears interest as provided in Section 2.05(d), an Advance denominated in
an Alternative Currency which bears interest as provided in Section 2.05(e), or
a Bid Advance which bears interest based on the Eurocurrency Rate.
"Eurocurrency Rate Bid Advance" means a Bid Advance denominated in
-----------------------------
Dollars made which bears interest based on the Eurocurrency Rate.
- 13 -
"Eurocurrency Rate Bid Margin" has the meaning specified in subsection
----------------------------
2.08(c)(ii)(C).
"Eurocurrency Rate Committed Advance" means a Committed Advance
-----------------------------------
denominated in Dollars which bears interest as provided in Section 2.05(d) or an
Advance denominated in an Alternative Currency which bears interest as provided
in Section 2.05(e).
"Eurocurrency Rate Reserve Percentage" for each Interest Period for
------------------------------------
each Eurocurrency Rate Advance means the reserve percentage applicable during
such Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System or any successor or, in the case of
Eurocurrency Rate Advances denominated in Pounds Sterling, the reserve
percentage applicable during such Interest Period under regulations issued from
time to time by the Bank of England or any successor or, in the case of
Eurocurrency Rate Advances denominated in other foreign currencies, the reserve
percentage applicable during such Interest Period under regulations issued from
time to time by such other foreign central bank or any successors thereto (or,
in each case, if different percentages shall be applicable during different
periods within such Interest Period, the daily average of such percentages
during such Interest Period) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for the Agent with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Event of Default" has the meaning set forth for that term in Section
----------------
9.01.
"Excluded Taxes" has the meaning set forth for that term in Section
--------------
2.16.
"Existing Credit Agreement" means the Credit Agreement dated as of
-------------------------
December 12, 1991 among the Borrower, the subsidiary borrowers and guarantors
thereunder, the lenders parties thereto and Bank of America National Trust and
Savings Association, as agent, as amended, as amended and restated by a First
Amended and Restated Credit Agreement dated as of August 17, 1994, among the
Borrower, the subsidiary borrowers and guarantors thereunder, the lenders
parties thereto and Agent.
"Facility Usage" means, as of any date of determination, the sum of
--------------
(a) the Outstanding Advances plus (b) the aggregate Letter of Credit Liability
plus (c) the Restricted Commitment Amount.
- 14 -
"Federal Funds Rate" means, as of any date of determination, the rate
------------------
per annum (rounded upwards, if necessary, to the nearest one-hundredth (1/100th)
of one percent (1%)), equal to the weighted average of the rates of overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers on such date as published by the Federal Reserve Bank
of San Francisco on the Business Day immediately following such date; provided,
however, that: (a) if the date for which such rate is to be determined is not a
Business Day, the Federal Funds Rate for such date shall be such rate on such
transactions on the immediately preceding Business Day as published on the
immediately following Business Day; and (b) if such rate is not published for
any Business Day, the Federal Funds Rate for such date shall be the average of
the quotations for such date on such transactions received by the Agent from
three (3) federal funds brokers of recognized standing selected by the Agent.
"Final Maturity Date" means January 14, 2001, or such later date as
-------------------
may then be in effect pursuant to Section 2.10(c).
"Fiscal Quarter" means each of the four 13 or 14 week fiscal quarters
--------------
of Borrower ending on a Friday on or about each September 30, December 31, March
31 and June 30.
"Fiscal Year" means the 52 or 53-week fiscal year of Borrower ending
-----------
on a Friday on or about each June 30.
"Foreign Subsidiaries" means those Subsidiaries of any Borrower which
--------------------
are not Domestic Subsidiaries.
"Generally Accepted Accounting Principles" means, as of any date of
----------------------------------------
determination, accounting principles referenced as "generally accepted" in then
currently effective Statements of the Auditing Standards Board of the American
Institute of Certified Public Accountants, or if such statements are not then in
effect, accounting principles that are then approved by a significant segment of
the accounting profession in the United States of America, including in each
case, the materiality standards as generally accepted. The term "consistently
applied," as used in connection therewith, means that the accounting principles
applied are consistent in all material respects to those applied for the prior
period.
"Governmental Agency" means (a) any international, foreign, federal,
-------------------
state, county or municipal government, or political subdivision thereof, (b) any
governmental agency, authority, board, bureau, commission, department, or
instrumentality, (c) any court or administrative tribunal, (d) any non-
governmental agency or entity that is vested by a
- 15 -
governmental agency with applicable jurisdiction over a Person, or (e) any
arbitration tribunal or other non-governmental authority to whose jurisdiction a
Person has given its general consent.
"Government Securities" means direct full faith and credit obligations
---------------------
of the United States of America or obligations unconditionally guaranteed by the
full faith and credit of the United States of America.
"Guarantor" means the Borrower and each Domestic Subsidiary of the
---------
Borrower which has executed this Agreement as a "Guarantor," as identified on
the signature pages hereto, and each Domestic Subsidiary of the Borrower which
becomes a guarantor pursuant to Section 6.11.
"Guaranty" means the Guaranty set forth in Article VIII hereof.
--------
"Hazardous Materials" means substances regulated as hazardous or toxic
-------------------
substances or pollutants pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., or under any
other applicable Hazardous Materials Law, in each case as such laws are amended
from time to time.
"Hazardous Materials Laws" means all applicable federal and state laws
------------------------
governing the use, disposal or remediation of Hazardous Materials.
"Indebtedness" means, as to any Person (without duplication), (a) all
------------
indebtedness of such Person for borrowed money, (b) that portion of the
obligations of such Person under Capital Leases which is properly recorded as a
liability on a balance sheet of such Person prepared in accordance with
Generally Accepted Accounting Principles, (c) any obligation of such Person that
is evidenced by a promissory note or other instrument representing an extension
of credit (other than trade or other accounts payable in the ordinary course of
business in accordance with customary terms) to such Person, whether or not for
borrowed money, (d) any obligation of such Person for the deferred purchase
price of property or services (other than trade or other accounts payable in the
ordinary course of business in accordance with customary terms), (e) any
obligation of any Person that is secured by a Lien on assets of such Person,
whether or not that Person has assumed such obligation, but only to the extent
of the fair market value of the assets so subject to the Lien, (f) obligations
of such Person arising under acceptance facilities or under facilities for the
discount of accounts receivable of such Person, (g) obligations of such
- 16 -
Person for unreimbursed draws under letters of credit issued for the account of
such Person, (h) any net obligation of such Person under a Swap Agreement, (i)
any obligation of such Person for the unfunded portion of any pension liability
arising under any Plan, (j) any obligation of such Person arising under any
foreign currency hedging transactions, and (k) all preferred stock of such
Person which is subject to a sinking fund payment or other mandatory redemption
or payment (whether fixed or contingent).
"Indemnified Liabilities" has the meaning given that term in Section
-----------------------
11.09.
"Intangible Assets" means assets that are considered to be intangible
-----------------
assets under Generally Accepted Accounting Principles, including customer lists,
goodwill, computer software, copyrights, trade names, trade marks, patents,
unamortized deferred charges, unamortized debt discount and capitalized research
and development costs.
"Intercompany Indebtedness" means any indebtedness of the Borrower or
-------------------------
any Subsidiary of the Borrower which, in the case of the Borrower, is owing to
any of its Subsidiaries and which, in the case of any Subsidiary of the
Borrower, is owing to the Borrower or any other Subsidiary of the Borrower.
"Interest Charges" means, as of the last day of any fiscal period, the
----------------
sum of (a) all interest, premium payments, fees, charges and related expenses
payable by Borrower and its Subsidiaries with respect to that fiscal period to a
lender in connection with borrowed money (including capitalized interest), or to
a seller in connection with the deferred purchase price of assets, in each case,
that is treated as interest in accordance with Generally Accepted Accounting
Principles, plus (b) the portion of rent payable by Borrower and its
Subsidiaries with respect to that fiscal period under Capital Leases that should
be treated as interest in accordance with Generally Accepted Accounting
Principles.
"Interest Coverage Ratio" means the ratio of Adjusted Cash Flow
-----------------------
divided by Debt Service, calculated quarterly on a rolling four-quarter basis.
"Interest Period" means, for each Eurocurrency Rate Advance comprising
---------------
part of the same Borrowing, the period commencing on the date of such Advance
or, with respect to Eurocurrency Rate Committed Advances, the effective date of
any Notice of Conversion/Continuance with respect to such Advance, and ending on
the last day of the period selected by the Borrower or a Subsidiary Borrower
pursuant to the provisions below. The duration of each such Interest Period
shall be (i) in the case of
- 17 -
a Eurocurrency Rate Committed Advance comprising part of the same Borrowing and
denominated in Dollars, 1, 2, 3 or 6 months (or, with the consent of all the
Lenders, other periods), (ii) in the case of a Eurocurrency Rate Bid Advance
comprising part of the same Borrowing, 1, 2, 3 or 6 months, (iii) in the case of
a Eurocurrency Rate Advance comprising part of the same Borrowing and
denominated in an Alternative Currency, 1, 2, 3 or 6 months (or, with the
consent of all the Lenders, other periods) and (iv) as to any Absolute Rate Bid
Advance, a period of not less than 14 days and not more than 180 days as
selected by the Borrower in the applicable Competitive Bid Request; provided,
however, that:
(a) Interest Periods commencing on the same date for Committed
Advances comprising part of the same Borrowing shall be of the same
duration;
(b) the duration of any Interest Period for any Advance shall
end on or prior to the Final Maturity Date;
(c) the first day of an Interest Period for any Eurocurrency
Rate Advance shall be either the last day of any then current Interest
Period for such Eurocurrency Rate Advance, or, if there shall be no then
current Interest Period for such Advance, any Business Day; and
(d) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided, in the case of any Interest Period for a Eurocurrency Rate
Advance, that if such extension would cause the last day of such Interest
Period to occur in the next following month, the last day of such Interest
Period shall occur on the next preceding Business Day.
"Interest Type" means, (a) with respect to any Committed Advance, a
-------------
Base Rate Advance or a Eurocurrency Rate Advance and (b) with respect to any Bid
Advance, an Absolute Rate Bid Advance or a Eurocurrency Rate Bid Advance.
"Investment" means, when used in connection with any Person, any
----------
investment by that Person, whether by means of purchase or other acquisition of
capital stock or other securities of any other Person or by means of loan,
advance, capital contribution, or other debt or equity participation or interest
in any other Person, including any partnership or joint venture interest in any
other Person. The amount of any Investment shall be the amount actually
invested, without
- 18 -
adjustment for subsequent increases or decreases in the market value or book
value of such Investment.
"Invitation for Competitive Bids" means a solicitation for Competitive
-------------------------------
Bids, substantially in the form of Exhibit K.
"Issue" means, with respect to any Letter of Credit, either to issue,
-----
or to extend the expiry of, or to renew, or to increase the amount of, such
Letter of Credit or, with respect to any letter of credit issued under the
Existing Credit Agreement, to continue such letter of credit as a Letter of
Credit under this Agreement, and the term "Issued" or "Issuance" shall have
------ --------
corresponding meanings.
"Issuing Bank" means, with respect to any Letter of Credit, Bank of
------------
America or such other Lender reasonably acceptable to the Agent as may from time
to time be designated by the Borrower.
"Lenders" means the Lenders listed on the signature pages hereof and
-------
each Eligible Assignee that becomes a party hereto pursuant to Section 11.08.
"Letter of Credit" means, collectively, the Commercial Letters of
----------------
Credit and the Standby Letters of Credit and the letters of credit issued under
the Existing Credit Agreement which are outstanding on the Closing Date.
"Letter of Credit Liability" means, as of any date of determination,
--------------------------
all then existing liabilities of the Borrower to the Issuing Bank under this
Agreement in respect of the Letters of Credit Issued for the account of the
Borrower, whether such liability is contingent or fixed, and shall, in each
case, consist of the sum of (i) the aggregate maximum amount then available to
be drawn under such Letters of Credit (the determination of such maximum amount
to assume compliance with all conditions for drawing) and (ii) the aggregate
amount which has then been paid by, and not been reimbursed to, the Issuing Bank
under such Letters of Credit, after giving effect to all reimbursements on such
date.
"Leverage Ratio" means, as of any date of determination, the ratio of
--------------
Consolidated Funded Indebtedness to Consolidated EBITDA for the four Fiscal
Quarters ending on that date.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment for security, security interest, encumbrance, lien or charge of any
kind, sale or discount of accounts receivables, whether voluntarily incurred or
arising by
- 19 -
operation of law or otherwise, affecting any property, including any agreement
to grant any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature of a security interest, and/or the filing of
or agreement to give any financing statement (other than a precautionary
financing statement with respect to a lease that is not in the nature of a
security interest) under the Uniform Commercial Code or compara-ble law of any
jurisdiction with respect to any property.
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Swing Line Documents, the Letters of Credit, any Election to Participate, any
Notice of Borrowing, any Request for Letter of Credit, any Request for Extension
and any other agree-ments of any type or nature heretofore or hereafter executed
and delivered by any Loan Party or any of its Affiliates in favor of the Lenders
in any way relating to or in furtherance of this Agreement in each case either
as originally executed or as the same may from time to time be supplemented,
modified, amended, restated or extended.
"Loan Party" means any of the Subsidiary Borrowers, the Guarantors and
----------
the Borrower.
"Majority Lenders" means Lenders at any time holding at least 51% of
----------------
the then aggregate unpaid principal amount of the Committed Advances owing to
the Lenders, or, if no such principal amount is at such time outstanding,
Lenders having at least 51% of the Total Commitment.
"Material Adverse Effect" means any set of circumstances or events
-----------------------
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document, (b)
is or could reasonably be expected to be material and adverse to the condition
(financial or otherwise), business operations or prospects of Borrower and its
Subsidiaries, taken as a whole, (c) materially impairs or could reasonably be
expected to materially impair the ability of Borrower and its Subsidiaries,
taken as a whole, to perform the Obligations or (d) materially impairs or could
reasonably be expected to materially impair the ability of the Lenders to
enforce their legal remedies pursuant to the Loan Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Mortgage Financing" means mortgage financing for a minimum term of 10
------------------
years with a minimum average life of 7 years, provided that such mortgage
financing is non-recourse and is in an initial principal amount equal to not
less than 60% of the appraised value of the property to be financed.
- 20 -
"Multiemployer Plan" means any employee benefit plan of a type
------------------
described in Section 4001(a)(3) of ERISA.
"Negative Pledge" means a Contractual Obligation that contains a
----------------
covenant binding on Borrower or any of its Subsidiaries that prohibits Liens on
any of its or their property.
"Notes" means the Committed Advance Notes and the Bid Advance Notes.
-----
"Notice of Borrowing" means a written notice, substantially in the
-------------------
form of Exhibit E hereto, delivered in accordance with, and within the period
specified in, Section 2.02(a) hereof, wherein the Borrower or a Subsidiary
Borrower requests a Committed Borrowing.
"Notice of Conversion/Continuation" means a written notice,
---------------------------------
substantially in the form of Exhibit F hereto, delivered in accordance with, and
within the period specified in, Section 2.06(a) hereof, wherein the Borrower or
a Subsidiary Borrower elects to Convert Committed Advances and/or elects an
Interest Period and Interest Type for such Converted Committed Advances or
outstanding Committed Advances.
"Obligations" means all present and future obligations of every kind
-----------
or nature of any Loan Party at any time and from time to time owed to the Agent,
the Lenders or the Issuing Bank or any one or more of them under any one or more
of the Loan Documents, whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent, including
obligations of performance as well as obligations of payment, and including, to
the extent permitted by applicable Debtor Relief Laws, interest that accrues
after the commencement of any proceeding under any Debtor Relief Law by or
against any Loan Party or any Affiliate of any Loan Party.
"Officer's Certificate" means, when used with reference to any Person,
---------------------
a certificate signed by a Senior Officer of such Person.
"Outstanding Advances" means, as of any date of determination, the
--------------------
aggregate principal amount of Advances outstanding on such date.
"Outstanding Letter of Credit Liability" means, as of any date of
--------------------------------------
determination, the aggregate amount of Letter of Credit Liability outstanding on
such date, as reduced to the extent that such Letter of Credit Liability has
been cash collateralized pursuant to the terms hereof.
- 21 -
"Overnight Rate" means, for any day, the rate of interest per annum at
--------------
which overnight deposits in the Alternative Currency, in an amount approximately
equal to the amount with respect to which such rate is being determined, would
be offered for such day by Bank of America's principal office in London to major
banks in the London or other applicable offshore interbank market.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
----
thereto established under ERISA.
"Pension Plan" or "Plan" means any employee benefit or other plan that
------------ ----
is subject to Title IV of ERISA and which is maintained for employees of
Borrower or any of its ERISA Affiliates.
"Permitted Accounts Receivable Financings" means a sale or discount of
----------------------------------------
accounts receivable of Comfort Clinic, Inc. in which recourse is limited to a
designated pool of accounts receivable of Comfort Clinic, Inc. having a book
value not exceeding $35,000,000 in the aggregate at any time (net of collections
by the purchaser thereof).
"Permitted Encumbrances" means:
----------------------
(a) inchoate Liens incident to construction or maintenance of
real property, or Liens incident to construction or maintenance of real
property now or hereafter filed of record for which adequate reserves have
been set aside and which are being contested in good faith by appropriate
proceedings and have not proceeded to judgment, provided that, by reason of
nonpayment of the obligations secured by such Liens, no such real property
is subject to a material risk of loss or forfeiture prior to judgment;
(b) Liens for taxes and assessments on real property which are
not yet past due, or Liens for taxes and assessments on real property for
which adequate reserves have been set aside and are being contested in good
faith by appropriate proceedings and have not proceeded to judgment,
provided that, by reason of nonpayment of the obligations secured by such
Liens, no such real property is subject to a material risk of loss or
forfeiture prior to judgment;
(c) minor defects and irregularities in title to any real
property which in the aggregate do not materially impair the fair market
value or use of the real property for the purposes for which it is or may
reasonably be expected to be held;
- 22 -
(d) easements, exceptions, reservations, or other agreements for
the purpose of pipelines, conduits, cables, wire communication lines, power
lines and substations, streets, trails, walkways, drainage, irrigation,
water, and sewerage purposes, dikes, canals, ditches, the removal of oil,
gas, coal, or other minerals, and other like purposes affecting real
property which in the aggregate do not materially burden or impair the fair
market value or use of such real property for the purposes for which it is
or may reasonably be expected to be held;
(e) rights reserved to or vested in any Governmental Agency by
law to control or regulate, or obligations or duties under law to any
Governmental Agency with respect to, the use of any real property;
(f) rights reserved to or vested in any Governmental Agency by
law to control or regulate, or obligations or duties under law to any
Governmental Agency with respect to, any right, power, franchise, grant,
license, or permit;
(g) present or future zoning Laws or other laws restricting the
occupancy, use, or enjoyment of real property;
(h) non-consensual Liens imposed by law, including carrier's,
mechanics, landlord's, warehouseman's or other similar Liens, other than
those described in clauses (a) or (b) above, arising in the ordinary course
of business with respect to obligations which are not delinquent or are
being contested in good faith by appropriate proceedings, provided that, if
delinquent, adequate reserves have been set aside with respect thereto and,
by reason of nonpayment, no property is subject to a material risk of loss
or forfeiture prior to judgment;
(i) Liens consisting of pledges or deposits made in connection
with obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
dischargeable;
(j) Liens consisting of security interests, pledges or deposits
of property to secure performance in connection with operating leases made
in the ordinary course of business to which the Borrower or any of its
Subsidiaries is a party as lessee, provided the aggregate value of all such
pledges and deposits in connection with any such lease does not at any time
exceed 10% of the annual fixed rentals payable under such lease;
- 23 -
(k) Liens consisting of deposits of property to secure statutory
obligations of Borrower or a Subsidiary of Borrower in the ordinary course
of its business, including any liens created in connection with any letter
of credit;
(l) Liens consisting of deposits of property to secure (or in
lieu of) surety, appeal or customs bonds in proceedings to which Borrower
or a Subsidiary of Borrower is a party in the ordinary course of its
business in an aggregate amount not to exceed $3,000,000 at any time
outstanding and provided the value of the assets subject to such Lien does
not exceed 100% of the face amount of the bond so secured; and
(m) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or a Subsidiary of Borrower in the ordinary
course of its business which is currently being contested in good faith by
appropriate proceedings, provided that adequate reserves have been set
aside with respect thereto and such Liens are discharged or stayed within
30 days of creation (or such longer period as may be permitted by law or
otherwise binding on a judgment creditor before execution on a judgment is
allowed) and no material property is subject to a material risk of loss or
forfeiture prior to judgment.
"Person" means any entity, whether an individual, trustee,
------
corporation, general partnership, limited partnership, joint stock company,
trust, estate, unincorporated organization, business association, tribe, firm,
joint venture, Governmental Agency, or otherwise.
"Projections" means the financial projections prepared on behalf of
-----------
Borrower and its Subsidiaries and heretofore furnished to the Lenders.
"Pro Rata Share" means, with respect to each Lender, the percentage
--------------
set forth opposite the name of that Lender on Schedule 1.01(b), as such
percentage may be adjusted from time to time pursuant to an assignment under
Section 2.13(c) or Section 11.08.
"Register" has the meaning provided for such term in Section 11.08(e).
--------
"Regulation G" means Regulation G, as at any time amended, of the
------------
Board of Governors of the Federal Reserve System, or any other regulation in
substance substituted therefor.
- 24 -
"Regulation U" means Regulation U, as at any time amended, of the
------------
Board of Governors of the Federal Reserve System, or any other regulation in
substance substituted therefor.
"Reportable Event" means any reportable event as defined in Section
----------------
4043(b) of ERISA with respect to which the PBGC has not waived the 30-day
reporting requirement.
"Request for Extension" means a request for an extension of the Final
---------------------
Maturity Date substantially in the form of Exhibit H, signed by a Senior Officer
of the Borrower, and properly completed to provide all information required to
be included therein.
"Request for Letter of Credit" means a request for a Letter of Credit
----------------------------
in the customary form of letters of credit application and reimbursement
agreement used by the Issuing Bank, signed by a Senior Officer of the Borrower
and properly completed to provide all information required to be included
therein; provided that such application and reimbursement agreement shall be
deemed to incorporate by reference each representation of the Borrower set forth
in a Notice of Borrowing.
"Requirement of Law" means, as to any Person, (a) the articles or
------------------
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, (b) any law applicable to such Person and (c) any
judgment, award, decree, writ or determination of a Governmental Agency,
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Restricted Commitment Amount" means (x) so long as the Dollar
----------------------------
equivalent of the aggregate then outstanding Eurocurrency Rate Committed
Advances denominated in Alternative Currencies is less than $75,000,000, zero,
and (y) so long as such Dollar equivalent equals or exceeds $75,000,000, an
amount equal to $5,000,000 plus the amount, if any, by which the Dollar
equivalent of the aggregate then outstanding Eurocurrency Rate Committed
Advances denominated in Alternative Currencies minus the amount of any deposits
established or maintained with the Agent as cash collateral for such Advances
exceeds the Alternative Currency Sublimit. The Restricted Commitment Amount
shall be calculated as of the last Business Day of each week in accordance with
Section 1.05.
"Restricted Junior Payment" means, as to any Person, (i) any dividend
-------------------------
or other distribution, direct or indirect, on account of any shares of any class
of stock or other ownership interest of any Loan Party now or hereafter
outstanding, except a dividend payable solely in shares of that class of stock
to the
- 25 -
holders of that class, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock or other ownership interest of any Loan Party now
or hereafter outstanding, (iii) any prepayment of principal of, premium, if any,
or redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Subordinated Debt (other than prepayments in respect of any
Seller Note that is Subordinated Debt), other than refinancings thereof on
substantially similar terms, and (iv) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of any Loan Party now or hereafter outstanding.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
---
Hill, Inc.
"SEC" means the Securities and Exchange Commission and any successor
---
commission.
"Seller Note" means a promissory note or other obligation to pay money
-----------
(other than payments under customary indemnities) given by the Borrower or any
Subsidiary of the Borrower in connection with an Acquisition, together with all
security agreements, guaranties, pledge agreements or other forms of collateral
or credit support given by any Person in connection therewith.
"Senior Officer" means the president, the chief executive officer, the
--------------
chief financial officer, vice president, general counsel, treasurer and
controller, in each case whatever the title nomenclature may be, of the Person
designated.
"Shareholders' Equity" means, as of any date of determination,
--------------------
shareholders' equity as of that date determined in accordance with Generally
Accepted Accounting Principles; provided that there shall be excluded from
Shareholders' Equity any amount attributable to capital stock that is, directly
or indirectly, required by its terms to be redeemed or repurchased by the issuer
thereof at a specified date or upon the occurrence of specified events or at the
election of the holder thereof, if and to the extent that such date is, or such
events or election could occur, prior to the Final Maturity Date.
"Standby Letter of Credit" means a standby letter of credit in the
------------------------
customary form used by the Issuing Bank, issued by the Issuing Bank pursuant to
Section 3.01, either as originally issued or as the same from time to time may
be supplemented, modified, amended, renewed or extended.
- 26 -
"Subordinated Debt" means Indebtedness of a Loan Party which is
-----------------
subordinated in right of payment to the payment of the Obligations hereunder on
terms and conditions substantially similar to those set forth in Exhibit M.
"Subsidiary" means, as of any date of determination and with respect
----------
to any Person, any corporation, partnership or joint venture, whether now
existing or hereafter organized or acquired: (a) in the case of a corporation or
the foreign equivalent organization thereof, of which a majority of the
securities having ordinary voting power for the election of directors or other
governing body (other than securities having such power only by reason of the
happening of a contingency) are at the time beneficially owned, directly or
indirectly, by such Person and/or one or more Subsidiaries of such Person, or
(b) in the case of a partnership or joint venture, of which such Person or a
Subsidiary of such Person is a general partner or joint venturer or of which a
majority of the partnership or other ownership interests are at the time
beneficially owned, directly or indirectly by such Person and/or one or more of
its Subsidiaries.
"Subsidiary Borrower" means any Foreign Subsidiary in which the
-------------------
Borrower, directly or indirectly, has at least an 80% ownership interest and
which is identified on Schedule 1.01(c) or which shall have delivered to the
Agent and the Lenders an Election to Participate, duly executed by such
Subsidiary and the Borrower, and in respect of which the conditions set forth in
Section 4.03 have been satisfied.
"Subsidiary Borrower Sublimit" means, for each Subsidiary which
----------------------------
becomes a Subsidiary Borrower hereunder, the amount specified as such Subsidiary
Borrower's Sublimit on Schedule 1.01(c).
"Sunrise" means Sunrise Medical, Inc., a Delaware corporation.
-------
"Swap Agreement" means one or more written agreements between a Loan
--------------
Party and one or more financial institutions providing for "swap," "collar" or
other interest rate protection with respect to any Indebtedness.
"Swing Line" means the revolving line of credit established by the
----------
Swing Line Lender in favor of Borrower pursuant to Section 2.09.
"Swing Line Advances" means advances made by the Swing Line Lender to
-------------------
Borrower pursuant to Section 2.09.
"Swing Line Lender" means Bank of America.
-----------------
- 27 -
"Swing Line Documents" means any promissory note and any other
--------------------
documents executed by Borrower as requested by the Swing Line Lender from time
to time in favor of the Swing Line Lender in connection with the Swing Line.
"Swing Line Outstandings" means, as of any date of determination, the
-----------------------
aggregate principal Indebtedness of Borrower on all Swing Line Advances then
outstanding.
"Termination Event" means (a) a Reportable Event, (b) the withdrawal
-----------------
of any Loan Party or any of its ERISA Affiliates from a Pension Plan during any
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, if such withdrawal results in liability pursuant to Section
4063 of the Code, (c) the filing of a notice of intent to terminate a Pension
Plan or the treatment of an amendment to a Pension Plan as a termination thereof
pursuant to Section 4041 of ERISA, (d) the institution of proceedings to
terminate a Pension Plan by the PBGC or (e) any other event or condition which
might reasonably be expected to constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan.
"Total Commitment" means, as of the date of determination thereof, the
----------------
aggregate Commitments of all the Lenders.
"Total Liabilities" means, as of any date of determination, all
-----------------
liabilities that should be reflected as a liability on a consolidated balance
sheet of Borrower and its Subsidiaries on such date prepared in accordance with
Generally Accepted Accounting Principles.
"to the best knowledge of" means, when modifying a representation,
------------------------
warranty or other statement of any Person, that such representation, warranty or
statement is a representation, warranty or statement that the Person making it
has no actual knowledge, after performing reasonable due diligence under the
circumstances, of the inaccuracy of the matters therein stated. Where the Person
making the representation, warranty or statement is not a natural Person, the
aforesaid actual or constructive knowledge shall be that of any Senior Officer
of that Person.
"Wholly-Owned Subsidiary" means any Subsidiary of Borrower, whether
-----------------------
now existing or hereafter acquired, with respect to which Borrower owns,
directly or indirectly, and controls the power to vote, 100% of the capital
shares, partnership or other ownership interests in such Subsidiary other than
capital shares or partnership or other ownership interests which are held by
certain individuals as director's qualifying
- 28 -
shares or are otherwise held by directors of a Subsidiary in nominal amounts
necessary to comply with applicable local laws.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
--------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Use of Defined Terms. Any defined term used in the
--------------------
plural shall refer to all members of the relevant class, and any defined term
used in the singular shall refer to any one or more of the members of the
relevant class.
SECTION 1.03 Accounting Terms. All accounting terms not specifically
----------------
defined in this Agreement shall be construed in conformity with, and all
financial data required to be submitted by this Agreement shall be prepared in
conformity with, Generally Accepted Accounting Principles consistently applied,
except as otherwise specifically prescribed herein. In the event that Generally
Accepted Accounting Principles change during the term of this Agreement such
that the financial covenants contained in Sections 7.09 through 7.11 would then
be calculated in a different manner or with different components or would render
the same not meaningful criteria for evaluating Borrower's financial condition,
(a) Borrower and the Lenders agree to amend this Agreement in such respects as
are necessary to conform those covenants as criteria for evaluating Borrower's
financial condition to substantially the same criteria as were effective prior
to such change in Generally Accepted Accounting Principles and (b) during the
period pending agreement on such amendments (which may not exceed 60 days absent
the mutual agreement of the Borrower and the Lenders), Borrower shall be deemed
to be in compliance with the financial covenants contained in such Sections
following any such change in Generally Accepted Accounting Principles if and to
the extent that Borrower would have been in compliance therewith under Generally
Accepted Accounting Principles as in effect immediately prior to such change.
SECTION 1.04 Exhibits and Schedules. All Exhibits and Schedules to
----------------------
this Agreement, either as originally existing or as the same may from time to
time be supplemented, modified, or amended, are incorporated herein by
reference. A matter disclosed on any Schedule shall be deemed disclosed on all
Schedules.
SECTION 1.05 Currency Equivalents Generally. (a) For all purposes of
------------------------------
this Agreement other than Article II (but not for purposes of the preparation of
any financial statements delivered pursuant to this Agreement or any calculation
to be made on the
- 29 -
basis of any such financial statements), the equivalent in any Alternative
Currency of an amount in Dollars, and the equivalent in Dollars of an amount in
any Alternative Currency, shall be determined at the rate of exchange quoted by
the Agent in London, England, at 11:00 A.M. (London time) on the date of
determination, to prime banks in London, England for the spot purchase in the
London, England foreign exchange market of such amount of Dollars with such
Alternative Currency, or such amount of such Alternative Currency with such
Dollars, as the case may be.
(b) For purposes of determining compliance with covenants in Article
VII (other than Sections 7.09, 7.10 and 7.11), Dollar equivalents of Alternative
Currency amounts incurred or outstanding shall be deemed to be the Dollar
equivalent thereof at the time such Alternative Currency amount was incurred or
became outstanding. For purposes of determining compliance with the covenant set
forth in Section 7.10, with respect to Intangible Assets, Dollar equivalents of
Alternative Currency amounts shall be made with reference to the applicable
foreign exchange rate on the date any such Intangible Asset was acquired, and no
adjustments shall be made to the book value of Intangible Assets as a result of
foreign currency fluctuations.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
---------------------------------
SECTION 2.01 The Advances. (a) Committed Advances. Each Lender
------------ ------------------
severally agrees, on the terms and conditions hereinafter set forth, to make
Committed Advances to the Borrower and the Subsidiary Borrowers, from time to
time on any Business Day from the date hereof to the Final Maturity Date, in an
aggregate amount (determined in Dollars) not to exceed at any time outstanding
the Dollar amount of such Lender's Commitment; provided, however, that such
-------- -------
Lender shall not be obligated to make any Committed Advance if, after giving
effect to such Committed Advance and the other Committed Advances to be made by
the other Lenders as part of the same Committed Borrowing, (x) the Facility
Usage shall exceed the Total Commitment or (y) in the event such Borrowing is
being made by a Subsidiary Borrower, the aggregate amount of outstanding
Advances to such Subsidiary Borrower shall exceed such Subsidiary Borrower's
Subsidiary Borrower Sublimit; provided, further, that such Lender shall not be
-------- -------
obligated to make any Committed Advance in an Alternative Currency if, after
giving effect to such Committed Advance and the other Committed Advances to be
made by the other Lenders as part of the same Committed Borrowing, the then
outstanding aggregate principal amount (determined in Dollars) of all Committed
Advances denominated in Alternative Currencies shall
- 30 -
exceed the Alternative Currency Sublimit. Each Committed Borrowing under this
Section 2.01(a) shall (i) be in an aggregate amount not less than $1,000,000 in
the case of Base Rate Advances, $1,000,000 in the case of Eurocurrency Rate
Committed Advances denominated in Dollars and $1,500,000 in the case of
Eurocurrency Rate Committed Advances denominated in an Alternative Currency,
(ii) be in an integral multiple of $100,000 in the case of Base Rate Advances
and $500,000 in the case of each other type of Advance, and (iii) consist of
Committed Advances of the same Interest Type made in the same currency on the
same Business Day by the Lenders ratably according to their respective
Commitments, subject, however, to the provisions of Section 2.02(c). Within the
------- -------
limits of each Lender's Commitment and subject to the terms and provisions
hereof, the Borrowers may from time to time borrow under this Section 2.01(a),
prepay pursuant to Section 2.12, and reborrow under this Section 2.01(a).
(b) Currency Equivalents. For purposes of this Section 2.01 and all
--------------------
other provisions of this Article II, the equivalent in Dollars of any
Alternative Currency or the equivalent in any Alternative Currency of Dollars or
of any other Alternative Currency shall be determined in accordance with Section
2.19.
SECTION 2.02 Making the Committed Advances.
-----------------------------
(a) Committed Advances. Each Committed Borrowing shall be of the same
------------------
Interest Type and denominated in the same currency, and shall be made by a
Notice of Borrowing received by the Agent:
(x) not later than 9:30 A.M. (San Francisco time) on the date of such
Committed Borrowing if such Committed Borrowing consists of Base Rate
Advances;
(y) not later than 10:00 A.M. (San Francisco time) on the third
Business Day prior to the date of such Committed Borrowing if such
Committed Borrowing consists of Eurocurrency Rate Committed Advances
denominated in Dollars; and
(z) not later than 10:00 A.M. (San Francisco time) on the fifth
Business Day prior to the date of such Committed Borrowing if such
Committed Borrowing consists of Eurocurrency Rate Committed Advances
denominated in an Alternative Currency.
More than one Committed Borrowing may be made on any Business Day; provided no
more than one Committed Borrowing (which
- 31 -
excludes Conversions and Continuations) may be made in any single Currency on
the same Business Day. Each such Notice of Borrowing shall specify therein the
(i) date of such Committed Borrowing, (ii) Interest Type of Committed Advances
comprising such Committed Borrowing, (iii) in the case of a proposed Committed
Borrowing comprised of Eurocurrency Rate Committed Advances, currency of such
Committed Borrowing and the Dollar equivalent of Eurocurrency Rate Committed
Advances denominated in Alternative Currencies as of the date of such Notice,
(iv) aggregate amount and Borrower of such Committed Borrowing, (v) in the case
of a proposed Committed Borrowing comprised of Eurocurrency Rate Committed
Advances, initial Interest Period for each such Committed Advance and (vi) the
Applicable Margin for the Advances comprising such Committed Borrowing, and
shall be given in writing or by telecopier or telephone (and if by telephone,
confirmed promptly by telecopier).
In the case of a proposed Committed Borrowing comprised of
Eurocurrency Rate Committed Advances in an Alternative Currency, the Agent
shall, at the request of the relevant Borrower, use its best efforts to notify
such Borrower as to an indicative interest rate with respect to such proposed
Committed Borrowing by 9:00 A.M. (San Francisco time) the fourth Business Day
prior to the date of such Committed Borrowing, and such Borrower may, by notice
to the Agent not later than 10:00 A.M. (San Francisco time) on the fourth
Business Day preceding the date of such proposed Committed Borrowing, withdraw
the Notice of Borrowing relating to such requested Committed Borrowing and if so
withdrawn prior to such time, Borrower shall not be obligated to pay any costs
which might otherwise be payable pursuant to Section 2.02(b) in connection with
the Borrower's failure to incur such Advance; provided, however, the failure of
the Agent to so notify the Borrower shall not relieve such Borrower of any of
its obligations hereunder, including its obligation to borrow such Eurocurrency
Rate Committed Advances on the date of Borrowing specified in such Notice of
Borrowing; and provided further, notwithstanding anything to the contrary, in no
event shall the Agent have any liability to any Borrower for failing to notify a
Borrower of the interest rate on or prior to 9:00 A.M. (San Francisco time) such
fourth Business Day preceding such date of Borrowing.
If a Lender is unable to fund an Advance requested in an Alternative
Currency (whether due to changes in the interbank market or changes in funding
capabilities of such Lender, including, without limitation, changes due to such
Lender's decision to close a funding office or not to book loans in such
Alternative Currency), such Lender shall notify the Agent of such fact no later
than the later of (i) 10:00 A.M. (San Francisco time) on the fourth Business Day
preceding the applicable date of
- 32 -
such Committed Borrowing and (ii) one hour after being notified by the Agent of
the relevant Notice of Borrowing. The Agent shall promptly notify each other
Lender and the Borrower of the Agent's receipt of any such Notice that a Lender
is not going to fund a Committed Borrowing requested in an Alternative Currency
and the Notice of Borrowing shall be deemed to be withdrawn. In such event, no
Lender shall have any obligation to fund the Advances requested in such Notice
of Borrowing and the Borrower shall not be obligated to pay any costs which
might otherwise be payable pursuant to Section 2.02(b) with respect to any
requested Eurocurrency Rate Committed Advances which are not funded by the
Lenders under such withdrawn Notice of Borrowing.
Each Lender shall promptly notify the Agent and the Borrower if any
Alternative Currency in which the Borrower has previously received Eurocurrency
Rate Committed Advances is no longer available to such Lender. So long as no
Default or Event of Default shall have occurred and be continuing, the Borrower
may, upon receipt of such a notice, request that such Lender be replaced with
another commercial bank or other financial institution which has such
Alternative Currency available to it selected by the Borrower and approved in
writing by the Agent (which approval shall not be unreasonably withheld or
delayed). Upon any such request by the Borrower, if the Agent shall have
approved the commercial bank or other financial institution selected by the
Borrower, the Lender that is not able to fund in such Alternative Currency shall
execute and deliver a Commitment Assignment and Acceptance to the Agent pursuant
to which such Lender shall assign all of its Commitment to the commercial bank
or other financial institution selected by the Borrower. If any Lender which has
notified the Agent and the Borrower in accordance with this Section 2.02(a) that
an Alternative Currency is no longer available to it, is not so replaced, such
Lender shall promptly notify the Agent and the Borrower if such Alternative
Currency subsequently becomes available to it.
(b) Notices Irrevocable, Etc. Except as otherwise provided in
------------------------
Section 2.02(a), each Notice of Borrowing shall be irrevocable and binding on
the Borrower delivering any such notice. In the case of any Committed Borrowing
which the related Notice of Borrowing specified is to be comprised of
Eurocurrency Rate Committed Advances, unless such notice is withdrawn or deemed
withdrawn pursuant to Section 2.02(a), such Borrower shall indemnify each Lender
against any reasonable direct out-of-pocket loss, cost or expense incurred by
such Lender as a result of any failure by the Borrowers to fulfill on or before
the date specified in such Notice of Borrowing the applicable conditions set
forth in Article IV hereof, including, without limitation, any loss or
reasonable direct out-of-pocket cost or expense incurred by reason of the
liquidation or reemployment of deposits
- 33 -
or other funds acquired by any Lender to fund the Advance to be made by such
Lender as part of such Committed Borrowing when such Committed Borrowing, as a
result of such failure, is not made on such date.
(c) Advances by Lenders. The Agent shall promptly (and in any event
-------------------
within one Business Day) give each Lender notice of each Notice of Borrowing
received by it. Each Lender shall, before (i) 12:00 Noon (San Francisco time)
with respect to Borrowings in U.S. Dollars, and (ii) 9:00 a.m. (local time at
the Agent's Applicable Lending Office) with respect to Borrowings in Alternative
Currencies, on the date of the Committed Borrowing covered by each such Notice
of Borrowing, make available for the account of its Applicable Lending Office to
the Agent such Lender's ratable portion of such Committed Borrowing by deposit
ing the amount of such portion in the applicable currency and in same day funds
in the Agent's Account. Unless the Agent shall have received written notice from
a Lender prior to the date of any such Committed Borrowing that such Lender will
not make available to the Agent such Lender's ratable portion of such Committed
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Committed Borrowing in accordance with this
Section 2.02(c) and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount pursuant to
Section 2.02(d). If and to the extent any Lender shall not have made available
to the Agent on the date of the Committed Borrowing such Lender's ratable
portion of such Committed Borrowing, such Lender and the applicable Borrower
agrees to pay to the Agent forthwith on demand such amount together with
interest thereon, for each day from the date such amount is made available to
the applicable Borrower until the date such amount is repaid to the Agent, at an
interest rate equal to, in the case of a Borrower, the interest rate (plus the
Applicable Margin) stated in the Notice of Borrowing applicable thereto, or, in
the case of a Lender, the Federal Funds Rate or, in the case of a payment in an
Alternative Currency, the Overnight Rate. If such Lender shall pay to the Agent
such amount, such amount so paid shall constitute such Lender's Advance as part
of such Committed Borrowing for purposes of this Agreement and to such extent
the Borrower shall have no further obligation under this Section 2.02(c) to
repay such amount.
(d) Disbursement of Advances. Upon fulfillment of the applicable
------------------------
conditions set forth in Article IV hereof, the Agent will make funds for any
Committed Borrowing available to the applicable Borrower, to the extent of
Agent's receipt of such funds from the Lenders. The funds so made available to
the applicable Borrower, subject to the preceding sentence, will be same-day
funds to the extent funds are received by the Agent
- 34 -
prior to the close of business on the day received. Upon request of the
applicable Borrower, the Agent will disburse such funds to such accounts as are
designated by such Borrower, subject to the payment of customary wire transfer
costs.
(e) Nature of Lender's Obligations. The failure of any Lender to make
------------------------------
any Committed Advance to be made by it as part of any Committed Borrowing shall
not relieve any other Lender of its obligation, if any, hereunder to make its
Committed Advance on the date of such Committed Borrowing. In no event shall any
Lender be responsible for the failure of any other Lender to make the Committed
Advance to be made by such other Lender on the date of any Committed Borrowing.
SECTION 2.03 Fees.
----
(a) Agent's and Arranger's Fees. The Borrower agrees to pay to the
---------------------------
Agent and the Arranger, for their own accounts, the fees referred
to in the letter agreement dated August 30, 1995 between the
Borrower, Bank of America and the Arranger.
(b) Commitment Fee. The Borrower agrees to pay to the Agent, for the
--------------
account of each Lender, a commitment fee on the average daily unused portion of
such Lender's Commitment (as calculated in accordance with Section 2.03(c)) at a
rate per annum equal to the Applicable Margin as in effect from time to time for
all periods on and after the Closing Date, payable quarterly on the last
Business Day of each March, June, September and December in each year,
commencing on the last Business Day of December 1995, and on the Final Maturity
Date.
(c) Commitment Fee Calculations. For purposes of calculating each
---------------------------
Lender's commitment fee pursuant to Section 2.03(b), outstanding Letters of
Credit shall be considered a ratable usage of such Lender's Commitment based on
the Letter of Credit Liability attributable from time to time to such Letters of
Credit; Swing Line Advances and Bid Advances shall not be considered usage. For
purposes of determining the unused portion of each Lender's Commitment solely in
order to calculate the commitment fee under Section 2.03(b), the equivalent in
Dollars of each Eurocurrency Rate Committed Advance made by such Lender in an
Alternative Currency as determined on the date of the making of such Advance (in
accordance with the provisions of Section 2.19) shall be the amount of such
Lender's Commitment used in connection with such Advance, and no further
adjustments shall be made with respect to the unused portion of such Lender's
Commitment based upon fluctuations thereafter in the value of the Alternative
Currency of such Advance. Any change in the commitment fee because of a change
in the Leverage Ratio shall be effective upon receipt by the Agent from a Senior
- 35 -
Officer of the Borrower of a Compliance Certificate demonstrating such fact.
(d) Nature of Obligation. The Borrower's obligation hereunder to pay
--------------------
the fees referred to in this Section 2.03 shall be absolute and unconditional
and shall survive the making and repaying of Advances and the termination of
this Agreement.
SECTION 2.04 Repayment of Advances.
---------------------
(a) The Borrower agrees to repay on the Final Maturity Date the
outstanding principal amount of all Committed Advances made to the Borrower.
Notwithstanding any other provision of this Agreement, if a Subsidiary Borrower
shall be a party to this Agreement, the Obligations of each Borrower, in its
capacity as a Borrower, shall be several and not joint and several. Except as
provided in Section 2.06 (c) and (d), each Eurocurrency Rate Committed Advance
denominated in an Alternative Currency, together with interest thereon as
provided herein, shall be repaid in such Alternative Currency.
(b) Sunrise shall repay each Bid Advance on the last day of the
relevant Interest Period.
SECTION 2.05 Interest Rate Provisions, Etc.
-----------------------------
(a) Base Rate Advances. Except to the extent that the applicable
------------------
Borrower shall have elected in the applicable Notice of Borrowing or Notice of
Conversion/Continuation to pay interest on any Committed Advances denominated in
Dollars and comprising part of the same Committed Borrowing for an Interest
Period pursuant to subsection (d) of this Section 2.05, the Borrowers shall pay
interest on the unpaid principal amount of each Committed Advance denominated in
Dollars made to the Borrowers, from the date of such Advance until such
principal amount is paid in full, payable quarterly on the last Business Day of
each March, June, September and December in each year, commencing on the last
Business Day of December, 1995, and on the Final Maturity Date, at a fluctuating
interest rate per annum equal to the Base Rate in effect from time to time plus
or minus, if and as applicable, the Applicable Margin per annum; provided,
--------
however, that during any period in which an Event of Default has occurred and is
-------
continuing (but only so long as such Event of Default is continuing), the
Borrower shall pay interest on the unpaid principal amount of each Base Rate
Advance made to it, payable from the date such Event of Default occurs and upon
written demand by the Agent on behalf of the Lenders to the Borrowers, at the
Default Rate.
- 36 -
(b) Interest Periods. Any Borrower may, pursuant to subsection (d)
----------------
below, elect to have the interest on the principal amount of any Committed
Advances made to it denominated in Dollars and comprised or comprising part of
the same Committed Borrowing to be made to the Borrower pursuant to Section
2.02(a), or on all or any portion of the principal amount of any outstanding
Committed Advances of the same Interest Type, in each case ratably according to
the respective outstanding principal amounts of Committed Advances of such
Interest Type owing to each Lender, determined and payable for an Interest
Period in accordance with subsection (d) below; provided, however, that the
-------- -------
Borrowers may not select any Interest Period that ends after the Final Maturity
Date; and, provided, further, that the Borrowers may not, unless the Majority
-------- -------
Lenders shall otherwise agree in writing, have more than an aggregate of 40
Eurocurrency Rate Committed Advances and Bid Advances from any Lender
outstanding at any one time.
(c) Bid Advances. Each Bid Advance shall bear interest on the
------------
outstanding principal amount thereof from the Borrowing date at a rate per annum
equal to the Eurocurrency Rate plus (or minus) the Eurocurrency Rate Bid Margin,
or at the Absolute Rate, as the case may be; provided, however, that during any
-------- -------
period in which an Event of Default has occurred and is continuing (but only so
long as such Event of Default is continuing), the Borrower shall pay interest on
the unpaid principal amount of each such Bid Advance made to it, payable from
the date such Event of Default occurs and upon written demand by the Lender of
such Bid Advance, at the rate of 2% per annum above the rate otherwise
applicable in effect at the time of the occurrence of such Event of Default,
until the last day of the then current Interest Period for such Advance, and
thereafter at the Default Rate in effect from time to time.
(d) Eurocurrency Rate Committed Advances Denominated in Dollars. Any
-----------------------------------------------------------
Borrower may, from time to time and on the condition no Event of Default or
Default has occurred and is continuing and subject to the provisions of
subsections (f)-(k) below, elect to pay interest on each Committed Advance
denominated in Dollars and comprising part of the same Committed Borrowing made
to the Borrower during any Interest Period therefor at a rate per annum equal to
the sum of the Eurocurrency Rate for such Interest Period plus the Applicable
Margin, by selecting the same either in the Notice of Borrowing pursuant to
which such Committed Advance was made or in a Notice of Conversion/Continuation
covering such Committed Advance, each of which shall specify the Eurocurrency
Rate Committed Advances and the first day and duration of such Interest Period,
and which shall be delivered to the Agent as specified in Section 2.02(a),
Section 2.06(a) or Section 2.06(b), as applicable. If a Borrower
- 37 -
has made such an election for Eurocurrency Rate Committed Advances for any
Interest Period, such Borrower shall, subject to subsection (1) hereof, pay
interest on the unpaid principal amount of each such Eurocurrency Rate Committed
Advance during such Interest Period (i) in the case of an Interest Period which
is three months or less, on the last day of such Interest Period and (ii) in the
case of an Interest Period which is longer than three months, on the last day of
each three-month period of such Interest Period and on the last day of such
Interest Period, at a rate per annum equal to the sum of the Eurocurrency Rate
for such Interest Period for such Eurocurrency Rate Committed Advance plus the
----
Applicable Margin; provided, however, that during any period in which an Event
-------- -------
of Default has occurred and is continuing (but only so long as such Event of
Default is continuing), such Borrower shall pay interest on the unpaid principal
amount of each such Eurocurrency Rate Committed Advance made to it, payable from
the date such Event of Default occurs and upon written demand by the Agent on
behalf of the Lenders, at the rate of 2% per annum above the Eurocurrency Rate
plus the Applicable Margin for such Eurocurrency Rate Committed Advance in
----
effect at the time of the occurrence of such Event of Default, until the last
day of the then current Interest Period for such Advance, and thereafter at the
Default Rate in effect from time to time. On the last day of each Interest
Period for any Eurocurrency Rate Committed Advance denominated in Dollars, the
unpaid principal balance thereof shall automatically become and bear interest as
a Base Rate Advance, except to the extent that the applicable Borrower of such
Advance has elected to pay interest on all or any portion of such amount for a
new Interest Period commencing on such day in accordance with this Section 2.05
and by timely delivering a Notice of Conversion/Continuation pursuant to Section
2.06(a).
(e) Eurocurrency Rate Committed Advances Denominated in Alternative
---------------------------------------------------------------
Currencies. Each Borrower shall pay interest on the unpaid principal amount of
----------
each Committed Advance made to it denominated in an Alternative Currency and
comprising part of the same Committed Borrowing, from the date of such Advance
until such principal amount is paid in full at a rate per annum equal to the sum
of the Eurocurrency Rate, determined with regard to the applicable Alternative
Currency of such Advance and the Interest Period selected by such Borrower
pursuant to Section 2.02(a), 2.06(a) or 2.06(b), for such Interest Period plus
----
the Applicable Margin, payable (i) in the case of an Interest Period which is
one, two or three months, on the last day of such Interest Period and (ii) in
the case of an Interest Period which is six months, on the last day of the third
month of such Interest Period and on the last day of such Interest Period;
provided, however, that during any period in which an Event of Default has
-------- -------
occurred and is continuing (but only so long as such
- 38 -
Event of Default is continuing), each Borrower shall pay interest on the unpaid
principal amount of each Committed Advance made to it denominated in an
Alternative Currency, payable from the date such Event of Default occurs and
upon written demand by the Agent on behalf of the Lenders, at the rate of 2% per
annum above the Eurocurrency Rate plus the Applicable Margin for such Committed
Advance in effect at the time of the occurrence of such Event of Default, until
the principal amount of such Committed Advance is paid in full. On the last day
of each Interest Period for any Committed Advance denominated in an Alternative
Currency, so long as no Event of Default or Default has occurred and is
continuing, the unpaid principal balance thereof shall automatically become and
bear interest as a Eurocurrency Rate Committed Advance denominated in the same
Alternative Currency on the basis of a one month Interest Period, except to the
extent that the applicable Borrower has elected to pay interest on all or any
portion of such Advance for a new Interest Period commencing on such day in
accordance with this Section 2.05 and by timely delivering a Notice of
Conversion/Continuation pursuant to Section 2.06(a); provided, however, that if
-------- -------
the Agent shall have notified the Borrower on or prior to 11:00 A.M. (San
Francisco time) on the fourth Business Day preceding the last day of such
Interest Period that any Lender is unable to fund such Alternative Currency
after the expiration of such Interest Period, all Advances denominated in such
Alternative Currency maturing on the last day of such Interest Period shall,
notwithstanding the foregoing, be due and payable on the last day of such
Interest Period.
(f) Interest Rate Quotations. In the event that, prior to the first
------------------------
day of any Interest Period for any Borrowing, the Agent shall have determined in
good faith (or the Lender of any Eurocurrency Rate Bid Advance as to which the
Borrower has accepted such Lender's Competitive Bid, but as to which the
Borrowing Date has not arrived shall have determined and have notified the
Agent) (which determination shall be conclusive and binding upon all parties
hereto) that (i) Dollar or Alternative Currency deposits of the relevant amount
and for the relevant Interest Period for such Advances are not available to the
Lenders, or (ii) adequate and reasonable means do not exist for ascertaining the
Eurocurrency Rate for any Eurocurrency Rate Committed Advances denominated in
Dollars, or in an Alternative Currency then:
(i) the Agent shall forthwith notify the Borrowers and the
Lenders that the interest rate cannot be determined for such Eurocurrency
Rate Committed Advances denominated in Dollars or in such Alternative
Currency, as the case may be,
- 39 -
(ii) each such Committed Advance denominated in Dollars will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance unless an appropriate notice is
given for another Interest Type which is then available,
(iii) each such Committed Advance denominated in such
Alternative Currency will automatically, on the last day of the then
existing Interest Period therefor, be due and payable, and
(iv) the obligation of the Lenders to make, or to Convert
Advances into, Eurocurrency Rate Committed Advances, shall be suspended
until the Agent shall notify the Borrowers and the Lenders that the
circumstances causing such suspension no longer exist.
(g) Change in Circumstances. If, with respect to any Eurocurrency
-----------------------
Rate Advances, the Majority Lenders notify the Agent (or the Lender of any
Eurocurrency Rate Bid Advance as to which the Borrower has accepted such
Lender's Competitive Bid, but as to which the Borrowing Date has not arrived
notifies the Agent) that the Eurocurrency Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Majority Lenders of making
or maintaining their respective Eurocurrency Rate Advances for such Interest
Period, the Agent shall forthwith so notify the Borrowers and the Lenders,
whereupon (i) each Eurocurrency Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance,
and (ii) the obligation of the Lenders to make, or Convert Committed Advances
into, Eurocurrency Rate Advances shall be suspended until the Agent shall notify
the Borrowers and the Lenders that the circumstances causing such suspension no
longer exist.
(h) Failure to Notify. If any Borrower shall fail to select the
-----------------
duration of any Interest Period for any Eurocurrency Rate Committed Advances
made to such Borrower in accordance with Section 2.05(d) or Section 2.06(a) or
(b), the Agent will forthwith so notify such Borrower and the Lenders, and such
Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances; provided, however, that if
-------- -------
such failure to select an Interest Period relates to any Eurocurrency Rate
Advance denominated in an Alternative Currency, such Advance will automatically,
on the last day of the existing Interest Period for such Advance, be continued
as a Eurocurrency Rate Advance denominated in such Alternate Currency with an
Interest Period of one month.
- 40 -
(i) Minimum Amounts. On the date on which the aggregate unpaid
---------------
principal amount of Committed Advances comprising any Committed Borrowing shall
be reduced, by payment or prepayment (but not by reason of fluctuations in
foreign currency exchange rates), to less than $1,000,000, such Advances shall,
if they are Advances of an Interest Type other than Base Rate Advances,
automatically Convert into Base Rate Advances, and on and after such date the
right of the Borrower to Convert such Advances into Advances of an Interest Type
other than Base Rate Advances shall terminate.
(j) Illegality. Notwithstanding any other provision of this
----------
Agreement, if the enactment or issuance of or any change in or in the
interpretation of any law or regulation shall make it unlawful, or any central
bank or other governmental authority shall assert in writing that it is
unlawful, for any Lender or its Eurocurrency Lending Office to fund or maintain
Eurocurrency Rate Advances denominated in Dollars or in any Alternative Cur-
rencies hereunder, then, on notice thereof by such Lender to the Borrowers
through the Agent, (i) the right of the Borrowers to select such Interest Type
for any Advance pursuant to subsection (d) or (e) above and pursuant to Section
2.06(a) and (b) or to accept a bid from the affected Lender pursuant to Section
2.08(e), as the case may be, shall thereupon be suspended until the Agent shall
notify the Borrowers and the Lenders that the circumstances causing such
suspension no longer exist (and each Lender shall promptly notify Borrower if
such circumstance no longer exists), (ii) each such affected Advance denominated
in Dollars shall automatically become a Base Rate Advance and (iii) the
Borrowers shall forthwith prepay in full all such affected Eurocurrency Rate
Advances denominated in an Alternative Currency of all Lenders then outstanding,
together with interest accrued thereon.
(k) Quoted Rates. The Agent shall give prompt (and in any event
------------
within one Business Day) notice to the Borrowers and the Lenders of the
applicable interest rate determined by the Agent for the purposes of Section
2.05(c), (d) or (e).
(l) Swing Line Advances. The Borrower shall pay interest on the
-------------------
unpaid principal amount of each Swing Line Advance from the date of such Advance
until such principal amount is paid in full, payable on such dates, not more
frequently than monthly, as may be specified by the Swing Line Lender and in any
event on the Final Maturity Date, at a fluctuating interest rate per annum equal
to the sum of the Base Rate in effect from time to time plus or minus, if and as
applicable, the Applicable Margin per annum; provided, however, that during any
-------- -------
period in which an Event of Default has occurred and is continuing (but only so
long as such Event of Default is continuing), such
- 41 -
Borrower shall pay interest on the unpaid principal amount of each Swing Line
Advance made to it, payable from the date such Event of Default occurs and upon
written demand by the Swing Line Lender to such Borrower, at the Default Rate.
The Swing Line Lender shall be responsible for invoicing such Borrower for such
interest. The interest payable on Swing Line Advances is solely for the account
of the Swing Line Lender.
SECTION 2.06 Voluntary Conversions and Continuations of Committed
----------------------------------------------------
Advances.
--------
(a) Conversion and Continuation. The Borrower may, from time to time
---------------------------
and on the condition that no Default or Event of Default shall have occurred and
be continuing, on any Business Day, upon delivery of a Notice of
Conversion/Continuation given to the Agent not later than 10:00 A.M. (San
Francisco time) on the third Business Day (or, in the case of Alternative
Currency Advances, the fifth Business Day) prior to the date of the proposed
Conversion or Continuation and subject to the other provisions of Section 2.05
and this Section 2.06, (i) continue Committed Advances of the same Interest Type
and Interest Period and comprising the same Committed Borrowing as Committed
Advances of such Interest Type or (ii) Convert such Committed Advances, if such
Committed Advances are denominated in Dollars, into Committed Advances of
another Interest Type denominated in Dollars; provided, however, that any
-------- -------
Conversion of any Eurocurrency Rate Committed Advances into Committed Advances
of another Interest Type shall be made on, and only on, the last day of an
Interest Period for such Eurocurrency Rate Committed Advances; and, provided,
--------
further, that Eurocurrency Rate Committed Advances denominated in an Alternative
-------
Currency may not be converted into another Alternative Currency and may only be
continued as Eurocurrency Rate Committed Advances denominated in such
Alternative Currency. Each such Notice of a Conversion/Continuation shall be in
writing or by telecopier or telephone (and if by telephone, confirmed
immediately by telecopier), and delivered or given to the Agent within the time
period specified above, and shall specify (i) the date of such
Conversion/Continuation, (ii) the Committed Advances to be Converted/Continued,
and (iii) if such Conversion/Continuation is into Eurocurrency Rate Committed
Advances, the duration of the Interest Period for each such Advance.
In the case of a Notice of Conversion/Continuation relating to
Eurocurrency Rate Committed Advances in an Alternative Currency, the Agent
shall, at the request of the applicable Borrower, use its best efforts to notify
the Borrower as to an indicative interest rate with respect to such proposed
Continuation/Conversion by 9:00 A.M. (San Francisco time) the fourth Business
Day prior to the date of such
- 42 -
Continuation/Conversion, and such Borrower may, by notice to the Agent not later
than 10:00 A.M. (San Francisco time) on the fourth Business Day preceding the
date of such proposed Continuation/Conversion, withdraw such Notice of
Continuation/ Conversion and submit a new Notice of Continuation/ Conversion not
denominated in an Alternative Currency, and if so withdrawn prior to such time,
Borrower shall not be obligated to pay any costs which might otherwise be
payable pursuant to Section 2.06(c) in connection with the Borrower's failure to
so Continue; provided, however, the failure of the Agent to so notify the
-------- -------
Borrower shall not relieve such Borrower of any of its obligations hereunder,
including its obligation to Continue such Eurocurrency Rate Committed Advances
on the date of the Continuation specified in such Notice of
Continuation/Conversion; and provided, further, notwithstanding anything to the
-------- -------
contrary, in no event shall the Agent have any liability to any Borrower for
failing to notify a Borrower of the interest rate on or prior to 9:00 A.M. such
fourth Business Day preceding such date of Conversion or Continuation.
In the case of a Notice of Conversion/Continuation with respect to
Eurocurrency Rate Committed Advances denominated in an Alternative Currency, in
the event any Lender notifies the Agent that it is no longer able to continue
such Advance in an Alternative Currency (whether due to changes in the interbank
market or changes in funding capabilities of such Lender, including, without
limitation, changes due to such Lender's decision to close a funding office or
not to book loans in such Alternative Currency), such Lender shall notify the
Agent of such fact no later than the later of (x) 10:00 A.M. (San Francisco
time) on the fourth Business Day preceding the requested effective date of such
Continuation or (y) one hour after being notified by the Agent of the relevant
Notice of Conversion/Continuation. The Agent shall promptly notify the other
Lenders and the Borrower of the receipt of any such notice and the relevant
Notice of Conversion/Continuation shall be deemed to be withdrawn by the
relevant Borrower. The Borrower shall not be obligated to pay any costs which
might otherwise be payable pursuant to Section 2.06(c) in connection with any
Notice of Conversion/Continuation withdrawn or deemed withdrawn, in accordance
with this paragraph.
(b) Notices Irrevocable. Except as otherwise provided herein, each
-------------------
notice by a Borrower under this Section 2.06 shall be irrevocable, and the
Borrowers shall indemnify each Lender against any reasonable direct out-of-
pocket loss, cost or expenses incurred by such Lender as a result of any failure
by the Borrower to fulfill on or before the date specified by such notice the
applicable conditions set forth in this Section 2.06 or Article IV. The Agent
promptly (and in any event within one
- 43 -
Business Day) will give each Lender notice of each Notice of
Conversion/Continuation received by it.
(c) Alternative Currency Conversion. Notwithstanding anything herein
-------------------------------
to the contrary, upon the occurrence and continuation of an Event of Default
resulting from the failure of a Borrower to make any payment of principal or
interest on any Obligation, upon notice from the Agent, all of the Advances
denominated in an Alternative Currency shall automatically be converted to Base
Rate Advances in a principal amount equal to the Dollar equivalent of such
Alternative Currency on the date of such conversion. Such Borrower shall be
responsible for all costs associated with such conversion to the full extent of
each indemnity provided herein in connection with a conversion prior to the last
day of an Interest Period.
SECTION 2.07 Bid Borrowings.
--------------
(a) In addition to Committed Borrowings pursuant to Section 2.02,
each Lender severally agrees that Sunrise may, as set forth in Section 2.08,
from time to time request the Lenders prior to the Final Maturity Date to submit
offers to make Bid Advances to such Borrower; provided, however, that the
-------- -------
Lenders may, but shall have no obligation to, submit such offers and such
Borrower may, but shall have no obligation to, accept any such offers; provided,
--------
further, that no Bid Advance shall be made if, after giving effect to such Bid
-------
Advance and the other Bid Advances to be made by the other Lenders as part of
the same Bid Borrowing, (a) the Facility Usage shall exceed the Total
Commitment, (b) the outstanding aggregate principal amount of all Bid Advances
made by all Lenders shall exceed $137,500,000; or (c) the number of Interest
Periods for Bid Advances then outstanding plus the number of Interest Periods
for Committed Advances then outstanding exceeds 40.
(b) Each Lender may designate one Designated Bidder to have a right
to offer and make Bid Advances as a Lender pursuant to Sections 2.07 and 2.08;
provided, however, that (i) each such Lender shall retain the right to make Bid
-------- -------
Advances as a Lender, (ii) each such designation shall be of a Designated Bidder
and (iii) the parties to each such designation shall execute and deliver to the
Agent, for its acceptance, an agreement and acknowledgment substantially in the
form of Exhibit N hereto, whereby such Designated Bidder agrees to be bound by
the terms and conditions of this Agreement as a Lender for purposes of Bid
Advances. Upon the Agent accepting an appropriately completed agreement and
acknowledgment, the Designated Bidder shall be deemed to be a direct party to
this Agreement as a Lender for purposes of Bid Advances only, and each reference
to "Lender" in Section 2.07(a) and 2.08 (and the defined terms used therein)
- 44 -
shall be deemed to include a reference to each Designated Bidder. Except (A)
that each Designated Bidder shall be solely responsible to the other parties
hereto for the performance of its obligations relating to its Bid Advances, and
(B) for the right of each Designated Bidder to offer and make Bid Advances (and
receive notices directly from the Agent in connection therewith) and to receive
payments as a Lender with respect to its Bid Advances, each Designated Bidder
shall be deemed to have only the rights of a participant in a Bid Loan
hereunder, as set forth in (and limited by) Section 11.08(g) (but with no rights
under Section 2.13(a), 3.07, 11.02, 11.08, 11.10 or 11.14), and the Agent shall
be entitled to deal solely with the Lender designating such Designated Bidder
for all matters, including voting. Upon the request of the Designated Bidder
made through the Agent, Sunrise shall execute and deliver a Bid Advance Note to
evidence Bid Advances made by each Designated Bidder. A Lender may revoke any
designation of a Designated Bidder at any time upon written notice to the Agent,
but such revocation shall not affect the rights and obligations of a Designated
Bidder as to any of its Bid Advances remaining outstanding.
SECTION 2.08 Procedure for Bid Borrowings.
----------------------------
(a) When Sunrise wishes to request the Lenders to submit offers to
make Bid Advances hereunder, it shall transmit to the Agent by telephone call
followed promptly by facsimile transmission a notice in substantially the form
of Exhibit J (a "Competitive Bid Request") so as to be received no later than
9:00 a.m. (San Francisco time) (x) four Business Days prior to the date of a
proposed Bid Borrowing in the case of a Eurocurrency Auction, or (y) one
Business Day prior to the date of a proposed Bid Borrowing in the case of an
Absolute Rate Auction, specifying: (i) the date of such Bid Borrowing, which
shall be a Business Day; (ii) the aggregate amount of such Bid Borrowing, which
shall be a minimum amount of $5,000,000 or in multiples of $1,000,000 in excess
thereof; (iii) whether the Competitive Bids requested are to be for Eurocurrency
Rate Bid Advances or Absolute Rate Bid Advances or both; and (iv) the duration
of the Interest Period applicable thereto, subject to the provisions of the
definition of "Interest Period" herein. Subject to subsection 2.08(c), such
Borrower may not request Competitive Bids for more than four Interest Periods in
a single Competitive Bid Request and may not request Competitive Bids more than
twice in any period of five Business Days. Sunrise shall pay to the Agent for
the Agent's sole benefit a bid auction fee of $400 on the day of each Absolute
Rate Auction and Eurocurrency Auction.
(b) Upon receipt of a Competitive Bid Request, the Agent will
promptly send to the Lenders by facsimile transmission
- 45 -
an Invitation for Competitive Bids, which shall constitute an invitation by
Sunrise to each Lender to submit Competitive Bids offering to make the Bid
Advances to which such Competitive Bid Request relates in accordance with this
Section 2.08.
(c) (i) Each Lender may at its discretion submit a Competitive Bid
containing an offer or offers to make Bid Advances in response to any
Invitation for Competitive Bids. Each Competitive Bid must comply with the
requirements of this subsection 2.08(c) and must be submitted to the Agent
by facsimile transmission at the Agent's office for notices set forth on
Schedule 11.06 hereto not later than 7:00 a.m. (San Francisco time) (1)
three Business Days prior to the proposed date of Borrowing, in the case of
a Eurocurrency Auction or (2) on the proposed date of Borrowing, in the
case of an Absolute Rate Auction; provided that Competitive Bids submitted
--------
by Bank of America (or any Affiliate of Bank of America) in the capacity of
a Lender may be submitted, and may only be submitted, if Bank of America or
such Affiliate notifies the Agent of the terms of the offer or offers
contained therein not later than 6:45 a.m. (San Francisco time) (A) three
Business Days prior to the proposed date of Borrowing, in the case of a
Eurocurrency Auction or (B) on the proposed date of Borrowing, in the case
of an Absolute Rate Auction.
(ii) Each Competitive Bid shall be in substantially the form of
Exhibit L, specifying therein: (A) the proposed date of Borrowing; (B) the
principal amount of each Bid Advance for which such Competitive Bid is
being made, which principal amount (x) may be equal to, greater than or
less than the Commitment of the quoting Lender, (y) must be $5,000,000 or
in multiples of $1,000,000 in excess thereof, and (z) may not exceed the
principal amount of Bid Advances for which Competitive Bids were requested;
(C) in case the Borrower elects a Eurocurrency Auction, the margin above or
below the Eurocurrency Rate (the "Eurocurrency Rate Bid Margin") offered
for each such Bid Advance, expressed as a percentage (rounded to the
nearest 1/100th of 1%) to be added to or subtracted from the Eurocurrency
Rate and the Interest Period applicable thereto; (D) in case the Borrower
elects an Absolute Rate Auction, the rate of interest per annum (rounded
upward to the nearest 1/100th of 1%) (the "Absolute Rate") offered for each
such Bid Advance; and (E) the identity of the quoting Lender. A Competitive
Bid may contain up to three separate offers by the
- 46 -
quoting Lender with respect to each Interest Period specified in the
related Invitation for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it: (A) is not
substantially in conformity with Exhibit L or does not specify all of the
information required by subsection (c)(ii) of this Section; (B) contains
qualifying, conditional or similar language; (C) proposes terms other than
or in addition to those set forth in the applicable Invitation for
Competitive Bids; or (D) arrives after the time set forth in subsection
(c)(i).
(iv) Notwithstanding anything to the contrary contained in this
section, a Competitive Bid by Bank of America may contain, and will not be
disregarded if it does contain, a restriction on the use of proceeds
consistent with Section 2.21.
(d) Promptly on receipt and not later than 7:30 a.m. (San Francisco
time) (i) three Business Days prior to the proposed date of Borrowing in the
case of a Eurocurrency Auction, or (ii) on the proposed date of Borrowing, in
the case of an Absolute Rate Auction, the Agent will notify Sunrise of the terms
(A) of any Competitive Bid submitted by a Lender that is in accordance with
subsection 2.08(c), and (B) of any Competitive Bid that amends, modifies or is
otherwise inconsistent with a previous Competitive Bid submitted by such Lender
with respect to the same Competitive Bid Request. Any such subsequent
Competitive Bid shall be disregarded by the Agent unless such subsequent
Competitive Bid is submitted solely to correct a manifest error in such former
Competitive Bid and only if received within the times set forth in subsection
2.08(c). The Agent's notice to the Borrower shall specify (1) the aggregate
principal amount of Bid Advances for which offers have been received for each
Interest Period specified in the related Competitive Bid Request; and (2) the
respective principal amounts and Eurocurrency Rate Bid Margins or Absolute
Rates, as the case may be, so offered. Subject only to the provisions of
Sections 2.05(g), 2.05(j) and 4.02 and the provisions of this subsection (d),
any Competitive Bid shall be irrevocable except with the written consent of the
Agent given on the written instructions of the Borrower.
(e) Not later than 8:00 a.m. (San Francisco time) (i) three Business
Days prior to the proposed date of Borrowing, in the case of a Eurocurrency
Auction, or (ii) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction, the Borrower shall notify the Agent of its acceptance or
- 47 -
non-acceptance of the offers so notified to it pursuant to subsection 2.08(d).
Such Borrower shall be under no obligation to accept any offer and may choose to
reject all offers. In the case of acceptance, such notice shall specify the
aggregate principal amount of offers for each Interest Period that is accepted.
Such Borrower may accept any Competitive Bid in whole or in part; provided that:
--------
(i) the aggregate principal amount of each Bid Borrowing may not
exceed the applicable amount set forth in the related Competitive Bid
Request;
(ii) the aggregate principal amount of Bid Borrowing on each day
must be $5,000,000 or in any multiple of $1,000,000 in excess thereof;
(iii) acceptance of offers may only be made on the basis of
ascending Eurocurrency Rate Bid Margins or Absolute Rates within each
Interest Period, as the case may be; and
(iv) such Borrower may not accept any offer that is described in
subsection 2.08(c)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(f) If offers are made by two or more Lenders with the same
Eurocurrency Rate Bid Margins or Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in respect of which such
offers are accepted for the related Interest Period, the principal amount of Bid
Advances in respect of which such offers are accepted shall be allocated by the
Agent among such Lenders as nearly as possible (in such multiples, not less than
$1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determination by the Agent of the amounts of
Bid Advances shall be conclusive in the absence of manifest error.
(g) (i) The Agent will promptly notify each Lender having submitted
a Competitive Bid if its offer has been accepted and, if its offer has been
accepted, of the amount of the Bid Advance or Bid Advances to be made by it
on the date of the Bid Borrowing.
(ii) Each Lender, which has received notice pursuant to
subsection 2.08(g)(i) that its Competitive Bid has been accepted, shall
make the amounts of such Bid Advances available to the Agent for the
account of the Borrower at the Agent's Office, by 11:00 a.m. (San Francisco
time) in the case of Absolute Rate Bid
- 48 -
Advances, and by 11:00 a.m. (San Francisco time) in the case of
Eurocurrency Rate Bid Advances, on such date of Bid Borrowing, in funds
immediately available to the Agent for the account of such Borrower at the
Agent's Office.
(iii) Promptly following each Bid Borrowing, the Agent shall
notify each Lender of the ranges of bids submitted and the highest and
lowest Bids accepted for each Interest Period requested by the Borrower and
the aggregate amount borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Borrower and the Lenders shall
furnish such information to the Agent as the Agent may request relating to
the making of Bid Advances, including the amounts, interest rates, dates of
borrowings and maturities thereof, for purposes of the allocation of
amounts received from such Borrower for payment of all amounts owing
hereunder.
(h) If, on or prior to the proposed date of Borrowing, the
Commitments have not been terminated and if, on such proposed date of Borrowing
all applicable conditions to funding referenced in Sections 4.01 and 4.02 are
satisfied, the Lender or Lenders whose offers Sunrise has accepted will fund
each Bid Advance so accepted. Nothing in this Section 2.08 shall be construed as
a right of first offer in favor of the Lenders or to otherwise limit the ability
of the Borrower to request and accept credit facilities from any Person
(including any of the Lenders), provided that no Default or Event of Default
would otherwise arise or exist as a result of such Borrower executing,
delivering or performing under such credit facilities.
(i) Each outstanding Bid Loan shall be deemed to utilize the
Commitment of each lender by an amount equal to such Lender's Pro Rata Share
times the amount of such Bid Loan.
-----
SECTION 2.09 The Swing Line.
--------------
(a) Availability. The Swing Line Lender shall from time to time
------------
through the day prior to the Final Maturity Date make Swing Line Advances in
Dollars to Sunrise in such amounts as Sunrise may request, provided that (i)
--------
giving effect to such Swing Line Advance, the Swing Line Outstandings shall not
exceed $10,000,000 and the Facility Usage shall not exceed the Total Commitment,
(ii) without the consent of the Majority Lenders, no Swing Line Advance may be
made during the continuation of an Event of Default and (iii) the Swing Line
Lender has not given at least twenty-four (24) hours prior notice to Sunrise
that
- 49 -
availability under the Swing Line is suspended or terminated. Sunrise may
borrow, repay and reborrow under this Section. Unless notified to the contrary
by the Swing Line Lender, Borrowings under the Swing Line may be made in a
minimum amounts of $100,000 and multiples of $25,000 in excess thereof upon
telephonic request made to the Swing Line Lender not later than 3:00 p.m., San
Francisco time, on the Business Day of the requested Borrowing (which telephonic
request shall be promptly confirmed in writing by a Senior Officer of Sunrise by
telecopier with telephonic notice to the Agent). Promptly after receipt of such
a request for borrowing, the Swing Line Lender shall obtain telephonic
verification from the Agent that, giving effect to such request, availability
for Advances will exist under Section 2.01(a) (and such verification shall be
promptly confirmed in writing by telecopier). Unless notified to the contrary by
the Swing Line Lender, each repayment of a Swing Line Advance shall be in an
amount which is an integral multiple of $25,000. If Sunrise instructs the Swing
Line Lender to debit its demand deposit account at the Swing Line Lender in the
amount of any payment with respect to a Swing Line Advance, or the Swing Line
Lender otherwise receives repayment, after 3:00 p.m., San Francisco time, on a
Business Day, such payment shall be deemed received on the next Business Day.
The Swing Line Lender shall promptly notify the Agent of the Swing Advance
Outstandings each time there is a change therein. The Swing Line Lender may at
any time in its sole discretion notify Sunrise that availability under the Swing
Line is suspended or terminated.
(b) Repayment of Swing Line Advances. In the event
--------------------------------
that there are Swing Line Outstandings on five (5) consecutive Business Days,
then on the next Business Day (unless Sunrise has made other arrangements
acceptable to the Swing Line Lender to reduce the Swing Line Outstandings to
zero), Sunrise shall request a Committed Advance pursuant to Section 2.02(a) in
an amount complying with Section 2.01 and sufficient to reduce the Swing Line
Outstandings to zero. The Agent shall automatically provide such amount directly
to the Swing Line Lender (which the Swing Line Lender shall then apply to the
Swing Line Outstandings) and credit any balance of the Committed Advance in
immediately available funds as provided in Section 2.02(d). In the event that
Sunrise fails to request a Committed Advance within the time specified by
Section 2.02 on any such date, the Agent may, but is not required to, without
notice to or the consent of Sunrise, cause Committed Advances to be made by the
Lenders under the Commitments in the amount necessary to comply with Section
2.01 and sufficient to reduce the Swing Line Outstandings to $5,000,000 and, for
this purpose, the conditions precedent set forth in Sections 4.01 and 4.02 shall
not apply. The proceeds of such Committed Advances shall be paid to the Swing
Line Lender for application to the Swing Line Outstandings.
- 50 -
(c) Purchase of Participations. Upon the making of a Swing Line
--------------------------
Advance, each Lender shall be deemed to have purchased from the Swing Line
Lender a participation therein in an amount equal to that Lender's Pro Rata
Share of the Commitment times the amount of the Swing Line Advance. Upon demand
made by the Swing Line Lender, each Lender shall, according to its Pro Rata
Share of the Commitment, promptly provide to the Swing Line Lender its purchase
price therefor in an amount equal to its participation therein. The obligation
of each Lender to so provide its pur-chase price to the Swing Line Lender shall
be absolute and uncon-ditional and shall not be affected by the occurrence of an
Event of Default or any other occurrence or event.
SECTION 2.10 Reduction of Commitments.
------------------------
(a) Voluntary Reductions. Sunrise shall have the right, upon written
--------------------
notice to the Agent not later than 10:00 A.M. (San Francisco Time) on the fifth
Business Day prior thereto, to terminate in whole or reduce ratably in part the
unused portions of the respective Commitments of the Lenders; provided, however,
-------- -------
that each partial reduction shall be in the amount of $5,000,000 or any multiple
of $l,000,000 in excess thereof. At the direction of Sunrise, any voluntary
reduction made pursuant to this Section 2.10(a) may be credited against the next
scheduled reductions required pursuant to Section 2.10(b).
(b) Scheduled Reductions. The Total Commitment shall automatically
--------------------
reduce on each Amortization Date by an amount equal to the Amortization Amount
unless the Final Maturity Date is extended within the three months preceding
such Amortization Date in accordance with Section 2.10(c) below, in which case
each Amortization Date shall be delayed by one year. The Total Commitment shall
be reduced to zero on the Final Maturity Date.
(c) Extension of Final Maturity Date. Provided that there is no
--------------------------------
Default or Event of Default and Borrower has theretofore delivered to the
Lenders the financial statements required under Section 6.01(b) for the
immediately preceding Fiscal Year and the projected financial statements
required under Section 6.01(c) for the forthcoming Fiscal Years, Borrower may by
delivery of a Request for Extension to the Agent and the Lenders request that
the Final Maturity Date be extended by one year. The Request for Extension shall
not be delivered earlier than October 14, commencing October 14, 1996, nor later
than November 14 in any year. Each Lender shall use its best efforts to respond
either affirmatively or negatively (in its sole and absolute discretion) to such
Request for Extension by written notice to Borrower and the Agent within thirty
days after receipt thereof from Borrower. If each Lender so notifies Borrower
and the Agent in writing that such Lender consents to the extension
- 51 -
of the Final Maturity Date, then the Agent shall by written notice to Borrower
and the Lenders in the form of a Certificate of Extension certify that the Final
Maturity Date has been so extended and the term "Final Maturity Date" shall be
deemed amended to mean the date which is the January 15 subsequent to the then
effective Final Maturity Date. If any Lender, in its sole and absolute
discretion, notifies Borrower and the Agent in writing within said thirty-day
period that it does not consent to such extension of the Final Maturity Date, or
fails to respond in writing within said thirty-day period, the Final Maturity
Date shall not be so extended. Notwithstanding the fact that the Final Maturity
Date is not extended pursuant to any Request for Extension, the Borrower may
nonetheless request a one-year extension the following year.
SECTION 2.11 Mandatory Prepayments.
---------------------
(a) Reduction in Commitments. If, at any time, the Facility Usage
------------------------
shall exceed the then existing Commitments of the Lenders, the Borrowers shall
(i) prepay at least such amount of the outstanding principal amount of Advances
and/or (ii) cash collateralize at least such amount of Outstanding Letter of
Credit Liability and/or Advances, as is necessary to make the then existing
Facility Usage less than or equal to the then existing Commitments of the
Lenders; provided, however, that all such prepayments shall be made as specified
-------- -------
by the applicable Borrower, and if not so specified, in the order set forth in
Section 2.15(e). All prepayments of Advances pursuant to this Section 2.11(a),
except in the case of prepayments of Base Rate Advances, shall be made together
with accrued interest to the date of such payment on the principal amount
repaid, together with any amounts payable under Section 2.20.
(b) Alternative Currency Exchange Rate Fluctuations.
-----------------------------------------------
If the Dollar equivalent of the aggregate outstanding principal amount of all
Committed Advances denominated in Alternative Currencies exceeds the Alternative
Currency Sublimit, the Borrowers shall, as of the last day of each Interest
Period with respect to an Alternative Currency which ends thereafter, repay
Advances denominated in Alternative Currencies or cash collateralize such
Advances in either case in an amount equal to the lesser of (i) the amount by
which the Dollar equivalent of outstanding Alternative Currencies exceeds the
Alternative Currency Sublimit on the last day of such Interest Period and (ii)
the Dollar equivalent of the Advance with respect to which such Interest Period
is expiring.
SECTION 2.12 Optional Prepayments. The Borrowers may, upon at least
--------------------
four Business Days' written notice to the Agent in the case of Eurocurrency Rate
Committed Advances and on
- 52 -
the date of prepayment to the Agent in the case of Base Rate Advances, stating
the proposed date and aggregate principal amount of the prepayment (and if such
notice is given the Borrowers shall), prepay, in whole or in part, the
outstanding principal amounts of the Advances comprising the same Committed
Borrowing, together with, in the case of prepayment of Eurocurrency Rate
Committed Advances, (i) accrued interest to the date of such prepayment on the
principal amounts prepaid and (ii) any additional amount for which the Borrowers
shall be obligated pursuant to Section 2.20; provided, however, that each
-------- -------
partial prepayment shall be in an aggregate principal amount not less than
$500,000 or any multiple of $100,000 (or the equivalent thereof in an
Alternative Currency) in excess thereof, except with respect to Base Rate
Advances, which shall be in an aggregate principal amount not less than $300,000
or any multiple of $100,000 in excess thereof, and if not otherwise specified by
the applicable Borrower, shall be applied in accordance with Section 2.15(e);
provided, further, that no partial prepayment of any Eurocurrency Rate Committed
-------- -------
Advances denominated in an Alternative Currency and comprising part of the same
Committed Borrowing shall be permitted if less than $1,500,000 Dollar equivalent
principal amount of such Advances shall remain outstanding after giving effect
to such prepayment. Bid Advances may not be voluntarily prepaid without the
consent of the Lender making such Bid Advance.
SECTION 2.13 Increased Costs. (a) If, due to either (i) the enactment
---------------
or issuance of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements other than as provided in the
definition of Eurocurrency Rate Reserve Percentage in Section 1.01) in or in the
interpretation of any law or regulation by any governmental or regulatory body
or agency having jurisdiction over the Lenders or (ii) the compliance by any
Lender with any written guideline or request from any central bank or other
governmental authority having jurisdiction, whether or not having the force of
law, there shall be any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining Eurocurrency Rate Committed Advances, then the
Borrowers shall from time to time, upon demand by such Lender (with a copy of
such demand to the Agent), promptly (and in any event within five Business Days)
pay to the Agent for account of such Lender additional amounts sufficient to
reimburse such Lender for such increased cost. Any Lender making a demand under
this Section 2.13(a) shall promptly notify the Borrowers of the event or
condition giving rise to such demand; provided however that, failure to give
such notice promptly shall not relieve the Borrowers of any obligation or
liability hereunder. A certificate as to the amount of such increased costs
setting forth in reasonable detail the basis for the calculations of such
increased costs shall be submitted to
- 53 -
the Borrowers and the Agent by such Lender and such certificate shall be
conclusive and binding for all purposes, absent manifest error.
(b) If, at any time after the Closing Date, any Lender determines
that compliance with any law or regulation as adopted, amended or otherwise
modified after the Closing Date or with any written guideline or request from
any central bank or other governmental authority having jurisdiction published
after the Closing Date, whether or not having the force of law, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender (whether by increasing the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender or otherwise) as a consequence of, or with reference to,
such Lender's Commitments or its making or maintaining Committed Advances below
the rate that the Lender or any such other corporation, as the case may be,
could have achieved but for compliance therewith (taking into account the
policies of such Lender or any such corporation with regard to capital), then
the Borrowers shall from time to time, upon demand by such Lender (with a copy
of such demand to the Agent), promptly (and in any event within five Business
Days) pay to such Lender additional amounts sufficient to compensate such Lender
or any such other corporation, as the case may be, for such reduction. A
certificate setting forth in reasonable detail the basis for the calculation of
such amounts shall be submitted to the Borrowers and the Agent by such Lender,
which certificate shall be conclusive and binding for all purposes, absent
manifest error.
(c) Upon any Lender (an "Affected Lender") (i) making a claim for
compensation pursuant to this Section 2.13, or (ii) giving a notice under
Section 2.05(f) or (g) and Section 3.07(a) and (b), the Borrower may: (A)
request the Affected Lender to use its reasonable efforts to obtain a
replacement bank or financial institution satisfactory to the Borrower to
acquire and assume all or part of such Affected Lender's Loans and Commitment
pursuant to a Commitment Assignment and Acceptance (a "Replacement Lender"); (B)
request one more of the other Lenders to acquire and assume all or part of such
Affected Lender's Loans and Commitment; or (C) designate a Replacement Lender.
Any such designation of a Replacement Lender under clause (A) or (C) shall be
subject to the prior written consent of the Agent (which consent shall not be
unreasonably withheld). This section shall not affect or limit the rights of any
Affected Lender under Section 2.05(f) or 2.13 in respect of any period prior to
such Lender being replaced hereunder.
(d) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and
- 54 -
obligations of the Borrowers contained in this Section 2.13 shall survive the
payment in full of the Obligations.
SECTION 2.14 Evidence of Debt. (a) The Committed Advances made by
----------------
each Lender shall be evidenced by one or more loan accounts or records
maintained by such Lender in the ordinary course of business. The loan accounts
or records maintained by the Agent and each Lender shall be conclusive absent
manifest error of the amount of the Committed Advances made by the Lenders to
the Borrowers and the interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrowers hereunder to pay any amount owing with respect to
the Committed Advances.
(b) The Committed Advances made by such Lender may, at the request of
a Lender, be evidenced by one or more Committed Advance Notes, instead of loan
accounts. Each such Lender shall endorse on the schedules annexed to its
Committed Advance Note(s) the date, amount and maturity of each Committed
Advance made by it and the amount of each payment of principal made by each
Borrower with respect thereto. Each such Lender is irrevocably authorized by the
Borrowers to endorse its Committed Advance Note(s) and each Lender's record
shall be conclusive absent manifest error; provided, however, that the failure
-------- -------
of a Lender to make, or an error in making, a notation thereon with respect to
any Committed Advance shall not limit or otherwise affect the obligations of the
Borrowers hereunder or under any such Committed Advance Note to such Lender.
(c) The Bid Advances made by such Lender shall be evidenced by one or
more Bid Advance Notes, instead of loan accounts. Each such Lender shall endorse
on the schedules annexed to its Bid Advance Note(s) the date, amount and
maturity of each Bid Advance made by it and the amount of each payment of
principal made by each Borrower with respect thereto. Each such Lender is
irrevocably authorized by the Borrowers to endorse its Bid Advance Note(s) and
each Lender's record shall be conclusive absent manifest error; provided,
--------
however, that the failure of a Lender to make, or an error in making, a notation
-------
thereon with respect to any Bid Advance shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under any such Bid Advance Note to
such Lender.
(d) The Swing Line Advances shall be evidenced by one or more loan
accounts maintained by the Swing Line Lender in the ordinary course of business,
and such accounts shall be presumptive evidence of the principal amount owing
under the Swing Line. Any failure to so record or any error in doing so shall
not, however, limit or otherwise affect the obligation of
- 55 -
the Borrower to pay any amount owing with respect to Swing Line Advances;
provided, however, that the Swing Line Lender may request such Borrower to
-------- -------
execute and deliver a promissory note to evidence the Swing Line Advances, and
such Borrower agrees to execute and deliver such a promissory note, and such
other Swing Line Documents as the Swing Line Lender may from time to time
reasonably request.
SECTION 2.15 Payments and Computations. (a) Except as provided in
-------------------------
Section 2.16, the Borrowers shall pay all amounts due to the Agent, Lenders and
the Issuing Bank hereunder or under any other Loan Document to which it is a
party (except, in each case, with respect to principal of, interest on and other
amounts relating to, Advances denominated in an Alternative Currency),
irrespective of, and without condition or deduction for, any counterclaim,
defense, recoupment or setoff, in lawful money of the United States and in same
day funds delivered to the Agent not later than 12:00 noon (San Francisco time)
on the day when due in Dollars by deposit of such funds to the Agent's Account
maintained for payments in Dollars. The Borrowers shall make each payment due
hereunder with respect to principal of, interest on and other amounts relating
to Advances denominated in an Alternative Currency not later than 9:00 a.m.
(local time for the city specified for such Alternative Currency on Schedule
1.01(a)) on the day when due in such Alternative Currency to the Agent in same
day funds by deposit of such funds to the Agent's Account maintained for
payments in such Alternative Currency. The Agent will promptly thereafter cause
to be distributed like funds relating to the payment of principal (including
reimbursement for payments under Letters of Credit), interest, or commitment
fees, or letter of credit fees ratably (other than amounts payable to any Lender
or the Issuing Bank pursuant to Section 2.03(a), 2.08, 2.09, 2.13, 2.20 or 3.07
or amounts subject to Taxes pursuant to Section 2.16) to the Lenders, for the
account of their respective Applicable Lending Offices, or the Issuing Bank and
like funds relating to the payment of any other amount payable to any Lender or
the Issuing Bank to such Lender, for the account of its Applicable Lending
Office, or to the Issuing Bank, in each case to be applied in accordance with,
and subject to, the terms of this Agreement. Upon its acceptance of a Commitment
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 11.08, from and after the effective date
specified in such Commitment Assignment and Acceptance, the Agent shall make all
payments hereunder and under any other Loan Document in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
- 56 -
(b) Each Borrower hereby authorizes each Lender and the Issuing Bank
if and to the extent payment owing to such Lender or the Issuing Bank, as the
case may be, from the Borrower is not made when due hereunder to charge from
time to time against any or all of such Borrower's accounts (other than any
trust or segregation account maintained for the benefit of any Person that is
not a Subsidiary or an Affiliate any of the Borrowers) with such Lender or the
Issuing Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Eurocurrency Rate
(other than with respect to Pound Sterling denomination) or the Federal Funds
Rate and of commitment and letter of credit fees shall be made by the Agent on
the basis of a year of 360 days, and computations of interest based on the Base
Rate or Eurocurrency Rate with respect to Pound Sterling denominations shall be
made by the Agent on the basis of a year of 365 or 366 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes absent manifest error.
(d) Unless the Agent shall have received notice from the applicable
Borrower prior to the date on which any payment is due to the Lenders or the
Issuing Bank, as the case may be, hereunder that such Borrower will not make
such payment in full to the Agent, the Agent may assume that such Borrower has
made such payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each Lender or the
Issuing Bank, as the case may be, on such due date an amount equal to the amount
then due to such Lender or the Issuing Bank, as the case may be. If and to the
extent such Borrower shall not have so made such payment in full to the Agent,
each Lender or the Issuing Bank, as the case may be, shall repay to the Agent
forthwith on demand such amount distributed to such Lender or the Issuing Bank,
as the case may be, together with interest thereon, for each day from the date
such amount is distributed to such Lender or the Issuing Bank, as the case may
be, until the date such Lender or the Issuing Bank, as the case may be, repays
such amount to the Agent, at the Federal Funds Rate or, in the case of a payment
in an Alternative Currency, the Overnight Rate.
(e) Amounts received by the Agent for application to amounts due and
payable to the Agent, the Lenders or the Issuing Bank shall be applied, if not
specified by the applicable Borrower or if received after the occurrence and
continuance of an Event of Default, to amounts due and payable as follows:
first, to any amounts due and payable under Section 11.03,
-----
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second, to the ratable payment of any accrued interest or fees that are then due
------
and payable, third, to the payment of the outstanding Swing Line Advances,
-----
fourth, to the ratable payment of the outstanding Base Rate Advances, fifth to
------ -----
the ratable payment of other outstanding Advances in the order of nearest
expiring Interest Periods, and sixth, to cash collateralize Letter of Credit
-----
Liability, together with, in the case of payment of Eurocurrency Rate Advances,
any additional amount for which the Borrowers shall be obligated in respect of
the payment of Eurocurrency Rate Advances pursuant to Section 2.20. Any cash
collateralization of Letter of Credit Liability pursuant to this Section 2.15(e)
shall be effected by documentation prepared by the Issuing Bank having terms
consistent with those in documentation customarily employed by the Issuing Bank
for purposes of establishing and maintaining cash collateral for letters of
credit issued by the Issuing Bank. Payments for reimbursement of amounts drawn
under any Letter of Credit shall be applied as set forth in Section 3.04(c).
SECTION 2.16 Taxes. (a) Subject to subsection (e) below, any and all
-----
payments by the Borrowers hereunder or any other Loan Document shall be made, in
accordance with Section 2.15, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, (i) in the
---------
case of each Lender, the Issuing Bank and the Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws of
which such Lender, the Issuing Bank or the Agent (as the case may be) is
organized or any political subdivision thereof, (ii) in the case of each Lender
and the Issuing Bank, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction of such Lender's Applicable Lending Office or of the
Issuing Bank's office through which it Issues Letters of Credit, as the case may
be, or any political subdivision thereof and (iii) in the case of each Lender,
the Issuing Bank and the Agent, taxes imposed by the United States by means of
withholding taxes if and to the extent that such withholding taxes shall be in
effect and shall be applicable on the date hereof under current laws and
regulations (including judicial and administrative interpretations thereof) to
payments to be made for the account of such Lender's Applicable Lending Office
or to the Issuing Bank or to the Agent (all taxes described in subclauses (i),
(ii) and (iii) being referred to as "Excluded Taxes" and all taxes, levies,
--------------
imposts, deductions, charges, withholdings and liabilities not described in
subclauses (i), (ii) and (iii) being hereinafter referred to as "Taxes"). If any
-------
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any other Loan Document to any Lender, the
Issuing Bank or the Agent, (x) the sum payable shall be increased as may be
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necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.16) such Lender, the
Issuing Bank or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (y) such Borrower
shall make such deductions and (z) such Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery or registration or filing or
recording of, or otherwise with respect to, this Agreement or any other Loan
Document (including, without limitation, tangible or intangible property or ad
valorem taxes) or document delivered hereunder or under any other Loan Document
(hereinafter referred to as "Other Taxes").
-----------
(c) The Borrowers will indemnify each Lender, the Issuing Bank and
the Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.16) paid by such Lender, the Issuing Bank or the
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender, the Issuing Bank or the Agent (as
the case may be) makes written demand therefor, which demand shall specify in
reasonable detail the basis for such demand.
(d) Within 30 days after the date of any payment of Taxes by the
Borrower, the Borrowers will furnish to the Agent, at its address referred to in
Section 11.06, the original or a certified copy of a receipt or other evidence
satisfactory to the Agent of payment thereof.
(e) Prior to the date of the initial Committed Borrowing in the case
of each Lender or Issuance of the initial Letter of Credit in the case of the
Issuing Bank, on the date of the Commitment Assignment and Acceptance pursuant
to which it became a Lender in the case of each other Lender, or if otherwise
requested from time to time by the Borrowers or the Agent, each Lender organized
under the laws of a jurisdiction outside the United States and the Issuing Bank,
if organized under the laws of a jurisdiction outside the United States, shall
provide the Agent and the Borrowers with three counterparts of each of the forms
prescribed by the Internal Revenue Service (Form 1001 or
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4224, or successor form(s), as the case may be) of the United States certifying
as to such Lender's or Issuing Bank's (if applicable) status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to such Lender or the Issuing Bank under any Loan Document.
(f) Without affecting its rights under this Section 2.16 or any
provision of this Agreement, each Lender and the Issuing Bank agree that if any
Taxes or Other Taxes are imposed and required by law to be paid or to be
withheld from any amount payable to such Lender or its Applicable Lending Office
or the Issuing Bank, as the case may be, with respect to which any Borrower
would be obligated pursuant to this Section 2.16 to increase any amounts payable
to such Lender or the Issuing Bank, as the case may be, or to pay any such Taxes
or Other Taxes, such Lender shall use reasonable efforts to select an
alternative Applicable Lending Office and the Issuing Bank shall use reasonable
efforts to select an alternative office for purposes of issuing and receiving
payments in respect of Letters of Credit, as the case may be, which would not
result in the imposition of such Taxes or Other Taxes; provided, however, that
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none of the Lenders or the Issuing Bank shall be obligated to select any such
alternative office if such Lender or the Issuing Bank, as the case may be,
determined that (i) as a result of such selection it would be in violation of an
applicable law, regulation or treaty or (ii) such selection would result in
additional costs to such Lender or the Issuing Bank, as the case may be.
(g) Each Lender and the Issuing Bank agree with the Borrowers that it
will take all reasonable actions by all usual means (i) to secure and maintain
all benefits available to it under the provisions of any applicable tax treaty
concluded to which it may be entitled, if such benefit would reduce the amount
payable by the Borrowers in accordance with this Section 2.16, (ii) otherwise to
cooperate with the Borrowers to minimize the amount payable by any Borrower
pursuant to this Section 2.16 and (iii) to assist the Borrowers, at the expense
of the Borrowers, in contesting any such Taxes or Other Taxes; provided,
--------
however, that none of the Lenders or the Issuing Bank, as the case may be, shall
-------
be obliged to disclose to any Borrower any information regarding its tax affairs
or tax computations, to reorder its tax affairs or tax planning pursuant hereto
nor to incur any cost or additional expense as a result thereof. If any Lender
or the Issuing Bank makes a demand under this Section 2.16 for the payment by
any Borrower of any Taxes or Other Taxes and as a result of any such payment by
such Borrower, such Lender or the Issuing Bank, as the case may be, receives a
direct cash benefit (either by the receipt of a refund or a reduction in the
amount
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of taxes otherwise payable), the Lender or the Issuing Bank, as the case may be,
receiving such direct cash benefit shall, to the extent permitted by applicable
law, refund the amount of such cash benefit to the appropriate Borrower.
(h) So long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may, within the 30-day period commencing on the day
that any Borrower receives a demand for the payment of Taxes or Other Taxes from
any Lender pursuant to this Section 2.16, or notification that Taxes or Other
Taxes may become due, demand that the Lender making such demand be replaced with
another commercial bank or other financial institution selected by the Borrower
and approved in writing by the Agent (which approval shall not be unreasonably
withheld or delayed). Upon any such demand by the Borrower, if the Agent shall
have approved the commercial bank or other financial institution selected by the
Borrower, the Lender that made a demand pursuant to this Section 2.16 shall
execute and deliver a Commitment Assignment and Acceptance to the Agent pursuant
to which such Lender shall assign all of its Commitment to the commercial bank
or other financial institution selected by the Borrower.
(i) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 2.16 shall survive the payment in full of the Obligations
hereunder for a period expiring concurrently with the expiration of the statute
of limitations applicable to claims made by the tax authorities to collect Taxes
or Other Taxes.
SECTION 2.17 Payments on Business Days. Whenever any payment
-------------------------
hereunder shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest or
commitment fee, as the case may be; provided, however, that if such extension
-------- -------
would cause payment of interest on or principal of Eurocurrency Rate Advances to
be made in the next following month, such payment shall be made on the next
preceding Business Day.
SECTION 2.18 Sharing of Payments, Etc. If any Lender or the Issuing
------------------------
Bank shall obtain any payment whether voluntary, involuntary, through the
exercise of any right of setoff, or otherwise (other than amounts payable to any
Lender or the Issuing Bank pursuant to Section 2.03(a), 2.08, 2.09, 2.13, 2.20
or 3.07 or amounts subject to Taxes pursuant to Section 2.16) in excess of its
ratable share of payments on account of the Committed Advances or Letter of
Credit Liability owing to all the
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Lenders, such Lender or the Issuing Bank, as the case may be, shall forthwith
purchase from the other Lenders such participations in the Committed Advances or
Letter of Credit Liability owing to them as shall be necessary to cause such
purchasing Lender or the Issuing Bank, as the case may be, to share the excess
payment ratably with each of them; provided, however, that if all or any portion
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of such excess payment is thereafter recovered from such purchasing Lender or
the Issuing Bank, as the case may be, such purchase from each Lender shall be
rescinded and such Lender or the Issuing Bank, as the case may be, shall repay
to the purchasing Lender or the Issuing Bank, as the case may be, the purchase
price to the extent of such recovery, together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender or the Issuing Bank, as the case may be, in respect of the
total amount so recovered. The Borrower agrees that any Lender or the Issuing
Bank, as the case may be, purchasing a participation from another Lender
pursuant to this Section 2.18, Section 3.04 or 11.08(g) may, to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of setoff) with respect to such participation as fully as if such Lender or the
Issuing Bank, as the case may be, were the direct creditor of the Borrower in
the amount of such participation.
SECTION 2.19 Currency Equivalents. For purposes of determining the
--------------------
amount of any Advance, Conversion or Continuation requested pursuant to this
Article II, (i) the equivalent in Dollars of any Alternative Currency shall be
determined by using the quoted spot rate at which Bank of America's principal
office in London offers to exchange Dollars for such Alternative Currency in
London, England at 11:00 A.M. (London time) two Business Days prior to the date
on which such equivalent is to be determined, (ii) the equivalent in any
Alternative Currency of any other Alternative Currency shall be determined by
using the quoted spot rate at which Bank of America's principal office in London
offers to exchange such Alternative Currency for such other Alternative Currency
in London, England at 11:00 A.M. (London time) two Business Days prior to the
date on which such equivalent is to be determined, and (iii) the equivalent in
any Alternative Currency of Dollars shall be determined by using the quoted spot
rate at which Bank of America's principal office in London offers to exchange
such Alternative Currency for Dollars in London, England at 11:00 A.M. (London
time) two Business Days prior to the date on which such equivalent is to be
determined. For purposes of determining the unused portion of each Lender's
Commitment and the amount of any or all Advances outstanding on any date (except
for Advances to be Converted or Continued
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pursuant to the Notice of Borrowing or the Notice of Continuation/Conversion, as
the case may be, with respect to which any calculation is made), the
calculations shall be based on the rate quoted by Bank of America's principal
office in London for offers to exchange such Alternative Currency for the
equivalent Dollar amount on the date of determination.
SECTION 2.20 Funding Losses. Except as otherwise provided, if any
--------------
payment of principal of, or any Conversion of, any Eurocurrency Rate Advance is
made by any Borrower to or for the account of a Lender other than on the last
day of the Inter-est Period for such Advance, as a result of a Conversion
pursuant to Section 2.06, a prepayment pursuant to Section 2.08 or 2.09,
acceleration of the maturity of the Advances pursuant to Section 9.02 or for any
other reason, the applicable Borrower shall, upon demand by such Lender (with a
copy of such demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses which it may reasonably incur as a result of such payment or
Conversion, including, without limitation, any reasonable direct out-of-pocket
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.
SECTION 2.21 Use of Proceeds. The Borrowers shall use the proceeds
---------------
of Advances to continue the Borrowers' outstanding obligations under the
Existing Credit Agreement and for the general working capital needs of the
Borrowers and for other general corporate purposes of the Borrowers, including,
without limitation, acquisitions permitted hereunder. The Borrowers shall not,
directly or indirectly, use any portion of any Advance proceeds (i) knowingly to
purchase Ineligible Securities from a Section 20 Subsidiary during any period in
which such Section 20 Subsidiary makes a market in such Ineligible Securities,
(ii) knowingly to purchase during the underwriting or placement period
Ineligible Securities being underwritten or privately placed by a Section 20
Subsidiary, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by a Section 20 Subsidiary and
issued by or for the benefit of the Borrowers or any Affiliate of the Borrower.
As used in this Section, "Section 20 Subsidiary" means the Subsidiary of the
bank holding company controlling any Lender, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities; and "Ineligible Securities" means securities which may
not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (as U.S.C. (S) 24, Seventh), as
amended.
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SECTION 2.22 Funding Sources. Nothing in this Agreement shall be
---------------
deemed to obligate any Lender to obtain the funds for its share of any Advance
in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for its share of any
Advance in any particular place or manner.
SECTION 2.23 Borrower's Agent. Each Subsidiary Borrower hereby
----------------
authorizes Sunrise to execute and deliver on its behalf, and as its agent, any
notice or request permitted by or required of a Borrower under this Article II
and under Article III, and the Agent and the Lenders shall be entitled to rely
on any such notice or request delivered by Sunrise as if the same had been
delivered by such Subsidiary Borrower.
ARTICLE III
AMOUNT AND TERMS OF LETTERS OF
CREDIT AND PARTICIPATIONS THEREIN
---------------------------------
SECTION 3.01 Letters of Credit. The Issuing Bank agrees, on the
-----------------
terms and conditions hereinafter set forth, to Issue, including the continuance
of the letter(s) of credit issued under the Existing Credit Agreement as Letters
of Credit hereunder (the "Continuing Letters of Credit") for the account of any
Borrower, one or more Letters of Credit from time to time during the period from
the Closing Date until the date which occurs 90 days before the Final Maturity
Date in an aggregate undrawn amount not to exceed at any time $25,000,000, each
such Letter of Credit upon its Issuance to expire on or before the earlier of
(i) the date which occurs (x) in the case of Commercial Letters of Credit, 180
days from the date of its Issuance and (y) in the case of Standby Letters of
Credit, 24 months from the date of its Issuance or (ii) the Final Maturity Date;
provided, however, that the Issuing Bank shall not be obligated to Issue any
Letter of Credit if:
(i) after giving effect to the Issuance of such Letter of
Credit, the then existing Facility Usage shall exceed the Total Commitment;
or
(ii) the Agent or the Majority Lenders shall have notified the
Issuing Bank and the Borrower that no further Letters of Credit are to be
Issued by the Issuing Bank due to a continuing failure to meet any of the
applicable conditions set forth in Article IV, and such notice has not
expired or been withdrawn by the Agent or the Majority Lenders.
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Within the limits of the obligations of the Issuing Bank set forth above, any
Borrower may request the Issuing Bank to Issue one or more Letters of Credit,
reimburse the Issuing Bank for payments made thereunder pursuant to Section
3.03(a), and request the Issuing Bank to Issue one or more additional Letters of
Credit under this Section 3.01.
SECTION 3.02 Issuing the Letters of Credit. Except with respect to
-----------------------------
Continuing Letters of Credit, which letters of credit are hereby automatically
incorporated herein without any further action, each Standby Letter of Credit
shall be Issued on at least three Business Days' notice and each Commercial
Letter of Credit shall be Issued on at least one Business Day's notice, in each
case from the applicable Borrower to the Issuing Bank specifying the date,
amount, expiry, and beneficiary thereof, accompanied by such application and
agreement for letter of credit as the Issuing Bank may specify to the Borrower,
each in form and substance satisfactory to the Issuing Bank. On the date
specified by such Borrower in such notice and upon fulfillment of the applicable
conditions set forth in Section 3.01 and Article IV hereof, the Issuing Bank
will Issue such Letter of Credit in the form specified in such notice and such
application and agreement for letter of credit and shall promptly notify the
Agent thereof.
SECTION 3.03 Reimbursement Obligations. (a) Notwithstanding any
-------------------------
provisions to the contrary in any application and agreement for letter of credit
applicable to any Letter of Credit, the applicable Borrower shall:
(i) pay to the Issuing Bank an amount equal to, and in
reimbursement for, each amount which the Issuing Bank pays under any Letter
of Credit on or before the earlier of (A) the time specified therefor in
the application and agreement for letter of credit applicable to such
Letter of Credit or (B) after timely notice by the Issuing Bank, the date
which occurs one Business Day after payment of such amount by the Issuing
Bank under such Letter of Credit; and
(ii) pay to the Issuing Bank interest on any amount remaining
unpaid under clause (i) above from the date on which the Issuing Bank pays
such amount under any Letter of Credit until such amount is reimbursed in
full to the Issuing Bank pursuant to clause (i) above, payable on demand,
at a fluctuating rate per annum equal to the Base Rate plus or minus, if
and as applicable, the Applicable Margin in effect from time to time,
provided that any such amount which is not reimbursed to the Issuing Bank
within one Business Day after notice thereof by the Issuing Bank shall
thereafter bear interest, until the amount is
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reimbursed in full to such Issuing Bank pursuant to clause (i) above,
payable on demand, at the Default Rate in effect from time to time.
(b) All amounts to be reimbursed to the Issuing Bank in accordance
with subsection (a) above may, subject to the limitations set forth in Section
2.01, be paid from the proceeds of Committed Advances. Each Borrower hereby
authorizes the Lenders, upon notice to the Borrower, to make pursuant to Section
2.02(a) Committed Advances which are in the amounts of the reimbursement
obligations of the Borrower set forth in subsection (a) above, and further
authorizes the Agent (i) to give the Lenders, pursuant to Section 2.02(a), a
Notice of Borrowing with respect to the Committed Borrowing comprised of such
Advances (which shall be Base Rate Advances) and (ii) to distribute the proceeds
of such Advances to the Issuing Bank to pay such amounts. Each Borrower agrees
that all such Advances so made shall be deemed to have been requested by it, and
directs that all proceeds thereof shall be used to pay such reimbursement
obligations under subsection (a) above.
(c) Notwithstanding any other provision of this Agreement, if a
Subsidiary Borrower shall be a party to this Agreement, the Obligations of each
such Borrower with respect to Letters of Credit Issued hereunder, in its
capacity as a Borrower, shall be several and not joint and several.
SECTION 3.04 Participations Purchased by the Lenders. (a) On the date of
---------------------------------------
Issuance of each Letter of Credcredit issued under the Existing Credit Agreement
as Letters of Credit hereunder, the Issuing Bank shall be deemed irrevocably and
unconditionally to have sold and transferred to each Lender without recourse or
warranty, and each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from such Issuing Bank, an undivided
interest and participation, to the extent of such Lender's Pro Rata Share, in
effect from time to time, in such Letter of Credit and all Letter of Credit
Liability relating to such Letter of Credit and all Loan Documents securing,
guaranteeing, supporting or otherwise benefiting the payment of such Letter of
Credit Liability. Promptly after the end of each calendar month, the Agent will
notify each Lender of the Letters of Credit Issued during the prior month and of
their dates of Issue, amounts, expiries and reference numbers.
(b) In the event that any reimbursement obligation under Section
3.03(a) is not paid when due to the Issuing Bank with respect to any Letter of
Credit, the Issuing Bank shall promptly notify the Agent to that effect, and the
Agent shall promptly notify the Lenders of the amount of such reimbursement
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obligation and each Lender shall immediately pay to the Issuing Bank, in lawful
money of the United States and in same day funds, an amount equal to such
Lender's Pro Rata Share then in effect of the amount of such unpaid
reimbursement obligation with interest at the Federal Funds Rate for each day
after such notification until such amount is paid to the Issuing Bank.
(c) Promptly after the Issuing Bank receives a payment on account of
a reimbursement obligation with respect to any Letter of Credit, the Issuing
Bank shall promptly pay to the Agent, and the Agent shall promptly pay to each
Lender which funded its participation therein, in lawful money of the United
States and in the kind of funds so received, an amount equal to such Lender's
ratable share thereof.
(d) Upon the request of any Lender, the Issuing Bank shall furnish to
such Lender copies of any Letter of Credit and any application and agreement for
letter of credit and other documents related thereto as may be reasonably
requested by such Lender.
(e) The obligation of each Lender to make payments under subsection
(b) above shall be unconditional and irrevocable and shall be made under all
circumstances, including, without limitation, any of the circumstances referred
to in Section 3.06(b).
(f) If any payment received on account of any reimbursement
obligation with respect to a Letter of Credit and distributed to a Lender as a
participant under Section 3.04(c) is thereafter recovered from the Issuing Bank
in connection with any bankruptcy or insolvency proceeding relating to any
Borrower, each Lender which received such distribution shall, upon demand by the
Agent, repay to the Issuing Bank such Lender's ratable share of the amount so
recovered together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered) of any interest or other amount
paid or payable by the Issuing Bank in respect of the total amount so
recovered.
SECTION 3.05 Letter of Credit Fees. (a) The Borrowers hereby agree
---------------------
to pay to the Issuing Bank a standby letter of credit fee equal to the greater
of $150 or 0.125% per annum of the face amount (as such amount may be reduced
from time to time pursuant to the terms of such letter of credit) for the term
of each Standby Letter of Credit quarterly in arrears on the last Business Day
of each quarter. In addition to such standby letter of credit fee, the Borrowers
hereby agree to pay to the Agent for the account of each Lender (including the
Issuing Bank,
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if applicable), according to each Lender's Pro Rata Share, a fee equal to the
Applicable Margin per annum of the face amount (as such amount may be reduced
from time to time pursuant to the terms of such letter of credit) for the term
of such Standby Letter of Credit, quarterly in arrears on the last Business Day
of each quarter.
(b) The Borrowers shall pay to the Agent for the account of each
Lender (including the Issuing Bank, if applicable), according to each Lender's
Pro Rata Share, and the Issuing Bank a letter of credit fee on each Commercial
Letter of Credit equal to the greater of $150 or .25% of the negotiated face
amount of such Commercial Letter of Credit quarterly in arrears on the last
Business Day of any quarter in which there has been any negotiation thereof. Of
such Commercial Letter of Credit fee, the Agent shall pay to the Issuing Bank
for its own account an amount equal to the greater of $150 or 0.125% of the
negotiated face amount of such Commercial Letter of Credit.
(c) The Borrowers shall pay to the Issuing Bank, for its own account
and on demand, sums equal to standard fees (in addition to its letter of credit
fee payable pursuant to clause (a) above), charges and expenses, including
origination fees, that such Issuing Bank may impose, pay or incur in connection
with the Issuance, amendment, administration, transfer or cancellation of any or
all Letters of Credit or in connection with any payment by such Issuing Bank
thereunder. The Issuing Bank shall give the applicable Borrower notice of any
change in its standard fees, charges or expenses payable by such Borrower to the
Issuing Bank pursuant to this Section 3.05(c); provided, however, that any
-------- -------
failure by the Issuing Bank to give such notice shall not affect such Borrower's
obligations under this Section 3.05(c) to pay the Issuing Bank's reasonable
current standard fees, charges or expenses in accordance herewith.
(d) All fees payable in respect of Letters of Credit shall be
nonrefundable.
SECTION 3.06 Indemnification: Nature of the Issuing Bank's Duties.
----------------------------------------------------
(a) The Borrowers agree to indemnify and save harmless the Agent, the Issuing
Bank and each Lender from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees, which the Agent, the Issuing Bank or such Lender may incur or be subject
to as a consequence, direct or indirect, of (i) the Issuance of any Letter of
Credit or (ii) any action or proceeding relating to a court order, injunction,
or other process or decree restraining or seeking to restrain the Issuing Bank
from paying any amount under any Letter of Credit.
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(b) The obligations of the Borrowers hereunder with respect to
Letters of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms hereof under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit or Loan Document or any agreement or instrument relating thereto;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against the beneficiary, or any
transferee, of any Letter of Credit, or the Issuing Bank, any Lender, or
any other Person;
(iii) any draft, certificate, or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) any lack of validity, effectiveness, or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part;
(v) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or
of the proceeds thereof;
(vi) any failure of the beneficiary of a Letter of Credit to
strictly comply with the conditions required in order to draw upon any
Letter of Credit;
(vii) any misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any other circumstance or happening whatsoever, whether
or not similar to the foregoing;
provided, that, notwithstanding the foregoing, the Issuing Bank shall not be
-------- ----
relieved of any liability it may otherwise have as a result of its gross
negligence or willful misconduct.
SECTION 3.07 Increased Costs. (a) Change in Law. If any change
--------------- -------------
after the Closing Date in any law or regulation or in the interpretation thereof
by any court or administrative or
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governmental authority charged with the administration thereof shall either (i)
impose, modify or deem applicable any reserve, special deposit or similar
requirement against letters of credit issued by the Issuing Bank or (ii) impose
on the Issuing Bank or any Lender any other condition regarding letters of
credit or, in the case of such Lender, its participation hereunder in Letters of
Credit, and the result of any event referred to in the preceding clause (i) or
(ii) shall be to increase the out-of-pocket cost to the Issuing Bank of Issuing
or maintaining or, in the case of such Lender, having a participation in Letters
of Credit, then, upon demand by the Issuing Bank or such Lender (with a copy to
the Agent), the Borrower shall promptly (and in any event within five Business
Days) pay to the Issuing Bank or such Lender from time to time as specified by
such Issuing Bank or such Lender (with a copy to the Agent) additional amounts
which shall be sufficient to compensate the Issuing Bank or such Lender for such
increased cost. A certificate as to such increased cost, and amount thereof,
incurred by the Issuing Bank or any Lender as a result of any event mentioned in
clause (i) or (ii) above, shall be submitted by the Issuing Bank or such Lender
to the Borrower and the Agent, which certificate shall set out in reasonable
detail the calculation of such amounts and be conclusive and binding for all
purposes, absent manifest error.
(b) Capital. If, at any time after the Closing Date, the Issuing
-------
Bank or any Lender determines that compliance with any law or regulation as
adopted, amended or otherwise modified after the Closing Date or with any
written guideline or request from any central bank or other governmental
authority published after the Closing Date (a copy of which shall be sent by the
Issuing Bank or such Lender, as the case may be, to the Borrower), whether or
not having the force of law, has or would have the effect of reducing the rate
of return on the capital of the Issuing Bank or such Lender or any corporation
controlling the Issuing Bank or such Lender (whether by increasing the amount of
capital required or expected to be maintained by the Issuing Bank or such Lender
or any corporation controlling the Issuing Bank or such Lender or otherwise) as
a consequence of, or with reference to, such Issuing Bank's commitment to issue,
the issuance of, or, with respect to such Lender's commitment, to participate
in, any Letter of Credit hereunder below the rate that the Issuing Bank or such
Lender or such other corporation could have achieved but for compliance
therewith (taking into account the policies of the Issuing Bank, such Lender or
corporation with regard to capital), then the Borrower shall from time to time,
upon demand by the Issuing Bank or such Lender (with a copy of such demand to
the Agent), immediately pay to the Issuing Bank or such Lender additional
amounts sufficient to compensate the Issuing Bank or such Lender or other
corporation for such reduction. A certificate as to such amounts shall be
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submitted to the Borrower and the Agent by the Issuing Bank or such Lender, as
the case may be, which certificate shall be conclusive and binding for all
purposes absent manifest error.
(c) Survival. Without prejudice to the survival of any other
--------
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 3.07 shall survive the payment of all
Obligations.
SECTION 3.08 Uniform Customs and Practice. The Uniform Customs and
----------------------------
Practice for Documentary Credits as most recently published by the International
Chamber of Commerce shall in all respects be deemed a part of this Article III
as if incorporated herein and shall apply to the Letters of Credit.
ARTICLE IV
CONDITIONS OF EFFECTIVENESS
---------------------------
SECTION 4.01 Conditions to Initial Advances. The obligations of the
------------------------------
Lenders to, on and after the Closing Date, continue advances outstanding under
the Existing Credit Agreement as Advances hereunder, make the initial Advances
hereunder and receive through the Agent the initial Competitive Bid Request and
the initial Notice of Conversion/Continuation, and the obligation of the Issuing
Bank to, on and after the Closing Date, continue any letter of credit
outstanding under the Existing Credit Agreement as a Letter of Credit hereunder
and issue any Letter of Credit hereunder, are subject to the following
conditions precedent, each of which shall be satisfied prior to or on the
Closing Date:
(a) The Agent shall have received all of the following in form
and substance reasonably satisfactory to the Agent and legal counsel for
the Agent (unless otherwise specified or unless the Agent otherwise
agrees):
(1) executed counterparts of this Agreement,
sufficient in number for distribution to the Borrower, the Agent
and each Lender;
(2) the Committed Advance Notes, executed by the
Borrower in favor of each Lender requesting a Committed Advance
Note, each in a principal amount equal to that Lender's Pro Rata
Share of the Total Commitment;
(3) the Bid Advance Notes, executed by the Borrower in
favor of each Lender, each in a principal amount equal to
$137,500,000;
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(4) with respect to Sunrise: (i) the certificate of
incorporation of Sunrise as in effect on the Closing Date,
certified by the secretary of state of the state of Delaware as
of a recent date and by the Secretary or Assistant Secretary of
Sunrise as of the Closing Date; (ii) the bylaws of Sunrise as in
effect on the Closing Date, certified by the Secretary or
Assistant Secretary of Sunrise as of the Closing Date; and (iii)
a good standing certificate for Sunrise from the secretary of
state of the states of Delaware and California dated as of a
recent date;
(5) with respect to each Guarantor: (i) if the
certificate of incorporation of any Guarantor that was a
guarantor under the Existing Credit Agreement has been amended
since the date last delivered to the Agent, a copy of such
certificate and the bylaws of such Guarantor as in effect on the
Closing Date, certified by the Secretary or Assistant Secretary
of such Guarantor as of the Closing Date; (ii) with respect to
each other Guarantor, its certificate of incorporation and bylaws
as in effect on the Closing Date, certified by the secretary of
state of the state of its incorporation as of a recent date and
by the Secretary or Assistant Secretary of such Guarantor as of
the Closing Date; and (iii) a good standing certificate for each
Guarantor from the secretary of state of the state of its
incorporation;
(6) certified copies of (i) the resolutions of the
Board of Directors of the Borrower and each Guarantor approving
this Agreement and each other Loan Document to which it is or is
to be a party and the transactions contemplated hereby and
thereby, and (ii) all documents evidencing other necessary
corporate action and governmental approvals with respect to each
Loan Document and the transactions contemplated thereby;
(7) a certificate of the Secretary or an Assistant
Secretary of the Borrower and each Guarantor certifying the names
and true signatures of the officers of such Loan Party authorized
to sign each Loan Document to which it is or is to be a party and
the other documents to be delivered by it hereunder which
certificates may be
- 72 -
conclusively relied on by the Agent until the Agent shall receive
a further certification of the Secretary or Assistant Secretary
of such Loan Party cancelling or amending the prior certificate
of such Loan Party and submitting the names and signatures of the
officers named in such further certificate;
(8) a certificate signed by a Senior Officer of the
Borrower, dated as of the Closing Date stating that: (i) the
representations and warranties contained in Article V are true
and correct on and as of the Closing Date; (ii) no Default or
Event of Default exists on the Closing Date; and (iii) there has
occurred since June 30, 1995, no event or circumstance that
constitutes a Material Adverse Effect;
(9) the financial statements described in Section
5.05, together with a Compliance Certificate calculated as of
June 30, 1995;
(10) favorable opinions of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel
for the Borrower, and ▇▇▇▇▇▇▇ & ▇▇▇▇, special Wisconsin counsel,
as to the Borrower and all Guarantors; and
(11) such other assurances, certificates, documents,
consents or opinions as the Agent may reasonably require.
(b) The Agent shall have received the fees described in Section
2.03(a) for its and the Arranger's account;
(c) The reasonable allocated fees and expenses of Bank of
America's inhouse counsel invoiced to the Closing Date, relating to the
Loan Documents shall have been paid by Borrower;
(d) The representations and warranties contained in Article V
shall be true and correct in all material respects;
(e) No Default or Event of Default shall have occurred and be
continuing; and
(f) Each Lender shall have satisfactorily completed its due
diligence with respect to this Agreement.
- 73 -
SECTION 4.02 Conditions Precedent to All Borrowings and All
----------------------------------------------
Issuances. The obligation of each Lender to make an Advance on the occasion of
---------
any Borrowing, or any Bid Advance as to which the Borrower has accepted the
relevant Competitive Bid (including the initial Borrowing) and the obligation of
the Issuing Bank to issue any Letter of Credit (including the initial Letter of
Credit), shall be subject to the conditions precedent that on the date of such
Borrowing or Issuance (a) the following statements shall be true and each of the
giving of the applicable Notice of Borrowing, Competitive Bid Request or the
applicable request for Issuance (as the case may be) and the acceptance by the
Borrower of the proceeds of such Borrowing or the Issuance of such Letter of
Credit shall constitute a representation and warranty by the Borrower or such
Subsidiary Borrower that on the date of such Borrowing or Issuance, as the case
may be, such statements are true:
(i) each representation and warranty contained in Article V
hereof is true and correct in all material respects on and as of the date
of such Borrowing or Issuance, before and after giving effect to such
Borrowing and to the application of the proceeds therefrom or to such
Issuance (as the case may be), as though made on and as of such date except
to the extent any such representation and warranty is made as of any other
date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom or
from such Issuance (as the case may be) which constitutes an Event of
Default or a Default;
(iii) no event or circumstance shall have occurred since the
Closing Date that constitutes a Material Adverse Effect; and
(iv) there shall not be then pending or, to the knowledge of
any Loan Party, threatened any action, suit, proceeding or investigation
against or affecting Borrower or any of its Subsidiaries or any property of
any of them that constitutes a Material Adverse Effect;
and (b) the Agent shall have received such other approvals or documents relating
to the validity or enforceability of any Loan Documents as any Lender through
the Agent may reasonably request.
SECTION 4.03 Conditions to Effectiveness of Subsidiary Borrower to
-----------------------------------------------------
Participate After the Closing Date. It is a condition precedent to the
----------------------------------
effectiveness of any election by a Subsidiary to become a Subsidiary Borrower
that each Lender receives the following:
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(a) a duly executed and delivered Notice of Election to Participate;
(b) a Committed Advance Note duly executed by such Subsidiary
Borrower in favor of any Lender requesting a promissory note in a principal
amount equal to such Lender's Pro Rata Share of the Subsidiary Borrower
Sublimit;
(c) the documentation specified in Section 4.01(a)(5) and (6) with
respect to such Subsidiary Borrower; and
(d) a favorable opinion of counsel in the jurisdiction in which such
Subsidiary Borrower is incorporated confirming, among other things, that (i)
such Subsidiary Borrower's obligations under this Agreement and its Notes are
legal, valid, binding and enforceable against such Subsidiary Borrower, (ii) the
execution, delivery and performance of the Loan Documents by such Subsidiary
Borrower will not violate any law, decree or judgment or violate any material
agreement to which such Subsidiary Borrower is a party or by which its assets
are bound and (iii) no government approvals, consents, registrations or filings
are required by the Subsidiary Borrower; provided that such opinion shall be
--------
subject to such modifications as are acceptable to the Agent in its sole
discretion.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Loan Party represents and warrants to the Lenders that:
SECTION 5.01 Existence and Qualification; Power;
-----------------------------------
Compliance With Laws. The Borrower and each of its Subsidiaries is a
--------------------
corporation, partnership or joint venture duly organized and existing and in
good standing under the laws of its respective jurisdiction of organization. The
Borrower and each of its Subsidiaries is duly qualified and is in good standing,
in each other jurisdiction in which the conduct of its business or the ownership
or leasing of its properties makes such qualification necessary, except where
the failure so to qualify and to be in good standing would not constitute a
Material Adverse Effect. The Borrower and each of its Subsidiaries has the
requisite power and authority to conduct its business as now being conducted and
to own its property, and to execute and deliver each Loan Document to which it
is a party and to perform its Obligations. The Borrower and each of its
Subsidiaries is in compliance with all laws applicable to its business, has
obtained all authorizations,
- 75 -
consents, approvals, orders, licenses and permits from, and has accomplished all
filings, registrations and qualifications with, or obtained exemptions from any
of the foregoing from, any Governmental Agency that are necessary for the
transaction of its business, except where the failure to do any of the foregoing
would not constitute a Material Adverse Effect.
SECTION 5.02 Authority; Compliance with Other Agreements and
-----------------------------------------------
Instruments. The execution, delivery and performance by each Loan Party of the
-----------
Loan Documents to which it is a party have been duly authorized by all necessary
action, and do not:
(a) require any consent or approval not heretofore obtained of
any partner, stockholder, security holder or creditor of any Loan Party;
(b) violate or conflict with any provision of any Loan Party's
articles or certificate of incorporation or bylaws or other equivalent
instruments, as applicable;
(c) result in or require the creation or imposition of any Lien
upon or with respect to any property now owned or leased by any Loan Party;
(d) violate any Requirement of Law applicable to such Loan
Party; or
(e) result in a breach of or default under, or would with the
giving of notice or the lapse of time or both constitute a breach of or
default under, or cause or permit the acceleration of any obligation owed
under any indenture or loan or credit agreement or any other Contractual
Obligation to which such Loan Party is a party or by which such Loan Party
or any of its material property is bound or affected;
and none of the Loan Parties is in violation of, or default under, any
Requirement of Law applicable to it or Contractual Obligation applicable to it,
or any indenture or credit agreement described in Section 5.02(e), in any
respect that in such case constitutes a Material Adverse Effect.
SECTION 5.03 No Governmental Approvals Required. No authorization,
----------------------------------
consent, approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Agency is required by any Loan Party to
authorize or permit under applicable laws the execution, delivery and
performance by such Loan Party of the Loan Documents.
- 76 -
SECTION 5.04 Subsidiaries of Borrower. All of the Subsidiaries of
------------------------
Borrower, as of the date of this Agreement, are identified in Schedule 5.04
hereto. The capital stock of each such Subsidiary identified in Schedule 5.04 is
duly authorized, validly issued, fully paid and nonassessable. Schedule 5.04
correctly sets forth the ownership interest as of the date hereof of Borrower in
each of its subsidiaries. Each active Domestic Subsidiary is party hereto as a
Guarantor.
SECTION 5.05 Financial Statements. Borrower has furnished to the
--------------------
Lenders and the Agent the audited consolidated financial statements of Borrower
and its Subsidiaries as at June 30, 1995 and for the Fiscal Year then ended.
Such financial statements fairly present the financial position and results of
operations of Borrower and its Subsidiaries as at the dates and for the periods
indicated in accordance with Generally Accepted Accounting Principles,
consistently applied.
SECTION 5.06 No Other Liabilities; No Material Adverse Effect. As
------------------------------------------------
of June 30, 1995, Borrower and its Subsidiaries do not have any liability or
contingent liability that is material to Borrower and its Subsidiaries, taken as
a whole, that is not reflected in, reserved for or against or otherwise
disclosed in the financial statements described in Section 5.05, other than
liabilities and contingent liabilities (x) that in accordance with Generally
Accepted Accounting Principles are not required to be reflected or disclosed in
such financial statements or (y) that are disclosed on any schedule to this
Agreement. As of the Closing Date, no event or circumstance has occurred since
June 30, 1995 that constitutes a Material Adverse Effect.
SECTION 5.07 Title to Property. Borrower and its Subsidiaries have
-----------------
good and valid title to the property reflected in the financial statements
described in Section 5.05 (other than property subsequently sold or disposed of
to the extent permitted under this Agreement) free and clear of all Liens, other
than those permitted by Section 7.06.
SECTION 5.08 Intangible Assets. Borrower and its Subsidiaries own,
-----------------
or possess the right to use to the extent necessary in their respective
businesses, all trademarks, trade names, copyrights, patents, patent rights,
computer software, licenses and other Intangible Assets that are used or are
necessary in any material respect in the conduct of their businesses as now
operated. No such Intangible Asset, to the best knowledge of any Loan Party,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or Intangible Asset of any other Person to the extent that such conflict
constitutes a Material Adverse Effect.
- 77 -
SECTION 5.09 Governmental Regulation. Neither Borrower nor any of
-----------------------
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, the
Investment Company Act of 1940 or, to the best knowledge of the Borrower, any
other law limiting or regulating its ability to incur the Obligations.
SECTION 5.10 Litigation. Except for matters set forth in Schedule
----------
5.10 or otherwise disclosed pursuant to Section 6.01(i), there are no actions,
suits, proceedings or investigations pending as to which Borrower or its
Subsidiaries have been served or have received notice or, to the knowledge of
the Borrower, threatened against or affecting Borrower or its Subsidiaries or
any property of any of them before any Governmental Agency which, if determined
adversely to Borrower or its Subsidiaries, could reasonably be expected to
constitute a Material Adverse Effect.
SECTION 5.11 Binding Obligations. Each of the Loan Documents to
-------------------
which each Loan Party is a party will, when executed and delivered by such Loan
Party, constitute the legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms, except as
enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies as
a matter of judicial discretion.
SECTION 5.12 ERISA. Borrower and its Subsidiaries are in compliance
-----
in all material respects with the applicable provisions of ERISA and the Code
relating to Plans except to the extent as would not have a Material Adverse
Effect. No Plan is a Multiemployer Plan. As of the date hereof, neither Borrower
nor any Subsidiary has, with respect to any Plan established or maintained by
it, engaged in a prohibited transaction which would subject it to a tax or
penalty on prohibited transactions imposed by ERISA or Section 4975 of the Code
which tax or penalty would have or could reasonably be expected to have a
Material Adverse Effect. To the Borrower's knowledge, no liability to the PBGC
that is material is reasonably expected to be incurred with respect to the Plans
and there has been no Reportable Event and no other event or condition that, in
either case, presents a material risk of termination of a Plan by the PBGC.
Neither Borrower nor any of its Subsidiaries has engaged in a transaction
described in Section 4069 of ERISA during the last five years which would result
in the incurrence of a material liability. No Accumulated Funding Deficiency,
whether or not waived, exists with respect to any of the Plans, determined as of
the last day of the most recently ended fiscal year of each Plan. Neither
Borrower nor any of its Subsidiaries has incurred any Withdrawal Liability with
respect to any Multiemployer Plan.
- 78 -
SECTION 5.13 Regulations G and U. No part of the proceeds of any
-------------------
Advance hereunder will be used to purchase or carry, or to extend credit to
others for the purpose of purchasing or carrying, any "margin stock" (as such
term is defined in Regulations G and U) in violation of Regulation G or U.
Neither Borrower nor any of its Subsidiaries is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying any such "margin stock."
SECTION 5.14 Disclosure. No written statement made by a Senior
----------
Officer of any Loan Party to the Agent or the Lenders in connection with this
Agreement, or in connection with any Advance, contains any untrue statement of a
material fact or omits a material fact necessary in order to make the statement
made not misleading in light of all the circumstances existing at the date the
statement was made. There is no fact known to any Loan Party which would
constitute a Material Adverse Effect that has not been disclosed in writing to
the Lenders, other than general economic conditions.
SECTION 5.15 Tax Liability. Borrower and its Subsidiaries have
-------------
filed all material tax returns which are required to be filed, and have paid all
taxes due and payable by Borrower or its Subsidiaries with respect to the
periods, property or transactions covered by said returns, or pursuant to any
assessment received by Borrower or any of its Subsidiaries, except such taxes,
if any, as are being contested in good faith by appropriate proceedings and as
to which adequate reserves have been established and maintained.
SECTION 5.16 Hazardous Materials. To the extent that any Hazardous
-------------------
Materials have been, or are, used, generated or stored by Borrower or any of its
Subsidiaries on any real property, or transported to or from such real property
by Borrower or its Subsidiaries, such use, generation, storage and
transportation have been, to the best knowledge of each Loan Party, and are in
compliance in all material respects with all Hazardous Materials Laws.
SECTION 5.17 Employee Matters. There is no strike, work stoppage or
----------------
labor dispute with any union or group of employees pending or, to the best
knowledge of each Loan Party, overtly threatened involving Borrower or any of
its Subsidiaries that would constitute a Material Adverse Effect.
SECTION 5.18 Projections. As of the Closing Date, to the best
-----------
knowledge of the Borrower the assumptions set forth in the Projections are
reasonable and consistent with each other and the Projections are reasonably
based on such assumptions.
- 79 -
Nothing in this Section 5.18 shall be construed as a representation, warranty or
covenant that the Projections in fact will be achieved.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
So long as any Advance remains unpaid, any Letter of Credit remains
outstanding or any other Obligation remains unpaid, or any portion of the
Commitment remains outstanding, Borrower shall, and shall cause each of its
Subsidiaries to, unless the Agent (with the approval of the Majority Lenders)
otherwise consents in writing:
SECTION 6.01 Financial and Business Information. Deliver to the
----------------------------------
Agent and the Lenders at Borrower's sole expense:
(a) As soon as practicable, and in any event within 50 days
after the end of each Fiscal Quarter beginning with the Fiscal Quarter
ending September 29, 1995 (other than the fourth Fiscal Quarter in any
Fiscal Year), (i) the consolidated and consolidating balance sheets of
Borrower and its Subsidiaries as at the end of such Fiscal Quarter, and
(ii) consolidated and consolidating statements of income and cash flow, in
each case of Borrower and its Subsidiaries for such Fiscal Quarter and for
the portion of the Fiscal Year ended with such Fiscal Quarter, all in
reasonable detail sufficient to calculate compliance with financial
covenants, and presented in a manner comparing such financial statements to
the financial statements for the comparable fiscal periods of the prior
Fiscal Year and to Borrower's budget for the current Fiscal Year. Such
financial statements shall be certified by a Senior Officer of Borrower as
fairly presenting the financial condition, results of operations and cash
flow of Borrower and its Subsidiaries in accordance with Generally Accepted
Accounting Principles (other than any requirement for footnote
disclosures), consistently applied (except for those changes to which the
independent public accountants of Borrower have concurred), as at such date
and for such periods, subject only to normal year-end audit adjustments;
(b) As soon as practicable, and in any event within 100 days
after the end of each Fiscal Year, (i) the consolidated and consolidating
balance sheets of Borrower and its Subsidiaries as at the end of such
Fiscal Year, and (ii) consolidated and consolidating statement of income
and statement of cash flow, in each case of Borrower and its
- 80 -
Subsidiaries for such Fiscal Year, all in reasonable detail sufficient to
calculate compliance with financial covenants, and presented in a manner
comparing such financial statements to the financial-statements for the
comparable fiscal periods of the prior Fiscal Year and to Borrower's budget
for the current Fiscal Year. Such financial statements shall be prepared in
accordance with Generally Accepted Accounting Principles, consistently
applied (except for those changes to which the independent public
accountants of Borrower have concurred), and such consolidated financial
statements shall be accompanied by a report and opinion of KPMG Peat
Marwick or another of the six largest firms of independent public
accountants of recognized national standing, which report and opinion shall
be prepared in accordance with generally accepted auditing standards as at
such date, and shall not be subject to any qualifications or exceptions as
to the scope of the audit nor to any other qualification, exception or
explanation which the Majority Lenders determine reflects a Material
Adverse Effect;
(c) Not later than 120 days after the commencement of each
Fiscal Year, (i) the Borrower's business plan for such Fiscal Year, (ii)
projected consolidated financial statements showing the financial condition
and results of operation, by Fiscal Quarter, of Borrower and its
Subsidiaries for such Fiscal Year, including pro forma compliance (or non-
compliance, as the case may be) with the financial covenants set forth in
this Agreement, and (iii) projected consolidated financial statements
showing such financial condition and results of operation by Fiscal Year
for the next five succeeding Fiscal Years, in reasonable detail and in a
form reasonably satisfactory to the Agent, together with a description of
the material assumptions used in preparing such projected financial
statements and, as promptly as practicable after any revision thereof is
approved by the chief financial officer of Borrower, a copy of such
revision;
(d) Promptly after receipt thereof, Borrower will make available
for inspection copies of any detailed audit reports or recommendations
submitted to Borrower or any of its Subsidiaries by independent accountants
in connection with the accounts or books of Borrower or any of its
Subsidiaries, or any audit of any of them;
(e) Promptly after the same are available, and in any event
within 10 days after the sending or filing thereof, copies of each annual
report, proxy or financial statement or other report or communication sent
to the
- 81 -
shareholders of Borrower and copies of all annual, regular, periodic
and special reports and registration statements, in each case which
Borrower may file or be required to file with the SEC under the Securities
Act of 1933 or the Securities Exchange Act of 1934;
(f) Promptly after request by the Agent or any Lender, copies of
any other specific report or other document that was filed by Borrower or
any of its Subsidiaries with any Governmental Agency;
(g) Promptly upon a Senior Officer of Borrower obtaining actual
knowledge, and in any event within ten (10) Business Days after he obtains
actual knowledge, of the occurrence of any (i) Reportable Event, or (ii) a
material non-exempt "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) in connection with any
Pension Plan, other than a Multiemployer Plan, or any trust created
thereunder, a written notice specifying the nature thereof, what action
Borrower and any of its Subsidiaries is taking or proposes to take with
respect thereto, and, when known, any action taken by the Internal Revenue
Service with respect thereto;
(h) Promptly after the Borrower or any Subsidiary Borrower
obtains actual knowledge of the existence of any condition or event which
constitutes a Default, written notice specifying the nature and period of
existence thereof and specifying what action Borrower or any of its
Subsidiaries are taking or propose to take with respect thereto;
(i) Promptly after the Borrower or any Subsidiary Borrower
obtains actual knowledge that (i) any Person has commenced a legal
proceeding with respect to a claim against Borrower or any of its
Subsidiaries which alleges liability equal to or greater than $1,000,000
and which is not covered by insurance (subject to standard deductibles),
(ii) any creditor or lessor under a written credit agreement with respect
to Indebtedness or a material lease has asserted in writing a material
default thereunder on the part of Borrower or any of its Subsidiaries,
(iii) any other event or circumstance occurs or exists that would
constitute a Material Adverse Effect, in each case a written notice
describing the pertinent facts relating thereto and what action Borrower or
any of its Subsidiaries are taking or propose to take with respect thereto;
(j) Such other data and information relating to the performance
of the Obligations or the business,
- 82 -
condition or affairs of Borrower and its Subsidiaries as from time to time
may be reasonably requested by the Agent or any Lender;
(k) Promptly after entering into any letter of intent and/or
definitive contract with respect to any proposed Acquisition, notify the
Agent and, if the Borrower desires, each Lender directly of such fact; and
(l) Concurrently with delivery of the financial statements
referred to in Sections 6.01(a) and 6.01(b), deliver a Compliance
Certificate dated as of the last day of the Fiscal Quarter or Fiscal Year,
as the case may be.
SECTION 6.02 Payment of Taxes and Other Potential Liens. Pay and
------------------------------------------
discharge promptly all material taxes, assessments and governmental charges or
levies imposed upon any of them, upon their respective property or any part
thereof and upon their respective income or profits or any part thereof except
that Borrower and its Subsidiaries shall not be required to pay or cause to be
paid any tax, assessment, charge or levy that is not yet past due, or is being
contested in good faith by appropriate proceedings, so long as Borrower or its
Subsidiaries has established and maintains adequate reserves for the payment of
the same and by reason of such nonpayment and contest no material item or
portion of property of Borrower and its Subsidiaries, taken as a whole, is in
jeopardy of being seized, levied upon or forfeited prior to judgment.
SECTION 6.03 Preservation of Existence. Preserve and maintain their
-------------------------
respective existences in the respective jurisdictions of their formation and all
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective businesses, except where the
failure to so preserve and maintain would not constitute a Material Adverse
Effect; and qualify and remain qualified as a foreign corporation in each
jurisdiction in which such qualification is necessary in view of their
respective businesses or the ownership of their respective properties, except
(a) where the failure to so qualify and remain qualified would not constitute a
Material Adverse Effect and (b) that a merger permitted under Section 7.02 shall
not constitute a violation of this covenant.
SECTION 6.04 Maintenance of Properties. Maintain, preserve and
-------------------------
protect all of their respective depreciable properties necessary to their
operations in good order and condition, subject to wear and tear in the ordinary
course of business, and not permit any waste of their respective material
- 83 -
properties, except that the failure to maintain, preserve and protect a
particular item of depreciable property that is not of significant value, either
intrinsically or to the operations of Borrower and its Subsidiaries, taken as a
whole, shall not constitute a violation of this covenant.
SECTION 6.05 Maintenance of Insurance. Maintain liability, casualty
------------------------
and other insurance (subject to customary deductibles and retentions) with
responsible insurance companies in such amounts and against such risks as is
carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and its Subsidiaries
operate.
SECTION 6.06 Compliance With Laws. Comply with all Requirements of
--------------------
Law noncompliance with which would constitute a Material Adverse Effect, except
that Borrower and its Subsidiaries need not comply with a Requirement of Law
then being contested by any of them in good faith by appropriate proceedings.
SECTION 6.07 Inspection Rights. Upon reasonable notice, at any
-----------------
mutually agreeable times during regular business hours (but not so as to
materially interfere with the business of Borrower and its Subsidiaries), permit
the Agent or any Lender, or any authorized employee, agent or representative
thereof reasonably acceptable to Borrower, to examine, audit and make copies and
abstracts from the records and books of account of, and to visit and inspect the
properties of, Borrower and its Subsidiaries and to discuss the affairs,
finances and accounts of Borrower and its Subsidiaries with any of their
respective officers, key employees, accountants, customers and vendors.
SECTION 6.08 Keeping of Records and Books of Account. Make and keep
---------------------------------------
books, records and accounts which reflect in reasonable detail all transactions
as necessary to permit preparation of financial statements in conformity with
Generally Accepted Accounting Principles.
SECTION 6.09 Compliance With Agreements. Promptly and fully comply
--------------------------
with all Contractual Obligations under all material agreements, indentures,
leases and/or instruments to which any one or more of them is a party, whether
such material agreements, indentures, leases or instruments are with the Lenders
or another Person, where the failure to so comply would constitute a Material
Adverse Effect.
SECTION 6.10 Hazardous Materials Laws. Keep and maintain the real
------------------------
property owned or leased by it and each portion thereof in compliance in all
material respects with all Hazardous
- 84 -
Materials Laws; promptly advise the Agent in writing of (a) any and all
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened in writing pursuant to any applicable
Hazardous Materials Laws, (b) any and all claims made or threatened in writing
by any third party against Borrower or any Guarantor or any such real property
relating to damage, contribution, cost recovery, compensation, loss or injury
resulting from any Hazardous Materials and (c) discovery by any Senior Officer
of any Loan Party of any occurrence or condition on any such real property that
could reasonably be expected to cause any such real property or any part thereof
to be subject to any restrictions on the ownership, occupancy, transferability
or use of the real property under any Hazardous Materials Laws.
SECTION 6.11 Additional Guarantors After the Closing Date. If the
--------------------------------------------
Borrower or any Subsidiary of Borrower creates or otherwise acquires any active
Domestic Subsidiary at any time after the Closing Date, the Borrower shall cause
such Domestic Subsidiary to become a Guarantor hereunder by delivering to the
Agent:
(a) an instrument referring to this Agreement wherein such
Guarantor agrees to be bound by all the terms and conditions applicable to
a Guarantor under this Agreement as of the date thereof;
(b) the documentation specified in Section 4.01(a)(5) and (6)
with respect to such Guarantor; and
(c) with respect to any such Guarantor whose total assets
constitute at least 10% of Consolidated Total Assets at the time it becomes
a Guarantor, a favorable opinion of counsel in the jurisdiction in which
such Guarantor is incorporated confirming, among other things, that (i)
such Subsidiary's obligations under this Agreement are legal, valid,
binding and enforceable against such Subsidiary, (ii) the execution,
delivery and performance of the Loan Documents by such Subsidiary will not
violate any law, decree or judgment or violate any material agreement to
which such Subsidiary is a party or by which its assets are bound and (iii)
no government approvals, consents, registrations or filings are required by
the Subsidiary; provided that such opinion shall be subject to such
--------
modifications as are acceptable to the Agent in its sole discretion.
- 85 -
ARTICLE VII
NEGATIVE COVENANTS
------------------
So long as any Advance remains unpaid, any Letter of Credit remains
outstanding or any other Obligation remains unpaid, or any portion of the Total
Commitment remains outstanding, Borrower shall not, and shall cause each of its
Subsidiaries to not, unless the Agent (with the approval of the Majority
Lenders) otherwise consents in writing:
SECTION 7.01 Disposition of Property. Make any Disposition, whether
-----------------------
now owned or hereafter acquired, other than:
(a) Dispositions of inventory, machinery and equipment in the
ordinary course of business;
(b) Dispositions of assets the aggregate net book value of which
does not exceed $15,000,000 in the aggregate for the Borrower and all
Subsidiaries during any Fiscal Year; and
(c) in connection with Permitted Accounts Receivable Financings.
SECTION 7.02 Mergers. Merge, consolidate or amalgamate with or into
-------
any Person, provided that (i) any Subsidiary of Borrower may be merged with and
into Borrower (with Borrower as the surviving entity), (ii) any Domestic
Subsidiary may be merged with and into another Domestic Subsidiary, so long as,
if either of such Subsidiaries was a Guarantor, the surviving entity is a
Guarantor, (iii) any Foreign Subsidiary may be merged with another Foreign
Subsidiary, provided that if either of such Subsidiaries is a Subsidiary
Borrower, the surviving entity will assume all such Subsidiary Borrower
obligations hereunder and (iv) a Subsidiary may be merged with any other Person
to the extent such merger is consummated to effect (x) a Disposition permitted
pursuant to Section 7.01(b) or (y) an Acquisition permitted pursuant to Section
7.03.
SECTION 7.03 Investments and Acquisitions. Make any Acquisition or
----------------------------
enter into any agreement to make any Acquisition, or make or suffer to exist any
Investment, except:
(a) Investments existing on the Closing Date and disclosed in
Schedule 7.03(a);
(b) Investments consisting of Cash Equivalents;
- 86 -
(c) Investments in Persons which immediately before and after
giving effect to such Investment are Wholly-Owned Domestic Subsidiaries
which have become Guarantors hereunder;
(d) Investments in Subsidiaries in which the Borrower has at
least an 80% ownership interest, provided that (i) if such Subsidiary is a
--------
partnership or a joint venture (A) the partner or joint venture entity in
such Subsidiary shall be a Wholly-Owned Subsidiary of the Borrower, and (B)
the Investment by the Borrower in such Wholly-Owned Subsidiary which is the
partner or joint venture entity shall not exceed the amount being invested
in the partnership or joint venture, and (ii) if such Subsidiary is an
active Domestic Subsidiary, such Subsidiary shall have become a Guarantor
hereunder and each holder of a minority ownership interest in such
Subsidiary shall have executed a consent to the Guaranty; and
(e) Acquisitions of the stock or assets of a Person engaged in
business of the same general type as that of the Borrower and its
Subsidiaries; provided, further, that (a) such Acquisitions do not violate
-------- -------
Section 7.04 and (b) the purchase price paid for, and the Indebtedness
assumed in, such Acquisitions does not exceed, before giving effect to such
Acquisition, 25% of Shareholders' Equity (x) from June 30, 1995 through
December 31, 1995 and (y) during any calendar year period thereafter.
SECTION 7.04 Hostile Tender Offers. Make any tender offer to
---------------------
purchase or acquire any outstanding capital stock of any corporation or other
business entity without the prior approval of the board of directors of that
corporation or business entity.
SECTION 7.05 ERISA.
-----
(a) At any time, permit any Pension Plan maintained by it or by
any ERISA Affiliate, to:
(i) engage in any non-exempt "prohibited transaction," as
such term is defined in Section 4975 of the Code, that would subject
any Loan Party to a liability that may reasonably be expected to
constitute a Material Adverse Effect;
(ii) incur any material Accumulated Funding Deficiency; or
(iii) suffer a Termination Event to occur which may
reasonably be expected to result in liability
- 87 -
of any Loan Party or any ERISA Affiliate thereof to the Pension Plan
or to the PBGC or the imposition of a Lien on the property of any Loan
Party or any ERISA Affiliate thereof pursuant to Section 4068 of ERISA
and such liability or Lien may reasonably be expected to constitute a
Material Adverse Effect.
(b) Fail, upon a Senior Officer of Borrower be coming aware
thereof, promptly to notify the Agent of the occurrence of any Reportable
Event, or of any material non-exempt "prohibited transaction" (as defined
in Section 4975 of the Code) with respect to any Pension Plan maintained by
it or any trust created thereunder.
(c) At any time, permit any Pension Plan (other than a
Multiemployer Plan) maintained by it to fail to comply with ERISA or other
applicable Laws in any respect that constitutes a Material Adverse Effect.
SECTION 7.06 Liens; Negative Pledges; Sales and Leasebacks. Create,
---------------------------------------------
incur, assume or suffer to exist any Lien of any nature upon or with respect to
any of their respective properties, whether now owned or hereafter acquired; or
suffer to exist any Negative Pledge; or engage in any sale and leaseback
transaction with respect to its property; except:
(a) Permitted Encumbrances;
(b) Liens and Negative Pledges in favor of the Lenders;
(c) Liens in connection with Permitted Accounts Receivable
Financings permitted by Section 7.01(c);
(d) Liens on property acquired pursuant to Acquisitions
permitted hereunder, provided such Liens were not incurred in contemplation
of such Acquisition; and
(e) Other Liens securing Indebtedness not exceeding 15% of
Shareholders' Equity at any time.
SECTION 7.07 Indebtedness. Create, incur, assume or suffer to exist
------------
any Indebtedness except:
(a) Indebtedness under Swap Agreements incurred in the ordinary
course of business;
(b) Subordinated Debt of the Borrower or a Subsidiary incurred
in connection with permitted Acquisitions; provided that Majority Lenders
--------
shall have
- 88 -
approved the subordination provisions of any such Subordinated Debt in
excess of $5,000,000;
(c) Indebtedness in respect of contracts to exchange, settle or
otherwise hedge foreign currency exposure incurred in the ordinary course
of business;
(d) Permitted Accounts Receivable Financings to the extent
permitted by Section 7.01(c); and
(e) Consolidated Funded Indebtedness, the creation, incurrence,
assumption or existence of which would not cause the Leverage Ratio to
exceed 3.50 to 1 after giving effect to such Indebtedness on a pro forma
basis as of the date of the most recently delivered Compliance Certificate;
provided, however, that any unsecured Indebtedness of any Foreign
-------- -------
Subsidiary shall not exceed, together with the face amount of any letters
of credit issued on behalf of such Foreign Subsidiary (other than Letters
of Credit), $3,000,000 for any one Foreign Subsidiary and $45,000,000 for
all Foreign Subsidiaries in the aggregate at any one time outstanding.
SECTION 7.08 Conduct of Business. Engage in any business other than
------------------- ----- ----
businesses of the same nature as that which the Borrower and its Subsidiaries
conduct as of the Closing Date; provided, however, notwithstanding any other
provision of this Agreement, Borrower and its Subsidiaries may enter into
foreign exchange and commodity hedging agreements so long as such arrangements
are not for speculative purposes.
SECTION 7.09 Leverage Ratio. Permit the Leverage Ratio, as of the
--------------
end of any Fiscal Quarter, to exceed 3.50 to 1.00.
SECTION 7.10 Minimum Consolidated Tangible Net Worth. Permit at the
---------------------------------------
end of any Fiscal Quarter Consolidated Tangible Net Worth to be less than the
sum of (a) $83,000,000 plus (b) 50% of Consolidated Net Income after June 30,
----
1995 (not to be reduced by any losses incurred) plus (c) 50% of the net proceeds
----
from the issuance of any equity securities of the Borrower after June 30, 1995
less (d) 50% of Intangible Assets related to Acquisitions completed after June
----
30, 1995. For all purposes of this Section 7.10, the amount of Intangible Assets
shall be determined with reference to the applicable foreign exchange rate on
the date any such Intangible Asset was acquired, and no adjustments shall be
made to the book value of Intangible Assets as a result of foreign currency
fluctuations.
- 89 -
SECTION 7.11 Interest Coverage Ratio. Permit the Interest Coverage
-----------------------
Ratio, as of the end of any Fiscal Quarter for the four-quarter period ending on
such date, to be less than 1.50 to 1.00.
SECTION 7.12 Contingent Obligations. Create or become or be liable
----------------------
with respect to any Contingent Obligations except:
(a) Contingent Obligations of the Borrower or any Subsidiary
supporting obligations of the Borrower or a Subsidiary entered into in the
ordinary course of Business;
(b) Guarantees by the Borrower of operating leases and
performance bonds of any Subsidiary of the Borrower; provided, that such
--------
guarantees with respect to Foreign Subsidiaries shall not exceed
$12,000,000 in the aggregate outstanding at any one time; provided,
--------
further, that, for purposes of calculating the amount of a guarantee of an
-------
operating lease, such guarantee shall be deemed to be a guarantee of the
next 12 months rent due under the operating lease so guaranteed;
(c) Guaranties by the Borrower of any obligation of any of its
Subsidiaries permitted under Section 7.07(a), (b), (c) or (e) ;
(d) Guaranties by the Borrower, which are Subordinated Debt of
the Borrower, of any obligation of any of its Subsidiaries permitted under
Section 7.07(b);
(e) Other Contingent Obligations not incurred in the ordinary
course of business; provided that the maximum aggregate liability of the
--------
Borrower and its Subsidiaries in respect of all such Contingent Obligations
shall at no time exceed $10,000,000 outstanding; and
(f) Contingent Obligations in favor of the Lenders under this
Agreement and the Letters of Credit issued hereunder.
SECTION 7.13 Limitations on Restrictions Affecting Dividends and
---------------------------------------------------
Other Payments by Subsidiaries. Create or otherwise cause or suffer to exist or
------------------------------
become effective any encumbrance or restriction on the ability of any Subsidiary
of Borrower to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in, or measured by, its profits, or
pay any Indebtedness owed to Borrower or any of its Subsidiaries or (b) make
loans or advances to Borrower or any of its Subsidiaries, except, in each case,
for
- 90 -
such encumbrances or restrictions, if any, imposed by law or by this
Agreement, or (c) amend the terms of this Agreement.
SECTION 7.14 Restricted Junior Payments. Make any Restricted Junior
--------------------------
Payment except:
(a) Restricted Junior Payments that in the aggregate do not exceed
15% of Shareholders' Equity during any 12-month period;
(b) Restricted Junior Payments of the type described in clauses (i),
(ii) or (iv) of the definition of Restricted Junior Payments which are made
by a Subsidiary of the Borrower with respect to shares of any class of
stock or other ownership interest owned by the Borrower; and
(c) Purchases and redemptions from the Borrower's shareholders of any
warrants, options or other rights to acquire shares of the Borrower's stock
granted to shareholders pursuant to a shareholders' rights plan; provided
--------
that (i) the repurchase and redemption provisions of such shareholders'
rights plan shall be in form and substance satisfactory to the Lenders in
their absolute discretion, and (ii) the aggregate amount of Restricted
Junior Payments made pursuant to this clause (c) shall not exceed $200,000
during the period beginning on the Closing Date and ending on the Final
Maturity Date.
SECTION 7.15 Transactions with Affiliates. Enter into any
----------------------------
transaction of any kind with any Affiliate of Borrower other than (i)
transactions between or among Borrower and its Wholly-Owned Subsidiaries or
between or among its Wholly-Owned Subsidiaries and (ii) transactions on terms at
least as favorable to Borrower or its Subsidiaries as would be the case in any
arm's-length transaction between unrelated parties of equal knowledge respecting
the subject matter thereof and equal bargaining power.
SECTION 7.16 Subsidiaries. Create, acquire or permit to exist any
------------
Subsidiary less than 80% of the ownership interest of which is legally and
beneficially owned, directly or indirectly, by the Borrower.
- 91 -
ARTICLE VIII
GUARANTY
--------
SECTION 8.01 Guaranty.
--------
(a) Each Guarantor, jointly and severally, unconditionally and
irrevocably guarantees the due and punctual payment and performance of the
Obligations (including in each case interest accruing on and after the
filing of any petition in bankruptcy or of reorganization of the obligor
whether or not post filing interest is allowed in such proceeding). Each
Guarantor further agrees that the Obligations may be extended or renewed,
in whole or in part, without notice or further assent from it (except as
may be otherwise required herein), and it will remain bound upon this
guaranty notwithstanding any extension or renewal of any Obligation.
(b) Each Guarantor waives presentation to, demand for payment
from and protest to, as the case may be, the Borrower or any Subsidiary
Borrower or any other guarantor, and also waives notice of protest for
nonpayment. The obligations of each Guarantor hereunder shall not be
affected by (i) the failure of the Agent or the Lenders to assert any claim
or demand or to enforce any right or remedy against the Borrower or any
Subsidiary Borrower or any other guarantor under the provisions of this
Agreement or any other agreement or otherwise; (ii) any extension or
renewal of any provision hereof or thereof; (iii) the failure of the Agent
to obtain the consent of the Guarantors with respect to any rescission,
waiver, compromise, acceleration, amendment or modification of any of the
terms or provisions of this Agreement, the Notes or of any other agreement;
(iv) the release, exchange, waiver or foreclosure of any security held by
the Agent or the Lenders for the Obligations or any of them; (v) the
failure of the Agent to exercise any right or remedy against any other
guarantor of the Obligations; (vi) the release or substitution of any
guarantor; (vii) any defense based upon an election of remedies (including,
if available, an election to proceed by non-judicial foreclosure) by the
Agent or a Lender which destroys or otherwise impairs the subrogation
rights of any Guarantor or the right of any Guarantor to proceed against
the Borrower or any Subsidiary Borrower for reimbursement, or both; or
(viii) any rights or defenses created by the anti-deficiency statutes of
the State of California. Without limiting the generality of the foregoing
or any other provision hereof, any Guarantor hereby expressly waives any
and all benefits which might otherwise be available to it under California
- 92 -
Civil Code Sections 2809, 2910, 2819, 2839, 2845, 2849, 2850, 2899 and 3433
and California Code of Civil Procedure Sections 580a, 580b, 580d and 726.
(c) Each Guarantor further agrees that this guaranty constitutes
a guaranty of performance and of payment when due and not just of
collection, and waives any right to require that any resort be had by the
Agent or the Lenders to any security held for payment of the Obligations or
to any balance of any deposit, account or credit on the books of the Agent
in favor of the Borrower, any Subsidiary Borrower, any other guarantor or
to any other Person.
(d) Each Guarantor hereby expressly assumes all responsibilities
to remain informed of the financial condition of the Borrower or each
Subsidiary Borrower, as the case may be, and any circumstances affecting
the ability of the Borrower or any Subsidiary Borrower to perform under
this Agreement.
(e) Each Guarantor's guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations, the
Notes or any other instrument evidencing any Obligations, or by the
existence, validity, enforceability, perfection, or extent of any
collateral therefor or by any other circumstance relating to the
Obligations which might otherwise constitute a defense to these Guaranties.
The Agent makes no representation or warranty in respect to any such
circumstances and has no duty or responsibility whatsoever to the
Guarantors in respect to the management and maintenance of the Obligations
or any collateral security for the Obligations.
SECTION 8.02 No Impairment of Guaranties.
---------------------------
The obligations of the Guarantors hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality of
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the Guarantors hereunder shall
not be discharged or impaired or otherwise affected by the failure of the Agent
or the Lenders to assert any claim or demand or to enforce any remedy under this
Agreement or any other agreement, by any waiver or modification of any provision
thereof, by any default, failure or modification of any provision thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Obligations, or
- 93 -
by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of the
Guarantors or would otherwise operate as a discharge of the Guarantors as a
matter of law, unless and until the Obligations are paid in full.
SECTION 8.03 Continuation and Reinstatement, Etc.
-----------------------------------
(a) Each Guarantor further agrees that its guaranty hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation is
rescinded or must otherwise be restored by the Agent or the Lenders upon the
bankruptcy or reorganization of the Borrower, any of the Subsidiary Borrowers or
the Guarantors, or otherwise. In furtherance of the provisions of this Article
VIII, and not in limitation of any other right which the Agent or the Lenders
may have at law or in equity against the Borrower, any Subsidiary Borrower or
any Guarantor by virtue hereof, upon failure of the Borrower or any Subsidiary
Borrower to pay any Obligation when and as the same becomes due, whether at
maturity, by acceleration, after notice or otherwise, each Guarantor hereby
promises to and will, upon receipt of written demand by the Agent on behalf of
the Lenders, forthwith pay or cause to be paid to the Agent on behalf of the
Lenders in cash an amount equal to the unpaid amount of all the Obligations in
each case with interest thereon at a rate of interest equal to the rate
specified in Article II hereof, and thereupon the Agent and the Lenders shall
assign such Obligation, together with all security interests, if any, then held
by the Agent or the Lenders in respect of such Obligation, to the Guarantors
making such payment.
(b) Upon payment by any Guarantor of any sums to the Agent for the
benefit of the Lenders hereunder, all rights of such Guarantor against the
Borrower or any Subsidiary Borrower, as the case may be, arising as a result
thereof by way of right of subrogation or otherwise, shall in all respects be
subordinate and junior in right of payment to the prior final and indefeasible
payment in full of all Obligations to the Agent of the Lenders. If any amount
shall be paid to such Guarantor for the account of the Borrower's or any
Subsidiary Borrower's Obligations hereunder, such amount shall be held in trust
for the benefit of the Agent and shall forthwith be paid to the Agent on behalf
of the Lenders to be credited and applied to the Obligations, whether matured or
unmatured.
SECTION 8.04 Guaranteed Amount.
-----------------
(a) Notwithstanding any other provision of this Article VIII, the
amount guaranteed by each Guarantor hereunder
- 94 -
shall be limited to the extent, if any, required so that its obligations under
this Article VIII shall not be subject to avoidance under Section 548 of the
Bankruptcy Code or to being set aside or annulled under any applicable state law
relating to fraud on creditors. In determining the limitations, if any, on the
amount of any Guarantor's obligations hereunder pursuant to the preceding
sentence, any rights of subrogation or contribution which such Guarantor may
have under this Article VIII or applicable law shall be taken into account.
(b) Notwithstanding any provision in this Agreement to the contrary,
each Loan Party agrees that any Intercompany Indebtedness of any Guarantor shall
be subordinated in right of payment to the Obligations of such Guarantor under
this Guaranty and the other Loan Documents to the Lenders.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
------------------------------
UPON EVENTS OF DEFAULT
----------------------
SECTION 9.01 Events of Default. The existence or occurrence of any
-----------------
one or more of the following events, whatever the reason therefor and under any
circumstance whatsoever, shall constitute an Event of Default:
(a) any Loan Party fails to pay any principal on any Obligation
or any principal or interest on any Bid Advance on the date when due; or
(b) any Loan Party fails to pay any interest or premium on any
Obligation or any fees due to the Agent or the Lenders within five days
after the date when due or fails to pay any other fee or amount payable to
the Agent or the Lenders under any Loan Document, or any portion thereof,
within five days after demand therefor; or
(c) any Loan Party fails to perform or observe any of the
covenants contained in Section 6.01(h), 6.03 or 6.06 or in Article VII; or
(d) any Loan Party fails to perform or observe any of the
covenants contained in Sections 6.01(a)-(c) within 5 days after the giving
of written notice by the Agent of such Default; or
(e) any Loan Party fails to perform or observe any other
covenant or agreement contained in any Loan Document on its part to be
performed or observed within 30
- 95 -
days after the giving of written notice by the Agent of such Default; or
(f) any representation or warranty of any Loan Party made in any
Loan Document or in any certificate delivered pursuant to any Loan Document
proves to have been incorrect when made or reaffirmed in any respect that
is materially adverse to the interests of the Lenders; or
(g) Borrower or any of its Subsidiaries (i) fails to pay the
principal, or any principal installment, of any present or future
Indebtedness for borrowed money in an amount exceeding $1,000,000, or any
guaranty of present or future Indebtedness for borrowed money in an amount
exceeding $1,000,000, on its part to be paid, when due (or within any
stated grace period), whether at the stated maturity, upon acceleration, by
reason of required prepayment or otherwise or (ii) fails to perform or
observe any other term, covenant, or agreement on its part to be performed
or observed, or suffers any event to occur in connection with any present
or future Indebtedness for borrowed money in an amount exceeding
$1,000,000, or of any guaranty of present or future Indebtedness for
borrowed money in an amount exceeding $1,000,000, if as a result of such
failure or sufferance any holder or holders thereof (or an agent or trustee
on its or their behalf) has the right to declare such Indebtedness due
before the date on which it otherwise would become due unless any such
failure or sufferance is waived by such holders thereof (or an agent or
trustee on its or their behalf); or
(h) any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of the Lenders or
satisfaction in full of the Obligations, ceases to be in full force and
effect or is declared by a court of competent jurisdiction to be null and
void, invalid, or unenforceable in any respect which, in the opinion of the
Majority Lenders is materially adverse to their interest; or any Loan Party
thereto denies that it has any or further liability or obligation under any
Loan Document or purports to revoke, terminate or rescind same; or
(i) a judgment against any Loan Party is entered by a court of
competent jurisdiction for the payment of money in excess of $500,000 and
absent procurement of a stay of execution, such judgment remains unbonded
or unsatisfied for 30 calendar days after the date of entry of judgment or
such longer period as may be permitted by law or otherwise binding on the
judgment creditor before execution on such
- 96 -
judgment is allowed, or in any event later than five days prior to the date
of any proposed sale thereunder; or
(j) any Loan Party institutes or consents to any proceeding
under a Debtor Relief Law relating to it or to all or any material part of
its property, or is unable or admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of creditors
or applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator, or similar officer for
it or for all or any part of its property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator, or similar officer is
appointed without the application or consent of that Person and the
appointment continues undischarged or unstayed for 30 calendar days or any
proceeding under any Debtor Relief Law relating to any such Person or to
all or any material part of its property is instituted without the consent
of that Person and continues undismissed or unstayed for 30 calendar days
or results in the entry of an order for relief; or any judgment, writ,
warrant of attachment or execution, or similar process is issued or levied
against all or any material part of the property of any such Person and is
not released, vacated, or fully bonded within 30 calendar days after its
issue or levy; or
(k) the occurrence of a Termination Event with respect to any
Pension Plan if the aggregate liability of Borrower and its ERISA
Affiliates under ERISA as a result thereof exceeds $1,000,000; or the
complete or partial withdrawal subsequent to the Closing Date by Borrower
or any of its ERISA Affiliates from any Multiemployer Plan if the aggregate
liability of Borrower and its ERISA Affiliates as a result thereof would
constitute a Material Adverse Effect; or
(l) a Change of Control or a Change of Ownership shall have
occurred.
SECTION 9.02 Remedies Upon Event of Default. Without limiting any
------------------------------
other rights or remedies of the Agent or the Lenders provided for elsewhere in
this Agreement or the Loan Documents, or by applicable law, or in equity, or
otherwise:
(a) Upon the occurrence, and during the continuance, of any
Event of Default (other than an Event of Default described in Section
9.01(j)):
(i) the Commitments and all other obligations of the Agent
and the Lenders under the Loan
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Documents shall be suspended without notice to or demand upon any Loan
Party, which are expressly waived by each Loan Party to the fullest
extent permitted by applicable law, except that the Majority Lenders
may waive the Event of Default or, without waiving, determine, upon
terms and conditions satisfactory to the Majority Lenders, to
reinstate the Commitments;
(ii) the Majority Lenders may request the Issuing Bank to,
and the Issuing Bank thereupon shall, demand immediate payment by each
Loan Party of an amount equal to the aggregate outstanding face amount
of all Letters of Credit, which amount shall be deposited into a
deposit account established by or maintained with the Agent as cash
collateral for any reimbursement obligations under the Letters of
Credit as and when drawings are made thereunder (and each Loan Party
hereby grants to the Agent and the Lenders a security interest in such
account); and
(iii) the Majority Lenders may request the Agent to, and
the Agent thereupon shall, terminate the Commitments and declare all
or any part of the unpaid principal of the Notes, all interest accrued
and unpaid thereon, and all other amounts payable under the Loan
Documents to be forthwith due and payable, whereupon the same shall
become and be forthwith due and payable, without protest, presentment
for payment, notice of dishonor, demand, or further notice of any
kind, all of which are expressly waived by each Loan Party to the
fullest extent permitted by applicable law.
(b) Upon the occurrence of any Event of Default described in
Section 9.01(j):
(i) the Commitments and all other obligations of the Agent
and the Lenders under the Loan Documents shall terminate without
notice to or demand upon any Loan Party, which are expressly waived by
each Loan Party to the fullest extent permitted by applicable law;
(ii) an amount equal to the aggregate outstanding face
amount of the Letters of Credit shall be forthwith due and payable to
the Issuing Bank without protest, presentment, notice of dishonor,
demand or further notice of any kind, all of which are waived by each
Loan Party to the fullest extent permitted by applicable law, which
amount shall be
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deposited into a deposit account established by or maintained with the
Agent as cash collateral for any reimbursement obligations under the
Letters of Credit as when drawings are made thereunder (and each Loan
Party hereby grants to the Agent and the Lenders a security interest
in such account); and
(iii) the unpaid principal of the Advances, all interest
accrued and unpaid thereon and all other amounts payable under the
Loan Documents shall be forthwith due and payable, without protest,
presentment for payment, notice of dishonor, demand or further notice
of any kind, all of which are expressly waived by each Loan Party to
the fullest extent permitted by applicable law.
(c) Upon the occurrence of any Event of Default, the Agent,
without notice to (except as expressly provided for in any Loan Document)
or demand upon each Loan Party, which are expressly waived by any Loan
Party to the fullest extent permitted by applicable law, may proceed to
protect, exercise, and enforce the rights and remedies of the Agent and the
Lenders under the Loan Documents against each Loan Party and such other
rights and remedies as are provided by law or equity.
ARTICLE X
THE AGENT
---------
SECTION 10.01 Appointment and Authorization. Each Lender hereby
-----------------------------
irrevocably appoints, designates and authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Agent have or be deemed to have 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 Agent.
SECTION 10.02 Delegation of Duties. The Agent may execute any of its
--------------------
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters
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pertaining to such duties. The Agent shall not be responsible for the negligence
or misconduct of any agent or attorney-in-fact that it selects with reasonable
care.
SECTION 10.03 Liability of Agent. None of the Agent-Related Persons
------------------
shall (i) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document 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 the Borrower or any
of the Borrower's Subsidiaries or Affiliates.
SECTION 10.04 Reliance by Agent.
-----------------
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and other
experts selected by the Agent. The 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 Majority 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 Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or
consent of the Majority Lenders and such request and any action taken or
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failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, 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 Agent to
such Lender for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory
to the Lender unless such Lender notifies the Agent to the contrary.
SECTION 10.05 Notice of Default. The Agent shall not be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Lenders, unless the
Agent shall have received written notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Lenders in
accordance with Article IX; provided, however, that unless and until the Agent
-------- -------
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Lenders.
SECTION 10.06 Credit Decision. Each Lender acknowledges that none of
---------------
the Agent-Related Persons has made any representation or warranty to it, and
that no act by the Agent hereinafter taken, including any review of the affairs
of the Borrower and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower
and its Subsidiaries hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own
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credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the possession
of any of the Agent-Related Persons.
SECTION 10.07 Indemnification. Whether or not the transactions
---------------
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
-------- -------
that no Lender shall be liable for the payment to the Agent-Related Persons of
any portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrowers. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
SECTION 10.08 Agent in Individual Capacity. Bank of America and its
----------------------------
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Borrower and its Subsidiaries and Affiliates as though Bank of America were not
the Agent hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding the Borrower or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Borrower or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, Bank
of America
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shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" include Bank of America in its individual capacity.
SECTION 10.09 Successor Agent. The Agent may, and at the request of
---------------
the Majority Lenders shall, resign as Agent upon 30 days' notice to the Borrower
and the Lenders. If the Agent resigns under this Agreement, the Majority Lenders
shall appoint from among the Lenders a successor agent for the Lenders which
successor agent shall be approved by the Borrower. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Lenders and approval of the Borrower, a
successor agent from among the Lenders. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Agent and the term "Agent" shall mean
such successor agent and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article X and Sections 11.03 and 11.09 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Majority Lenders appoint a successor
agent as provided for above, with the approval of the Borrower.
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.01 Cumulative Remedies; No Waiver. The rights, powers,
------------------------------
privileges and remedies of the Agent or any Lender provided herein or in any
Note or other Loan Document are cumulative and not exclusive of any right,
power, privilege or remedy provided by law or equity. No failure or delay on the
part of the Agent or any Lender in exercising any right, power, privilege or
remedy may be, or may be deemed to be, a waiver thereof; nor may any single or
partial exercise of any right, power, or remedy preclude any other or further
exercise of any other right, power, privilege or remedy. The terms and
conditions of Sections 4.01 and 4.02 hereof are inserted for the sole benefit of
the Lenders and the Agent may (with the approval of the Majority Lender) waive
them in whole or in part with or without terms or conditions in respect of any
Advance or Letter of Credit, without prejudicing the Lenders' rights to assert
them
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in whole or in part in respect of any other Advance or Letter of Credit.
SECTION 11.02 Amendments; Consents. No amendment, modification,
--------------------
supplement, termination, or waiver of any provision of this Agreement or any
other Loan Document, and no consent to any departure by any Loan Party
therefrom, may in any event be effective unless in writing signed by the Agent
with the written approval of the Majority Lender, and then only in the specific
instance and for the specific purpose given; and without the approval in writing
of all the Lenders, no amendment, modification, supplement, termination, waiver,
or consent may be effective:
(a) to amend or modify the principal of, or decrease the amount
of principal prepayments or the rate of interest payable on, any Obligation
or increase the amount of any of the Commitments or decrease the amount of
any fee payable to any Lender;
(b) to postpone any date fixed for any payment of principal of,
prepayment of principal of, or any interest on, any Obligation or any fee
or to extend the term of any of the Commitments;
(c) to amend or modify the provisions of the definition of
"Majority Lender" or of Section 11.02, 11.09 or 11.10;
(d) to amend or modify any provision of Section 2.10;
(e) release any Guarantor from the Guaranty unless such
Guarantor is merged, consolidated or disposed of as permitted by Section
7.01 or 7.02; or
(f) to amend or modify any provision of this Agreement or the
Loan Documents that expressly requires the consent or approval of all the
Lenders.
Any amendment, modification, supplement, termination, waiver, or consent
pursuant to this Section 11.02 shall apply equally to, and shall be binding
upon, all the Lenders and the Agent.
SECTION 11.03 Costs, Expenses and Taxes. Borrower shall pay on
-------------------------
demand the reasonable costs and reasonable expenses of the Agent in connection
with the negotiation, preparation, execution and delivery of the Loan Documents,
or any amendment or waiver thereto requested by the Borrower, including
reasonable travel expenses, and other out of pocket expenses and the
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reasonable fees and out of pocket expenses of any legal counsel (including
without limitation, the reasonable allocated fees and expenses of Agent's in-
house counsel and staff), independent public accountants, and other outside
experts retained by the Agent, and the reasonable costs, expenses or fees
incurred or suffered by the Agent in connection with or during the course of any
bankruptcy or insolvency proceedings of Borrower, or any Subsidiary of Borrower.
After the occurrence and during the continuation of a Default or an Event of
Default, Borrower shall pay on demand the reasonable costs and expenses of the
Agent and each of the Lenders in connection with the amendment, waiver,
refinancing, restructuring, reorganization (including a bankruptcy
reorganization) and enforcement or attempted enforcement of any Loan Documents
and any matter related thereto, including reasonable travel expenses and other
out of pocket expenses and the reasonable fees and other out of pocket expenses
of any legal counsel retained by or employed by any of the Lenders, including
any reasonable costs, expenses or fees incurred or suffered by any of the
Lenders in connection with or during the course of any bankruptcy or insolvency
proceedings of Borrower, or any Subsidiary of Borrower. Borrower shall pay any
and all documentary and other taxes (other than income or gross receipts taxes
generally applicable to such type of lender) and all costs, expenses, fees and
charges payable or determined to be payable in connection with the filing or
recording of any Loan Document or any other instrument or writing to be
delivered hereunder or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify the
Agent and each Lender from and against any and all loss, liability or legal or
other expense with respect to or resulting from any delay in paying or failure
to pay any tax, cost, expense, fee or charge that any of them may suffer or
incur by reason of the failure of any Loan Party to perform any of its
Obligations. Any amount payable to the Agent or any Lender under this Section
11.03 shall be due and payable and bear interest from the date which is 10 days
after the date of receipt of demand for payment at the Base Rate.
SECTION 11.04 Nature of Lender's Obligations. Each Lender's
------------------------------
obligation to make any Advance pursuant hereto is several and not joint or joint
and several. A default by any Lender will not increase the Pro Rata Share of the
Commitments attributable to any other Lender. Any Lender not in default may, if
it desires, assume in such proportion as the nondefaulting Lenders agree the
obligations of any Lender in default, but is not obligated to do so. The Agent
agrees that it will use its best efforts either to induce the other Lenders to
assume the obligations of a Lender in default or to obtain another Lender,
reasonably satisfactory to Borrower, to replace such a Lender in default.
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SECTION 11.05 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties contained herein or in any other Loan Document or
in any certificate or other writing delivered by or on behalf of any one or more
of the parties to any Loan Document, will survive the making of the Advances
hereunder and the execution and delivery of the Notes, notwithstanding any
investigation made by the Agent or any Lender or on their behalf.
SECTION 11.06 Notices. Except as otherwise expressly provided in the
-------
Loan Documents, (a) all notices, requests, demands, directions, and other
communications provided for hereunder and under any other Loan Document must be
in writing and must be mailed, telegraphed, telecopied, delivered, or sent by
telex, or cable to the appropriate party at the address set forth on Schedule
11.06 or other applicable Loan Document or, as to any party to any Loan
Document, at any other address as may be designated by it in a written notice
sent to all other parties to such Loan Document in accordance with this Section
11.06 and (b) any notice, request, demand, direction, or other communication
given by telegram, telecopier, telex, or cable must be confirmed within 48 hours
by letter mailed or delivered to the appropriate party at its respective
address. Except as otherwise expressly provided in any Loan Document if any
notice, request, demand, direction, or other communication required or permitted
by any Loan Document is given by mail it will be effective on the earlier of
receipt or the third calendar day after deposit in the United States mail with
first class or airmail postage prepaid; if given by telegraph or cable, when
delivered to the telegraph company with charges prepaid; if given by telex or
telecopier, when received; or if given by personal delivery, when delivered.
SECTION 11.07 Execution in Counterparts. Unless the Agent otherwise
-------------------------
specifies with respect to any Loan Document, this Agreement and any other Loan
Document may be executed in any number of counterparts and any party hereto or
thereto may execute any counterpart, each of which when executed and delivered
will be deemed to be an original and all of which counterparts of this Agreement
or any other Loan Document, as the case may be, taken together will be deemed to
be but one and the same instrument. The execution of this Agreement or any other
Loan Document by any party hereto or thereto will not become effective until
counterparts hereto or thereto will not become effective until counterparts
hereof or thereof, as the case may be, have been executed by all the parties
hereto or thereto.
SECTION 11.08 Binding Effect; Assignment.
--------------------------
(a) This Agreement and the other Loan Documents shall be binding
upon and inure to the benefit of the
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Borrower, each Guarantor and each Subsidiary Borrower, the Agent, each of
the Lenders, and their respective successors and assigns, except that the
Borrower, each Guarantor and each Subsidiary Borrower may not assign its
rights hereunder or thereunder or any interest herein or therein without
the prior written consent of all the Lenders, except for any such
assignment resulting from any merger permitted by this Agreement. Each
Lender and the Agent shall have the right to sell or transfer any
participation interest in this Agreement. Each Lender and the Agent shall
have the right to sell or transfer any participation interest in this
Agreement, the Advances, the Notes, the Commitments and the Letters of
Credit in accordance with the provisions of this Section 11.08. Each Lender
represents that it is not acquiring its Notes with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (subject to any requirement that disposition of such Notes must be
within the control of such Lender). Any Lender may at any time pledge its
Notes or any other instrument evidencing its rights as a Lender under this
Agreement to a Federal Reserve Bank, but no such pledge shall release that
Lender from its obligations hereunder.
(b) From time to time each Lender may, with the prior consent of
Borrower, assign to one or more Eligible Assignees a portion of its Pro
Rata Share of the Commitments (including its interest in the Letters of
Credit); provided that (i) such Eligible Assignee, if not then a Lender,
shall be reasonably acceptable to the Agent, (ii) such assignment shall be
evidenced by a Commitment Assignment and Acceptance, a copy of which shall
be furnished to the Agent for registration as hereinbelow provided, (iii)
the assignment shall not assign a portion of the Commitments in an amount
less than $15,000,000, without the Borrower's consent, and (iv) the
effective date of any such assignment shall be as specified in the
Commitment Assignment and Acceptance, but not earlier than the date which
is five (5) Business Days after the later of the date Borrower has
consented to such assignment and the date the Agent has registered the
Commitment Assignment and Acceptance in the register kept for that purpose
by the Agent as described below. The prior consent of Borrower referred to
in the previous sentence shall not be unreasonably withheld; provided, that
it shall not be unreasonable for the Borrower to withhold consent to any
assignment to an Eligible Assignee which (x) is not capable of funding in
Pounds Sterling, Canadian Dollars, Deutsche Marks, Spanish Pesetas, Swiss
Francs, French Francs, Belgian Francs, Italian Lira, ECU, Swedish Krona,
Norwegian Krone, Australian Dollars, Japanese Yen or such other Alternative
Currency in which the
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Borrower has previously received Eurocurrency Rate Committed Advances and
(y) is unable to enter into a funding arrangement, reasonably acceptable to
the Borrower and the Agent, pursuant to which an existing Lender will fund
such currencies on such Eligible Assignee's behalf. Upon the effective date
of such Commitment Assignment and Acceptance, the Eligible Assignee named
therein shall be a Lender for all purposes of this Agreement, with the Pro
Rata Share of the Commitments therein set forth and, to the extent of such
Pro Rata Share, the assigning Lender shall be released from all of its
obligations under this Agreement assumed by such assignee Lender. The
Borrower agrees that it shall, upon the request of the assignee Lender,
execute and deliver (against delivery by the assigning Lender to such Loan
Party of any Committed Advance Notes) to such assignee Lender, a Committed
Advance Note evidencing that assignee Lender's Pro Rata Share of the
Commitment, and to the assigning Lender, if requested by such assigning
Lender, a Committed Advance Note evidencing the remaining Pro Rata Share
retained by the assigning Lender. The Borrower agrees that it shall also
execute and deliver (against delivery by the assigning Lender to such
Borrower of its Bid Notes) to such assignee Lender, a Bid Advance Note
evidencing that assignee Lender's Bid Advances, and to the assigning
Lender, a Bid Advance Note evidencing the Bid Advances of the assigning
Lender.
(c) By executing and delivering a Commitment Assignment and
Acceptance, the assigning Lender thereunder: (i) other than as provided in
such Commitment Assignment and Acceptance, assigns without recourse and
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished pursuant
hereto; and (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or
the performance or observance by any Loan Party of any of its Obligations
under this Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto.
(d) By executing and delivering a Commitment Assignment and
Acceptance, the assignee Lender or Eligible Assignee thereunder
acknowledges and agrees that: (i) other than the representation and
warranty that it is the legal and beneficial owner of the Pro Rata Share of
the Commitments being assigned thereby fee and clear of any adverse claim,
the assigning Lender has made no
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representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness or sufficiency of this Agreement or any other Loan Document;
(ii) the assigning Lender has made no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Loan Party or the performance by any Loan Party of the Obligations; (iii)
it has received a copy of this Agreement together with copies of the most
recent financial statements delivered pursuant to this Agreement and such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Commitment Assignment
and Acceptance; (iv) it will, independently and without reliance upon the
Agent, the assigning Lender or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement; (v) if not then a Lender, it is an Eligible Assignee; (vi) it
appoints and authorizes the Agent and the Issuing Bank to take such action
and to exercise such powers under this Agreement as are delegated to the
Agent and the Issuing Bank by Article X and Section 3.06; and (vii) it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(e) The Agent shall maintain at the Agent's Office a copy of
each Commitment Assignment and Acceptance delivered to it and a register
(the "Register") for recordation, upon payment to the Agent by the
assigning Lender of a registration fee of $3,500.00, of the names and
addresses of the Lenders and their respective Pro Rata Shares of the
Commitments. The entries in the Register shall be conclusive for all
purposes, in the absence of manifest error, and each Loan Party, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. Such
Register shall be available for inspection by any Loan Party or any Lender
at any reasonable time and from time to time upon reasonable prior notice.
Promptly following any entry in the Register, the Agent shall provide to
each Loan Party and the Lenders a revised Schedule 1.01 giving effect
thereto.
(f) Upon its receipt of a Commitment Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is an
Eligible Assignee, the Agent shall, if such Commitment Assignment and
Acceptance
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has been completed and is in substantially the form of Exhibit C hereto,
and subject to receipt of the written consent of Borrower and the Agent, if
required hereby, (i) accept such Commitment Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to each Loan Party.
(g) Each Lender may from time to time, with the consent of
Borrower (or without the consent of the Borrower in the case of granting a
participation solely in a Bid Loan), grant participations to one or more
Lenders or other financial institutions (or any Person, in the case of
granting a participation solely in a Bid Loan) in all or a portion of its
Pro Rata Share of the Commitments, including its interest in the Letters of
Credit; provided, however, that (i) such Lender's obligations under this
-------- -------
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participating Lenders or other entities shall not be
a Lender hereunder for any purpose except, if the participation agreement
so provides, for the purposes of Sections 2.13(a), 2.18, 2.20, 3.07, 11.09,
11.10 and 11.14 but only to the extent that such costs payable by each Loan
Party do not exceed the cost which each Loan Party would have incurred in
respect of such Lender absent the participation, (iv) each Loan Party, the
Agent, the Issuing Bank and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no Lender shall grant any
participation under which the consent of the holder of the participation
interest is required for amendments or waivers of provisions of the Loan
Documents other than those which (A) increase the monetary amount of any of
the Commitments, (B) postpone any date fixed for any scheduled payments of
principal or interest with respect to the Advances or any fees or other
amounts payable to such Lender hereunder in which such participant has a
direct monetary interest or (C) reduce the rate of interest on the
Advances, any fee or any other monetary amount payable to the Lenders in
which such participant has a direct monetary interest; provided that holder
--------
of a participation in a Bid Loan shall have the right to consent only to
the actions described in clauses (B) and (C), and then only if it affects
such Bid Loan. The prior consent of Borrower referred to in the previous
sentence shall not be unreasonably withheld.
SECTION 11.09 Indemnity by Loan Parties. The Borrower and each
-------------------------
Subsidiary Borrower hereby agrees to indemnify, save, and hold harmless the
Agent and each Lender and their Affiliates,
- 110 -
directors, officers, agents, attorneys, and employees (collectively, the
"Indemnitees") from and against: (a) any and all claims, demands, actions, or
causes of action that are asserted against any Indemnitee by any Person (other
than any Loan Party or any Lender) if the claim, demand, action, or cause of
action primarily relates to a claim, demand, action, or cause of action that
such Person asserts or may assert against any Loan Party, any Affiliate of any
Loan Party or any officer, director or shareholder of any Loan Party; (b) any
and all claims, demands, actions or causes of action that are asserted against
any Indemnitee by any Person (other than any Loan Party or any Lender) if the
claim, demand, action or cause of action arises out of or relates to the
Commitments, the use or contemplated use of proceeds of any Advance, or the
relationship of any Loan Party and the Lenders under this Agreement; (c) any
administrative or investigative proceeding by any Governmental Agency arising
out of or related to a claim, demand, action or cause of action described in
clauses (a) or (b) above; and (d) any and all liabilities, losses, costs, or
expenses (including reasonable attorneys' fees and disbursements and fees for
other professional services) that any Indemnitee suffers or incurs as a result
of any of the foregoing; provided, that no Indemnitee shall be entitled to
indemnification for any liability, loss, cost or expense caused directly or
indirectly by any Indemnitee's own gross negligence or willful misconduct
(collectively the "Indemnified Liabilities"). If any claim, demand, action or
cause of action is asserted against any Indemnitee and such Indemnitee intends
to claim indemnification from any Loan Party under this Section, such Indemnitee
shall promptly notify such Loan Party, but the failure to so promptly notify
such Loan Party shall not affect such Loan Party's obligations under this
Section unless such failure materially prejudices such Loan Party's right to
participate in the contest of such claim, demand, action or cause of action, as
hereinafter provided. Each Indemnitee may, and if requested by such Loan Party
in writing shall, in good faith contest the validity, applicability and amount
of such claim, demand, action or cause of action with counsel selected by such
Indemnitee and reasonably acceptable to such Loan Party, and shall permit such
Loan Party to participate in such contest. Any Indemnitee that proposes to
settle or compromise any claim or proceeding for which such Loan Party may be
liable for payment of indemnity hereunder shall obtain such Loan Party's prior
written consent, which consent shall not be unreasonably withheld. In connection
with any claim, demand, action or cause of action covered by this Section
against more than one Indemnitee, all such Indemnitees shall be represented by
the same legal counsel selected by the Indemnitees and reasonably acceptable to
Borrower; provided, that if such legal counsel determines in good faith and
advises Borrower in writing that representing all such Indemnitees would or
could result in a conflict of interest under
- 111 -
laws or ethical principles applicable to such legal counsel or that a defense or
counterclaim is available to an Indemnitee that is not available to all such
Indemnitees, then to the extent reasonably necessary to avoid such a conflict of
interest or to permit unqualified assertion of such a defense or counterclaim,
each Indemnitee shall be entitled to separate representation by legal counsel
selected by that Indemnitee and reasonably acceptable to Borrower. Any
obligation or liability of any Loan Party to any Indemnitee under this Section
shall survive the expiration or termination of this Agreement and the repayment
of all Loans and the payment and performance of all other Obligations owed to
the Lenders for the applicable statute of limitations period.
SECTION 11.10 Hazardous Materials Indemnity. The Borrower and the
-----------------------------
Subsidiary Borrowers each hereby agree to indemnify, hold harmless and defend
(by counsel reasonably satisfactory to the Agent) each of the Lenders and their
respective directors, officers, employees, agents, successors and assigns from
and against any and all claims, losses, damages, liabilities, fines, penalties
and charges, resulting from any administrative and judicial proceedings and
orders, judgments, or remedial enforcement actions of any kind, and all costs
and expenses incurred in connection therewith (including but not limited to
reasonable attorneys' fees and expenses to the extent that the defense of any
such action has not been assumed by any Loan Party), arising directly or
indirectly, in whole or in part, out of (i) the presence, any release or
discharge of any Hazardous Materials on, under or from the real property and
(ii) any activity carried on or undertaken on or off the real property by
Borrower or any of its Subsidiaries or any of their respective predecessors in
title, whether prior to or during the term of this Agreement, and whether by
Borrower or any of its Subsidiaries or any of their respective predecessors in
title or any employees, agents, contractors or subcontractors of Borrower or any
of its Subsidiaries or any of their respective predecessors in title, or any
third persons at any time occupying or present on the real property, in
connection with the handling, treatment, removal, storage, decontamination,
clean-up, transport or disposal of any Hazardous Materials at any time located
or present on or under the real property. The foregoing indemnity shall further
apply to any residual contamination on or under the real property, or affecting
any natural resources, and to any contamination of any property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Laws, but the foregoing indemnity shall not apply to Hazardous
Materials on the real property, the presence of which is directly caused by the
Agent or the Lenders.
- 112 -
SECTION 11.11 Nonliability of Lenders. Each Loan Party acknowledges
-----------------------
and agrees that:
(a) Any inspections of any property of any Loan Party made by or
through the Agent or the Lenders are for purposes of administration of the
Loan Documents only and such Loan Party is not entitled to rely upon the
same;
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Lenders or the Agent pursuant to the
Loan Documents, neither the Lenders nor the Agent shall be deemed to have
warranted or represented the sufficiency, legality, effectiveness or legal
effect of the same, or of any term, provision or condition thereof, and
such acceptance or approval thereof shall not constitute a warranty or
representation to anyone with respect thereto by the Lenders or the Agent;
(c) The relationship between the Loan Parties and the Lenders
arising out of or related to this Agreement is, and shall at all times
remain, solely that of a borrower and bank; neither the Agent nor any of
the Lenders shall under any circumstance be construed to be a partner or a
joint venturer of any Loan Party or any of their Affiliates; neither the
Agent nor any of the Lenders shall under any circumstance be deemed to be
in a fiduciary relationship with any Loan Party or their Affiliates in
connection with this Agreement, or to owe any fiduciary duty to any Loan
Party or their Affiliates in connection with this Agreement; neither the
Agent nor any of the Lenders undertakes or assumes any responsibility or
duty to any Loan Party or their Affiliates to select, review, inspect,
supervise, pass judgment upon or inform any Loan Party or their Affiliates
of any matter in connection with their property or the operations of the
Loan Parties or their Affiliates; each Loan Party and its Affiliates shall
rely entirely upon their own judgment with respect to such matters; and any
review, inspection, supervision, exercise of judgment or supply of
information undertaken or assumed by the Lenders or the Agent in connection
with such matters is solely for the protection of the Agent and the Lenders
and neither the Loan Parties nor any other Person is entitled to rely
thereon; and
(d) Neither the Agent nor any of the Lenders shall be
responsible or liable to any Person for any loss, damage, liability or
claim of any kind relating to injury or death to Persons or damage to
property or other loss, damage, liability or claim caused by the actions,
inaction or negligence of any Loan Party and/or its Affiliates.
- 113 -
SECTION 11.12 Confidentiality. Each Lender agrees to hold any
---------------
confidential information which it may receive from any Loan Party pursuant to or
in connection with this Agreement or the exercise of any rights hereunder in
confidence and to cause its officers, employees, agents and professional
advisors to do likewise. The foregoing shall not, however, restrict disclosure
of any such confidential information by any Lender (a) to other Lenders; (b) to
legal counsel, accountants and other professional advisors to any Loan Party or
that Lender retained in connection with this Agreement; (c) to regulatory
officials having jurisdiction over that Lender; (d) as required by law or legal
process or in connection with any legal proceeding to which that Lender and any
Loan Party are adverse parties; or (e) to another financial institution in
connection with a disposition or proposed disposition to that financial
institution of an assignment of or a participation interest in its Commitment
and/or Advances, provided that such disclosure is made subject to an appropriate
written confidentiality agreement on terms substantially similar to this Section
and provided further that Borrower is advised substantially concurrently with
such disclosure of the identity of such financial institution. For purposes of
the foregoing, "confidential information" shall mean any information respecting
Borrower or its Subsidiaries designated by Borrower or any Subsidiary to be
confidential, other than (i) information previously filed with any Governmental
Agency and available to the public without filing a request under the Freedom of
Information Act, (ii) information previously published in any public medium not
furnished directly or indirectly, by that Lender and (iii) information
previously disclosed by any Loan Party to any Person not associated or
affiliated with any Loan Party or any of its officers, directors, agents,
attorneys or employees without an appropriate confidentiality agreement and
subsequently disclosed by that Person. Nothing in this Section shall be
construed to create or give rise to any fiduciary duty on the part of the Agent
or the Lenders to any Loan Party.
SECTION 11.13 No Third Parties Benefited. This Agreement is made for
--------------------------
the purpose of defining and setting forth certain obligations, rights and duties
of each Loan Party, the Agent and the Lenders with respect to the Advances, and
is made for the sole benefit of each Loan Party, the Agent and the Lenders, and
the Agent's and the Lenders' successors and assigns. Except as provided in
Sections 11.08 and 11.10, no other Person shall have any rights of any nature
hereunder or by reason hereof.
SECTION 11.14 Right of Setoff. Upon the occurrence of an Event of
---------------
Default, each Loan Party hereby specifically authorizes each Lender (subject to
the approval of the Majority
- 114 -
Lenders) in which they maintain deposit accounts (whether a general or special
deposit account, other than trust accounts) or a certificate of deposit to
setoff any Obligations owned to the Lenders against such deposit account or
certificate of deposit without prior notice to such Loan Party (which notice is
hereby waived) whether or not such deposit account or certificate of deposit has
then matured. Nothing in this Section shall limit or restrict the exercise by a
Lender of any right to setoff or banker's lien under applicable Law, subject to
the approval of the Majority Lenders.
SECTION 11.15 Judgment Currency.
-----------------
(a) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under any instrument delivered
hereunder in any currency (the "Original Currency") into another currency
(the "Other Currency"), the parties hereto agree, to the fullest extent
permitted by law, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the
Original Currency with the Other Currency on the Business Day preceding
that on which final judgment is given.
(b) The obligation of each Loan Party in respect of any sum due
from it hereunder in the Original Currency shall, notwithstanding any
judgment in any Other Currency, be discharged only to the extent that on
the Business Day following receipt of any sum adjudged to be so due in such
Other Currency the Agent may in accordance with normal banking procedures
purchase such Original Currency with such Other Currency; if the amount of
the Original Currency so purchased is less than the sum originally due in
the Original Currency, such Loan Party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Lender or Person to
whom such amount was owing against such loss.
SECTION 11.16 Further Assurances. Borrower and its Subsidiaries
------------------
shall do, execute, and deliver such further acts and documents as any Lender or
the Agent from time to time reasonably requires for the assuring and confirming
unto the Lenders or the Agent the rights hereby created or facilitating the
exercise of remedies or other rights available to the Lenders under any Loan
Document.
SECTION 11.17 Integration. This Agreement, together with the other
-----------
Loan Documents, comprises the complete and integrated agreement of the parties
on the subject matter hereof and supersedes all prior agreements, written or
oral, on the
- 115 -
subject matter hereof. Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be construed neither
against nor in favor of any party, but rather in accordance with the fair
meaning thereof.
SECTION 11.18 Governing Law. Each Loan Document shall be governed
-------------
by, and construed and enforced in accordance with the laws of California without
regard to conflicts of laws.
SECTION 11.19 Severability of Provisions. Any provision in any Loan
--------------------------
Document that is held to be inoperative, unenforceable, or invalid as to any
party or in any jurisdiction shall, as to that party or that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the remaining
provisions or the operation, enforceability, or validity of that provision as to
any party or in any other jurisdiction, and to this end the provisions of all
Loan Documents are declared to be severable.
SECTION 11.20 Headings. Article and Section headings in this
--------
Agreement and the other Loan Documents are included for convenience of reference
only and are not part of this Agreement or the other Loan Documents for any
other purpose.
SECTION 11.21 Conflict in Loan Documents. To the extent there is any
--------------------------
actual irreconcilable conflict between the provisions of this Agreement and any
other Loan Document, the provisions of this Agreement shall prevail.
SECTION 11.22 WAIVER OF TRIAL BY JURY. WITH RESPECT TO ANY
-----------------------
PROCEEDING IN A COURT OF LAW, EACH LOAN PARTY (ON ITS BEHALF AND ON BEHALF OF
ITS AFFILIATES) AND THE AGENT AND EACH OF THE LENDERS HEREBY IN ANY EVENT
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF SUCH PERSONS OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH SUCH PERSON HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY TRIAL COURT WITHOUT
A JURY, AND THAT ANY OTHER PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT OF TRIAL BY JURY.
SECTION 11.23 PURPORTED ORAL AMENDMENTS. EACH LOAN PARTY EXPRESSLY
-------------------------
ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE
AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED,
BY AN INSTRUMENT IN
- 116 -
WRITING THAT COMPLIES WITH SECTION 11.02. EACH LOAN PARTY AGREES THAT IT WILL
NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN
STATEMENTS BY ANY REPRESENTATIVE OF AGENT OR ANY LENDER THAT DOES NOT COMPLY
WITH SECTION 11.02 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO
THE AGREEMENT OR THE OTHER LOAN DOCUMENTS.
SECTION 11.24 Amendment and Restatement of Existing Credit Agreement.
------------------------------------------------------
(a) This Agreement amends and restates the Existing Credit Agreement. Advances
outstanding under the Existing Credit Agreement which are not paid or prepaid on
or prior to the Closing Date ("Continuing Advances") and Continuing Letters of
Credit (collectively, the "Continuing Obligations") shall be deemed to continue
as Advances and Letters of Credit continuing outstanding hereunder. Any interest
periods relating to Continuing Advances which are committed advances under the
Existing Credit Agreement shall not extend beyond the Closing Date; such
Continuing Advances shall have Interest Period(s) commencing on the Closing
Date. From and after the Closing Date, all Continuing Advances which are
Committed Advances and Swing Line Advances shall bear interest related to the
Applicable Margin set forth herein. Continuing Advances which are Bid Advances
shall continue with the same interest period and shall continue to bear interest
at the existing interest rate. The Borrowers agree to pay to each lender on the
Closing Date all accrued and unpaid interest on Continuing Advances which are
Committed Advances and Swing Line Advances, together with any amounts required
to be paid as a result of any early termination of interest periods relating
thereto under Section 2.20 of the Existing Credit Agreement.
(b) To the extent required to have all Continuing Obligations (other
than Swing Line Advances and Bid Advances) held by each Lender in an amount
equal to each Lender's Pro Rata Share thereof, each Lender that was a party to
the Existing Credit Agreement (a "Selling Lender") hereby agrees to sell and
assign to the other Lenders (the "New Lenders"), and the New Lenders hereby
agree to purchase and assume, without recourse, from the Selling Lenders,
effective as of the Closing Date, all or a portion of the Selling Lenders'
Continuing Obligations.
(c) Each Selling Lender severally represents and warrants to each New
Lender that it is the legal and beneficial owner of the Continuing Obligations
it is assigning hereunder and that such obligations are free and clear of any
adverse claim. Other than as provided above, none of the Selling Lenders makes
any representation or warranty and assumes no responsibility with respect to the
Existing Credit Agreement or any other instrument or document furnished pursuant
thereto, the financial condition
- 117 -
of the Borrowers, or the performance or observance by the Borrowers of the
Continuing Obligations.
(d) Notwithstanding anything to the contrary in this Agreement, no
New Lender shall be entitled to any portion of any fee previously paid under the
Existing Credit Agreement in respect of any Continuing Letter of Credit.
(e) Delivery of the compliance certificate otherwise due under the
Existing Credit Agreement on September 28, 1995 is hereby waived.
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- 118 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
BORROWER:
--------
SUNRISE MEDICAL, INC.,
as Borrower and as a Guarantor
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
GUARANTORS
----------
BIO CLINIC CORPORATION
DEVILBISS HEALTH CARE, INC.
GUARDIAN PRODUCTS, INC.
▇▇▇ MEDICAL LTD.
JOERNS HEALTHCARE, INC.
QUICKIE DESIGNS, INC.
SUNMED FINANCE, INC.
SUNMED SERVICE, INC.
SUNRISE MARIN HOLDINGS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
(Signatures continue)
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a
Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇▇▇▇▇
Assistant Vice President
BANK OF AMERICA ILLINOIS [(as
a Selling Lender for purposes
of Section 11.24 only)]
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
- ▇▇▇ -
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VICE PRESIDENT
- 121 -
ABN AMRO BANK, Los Angeles
International Branch
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: ASSISTANT VICE PRESIDENT
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
VICE PRESIDENT
- 122 -
UNION BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
- 123 -
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT
- 124 -
DEUTSCHE BANK AG, Los Angeles
Branch and/or Cayman Islands
Branch
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Branch
Manager
- 125 -
PNC BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Manager
- 126 -
SCHEDULE 1.01(a)
----------------
AGENT'S ACCOUNTS
----------------
CURRENCY ACCOUNT
-------- -------
US Dollars Bank of America, San Francisco, Account
No. 12339-15444
Pounds Sterling Bank of America, London, Account No. ▇▇▇▇▇▇▇▇
Danish Krone Bank of America Account No.
Dutch Guilders Bank of America Account No.
Deutsche Marks Bank of America, Frankfurt, Account No. ▇▇▇▇▇▇▇▇
Japanese Yen Bank of America, Tokyo, Account No. ▇▇▇▇▇▇▇▇
Swiss Francs Bank of America, Zurich, Account No. ▇▇▇▇▇▇▇▇
French Francs Bank of America, Paris, Account No. ▇▇▇▇▇▇▇▇
Belgian Francs Bank of America, Brussels, Account No. ▇▇▇▇▇▇▇▇
Portuguese Escudo Bank of America Account No.
Spanish Peseta Bank of America, Madrid, Account No. ▇▇▇▇▇▇▇▇
Canadian Dollars Bank of America, Toronto, Account No. 65067-226
ECU Bank of America, Brussels, Account No. ▇▇▇▇▇▇▇▇
Italian Lira Bank of America, Milan, Account No. ▇▇▇▇▇▇▇▇
Australian Dollars Bank of America, Sydney, Account No. ▇▇▇▇▇▇▇▇
Swedish Krona Bank of America, London, Account No. ▇▇▇▇▇▇▇▇
Norwegian Krona Bank of America, London, Account No. ▇▇▇▇▇▇▇▇
N - 2
SCHEDULE 1.01(B)
Commitment and Pro Rata Share
-----------------------------
Lender Commitment Pro Rata Share
------ ---------- --------------
Bank of America National Trust
and Savings Association $ 67,500,000 24.545454545%
NationsBank of Texas, N.A. 50,000,000 18.181818182%
ABN AMRO Bank, N.V. 50,000,000 18.181818182%
Union Bank 40,000,000 14.545454545%
Deutsche Bank AG 22,500,000 8.181818182%
▇▇▇▇▇▇ Guaranty Trust
Company of New York 22,500,000 8.181818182%
PNC Bank, N.A. 22,500,000 8.181818182%
============ ============
$275,000,000 100%
SCHEDULE 1.01(C)
Subsidiary Borrower Sublimits
-----------------------------
The Subsidiary Borrower Sublimit applicable to each Subsidiary Borrower
shall be an amount equal to the lesser of (a) the requested Alternative Currency
equivalent (determined in accordance with Section 2.19 of the Credit Agreement)
of 80% of such Subsidiary Borrower's assets, determined as of the date of the
most recent financial statements delivered to the Agent pursuant to Section 6.01
of the Credit Agreement, and (b) the requested Alternative Currency equivalent
of US$20,000,000 determined in accordance with Section 2.19 of the Credit
Agreement; provided, that the amount of all Subsidiary Borrower Sublimits in the
--------
aggregate shall not exceed at any time the requested Alternative Currency
equivalent of US$150,000,000 determined in accordance with Section 2.19 of the
Credit Agreement.
SCHEDULE 5.04
SUBSIDIARIES OF SUNRISE MEDICAL, INC.
-------------------------------------
GUARANTORS
----------
NAME OF SUBSIDIARY INCORPORATION OWNERSHIP %
Bio Clinic Corporation Delaware 100
Guardian Products Inc. California 100
▇▇▇ Medical Ltd. Delaware 100
Joerns Healthcare, Inc. Wisconsin 100
Quickie Designs Inc. California 100
SunMed Finance Inc. Delaware 100
SunMed Service Inc. Delaware 100
Sunrise Marin Holdings, Inc. California 100
DeVilbiss Health Care, Inc. Delaware 100
SCHEDULE 5.04
SUBSIDIARIES OF SUNRISE MEDICAL, INC.
-------------------------------------
NAME OF SUBSIDIARY INCORPORATION OWNERSHIP %
Bio Clinic Corporation Delaware 100
▇▇▇▇▇ Healthcare, Inc. (I) California 100
Caremate, Inc. (I) Delaware 100
Guardian Products Inc. California 100
Comfort Research, Inc. (I) California 100
▇▇▇ Medical Ltd. Delaware 100
Joerns Healthcare, Inc. Wisconsin 100
Quickie Designs Inc. California 100
Motion Designs Virgin Islands, Inc. U.S. Virgin Islands 100
SunMed Finance Inc. Delaware 100
SunMed Service Inc. Delaware 100
Sunrise Marin Holdings, Inc. California 100
Sunrise Dallas Holdings, Inc. (I) Delaware ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. Canada 100
Sunrise Medical Holdings B.V. Netherlands 100
Norsk Rehab AS Norway 100
Sopur Medizintechnik GmbH Germany ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 100
Sopur Forschung und
Entwichlung GmbH Germany 100
Reha Vertrieb ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ GmbH Netherlands 100
Sunrise Medical B.V. Netherlands 100
Sunrise Medical S.A.R.L. France 100
Talleres ▇▇▇▇▇▇▇▇ ▇.▇. Spain 100
Sunrise Medical S.R.L. Italy 100
Homecare Holdings France, S.A. France 100
SCI La Planche S.A. France 100
Corona-Sepac S.A. France 100
Tecktona Sante S.A. Italy ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.▇. ▇▇▇▇▇▇ 100
Sunrise Medical Ltd. United Kingdom 100
BEC Mobility Ltd. United Kingdom 100
Minivator Ltd. United Kingdom 100
DeVilbiss Health Care, Inc. Delaware 100
Nihon Sunrise Medical KK Japan 100
Homecare Health Products (UK)
Limited United Kingdom 100
DeVilbiss Health Care (UK)
Holdings Ltd. United Kingdom ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ (▇▇)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100
Homecare (Deutschland) GmbH Germany 100
DeVilbiss Medzinische
Produckte (Deutschland)
GmbH Germany 100
DeVilbiss Health Care (Europa)
GmbH Germany 100
Rehabvision A.B. Sweden 100
Vitactiv A.B. Sweden 100
Livskvalitet ▇▇▇▇▇ ▇▇▇▇▇▇ A.B. Sweden 100
Sunrise Medical PTY Limited ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇ 100
Sunrise DeVilbiss Polska SP z.o:o. Poland 100
(I) = Inactive Subsidiary
2
SCHEDULE 5.10
LITIGATION
----------
On August 18, 1995, a lawsuit was filed in the Colorado District Court of
Boulder County, Colorado entitled Alden Laboratories, Inc. v. ▇▇▇▇ ▇. ▇▇▇,
----------------------------------------
Pressure Relief Technologies, Inc. d/b/a ▇▇▇ Fluid Mattress, Sunrise Medical,
-----------------------------------------------------------------------------
Inc., Quickie Designs, Inc. and ▇▇▇ Medical, Inc. The plaintiff alleges that
-------------------------------------------------
the activities of the defendants during and prior to the acquisition (the
"Acquisition") by the Company of the assets of Pressure Relief Technologies,
Inc. (formerly ▇▇▇ Medical, Ltd.), as the "Seller", constituted a breach of
contract, and other wrongful conduct by the defendants. The Plaintiff seeks
damages in an unspecified amount, injunctive relief and attorneys' fees and
costs. The Company believes that it has substantial defenses to each of the
claims asserted against it and its Subsidiaries, and intends to defend
vigorously against those claims. The Acquisition agreement obligates the Seller
to indemnify the Company against certain of the costs, expenses and losses it
may incur as a consequence of the suit.
SCHEDULE 7.03(A)
INVESTMENTS
-----------
Subsidiaries listed on Schedule 5.04 to this Agreement
one-third ownership of shares in a Benelux limited liability
partnership, United Comfort Industries B.V.
Interest in "Winners on Wheels", a 501(c)(3) organization
SCHEDULE 11.06
EUROCURRENCY AND DOMESTIC LENDING OFFICES,
------------------------------------------
ADDRESSES FOR NOTICES
---------------------
BORROWERS
---------
Sunrise Medical, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
and Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
------------------------------
AND SAVINGS ASSOCIATION,
-----------------------
as Agent
Bank of America National Trust
and Savings Association
Agency Management Services #5596
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-1-
BANK OF AMERICA NATIONAL TRUST
------------------------------
AND SAVINGS ASSOCIATION,
-----------------------
as a Lender
Domestic and Eurocurrency Lending Office:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
Bank of America National Trust
and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Assistant Vice President
Credit Products #5618
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
ABN AMRO BANK,
--------------
Los Angeles International Branch
--------------------------------
ABN AMRO Bank, Los Angeles International Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONSBANK OF TEXAS, N.A.
-------------------------
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
- 2 -
UNION BANK
----------
Union Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Corporate Banking, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
- 3 -
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
-----------------------------------------
▇▇▇▇▇▇ Guaranty Trust Company of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ Guaranty Trust Company of New York
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
DEUTSCHE BANK AG
----------------
Deutsche Bank AG
Los Angeles Branch and/or
Caymen Islands Branch
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Deutsche Bank, New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (212)
PNC BANK, N.A.
--------------
PNC Bank, N.A.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
- 4 -
EXHIBIT A
---------
FIRST AMENDED AND RESTATED
--------------------------
COMMITTED ADVANCE NOTE
----------------------
September 29, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, the undersigned, [Sunrise Medical, Inc., a
Delaware corporation] [Subsidiary Borrower] (the "Borrower"), promises to pay to
the order of ___________________, (the "Lender"), the aggregate principal amount
of Committed Advances as may be made by the Lender to the Borrower pursuant to
the Credit Agreement referred to below, together with interest on the principal
amount of each Committed Advance made hereunder and remaining unpaid from time
to time from the date of each such Committed Advance until the date of payment
in full, payable as hereinafter set forth.
Reference is made to the Second Amended and Restated Credit Agreement
dated as of September 29, 1995, by and among the Borrower, the Subsidiary
Borrowers, the Guarantors, the Lenders party thereto (the "Lenders"), and Bank
of America National Trust and Savings Association, as Agent for the Lenders (as
amended, further restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"), which amends and restates a First Amended and Restated
Credit Agreement dated as of August 17, 1994, among the Borrower, the subsidiary
borrowers and guarantors thereunder, the lenders parties thereto and Agent,
which amends a Credit Agreement dated as of December 12, 1991, as amended, by
and among the Borrower, the subsidiary borrowers parties thereto, the guarantors
party thereto, the lenders party thereto, and Agent as agent for the Lenders
(the "Existing Credit Agreement"). Terms defined in the Credit Agreement and
not otherwise defined herein are used herein with the meanings assigned thereto
in the Credit Agreement.
This is one of the Committed Advance Notes referred to in the Credit
Agreement, amends and restates the borrower note, if any, issued to the Lender
under the Existing Credit Agreement, and any holder hereof is entitled to all of
the rights, remedies, benefits and privileges provided for in the Credit
Agreement as originally executed or as it may from time to time be supplemented,
modified or amended. The Credit Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events upon the terms and conditions therein specified.
A - 1
The principal indebtedness evidenced by this Committed Advance Note
shall be payable as provided in the Credit Agreement and in any event on the
Final Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal
amount of Committed Advances from the date first written above until payment in
full and shall accrue and be payable at the rates and on the dates set forth in
the Credit Agreement both before and after default and before and after maturity
and judgment, with interest on overdue principal and interest to bear interest
at the rate set forth in Section 2.05 of the Credit Agreement, to the fullest
extent permitted by applicable law.
Each payment hereunder (except with respect to Committed Advances
denominated in an Alternative Currency) shall be made to the Agent at Agent's
Account for the account of the Lender in immediately available funds not later
than 12:00 noon (San Francisco time) on the day of payment (which must be a
Business Day). All such payments received after 12:00 noon (San Francisco time)
on any particular Business Day shall be deemed received on the next succeeding
Business Day. All such payments shall be made in lawful money of the United
States of America.
Each payment hereunder with respect to Committed Advances denominated
in an Alternative Currency shall be made to the Agent at Agent's Account for
such Alternative Currency is maintained for the account of the Lender in
immediately available funds not later than 9:00 a.m. (local time) on the day of
payment (which must be a Business Day). All such payments received after 9:00
a.m. (local time) on any particular Business Day shall be deemed received on the
next succeeding Business Day. All such payments shall be made in lawful money
of the applicable Alternative Currency.
The Lender shall use its best efforts to keep a record of Committed
Advances made by it and payments received by it with respect to this Committed
Advance Note, and such record shall be presumptive evidence of the amounts owing
under this Committed Advance Note; provided, however, that the failure of the
-------- -------
Lender to make, or an error in making, a notation thereon with respect to any
Committed Advance shall not limit or otherwise affect the obligations of the
Borrower hereunder or under the Credit Agreement.
The undersigned hereby promises to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigned's obligations
hereunder or in enforcing or attempting to enforce any of such holder's rights
hereunder, including reasonable attorneys' fees and disbursements, whether or
not an action is filed in connection therewith.
A - 2
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable laws.
This Committed Advance Note shall be delivered to and accepted by the
Lender in the State of California, and shall be governed by, and construed and
enforced in accordance with, the local Laws thereof.
[SUNRISE MEDICAL, INC.,
a Delaware corporation]
[SUBSIDIARY BORROWER]
By: ______________________________
Name:
Title:
A - 3
EXHIBIT B
---------
BID ADVANCE NOTE
----------------
September 29, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, the undersigned, Sunrise Medical, Inc., a Delaware
corporation (the "Borrower"), promises to pay to the order of
____________________ (the "Holder"), the aggregate principal amount of all Bid
Advances as may be made by the Holder to the Borrower pursuant to the Credit
Agreement referred to below, together with interest on the principal amount of
each Bid Advance made hereunder and remaining unpaid from time to time from the
date of each such Bid Advance until the date of payment in full, payable as
hereinafter set forth.
Reference is made to the Second Amended and Restated Credit Agreement
dated as of September 29, 1995, by and among the Borrower, the Subsidiary
Borrowers, the Guarantors, the Lenders party thereto (the "Lenders"), and Bank
of America National Trust and Savings Association, as Agent for the Lenders (as
amended, further restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"), which amends and restates a First Amended and Restated
Credit Agreement dated as of August 17, 1994, among the Borrower, the subsidiary
borrowers and guarantors thereunder, the lenders parties thereto and Agent,
which amends a Credit Agreement dated as of December 12, 1991, as amended, by
and among the Borrower, the subsidiary borrowers parties thereto, the guarantors
party thereto, the lenders party thereto, and Agent as agent for the Lenders
(the "Existing Credit Agreement"). Terms defined in the Credit Agreement and
not otherwise defined herein are used herein with the meanings assigned thereto
in the Credit Agreement.
This is one of the Bid Advance Notes referred to in the Credit
Agreement, and any holder hereof is entitled to all of the rights, remedies,
benefits and privileges provided for in the Credit Agreement as originally
executed or as it may from time to time be supplemented, modified or amended.
The Credit Agreement, among other things, contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events upon the
terms and conditions therein specified.
The principal indebtedness evidenced by this Bid Advance Note shall be
payable as provided in the Credit Agreement and in any event on the Final
Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal
amount of Bid Advances from the date first written above until payment in full
and shall accrue and be
B - 1
payable at the rates and on the dates set forth in the Credit Agreement both
before and after default and before and after maturity and judgment, with
interest on overdue principal and interest to bear interest at the rate set
forth in Section 2.05 of the Credit Agreement, to the fullest extent permitted
by applicable law.
Each payment hereunder shall be made to the Agent at Agent's Account
for the account of the Holder in immediately available funds not later than
12:00 noon (San Francisco time) on the day of payment (which must be a Business
Day). All such payments received after 12:00 noon (San Francisco time) on any
particular Business Day shall be deemed received on the next succeeding Business
Day. All such payments shall be made in lawful money of the United States of
America.
The Holder shall use its best efforts to keep a record of Bid Advances
made by it and payments received by it with respect to this Bid Advance Note,
and such record shall be presumptive evidence of the amounts owing under this
Bid Advance Note; provided, however, that the failure of the Holder to make, or
-------- -------
an error in making, a notation thereon with respect to any Bid Advance shall not
limit or otherwise affect the obligations of the Borrower hereunder or under the
Credit Agreement.
The undersigned hereby promises to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigned's obligations
hereunder or in enforcing or attempting to enforce any of such holder's rights
hereunder, including reasonable attorneys' fees and disbursements, whether or
not an action is filed in connection therewith.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable laws.
This Bid Advance Note shall be delivered to and accepted by the Holder
in the State of California, and shall be governed by, and construed and enforced
in accordance with, the local Laws thereof.
SUNRISE MEDICAL, INC.,
a Delaware corporation
By: ______________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
B - 2
EXHIBIT C
---------
COMMITMENT ASSIGNMENT AND ACCEPTANCE
------------------------------------
Dated: ______, 199_
THIS COMMITMENT ASSIGNMENT AND ACCEPTANCE ("Agreement"), dated as of
_________________, 19___ is made with reference to that certain Second Amended
and Restated Credit Agreement dated as of September 29, 1995, by and among
Sunrise Medical Inc., a Delaware corporation (the "Borrower"), the Subsidiary
Borrowers, the Guarantors, the Lenders party thereto (the "Lenders"), and Bank
of America National Trust and Savings Association, as Agent for the Lenders (as
amended, further restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"), and is entered into between the "Assignor" described
below, in its capacity as a Lender under the Credit Agreement, and the
"Assignee" described below.
Assignor and Assignee hereby represent, warrant and agree as follows:
1. Definitions. Capitalized terms defined in the Credit Agreement are
-----------
used herein with the meanings set forth for such terms in the Credit Agreement.
As used in this Agreement, the following capitalized terms shall have the
meanings set forth below:
"Assignee" means ________________________________________.
"Assigned Pro-Rata Share" means ______________ % of the Total Commitment of
-----------------------
the Lenders under the Credit Agreement which equals
$____________:
"Assignor" means ________________________________________.
--------
"Effective Date" means ____________, 199___, or such later date as may be
--------------
required pursuant to Section 11.08 of the Credit Agreement.
2. Representations and Warranties of the Assignor. The Assignor
----------------------------------------------
represents and warrants to the Assignee as follows:
(a) As of the date hereof, the Pro-Rata Share of the Assignor is _____% of
the Total Commitment (without giving effect to assignments thereof which have
not yet become effective). The Assignor is the legal and beneficial owner of
the Assigned Pro-Rata Share and the Assigned Pro-Rata Share is free and clear of
any adverse claim.
C - 1
(b) As of the date hereof, the outstanding principal balance of the
Assignor's Facility Usage is as follows:
(i) Committed Advances: $_________.
(ii) Bid Advances: $_________.
(iii) Unfunded participations in
Letters of Credit: $_________.
(iv) Funded participations in
Letters of Credit: $_________.
(v) Participations in Swing Line Advances: $________.
(c) The Assignor has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement and any and all other documents
required or permitted to be executed or delivered by it in connection with this
Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith; and
(d) This Agreement constitutes the legal, valid and binding obligation of
the Assignor.
The Assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrower, any Subsidiary Borrower or
any Guarantor or the performance by Borrower, any Subsidiary Borrower or any
Guarantor of the Obligations, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, or sufficiency of the Credit Agreement or any Loan Document other
than as expressly set forth above.
3. Representations and Warranties of the Assignee. The Assignee hereby
----------------------------------------------
represents and warrants to the Assignor as follows:
(a) The Assignee has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement, and any and al other documents
required or permitted to be executed or delivered by it in connection with this
Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith;
C - 2
(b) This Agreement constitutes the legal, valid and binding obligation of
the Assignee;
(c) The Assignee has independently and without reliance upon the Agent or
Assignor and based on such documents and information as the Assignee has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. The Assignee will, independently and without reliance upon the Agent
or any Lender, and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement;
(d) The Assignee has received copies of such of the Loan Documents
delivered pursuant to Section 4.01 or Section 4.02 of the Credit Agreement as it
has requested, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 of the Credit Agreement;
(e) The Assignee will perform in accordance with its terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; and
(f) The Assignee is an Eligible Assignee.
4. Assignment. On the terms set forth herein, the Assignor, as of the
----------
Effective Date, hereby irrevocably sells, assigns and transfers to the Assignee
all of the rights and obligations of the Assignor under the Credit Agreement,
the other Loan Documents and the Assignor's Notes, if any, to the extent of the
Assigned Pro-Rata Share, and the Assignee irrevocably accepts such assignment of
rights and assumes such obligations from the Assignor on such terms and
effective as of the Effective Date. As of the Effective Date, the Assignee
shall have the rights and obligations of a Lender under the Loan Documents,
except to the extent of any arrangements with respect to payments referred to in
Section 5 hereof. Assignee hereby appoints and authorizes the Agent and the
Issuing Bank to take such action and to exercise such powers under the Credit
Agreement as are delegated to the Agent and the Issuing Bank by Article III and
Article X of the Credit Agreement.
The Assignee's Domestic Lending Office and Eurocurrency Lending Office for
purposes of the Credit Agreement are those offices designated as such on
Schedule I hereto.
5. Payment. On the Effective Date, the Assignee shall pay to the
-------
Assignor, in immediately available funds, an amount equal to the purchase price
of the Assigned Pro-Rata Share, as agreed between the Assignor and the Assignee
pursuant to a letter agreement of even date herewith. Such letter agreement also
sets
C - 3
forth the agreement between the Assignor and the Assignee with respect to the
amount of interest, fees and other payments with respect to the Assigned Pro-
Rata Share which are to be retained by the Assignor.
The Assignor and the Assignee hereby agree that if either receives any
payment of interest, principal, fees or any other amount under the Credit
Agreement or any other Loan Documents which is for the account of the other, it
shall hold the same in trust for such party to the extent of such party's
interest therein and shall promptly pay the same to such party.
6. Principal, Interest, Fees, etc. Any principal that would be payable
------------------------------
and any interest, fees and other amounts that would accrue from and after the
Effective Date to or for the account of the Assignor pursuant to the Credit
Agreement shall be payable to or for the account of the Assignor and the
Assignee, in accordance with their respective interests as adjusted pursuant to
this Agreement.
7. Notes. The Assignor and the Assignee shall make appropriate
-----
arrangements with the Borrower or any Subsidiary Borrower, as the case may be,
concurrently with the execution and delivery hereof so that replacement Bid
Advance Notes and Committed Advance Notes, if any, are issued to the Assignor
and new Note(s) are issued to the Assignee, in each case in principal amounts
reflecting their Pro Rata Shares of the Commitment (as adjusted pursuant to this
Agreement).
8. Further Assurances. Concurrently with the execution of this
------------------
Agreement, the Assignor shall execute two counterpart original Requests for
Registration, in the form of Exhibit A to this Agreement, to be forwarded to the
Agent. The Assignor and the Assignee further agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Agreement, and
the Assignor specifically agrees to cause the delivery of (i) two original
counterparts of this Agreement and (ii) the Request for Registration, to the
Agent for the purpose of registration of the Assignee as a "Lender" pursuant to
Section 11.08 of the Credit Agreement.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL
-------------
OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA. FOR ANY DISPUTE ARISING
IN CONNECTION WITH THIS AGREEMENT, THE ASSIGNEE HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA.
10. Notices. All communications among the parties or notices in
-------
connection herewith shall be in writing, hand
C - 4
delivered or sent by registered airmail, postage prepaid, or by telex, telegram
or cable, addressed to the appropriate party at its address set forth on the
signature pages hereof. All such communications and notices shall be effective
upon receipt.
11. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties and their respective successors and assigns; provided,
however, that the Assignee shall not assign its rights or obligations without
the prior written consent of the Assignor and any purported assignment, absent
such consent, shall be void.
12. Counterparts. This Agreement may be executed in counterparts, each of
------------
which when executed and delivered will be deemed to be an original and both of
which counterparts taken together will be deemed to be but one and the same
instrument. The execution of this Agreement by either party hereto will not
become effective until counterparts hereof have been executed by both parties
hereto.
13. Interpretation. The headings of the various sections hereof are for
--------------
convenience of reference only and shall not affect the meaning or construction
of any provision hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officials, officers or agents thereunto duly
authorized as of the date first above written.
"Assignor"
___________________________________
By: ______________________________
Its: _____________________________
Address: _________________________
________________________
________________________
"Assignee"
___________________________________
By: ______________________________
Its: _____________________________
Address: _________________________
_________________________
C - 5
Exhibit 1 to
Commitment Assignment and Acceptance
Assignee's Domestic Lending Office
and Eurocurrency Lending Office
C - 6
Exhibit A to Commitment Assignment and Acceptance
REQUEST FOR REGISTRATION
------------------------
To: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent, and
Sunrise Medical, Inc., as Borrower
THIS REQUEST FOR REGISTRATION OF ASSIGNEE is made as of the date of
the enclosed Commitment Assignment and Acceptance with reference to that certain
Second Amended and Restated Credit Agreement dated as of September 29, 1995, by
and among Sunrise Medical Inc., a Delaware corporation (the "Borrower"), the
Subsidiary Borrowers, the Guarantors, the Lenders party thereto (the "Lenders"),
and Bank of America National Trust and Savings Association, as Agent for the
Lenders (as amended, further restated, supplemented or otherwise modified from
time to time, the "Credit Agreement").
The Assignor and Assignee described below hereby request that Agent
register the Assignee as a Lender pursuant to Section 11.08 of the Credit
Agreement effective as of the Effective Date described in the Commitment
Assignment and Acceptance.
Enclosed with this Request are two counterpart originals of the
Commitment Assignment and Acceptance as well as the original Bid Advance Note
[and any original Committed Advance Note(s)] in favor of the Assignor in the
aggregate principal amount of $_________. The Assignor and Assignee hereby
jointly request that Agent cause [Borrower/Subsidiary Borrower] to issue a
replacement Bid Advance Note [and Committed Advance Note], dated as of the
Effective Date, pursuant to Section 11.08 of the Credit Agreement in favor of
Assignor in the principal amount of the remainder of its Pro-Rata Share of the
Commitment and in favor of the Assignee in the amount of the Assigned Pro-Rata
Share.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Request for Registration by their duly authorized officers as of this ___ day of
___, 199__.
"Assignor" "Assignee"
___________________________ ___________________________
By: ______________________ By: ______________________
Its: ________________ Its: ________________
C - 7
CONSENT OF BORROWER
-------------------
TO: The Assignor and Assignee referred to in the above Request for Registration
The undersigned hereby certifies as follows:
1. Borrower has consented, pursuant to the terms of the Loan
Documents, to the assignment by the Assignor to the Assignee of the Assigned
Pro-Rata Share pursuant to the attached Commitment Assignment and Acceptance.
2. Agent has registered the Assignee as a Lender under the Credit
Agreement, effective as of the Effective Date (as defined in the Commitment
Assignment and Acceptance), with a Pro-Rata Share of the Commitment
corresponding to the Assigned Pro-Rata Share and has adjusted the registered
Pro-Rata Share of the Commitment of the Assignor to reflect the assignment of
the Assigned Pro-Rata Share.
Approved:
Sunrise Medical, Inc.,
a Delaware corporation
By:________________________
Its: _____________________
C - 8
EXHIBIT D
---------
CERTIFICATE OF EXTENSION
------------------------
Dated: _______, 199_
Reference is made to that certain Second Amended and Restated Credit
Agreement dated as of September 29, 1995, by and among Sunrise Medical Inc., a
Delaware corporation (the "Borrower"), the Subsidiary Borrowers, the Guarantors,
the Lenders party thereto (the "Lenders"), and Bank of America National Trust
and Savings Association, as Agent for the Lenders (as amended, further restated,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement and not otherwise defined in this
Certificate of Extension ("Certificate") shall have the meanings assigned
thereto in the Credit Agreement. This Certificate is delivered in accordance
with Section 2.10(c) of the Credit Agreement.
1. The undersigned hereby certify that the Final Maturity Date for all
Committed Advances made under the Credit Agreement is hereby extended by
one year to January 15, 200_, pursuant to the Request for Extension, dated
__________, 199_, delivered by Borrower.
2. As of the date hereof, the Total Commitment is $______________.
3. The Amortization Dates will be as follows: January 15, 199_; January 15,
200_ ; January 15, 200_.
IN WITNESS WHEREOF, the Lenders have caused this
D - 1
Certificate of Extension to be executed and delivered by their respective
officers or agents thereunto duly authorized as of the date first above written.
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:_______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Lender
By: ______________________________
Name:
Title:
[LENDERS]
By: ______________________________
Name:
Title:
D - 2
EXHIBIT E
---------
NOTICE OF BORROWING
-------------------
Dated: ____, 199_
1. This NOTICE OF BORROWING is executed and delivered by
[ ] ("Borrower") to Bank of America National Trust
and Savings Association, as Agent ("Agent") pursuant to that certain Second
Amended and Restated Credit Agreement dated as of September 29, 1995, by and
among the Borrower, the Subsidiary Borrowers, the Guarantors, the Lenders party
thereto (the "Lenders"), and Agent, as agent for the Lenders (as amended,
further restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Any terms used herein and not defined herein shall have the
meanings defined in the Credit Agreement.
2. Borrower hereby requests that the Lenders make a Committed
Advance for the account of Borrower pursuant to the Agreement, as follows:
a. Amount of requested Committed Advance: ___________/1/ [; the
Dollar equivalent of such Committed Advance is $______]./2/
[Wire Transfer Instructions:]
b. Date of requested Committed Advance: ____________, 19__.
c. Type of requested Committed Advance (check one box only):
[_] Base Rate Advance
[_] Eurocurrency Rate Committed Advance, denominated in
____________/3/, with a ___-month Interest Period
___________________
1. Insert Dollars or specify Alternative Currency, as appropriate.
2. Insert if Alternative Currency is being requested.
3. Insert Dollars or specify Alternative Currency, as appropriate.
E - 1
d. The Leverage Ratio as of the most recent Compliance Certificate
dated __________, 199_ was _________ and, accordingly, the
Applicable Margin for the Committed Advance requested herein is
__________.
3. In connection with the Committed Advance requested herein,
Borrower hereby represents, warrants and certifies to each Lender that, as of
the date of the Committed Advance requested herein:
a. Each representation and warranty contained in Article V of the
Credit Agreement is true and correct in all material respects, before and after
giving effect to the Committed Advance requested herein and to the application
of the proceeds therefrom, as though made on and as of the date of the Committed
Advance requested herein except to the extent any such representation and
warranty is made as of any other date; and
b. No event has occurred and is continuing, or would result from the
Committed Advance requested herein or from the application of the proceeds
therefrom which constitutes an Event of Default or a Default; and
c. No event or circumstance has occurred since the Closing Date that
constitutes a Material Adverse Effect; and
d. There is not pending, or, to Borrower's knowledge, threatened,
any action, suit, proceeding or investigation against or affecting Sunrise
Medical, Inc. or any of its Subsidiaries or any property of any of them that
constitutes a Material Adverse Effect.
(If any of the foregoing statements is not true and correct, attach a
statement specifying in detail the circumstances thereof and the actions
Borrower is taking or proposes to take with respect thereto.)
4. This Notice of Borrowing is executed on __________, 19__, by an
officer of Borrower, on behalf of Borrower. The undersigned, in such capacity,
hereby certifies each and every matter contained herein to be true and correct.
BORROWER:
[ ], a corporation
By:_______________________________________
Title: ______________________________
E - 2
EXHIBIT F
---------
NOTICE OF CONVERSION/CONTINUATION
---------------------------------
Dated:_______, 199_
1. This NOTICE OF CONVERSION/CONTINUATION is executed and delivered
by [ ] ("Borrower") to Bank of America National
Trust and Savings Association, as Agent, pursuant to that certain Second Amended
and Restated Credit Agreement dated as of September 29, 1995, by and among the
Borrower, the Subsidiary Borrowers, the Guarantors, the Lenders party thereto
(the "Lenders"), and Agent, as agent for the Lenders (as amended, further
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Any terms used herein and not defined herein shall have the
meanings defined in the Credit Agreement.
2. Borrower requests that the Lenders:
a. Convert _________ in principal amount of presently
outstanding [Base Rate/Eurocurrency Committed Rate] Advances,
denominated in Dollars, to [Base Rate/Eurocurrency Rate Committed]
Advances, denominated in Dollars, on _________, 19__ [The Interest
Period for such Eurocurrency Rate Committed Advances is requested to
be _______ months.]
b. Continue as Eurocurrency Rate Committed Advances ________ in
principal amount of presently outstanding Eurocurrency Rate Committed
Advances on _________, 19__. The Interest Period for such
Eurocurrency Rate Committed Advances is requested to be _____ months.
3. In connection with the Conversion/Continuation requested herein,
Borrower hereby represents, warrants and certifies to each Lender that, as of
the date hereof no event has occurred and is continuing, or would result from
the [Conversion/Continuation] requested herein or from the application of the
proceeds therefrom which constitutes an Event of Default or a Default.
(If the foregoing statement is not true and correct, attach a
statement specifying in detail the circumstances thereof and the actions
Borrower is taking or proposes to take with respect thereto.)
F - 1
4. This Notice of Conversion/Continuation is executed on __________,
19__ by an authorized officer of Borrower, on behalf of Borrower. The
undersigned, in such capacity, hereby certifies each and every matter contained
herein to be true and correct.
BORROWER:
[ ]
By: ___________________________________
Title: ____________________________
F - 1
EXHIBIT G
---------
Election to Participate
-----------------------
Dated: ______, 199_
Reference is made to the Second Amended and Restated Credit Agreement dated
as of September 29, 1995, by and among the Borrower, the Subsidiary Borrowers,
the Guarantors, the Lenders party thereto (the "Lenders"), and Bank of America
National Trust and Savings Association, as Agent for the Lenders (as amended,
further restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement and not otherwise
defined in this Election to Participate shall have the meanings assigned thereto
in the Credit Agreement. This Election to Participate is delivered in accordance
with Section 4.03 of the Credit Agreement.
_______________, a Foreign Subsidiary of [ ] ****, hereby
elects to become a Subsidiary Borrower under the Credit Agreement, and agrees to
be bound by all the terms and conditions applicable to a Subsidiary Borrower
under the Credit Agreement as of the date hereof.
This Election to Participate is executed by the parties hereto as of the
date first written above.
Foreign Subsidiary
------------------
[ ]
By:____________________________________
Name:
Title:
(Signatures continue)
____________________
**** Insert Borrower or name of Subsidiary Borrower, as appropriate.
G - 1
SUNRISE MEDICAL, INC.,
as Borrower and as Guarantor
By:________________________________
Name:
Title:
GUARANTORS
----------
By:________________________________
Name:
As [title] for each of the
following corporations:
[List Guarantors]
Accepted and agreed this
____ day of _________, 199_.
[Lenders]
G - 2
EXHIBIT H
---------
REQUEST FOR EXTENSION
---------------------
Dated: _________, 199_
1. This REQUEST FOR EXTENSION is executed and delivered by Sunrise
Medical, Inc., a Delaware corporation ("Borrower") to Bank of America National
Trust and Savings Association, as Agent, pursuant to that certain Second Amended
and Restated Credit Agreement dated as of September 29, 1995, by and among the
Borrower, the Subsidiary Borrowers, the Guarantors, the Lenders party thereto
(the "Lenders"), and Agent, as agent for the Lenders (as amended, further
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Any terms used herein and not defined herein shall have the
meanings defined in the Credit Agreement.
2. Borrower hereby requests that the Lenders extend the Final
Maturity Date for all Committed Advances by one year to January 15, 200_.
3. In connection with the extension requested herein, Borrower
hereby represents, warrants and certifies to each Lender that, as of the date
hereof no event has occurred and is continuing, or would result from the
extension requested herein which constitutes an Event of Default or a Default.
(If any of the foregoing statements is not true and correct, attach a
statement specifying in detail the circumstances thereof and the actions
Borrower is taking or proposes to take with respect thereto.)
4. Borrower has heretofore delivered to the Lenders the financial
statements required under Section 6.01(b) of the Credit Agreement for the
immediately preceding Fiscal Year and the projected financial statements
required under Section 6.01(c) of the Credit Agreement for the forthcoming
Fiscal Years.
5. This Request for Extension is executed on __________, 19__, by a
Senior Officer of Borrower, on behalf of Borrower. The undersigned, in such
capacity, hereby certifies each and every matter contained herein to be true and
correct.
SUNRISE MEDICAL, INC.,
a Delaware corporation
By: _______________________________________
Title: _______________________________
H - 1
EXHIBIT I
---------
COMPLIANCE CERTIFICATE
----------------------
TO: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
Reference is made to that certain Second Amended and Restated Credit
Agreement dated as of September 29, 1995, by and among Sunrise Medical Inc., a
Delaware corporation (the "Borrower"), the Subsidiary Borrowers, the Guarantors,
the Lenders party thereto (the "Lenders"), and Bank of America National Trust
and Savings Association, as Agent for the Lenders (as amended, further restated,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement and not otherwise defined in this
Compliance Certificate ("Certificate") shall have the meanings assigned thereto
in the Credit Agreement.
This Certificate is delivered in accordance with Section 6.01(m) of the
Credit Agreement.
As used herein, "Subject Period" means the fiscal period consisting of the
Fiscal Quarter ending on the date of the attached financial statements and the
three immediately preceding Fiscal Quarters. All balance sheet items are as of
the date of the attached financial statements.
A. COMPLIANCE WITH FINANCIAL COVENANTS
-----------------------------------
Computations showing compliance with Sections 7.03, 7.09, 7.10, 7.11 and
7.14 of the Credit Agreement are as follows:
1. 7.03; Investments and Acquisitions. As of the date of the attached
----------------------------------
financial statements:
A. The purchase prices paid for, and the Indebtedness assumed in,
Acquisitions of the stock or assets of a Person engaged in business of
the same general type as that of the Borrower and its Subsidiaries
made (i) during the period commencing on June 30, 1995 and ending on
December 31, 1995, or (ii) during the calendar year to the date of the
attached financial statements, and the dates of such Acquisitions, are
as follows:
I - 1
Price/Indebtedness
Acquisition Date Assumed
----------- ---- ------------------
Total: $_________
B. Shareholders Equity (before giving effect to
each Acquisition) : $_________
C. 25% of Shareholders Equity (Line 1B x 25%): $_________
Maximum Permitted: (x) 25% of Shareholders Equity (before giving
effect to each Acquisition) during the period commencing on June 30,
1995 and ending on December 31, 1995, and (y) thereafter, 25% of
Shareholders Equity (before giving effect to each Acquisition) during
any calendar year period.
2. 7.09; Leverage Ratio. As of the date of the attached financial
--------------------
statements, the Leverage Ratio was ___:1.00.
The foregoing ratio is computed as follows:
A. Consolidated Funded Indebtedness:
1. Principal amount of all obligations
and liabilities for borrowed money: $_________
2. Portion of obligations with respect
to capital leases which is capitalized
in the consolidated balance sheet: $_________
3. All Contingent Obligations for Persons
other than Borrower and its
Subsidiaries (without duplication): $_________
4. Consolidated Funded Indebtedness
(Lines A1+A2+A3): $
=========
B. Consolidated EBITDA:
1. Consolidated Net Income for Subject
Period: $_________
2. Interest Charges for Subject
Period: $_________
I - 2
3. Taxes on Consolidated Net
Income for Subject Period: $_________
4. Depreciation and amortization
for Subject Period: $_________
5. Consolidated EBITDA
(Lines B1+B2+B3+B4): $
=========
C. Leverage Ratio (Line A4 divided
by Line B5): to 1:00
=====
D. Maximum Permitted Leverage Ratio: 3.50 to 1.00
3. 7.10; Minimum Consolidated Tangible Net Worth.
---------------------------------------------
A. Actual Consolidated Tangible Net Worth
for covenant:
1. Shareholders' Equity: $_________
2. Intangible Assets: $_________
a. Intangible Assets per Generally
Accepted Accounting Principles: $_________
b. Intangible Assets counted for
covenant (Line 2a less
----
$72,000,000): $_________
3. Actual Consolidated Tangible Net
Worth for covenant (line A1 less 2b): $
---- =========
B. 50% of Consolidated Net Income after
June 30, 1995 (no reduction for losses): $_________
C. 50% of the net proceeds from issuance
of equity securities of Borrower
after June 30, 1995: $_________
I - 3
D. 50% of Intangible Assets related to
acquisitions completed after June 30, 1995:
50% of Intangible
Acquisition Date Assets
----------- ---- -----------------
Total: $_________
E. Minimum required Consolidated Tangible Net Worth
(Lines B+C+$83,000,000 less Line D): $_________
----
F. Excess (Deficient) Consolidated Tangible
Net Worth (Line A3 less Line E3): $
---- =========
For purposes hereof, the amount of Intangible Assets should be determined
with reference to the applicable foreign exchange rate on the date any such
Intangible Asset was acquired, and no adjustments shall be made to the book
value of Intangible Assets as a result of foreign currency fluctuations.
4. 7.11; Interest Coverage Ratio. As of the date of the attached
-----------------------------
financial statements, the Interest Coverage Ratio was ___:1.00.
The foregoing ratio is computed as follows:
A. Adjusted Cash Flow for the Subject
Period (as computed below): $_________
B. Debt Service for Subject Period
(as computed below): $_________
C. Interest Coverage Ratio (Line A / line B): ___:1.00
D. Minimum Requirement: 1.50:1.00
I - 4
INTEREST COVERAGE RATIO - ADJUSTED CASH FLOW COMPUTATION
--------------------------------------------------------
In the computation of Interest Coverage Ratio, "Adjusted Cash Flow" is
computed as follows, without duplication, and, in the case of depreciation,
amortization, deferred taxes and other non-Cash expenses, including non-Cash
amounts relating to non-recurring charges to the extent that such charges will
not result in future cash outflows, and Interest Charges, in each case only to
the extent deducted from revenues to arrive at Consolidated Net Income for such
fiscal period:
Most First Second Third
Recent Preceding Preceding Preceding
Fiscal Fiscal Fiscal Fiscal
Quarter Quarter Quarter Quarter Total
Consolidated Net Income for that $_______ _______ _______ _______ $_______
fiscal period
plus depreciation and amortization $_______ _______ _______ _______ $_______
plus deferred taxes $_______ _______ _______ _______ $_______
plus other non-Cash expenses, $_______ _______ _______ _______ $_______
including non-Cash amounts relating
to non-recurring charges to the
extent that such charges will not
result in future cash outflows for
that fiscal period
plus Interest Charges expensed $_______ _______ _______ _______ $_______
during that fiscal period
minus Capital Expenditures made by $_______ _______ _______ _______ $_______
Borrower or any Subsidiary during
that fiscal period
minus the aggregate dividends made $_______ _______ _______ _______ $_______
by Borrower to its shareholders and
by any Subsidiary which is not a
wholly-owned subsidiary to its
minority shareholders, during that
fiscal period
equals Adjusted Cash Flow $_______ _______ _______ _______ $_______
I - 5
INTEREST COVERAGE RATIO - DEBT SERVICE COMPUTATION
--------------------------------------------------
In the computation of Interest Coverage Ratio, "Debt Service" is
computed as follows:
Most First Second Third
Recent Preceding Preceding Preceding
Fiscal Fiscal Fiscal Fiscal
Quarter Quarter Quarter Quarter Total
Interest Charges $_______ _______ _______ _______ $_______
for that fiscal
period
Plus Current $_______ _______ _______ _______ $_______
Maturities of
Long-Term Debt
equals Debt $_______ _______ _______ _______ $_______
Service
I - 6
5. 7.14; Restricted Junior Payments.
--------------------------------
A. Restricted Junior Payments made during
the 12-month period ending on the date of
the attached financial statements: $_________
B. Shareholders Equity as of date of
attached financial statements: $_________
C. 15% of Shareholders Equity (Line 5B x 15%): $_________
Maximum Permitted: 15% of Shareholders Equity during such 12-month
period.
D. Amount of purchases and redemptions in
clause (c) of Section 7.14: $_________
Maximum Permitted: $200,000
B. PERFORMANCE OF OBLIGATIONS
--------------------------
A review of the activities of Borrower and its Subsidiaries during the
fiscal period covered by the attached financial statements has been made under
my supervision with a view to determining whether during such fiscal period
Borrower and its respective Subsidiaries performed and observed all of their
respective Obligations under the Loan Documents. Except as described in an
attached document (which includes the response thereto which Borrower has taken
or proposes to take) or in an earlier Compliance Certificate, to the best of my
knowledge, as of the date of this Compliance Certificate there is no Default or
Event of Default.
C. NO MATERIAL ADVERSE CHANGE.
--------------------------
To the best of my knowledge, except as described in an attached document or
in an earlier Compliance Certificate, no Material Adverse Effect has occurred
since the date of the most recent Compliance Certificate delivered to the
Lenders.
Dated: _______________, 19___
SUNRISE MEDICAL, INC.
By: _______________________
Title: ____________________
I - 7
EXHIBIT J
---------
FORM OF COMPETITIVE BID REQUEST
-------------------------------
_____________________, 199__
Bank of America National Trust
and Savings Association,
as Agent
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Management Services #5596
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit Agreement dated
as of September 29, 1995, by and among the undersigned Borrower, the Subsidiary
Borrowers, the Guarantors, the Lenders party thereto (the "Lenders"), and Bank
of America National Trust and Savings Association, as Agent for the Lenders (as
amended, further restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"). Terms defined in the Credit Agreement and not
otherwise defined herein are used herein with the meanings assigned thereto in
the Credit Agreement.
The Borrower hereby requests an auction for Bid Advances. In
connection therewith, this is a Competitive Bid Request for Bid Advances
pursuant to Section 2.08(a) of the Credit Agreement as follows:
(i) The borrowing date (which shall be a Business Day) of the proposed
Bid Borrowing is _______________, 199__.
(ii) The aggregate amount of the proposed Bid Borrowing is
$__________________.
(iii) The proposed Bid Borrowing to be made pursuant to Section 2.08
shall be comprised of [Eurocurrency Rate] [Absolute Rate] Bid Advances.
(iv) The Interest Period[s] for the Bid Advances comprised in the Bid
Borrowing shall be ________________, _______________, ________________
and ________________.
SUNRISE MEDICAL, INC.,
a Delaware corporation
By: _______________________________
Name:
Title:
J - 1
EXHIBIT K
---------
FORM OF INVITATION FOR COMPETITIVE BIDS
---------------------------------------
VIA FACSIMILE
-------------
To the Lenders Listed on Schedule A hereto:
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit Agreement
dated as of September 29, 1995, by and among the Borrower, the Subsidiary
Borrowers, the Guarantors, the Lenders party thereto (the "Lenders"), and Bank
of America National Trust and Savings Association, as Agent for the Lenders (as
amended, further restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"). Terms defined in the Credit Agreement and not
otherwise defined herein are used herein with the meanings assigned thereto in
the Credit Agreement.
Pursuant to Section 2.08(b) of the Credit Agreement, you are hereby
invited to submit offers to make Bid Advances to the Borrower based on the
following specifications:
1. Borrowing date: _____________, 1994;
2. Aggregate amount requested by the Borrower $___________;
3. [Eurocurrency Rate Bid Advance] [Absolute Rate Bid Advance]; and
4. Interest Period[s]: _____________, ___________, ______________,
and _____________.
All Competitive Bids must be substantially in the form of Exhibit L to
the Credit Agreement and must be received by the Agent no later than 7:00 A.M.
(San Francisco time) on ____________, 199_.
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as the Agent
By: ______________________________________
Vice President
K - 1
SCHEDULE A
TO
INVITATION FOR COMPETITIVE BIDS
[List Lenders]
K - 1
EXHIBIT L
---------
FORM OF COMPETITIVE BID
-----------------------
________________, 199__
Bank of America National Trust
and Savings Association,
as Agent
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Management Services #5596
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit Agreement
dated as of September 29, 1995, by and among the Borrower, the Subsidiary
Borrowers, the Guarantors, the Lenders party thereto (the "Lenders"), and Bank
of America National Trust and Savings Association, as Agent for the Lenders (as
amended, further restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"). Terms defined in the Credit Agreement and not
otherwise defined herein are used herein with the meanings assigned thereto in
the Credit Agreement.
In response to the Competitive Bid Request of the Borrower dated
______________, 199__ and in accordance with Section 2.08(c) of the Credit
Agreement, the undersigned Lender offers to make Bid Advance[s] thereunder in
the following principal amount[s] at the following interest rates for the
following Interest Period[s]:
Date of Borrowing: ____________________, 199__
Aggregate Maximum Bid Amount: $_______________
I. Interest Period: ___________________
A. Principal Amount: ______________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- ________%]
B. Principal Amount: ______________
Interest:
[Absolute Rate: _______%] or
[Eurocurrency Rate Bid Margin: +/- ________%]
C. Principal Amount: ______________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- ________%]
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D. Principal Amount: ______________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- ________%]
II. Interest Period: _________________
A. Principal Amount: ____________
Interest:
[Absolute Rate: _______%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
B. Principal Amount: ____________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
C. Principal Amount: ____________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
III. Interest Period:
A. Principal Amount: ____________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
B. Principal Amount:
Interest:
[Absolute Rate: _______%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
C. Principal Amount: ____________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
IV. Interest Period: _________________
A. Principal Amount: ____________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
B. Principal Amount: ____________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
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C. Principal Amount: ______________
Interest:
[Absolute Rate: ________%] or
[Eurocurrency Rate Bid Margin: +/- _________%]
[NAME OF LENDER/DESIGNATED BIDDER]
By: ________________________
Title: _____________________
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EXHIBIT M
---------
SUBORDINATED PROMISSORY NOTE
----------------------------
_________________, 199__
FOR VALUE RECEIVED, Sunrise Medical Inc., a Delaware corporation (the "Maker"),
having it's principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ hereby promises to pay ____________________________,
the principal sum of ( ), which principal shall
------------------------------------
be due in five equal payments of ( ) each on
----------------------------------
_________________, 1996, 1997, 1998, 1999 and 2000. The outstanding principal
amount shall bear interest at the rate of ______% per annum, with interest
payable quarterly until this note is fully paid. [The note shall be guaranteed
by the general credit of Sunrise Medical Inc. ("Guarantor"), the 100%
shareholder of __________________________.]
This Note may be prepaid at the option of the Maker in whole at any time or in
part from time to time without notice or penalty. Each such prepayment shall be
applied to accrued but unpaid interest and then to the next installment(s) of
principal becoming due.
This Note is issued pursuant to a _____________________ Purchase Agreement,
dated ___________________, (the "Agreement"), between Sunrise Medical Inc. and
the vendors of ________________________. This Note is subject to provisions of
the Agreement, including, without limitation, adjustment of, and offset to the
principal amount pursuant to the Agreement.
If an Event of Default (as hereinafter defined shall occur, then, at the option
of the holder hereof, and subject to the subordination provisions below, this
Note shall upon presentment become immediately due and payable.
An "Event of Default" shall be deemed to have occurred hereunder if (a) the
Maker shall fail to make any payment under this Note in full when due and such
failure shall not be cured within twenty (20) days following receipt of written
notice thereof; (b) any proceeding shall be commenced by the Maker, as debtor,
under any bankruptcy, reorganization, insolvency, readjustment of debt,
arrangement, receivership or liquidation law or statute, and such proceeding is
not dismissed within 60 days or is not timely controverted in good faith and on
reasonable grounds by the Maker or an order of relief is granted in such
proceedings.
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The indebtedness represented by this Note (including the interest thereon) shall
be subordinate and junior in right of payment, to the extent set forth herein,
to the prior payment in full of all indebtedness (including, without limitation,
all interest accrued thereon and all fees and expenses accrued or incurred in
relation thereto) of the Maker or the Guarantor, whether presently existing or
hereafter incurred, and any extensions, renewals or modifications thereof, for
money borrowed from or guaranteed to any banks, trust companies, insurance
companies or other lending institutions (the "Senior Indebtedness").
The indebtedness represented by this Note (including the interest thereon) shall
be equal in priority with all other Acquisition Indebtedness (as hereinafter
defined) including, without limitation, all interest incurred in relation
thereto of the Maker or the Guarantor. "Acquisition Indebtedness" shall mean
all indebtedness of the Maker or the Guarantor incurred in full or partial
payment for the assets or stock associated with business acquired by the Maker
or the Guarantor heretofore except Senior Indebtedness arising as a result of
each acquisition.
No payment shall be made hereunder if an event which would, or which with the
giving of notice or passage of time would, permit any Senior Indebtedness to be
accelerated and to become immediately due at the option of the holder thereof
shall have occurred and be continuing or would occur and exist by virtue of such
payment, and such event shall not have been waived or consented to by the
holders of such Senior Indebtedness.
In the event an Event of Default occurs hereunder, or any voluntary liquidation,
dissolution or other winding up of the Maker or Guarantor, shall occur, all
Senior Indebtedness must first be paid in full before any payment or
distribution of any character shall be made in respect of this Note, and all
payments and distributions which would otherwise (but for the terms hereof) be
payable or deliverable in respect of this Note shall be paid or delivered
directly to the holder of Senior Indebtedness at the time outstanding, in
accordance with the priorities of payment thereof, until all such Senior
Indebtedness shall have been paid in full. If any payment or distribution shall
be received by any holder of this Note in contravention of any of the terms
hereof and before all Senior Indebtedness shall be paid in full, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of the Senior Indebtedness at the time outstanding
for application to the payment of all Senior Indebtedness remaining unpaid, in
accordance with the priorities of payment thereof, to the extent necessary to
pay all Senior Indebtedness in full.
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No act or failure to act on the part of the Maker, and no default or breach of
any agreement of the Maker, whether or not herein set forth, shall in any way
prevent or limit the holder of any Senior Indebtedness from enforcing fully the
subordination herein provided for, irrespective of any knowledge or notice which
such holder hereof may at any time have.
So long as any Senior Indebtedness shall be outstanding, the Maker shall not,
without the prior written consent of the holders thereof, alter or amend any of
the terms of this Note in any manner which might adversely affect the holder of
Senior Indebtedness. Nothing in this Note shall impair or qualify, as between
the Maker and holder hereof, (i) the obligation of the Maker to pay the holder
hereof the principal of and interest on this Note when and as due as set forth
elsewhere herein, or (ii) the rights of the holder hereof upon an Event of
Default, all subject to the rights of the holders of Senior Indebtedness as
provided herein.
The Maker hereby waives all rights to offset against its obligations hereunder
claims which it may now or hereafter have against the payee or subsequent holder
hereof, except for claims arising under the Agreement or any agreement or
instruments entered into pursuant thereto.
If any action should be commenced to collect this Note or any portion thereof,
such sum as the Court may deed reasonable shall be added hereto as attorneys'
fees. The prevailing party shall be entitled to recover its reasonably
attorney's fees and costs of suit.
In the event that any term, covenant, condition, provision or agreement herein
contained is held to be invalid, void or otherwise enforceable by any court of
competent jurisdiction, the fact that such term, covenant, condition, provision
or agreement is invalid, void or otherwise unenforceable shall in no way affect
the validity or enforceability of any other term, covenant, condition, provision
or agreement herein contained.
This Note shall be governed by and construed in accordance with the laws of
_____________________ without regard to principles of conflict of laws, and may
not be amended, modified or cancelled orally.
SUNRISE MEDICAL INC.
By:____________________________
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EXHIBIT N
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DESIGNATED BIDDER AGREEMENT AND ACKNOWLEDGMENT
----------------------------------------------
________________, 199__
Bank of America National Trust
and Savings Association,
as Agent
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Agency Management Services #5596
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Re: Sunrise Medical, Inc.
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit Agreement
dated as of September 29, 1995, by and among Sunrise Medical, Inc., the
Subsidiary Borrowers, the Guarantors, the Lenders party thereto (the "Lenders"),
and Bank of America National Trust and Savings Association, as Agent for the
Lenders (as amended, further restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"). Terms defined in the Credit Agreement
and not otherwise defined herein are used herein with the meanings assigned
thereto in the Credit Agreement. This Designated Bidder Agreement and
Acknowledgment ("Agreement") is entered into pursuant to Section 2.07(b) of the
Credit Agreement.
1. _______________, a Lender under the Credit Agreement, hereby
designates ______________________ (the "Designee") to become a Designated Bidder
under the Credit Agreement.
2. The undersigned hereby jointly and severally represent and
warrant to the Borrowers, the Agent and the Lenders as follows:
(a) The Designee has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement and any and all other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith;
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(b) This Agreement constitutes the legal, valid and binding obligation
of the Designee;
(c) The Designee has independently and without reliance upon the Agent and
based on such documents and information as the Designee has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. The
Designee will, independently and without reliance upon the Agent or any Lender,
and based upon such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement;
(d) The Designee has received copies of such of the Loan Documents
delivered pursuant to Section 4.01 or Section 4.02 of the Credit Agreement as it
has requested, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 of the Credit Agreement;
(e) The Designee will perform all of the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender with respect
to Bid Advances; and
(f) The Designee is a Designated Bidder.
3. The Designee hereby accepts and assumes the rights and
obligations of a Lender with respect to Bid Advances, subject to Section 2.07(b)
of the Credit Agreement, as of the date this Agreement is acknowledged by the
Agent (the "Effective Date"). As the Effective Date, the Designee shall have
such rights and obligations of a Lender under the Loan Documents with respect to
Bid Advances. Designee hereby appoints and authorizes the Agent to take such
actions and to exercise such powers under the Credit Agreement as are delegated
to the Agent by Sections 2.07 and 2.08 and Article X of the Credit Agreement.
The Designee's Domestic Lending Office and Eurocurrency Lending Office
for purposes of the Credit Agreement are those offices designated as such on
Schedule I hereto.
4. Concurrently with the execution of this Agreement, Designee shall
execute two counterpart original Requests for Registration, in the form of
Exhibit A to this Agreement, to be forwarded to the Agent. The undersigned
further agree to execute and deliver such other instruments, and take such other
action, as Agent may reasonably request in connection with the transactions
contemplated by this Agreement.
5. The Designee hereby requests that Sunrise execute and deliver a Bid
Advance Note to evidence Bid Advances made by the undersigned.
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6. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION
UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA. FOR ANY DISPUTE ARISING IN
CONNECTION WITH THIS AGREEMENT, THE DESIGNEE HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA.
7. All communications among the parties or notices in connection
herewith shall be in writing, hand delivered or sent by registered airmail,
postage prepaid, or by telex, telegram or cable, addressed to the appropriate
party at its address set forth on Schedule 1 hereto. All such communications
and notices shall be effective upon receipt.
8. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns; provided, however, that
the Designee shall not assign its rights or obligations, and any purported
assignment shall be void.
9. This Agreement may be executed in counterparts, each of which
when executed and delivered will be deemed to be an original and both of which
counterparts taken together will be deemed to be but one and the same
instrument. The execution of this Agreement by either party hereto will not
become effective until counterparts hereof have been executed by both parties
hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officials, officers or agents
thereunto duly authorized as of the date first above written.
"Lender"
___________________________________
By: ______________________________
Its: _____________________________
"Designee"
___________________________________
By: ______________________________
Its: _____________________________
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Exhibit 1 to
Designated Bidder Agreement and Acknowledgement
Designee's Domestic Lending Office
and Eurocurrency Lending Office.
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Exhibit A to Designated Bidder Agreement and Acknowledgement
REQUEST FOR REGISTRATION
------------------------
To: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
THIS REQUEST FOR REGISTRATION OF DESIGNATED BIDDER is made as of
the date of the enclosed Designated Bidder Agreement and Acknowledgement with
reference to that certain Second Amended and Restated Credit Agreement dated as
of September 29, 1995, by and among Sunrise Medical Inc., a Delaware corporation
(the "Borrower"), the Subsidiary Borrowers, the Guarantors, the Lenders party
thereto (the "Lenders"), and Bank of America National Trust and Savings
Association, as Agent for the Lenders (as amended, further restated,
supplemented or otherwise modified from time to time, the "Credit Agreement").
The undersigned hereby request that Agent register the Designee
as a Designated Bidder under the Credit Agreement effective as of the date this
request is acknowledged by the Agent below.
Enclosed with this Request are two counterpart originals of the
Designated Bidder Agreement and Acknowledgement. The undersigned hereby jointly
request that Agent cause Sunrise to issue a new Bid Advance Note in favor of
Designee in the principal amount of the undersigned Lender's Commitment.
IN WITNESS WHEREOF, the undersigned have executed this Request
for Registration by their duly authorized officers as of this ___ day of ___,
199__.
"Lender" "Designated Bidder"
___________________________ ___________________________
By: ______________________ By: ______________________
Its: ____________________ Its: _____________________
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ACKNOWLEDGEMENT BY AGENT
------------------------
TO: The Lender and Designated Bidder referred to in the above Request for
Registration
The undersigned hereby certifies as follows:
1. Agent hereby acknowledges, pursuant to the terms of the Loan
Documents, to the designation by the Lender of the Designee as a Designated
Bidder pursuant to the attached Designated Bidder Agreement and Acknowledgement.
2. Agent has registered the Designee as a Designated Bidder under
the Credit Agreement, effective as of the date hereof.
Acknowledged:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By:________________________________
Its:
Effective Date: __________________
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