AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
March 29, 1999, is entered into by and among:
(1) ADAC LABORATORIES, a California corporation ("BORROWER");
(2) Each of the financial institutions from time to time
listed in SCHEDULE I hereto, as amended from time to time (such
financial institutions to be referred to herein collectively as the
"LENDERS"); and
(3) ABN AMRO BANK N.V., a Netherlands public company acting
through its San Francisco International Branch, as agent for the
Lenders (in such capacity, "AGENT").
RECITALS
A. Borrower, Agent and certain of the Lenders are parties to
that certain Credit Agreement, dated as of July 31, 1996 (as amended, the
"EXISTING CREDIT AGREEMENT"), pursuant to which such Lenders have provided to
Borrower certain credit facilities upon the terms and subject to the conditions
set forth therein.
B. Borrower has requested Agent and such Lenders to amend the
Existing Credit Agreement in certain respects, including without limitation, to
add a new Person as a Lender and to increase the amount available for borrowing
under the Existing Credit Agreement.
C. Agent, such Lenders and the new Lender have agreed to
amend the Existing Credit Agreement upon the terms and subject to the
conditions set forth herein. For convenience of reference, the parties hereto
wish to restate the Existing Credit Agreement as so amended in its entirety.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the
mutual covenants herein contained, the parties hereto hereby agree that the
Existing Credit Agreement shall be amended and restated as of the date hereof to
read in its entirety as follows
SECTION I. INTERPRETATION.
1.1. DEFINITIONS. Unless otherwise indicated in this Agreement or any
other Credit Document, each term set forth below, when used in this Agreement or
any other Credit Document, shall have the respective meaning given to that term
below or in the provision of this Agreement or other document, instrument or
agreement referenced below.
"ABN" shall mean ABN AMRO Bank N.V., a Netherlands public
company.
"ACQUISITION IN-PROCESS R&D CHARGES" shall mean non-recurring
charges, not to exceed $50,000,000 (pre-tax) in the aggregate, to be
taken by Borrower as a result of write-offs of in process research and
development expenses and charges incurred in connection with the
consummation of acquisitions by Borrower otherwise permitted pursuant
to SUBPARAGRAPH 5.02(d).
"AFFILIATE" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, five percent
(5%) or more of any class of Equity Securities of such Person, (b) each
Person that controls, is controlled by or is under common control with
such Person or any Affiliate of such Person or (c) each of such
Person's officers, directors, joint venturers and partners; PROVIDED,
HOWEVER, that in no case shall Agent or any Lender be deemed to be an
Affiliate of Borrower or any of its Subsidiaries for purposes of this
Agreement. For the purpose of this definition, "control" of a Person
shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise.
"AGENT" shall have the meaning given to that term in CLAUSE
(3) OF THE INTRODUCTORY PARAGRAPH.
"AGENT'S FEE LETTER" shall mean the letter agreement dated as
of March 29, 1999 between Borrower and Agent.
"AGREEMENT" shall mean this Amended and Restated Credit Agreement.
"AMENDED AND RESTATED GUARANTY" shall have the meaning given
to that term in SUBPARAGRAPH 2.12(a).
"AMENDED AND RESTATED NOTES" shall have the meaning given to
that term in SUBPARAGRAPH 2.06(a).
"APPLICABLE LENDING OFFICE" shall mean, with respect to any
Lender, (a) initially, its office designated as such in SCHEDULE I (or,
in the case of any Lender which becomes a Lender by an assignment
pursuant to SUBPARAGRAPH 8.05(c), its office designated as such in the
applicable Assignment Agreement) and (b) subsequently, such other
office or offices as such Lender may designate to Agent as the office
at which such Lender's Loans will thereafter be maintained and for the
account of which all payments of principal of, and interest on, such
Lender's Loans will thereafter be made.
"APPLICABLE MARGIN" shall mean, with respect to any Loan at
any time, the per annum margin which is determined pursuant to the
Pricing Grid and added to the Base Rate or LIBO Rate, as the case may
be, for such Loan; PROVIDED, HOWEVER, that each Applicable Margin
determined pursuant to the Pricing Grid shall be increased by two
percent (2.00%) on the date an Event of Default occurs and shall
continue at such increased rate unless and until such Event of Default
is waived in accordance with this
Agreement.
"ASSIGNEE LENDER" shall have the meaning given to that term
in SUBPARAGRAPH 8.05(c).
"ASSIGNMENT" shall have the meaning given to that term in
SUBPARAGRAPH 8.05(c).
"ASSIGNMENT AGREEMENT" shall have the meaning given to that
term in SUBPARAGRAPH 8.05(c).
"ASSIGNMENT EFFECTIVE DATE" shall have, with respect to
each Assignment Agreement, the meaning set forth therein.
"ASSIGNOR LENDER" shall have the meaning given to that term
in SUBPARAGRAPH 8.05(c).
"BASE RATE" shall mean, on any day, the greater of (a) the
Prime Rate in effect on such date and (b) the Federal Funds Rate for such day
PLUS one-half percent (0.50%).
"BASE RATE LOAN" shall mean, at any time, a Loan which then
bears interest as provided in CLAUSE (i) OF SUBPARAGRAPH 2.01(c).
"BNP" shall mean Banque National de Paris, acting through
its San Francisco Branch.
"BORROWER" shall have the meaning given to that term in
CLAUSE (1) OF THE INTRODUCTORY PARAGRAPH.
"BORROWER NOTE GUARANTIES" shall mean, collectively, all
guaranties executed by Borrower in favor of ABN, Sanwa, BNP or UBOC in
connection with sales by Borrower to such Person of promissory notes or other
instruments of indebtedness owed to Borrower and all other documents,
instruments and agreements executed by Borrower and delivered to such Person
in connection with such sales.
"BORROWING" shall mean a borrowing by Borrower consisting
of the Loans made by each of the Lenders on the same date and of the same
Type pursuant to a single Notice of Borrowing.
"BUSINESS DAY" shall mean any day on which (a) commercial
banks are not authorized or required to close in San Francisco, California or
New York, New York and (b) if such Business Day is related to a LIBOR Loan,
dealings in Dollar deposits are carried out in the London interbank market.
"CAPITAL ADEQUACY REQUIREMENT" shall have the meaning given to
that term in SUBPARAGRAPH 2.09(d).
"CAPITAL ASSET" shall mean, with respect to any Person, any
tangible fixed or
capital asset owned or leased (in the case of a Capital Lease) by such
Person, or any expense incurred by such Person that is required by GAAP to be
reported as a non-current asset on such Person's balance sheet.
"CAPITAL EXPENDITURES" shall mean, with respect to any
Person and any period, all amounts expended by such Person during such period
for the acquisition of Capital Assets (including all amounts paid or accrued
on Capital Assets and other Indebtedness incurred or assumed to acquired
Capital Assets but excluding Capital Assets acquired as a result of a
consolidation or merger with any other Person or the acquisition of
substantially all of the assets of any other Person).
"CAPITAL LEASES" shall mean any and all lease obligations
that, in accordance with GAAP, are required to be capitalized on the books of
a lessee.
"CASH EQUIVALENTS" shall mean:
(a) Direct obligations of, or obligations the
principal and interest on which are unconditionally guaranteed
by, the United States of America or obligations of any agency
of the United States of America to the extent such obligations
are backed by the full faith and credit of the United States
of America, in each case maturing within one year from the
date of acquisition thereof;
(b) Certificates of deposit maturing within one year
from the date of acquisition thereof issued by a commercial
bank or trust company organized under the laws of the United
States of America or a state thereof or that is a Lender,
provided that (A) such deposits are denominated in Dollars,
(B) such bank or trust company has capital, surplus and
undivided profits of not less than $100,000,000 and (C) such
bank or trust company has certificates of deposit or other
debt obligations rated at least A-1 (or its equivalent) by
Standard and Poor's Ratings Group or P-1 (or its equivalent)
by Moody's Investors Service, Inc.;
(c) Open market commercial paper maturing within 270
days from the date of acquisition thereof issued by a
corporation organized under the laws of the United States of
America or a state thereof, provided such commercial paper is
rated at least A-1 (or its equivalent) by Standard and Poor's
Ratings Group or P-1 (or its equivalent) by Moody's Investors
Service, Inc.;
(d) Any repurchase agreement entered into with a
commercial bank or trust company organized under the laws of
the United States of America or a state thereof or that is a
Lender, provided that (A) such bank or trust company has
capital, surplus and undivided profits of not less than
$100,000,000, (B) such bank or trust company has certificates
of deposit or other debt obligations rated at least A-1 (or
its equivalent) by Standard and Poor's Ratings Group or P-1
(or its equivalent) by Moody's Investors Service, Inc., (C)
the repurchase obligations of such bank or trust company under
such repurchase agreement are fully secured by a perfected
security interest in a security or instrument of the type
described in
CLAUSE (i), (ii) OR (iii) above and (D) such security or
instrument so securing the repurchase obligations has a fair
market value at the time such repurchase agreement is entered
into of not less than 100% of such repurchase obligations; and
(e) Other Investments permitted from time to time
under Borrower's corporate investment policy as it exists on
the date of this Agreement and as it may be amended from time
to time with the approval of Agent.
"CHANGE OF CONTROL" shall mean, with respect to Borrower, the
occurrence of any of the following events: (a) any person or group of
persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall (i) acquire beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended) of forty percent (40%) or more of the outstanding
Equity Securities of Borrower entitled to vote for members of the board
of directors or (ii) acquire all or substantially all of the assets of
Borrower and its Subsidiaries taken as a whole or (b) during any period
of twelve (12) consecutive calendar months, individuals who are
directors of Borrower on the first day of such period ("Initial
Directors") and any directors of Borrower who are specifically approved
by two-thirds of the Initial Directors and previously-approved
Directors shall cease to constitute a majority of the Board of
Directors of Borrower before the end of such period.
"CHANGE OF LAW" shall have the meaning given to that term in
SUBPARAGRAPH 2.09(b).
"CLOSING DATE" shall mean the Business Day, not later than
March 31, 1999, that each of the conditions set forth in PARAGRAPH 3.01
and SCHEDULE 3.01 has been satisfied by Borrower or waived in writing
by Agent on behalf of the Lenders.
"COMMITMENT" shall mean, with respect to any Lender at any
time, such Lender's Proportionate Share at such time of the Total
Commitment at such time.
"COMMITMENT FEE PERCENTAGE" shall mean, with respect to the
Unused Commitment at any time, the per annum rate which is determined
pursuant to the Pricing Grid and used to calculate the Commitment Fees.
"COMMITMENT FEES" shall have the meaning given to that term in
SUBPARAGRAPH 2.03(b).
"CONTINGENT OBLIGATION" shall mean, with respect to any
Person, (a) any Guaranty Obligation of that Person; and (b) any direct
or indirect obligation or liability, contingent or otherwise, of that
Person (i) in respect of any Surety Instrument issued for the account
of that Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments, (ii) to purchase any materials,
supplies or other property from, or to obtain the services of, another
Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or
other property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other property is ever
made or tendered, or such services are ever performed or tendered, or
(iii) in respect to any Rate Contract that is not entered into in
connection with a bona fide hedging operation that provides offsetting
benefits to such Person. The amount of any Contingent Obligation shall
(subject, in the case of Guaranty Obligations, to the last sentence of
the definition of "Guaranty Obligation") be deemed equal to the maximum
reasonably anticipated liability in respect thereof, and shall, with
respect to ITEM (b)(iii) of this definition be marked to market on a
current basis.
"CONTRACTUAL OBLIGATION" of any Person shall mean, any
indenture, note, lease, loan agreement, security, deed of trust,
mortgage, security agreement, guaranty, instrument, contract, agreement
or other form of contractual obligation or undertaking to which such
Person is a party or by which such Person or any of its property is
bound.
"CREDIT DOCUMENTS" shall mean and include this Agreement, the
Amended and Restated Notes, the Amended and Restated Guaranty, all Rate
Contracts of Borrower with any Lender related to any Loan and the
Agent's Fee Letter; all other documents, instruments and agreements
delivered to Agent or any Lender pursuant to PARAGRAPH 3.01; and all
other documents, instruments and agreements delivered by Borrower or
any of its Subsidiaries to Agent or any Lender in connection with this
Agreement on or after the date of this Agreement.
"CREDIT EVENT" shall mean the making of any Loan, the
conversion of any Loan into a LIBOR Loan or the selection of a new
Interest Period for any LIBOR Loan.
"DEBT/EBITDA RATIO" shall mean, with respect to Borrower and
its Subsidiaries on the last day of any fiscal quarter, the ratio,
determined on a consolidated basis in accordance with GAAP, of (a) the
sum of the Funded Indebtedness of Borrower and its Subsidiaries at such
time to (b) the EBITDA of Borrower and its Subsidiaries for the
consecutive four-quarter period which ended on the last day of such
fiscal quarter.
"DEFAULT" shall mean any event or circumstance not yet
constituting an Event of Default which with the giving of any notice or
the lapse of any period of time or both, would become an Event of
Default.
"DISCLOSURE LETTER" shall mean the letter from Borrower to
Agent, dated the date of this Agreement, which identifies itself as the
"Disclosure Letter" under this Agreement.
"DOLLARS" and "$" shall mean the lawful currency of the United
States of America and, in relation to any payment under this Agreement,
same day or immediately available funds.
"DOMESTIC SUBSIDIARY" shall mean each Subsidiary of Borrower
which is "domestic" within the meaning of Section 7701(a)(4) of the
IRC.
"EBITDA" shall mean, with respect to Borrower and its
Subsidiaries for any period, the sum of the following, determined on a
consolidated basis in accordance with GAAP:
(a) The net income of Borrower and its Subsidiaries
for such period before provision for income taxes;
PLUS
(b) The sum (to the extent deducted in calculating
such Adjusted Net Income) of (i) all Interest Expenses of
Borrower and its Subsidiaries accrued during such period and
(ii) all depreciation and amortization expenses of Borrower
and its Subsidiaries accrued during such period;
PLUS
(c) To the extent deducted in calculating such net
income for such period under CLAUSE (a) above, all Acquisition
In-Process R&D Charges taken by Borrower and its Subsidiaries
during such period.
"EBITDAR" shall mean, with respect to Borrower and its
Subsidiaries for any period, the sum of the following, determined on a
consolidated basis in accordance with GAAP:
(a) EBITDA of Borrower and its Subsidiaries for such
period;
PLUS
(b) The sum of all lease Rental Obligations of
Borrower and its Subsidiaries accrued during such period.
"EBITDAR/FIXED CHARGE COVERAGE RATIO" shall mean, with respect
to Borrower and its Subsidiaries for any period, the ratio, determined
on a consolidated basis in accordance with GAAP, of:
(a) EBITDAR of Borrower and its Subsidiaries for the
consecutive four-quarter period which ended on the last day of
such fiscal quarter;
TO
(b) The sum of (i) to the extent deducted in
calculating such EBITDAR for such period, all Interest
Expenses of Borrower and its Subsidiaries for such period,
PLUS (ii) to the extent deducted in calculating such EBITDAR
for such period, all payments of Rental Obligations made by
Borrower and its Subsidiaries for such period, PLUS (iii) the
aggregate principal amount of all long-term Indebtedness of
Borrower and its Subsidiaries that matures during the
consecutive four-quarter period immediately following such
period.
"ELIGIBLE ASSIGNEE" shall mean (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (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 a combined
capital and surplus of at least $100,000,000, provided that such bank
is acting through a branch or agency located in the United States; or
(c) a Person that is primarily engaged in the business of commercial
banking and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of
a Person of which a Lender is a Subsidiary, or (iii) a Person of which
a Lender is a Subsidiary.
"EMPLOYEE BENEFIT PLAN" shall mean any employee benefit plan
within the meaning of section 3(3) of ERISA maintained or contributed
to by Borrower or any ERISA Affiliate, other than a Multiemployer Plan.
"ENVIRONMENTAL LAWS" shall mean all Requirements of Law
relating to the protection of human health and the environment,
including, without limitation, all Requirements of Law, pertaining to
reporting, licensing, permitting, transportation, storage, disposal,
investigation, and remediation of emissions, discharges, releases, or
threatened releases of Hazardous Materials, chemical substances,
pollutants, contaminants, or hazardous or toxic substances, materials
or wastes, whether solid, liquid, or gaseous in nature, into the air,
surface water, groundwater, or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of chemical substances, pollutants, contaminants, or
hazardous or toxic substances, materials, or wastes, whether solid,
liquid, or gaseous in nature.
"EQUITY SECURITIES" of any Person shall mean (a) all common
stock, preferred stock, participations, shares, partnership interests
or other equity interests in and of such Person (regardless of how
designated and whether or not voting or non-voting) and (b) all
warrants, options and other rights to acquire any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may from time to time be amended or supplemented,
including any rules or regulations issued in connection therewith.
"ERISA AFFILIATE" shall mean any Person which is treated as a
single employer with Borrower under Section 414 of the IRC.
"EVENT OF DEFAULT" shall have the meaning given to that term
in PARAGRAPH 6.01.
"EXISTING CREDIT AGREEMENT" shall have the meaning given to
that term in the RECITAL B.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per
annum set forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the Federal
Reserve Board (including any such successor publication, "H.15
(519)") for such day opposite the caption "Federal Funds (Effective)".
If on any relevant day, such rate is not yet published in H.15 (519),
the rate for such day shall be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations
for U.S. Government Securities, or any successor publication, published
by the Federal Reserve Bank of New York (including any such successor
publication, the "Composite 3:30 p.m. Quotations") for such day under
the caption "Federal Funds Effective Rate". If on any relevant day,
such rate is not yet published in either H.15 (519) or the Composite
3:30 p.m. Quotations, the rate for such day shall be the arithmetic
means, as determined by Agent, of the rates quoted to Agent for such
day by three (3) Federal funds brokers of recognized standing selected
by Agent.
"FEDERAL RESERVE BOARD" shall mean the Board of Governors of
the Federal Reserve System.
"FINANCIAL STATEMENTS" shall mean, with respect to any
accounting period for any Person, statements of income, shareholders'
equity and cash flows of such Person for such period, and a balance
sheet of such Person as of the end of such period, setting forth in
each case in comparative form figures for the corresponding period in
the preceding fiscal year if such period is less than a full fiscal
year or, if such period is a full fiscal year, corresponding figures
from the preceding annual audit, all prepared in reasonable detail and
in accordance with GAAP.
"FUNDED INDEBTEDNESS" of any Person shall mean, without
duplication:
(a) All obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments and all
other obligations of such Person for borrowed money (including
obligations to repurchase receivables and other assets sold
with recourse);
(b) All obligations of such Person for the deferred
purchase price of property or services (including obligations
under letters of credit and other credit facilities which
secure or finance such purchase price and obligations under
"synthetic" leases), but excluding trade accounts payable,
provided that (A) such accounts arise in the ordinary course
of business and are not evidenced by a note or similar
instrument and (B) no material part of any such account is
more than ninety (90) days past due (unless subject to a bona
fide dispute and for which adequate reserves have been
established);
(c) All obligations of such Person under conditional
sale or other title retention agreements with respect to
property acquired by such Person (to the extent of the value
of such property if the rights and remedies of the seller or
lender under such agreement in the event of default are
limited solely to repossession or sale of such property);
(d) All obligations of such Person as lessee under
or with respect to Capital Leases;
(e) All non-contingent payment or reimbursement
obligations of such Person under or with respect to Surety
Instruments;
(f) All Guaranty Obligations of such Person with
respect to the obligations of other Persons of the types
described in CLAUSES (a) - (e) above; and
(g) All obligations of other Persons of the types
described in CLAUSES (a) - (e) above to the extent secured by
(or for which any holder of such obligations has an existing
right, contingent or otherwise, to be secured by) any Lien in
any property (including accounts and contract rights) of such
Person, even though such Person has not assumed or become
liable for the payment of such obligations.
"GAAP" shall mean generally accepted accounting principles and
practices as in effect in the United States of America from time to
time, consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any domestic or foreign
national, state or local government, any political subdivision thereof,
any department, agency, authority or bureau of any of the foregoing, or
any other entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including, without limitation, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, the Comptroller of the
Currency, any central bank or any comparable authority.
"GOVERNMENTAL CHARGES" shall mean, with respect to any Person,
all levies, assessments, fees, claims or other charges imposed by any
Governmental Authority upon such Person or any of its property or
otherwise payable by such Person.
"GOVERNMENTAL RULE" shall mean any law, rule, regulation,
ordinance, order, code interpretation, judgment, decree, directive,
guidelines, policy or similar form of decision of any Governmental
Authority.
"GUARANTY OBLIGATION" shall mean, with respect to any Person,
any direct or indirect liability of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation
(the "primary obligations") of another Person (the "primary obligor"),
including any obligation of that Person, whether or not contingent, (a)
to purchase, repurchase or otherwise acquire such primary obligations
or any property constituting direct or indirect security therefor, or
(b) to advance or provide funds (i) for the payment or discharge of any
such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, or (c) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation, or (d) otherwise to assure or
hold harmless the holder of any such primary obligation against loss in
respect thereof. (Without limiting the generality of the foregoing
definition, the Guaranty Obligations of Borrower shall include the
obligations of Borrower under the Borrower Note Guaranties.) The amount
of any Guaranty Obligation shall be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable, the
maximum reasonably anticipated liability in respect thereof.
"HAZARDOUS MATERIALS" shall mean all materials, substances and
wastes which are classified or regulated as "hazardous," "toxic" or
similar descriptions under any Environmental Law or which are
hazardous, toxic, harmful or dangerous to human health.
"INDEBTEDNESS" of any Person shall mean, without duplication:
(a) All obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments and all
other obligations of such Person for borrowed money (including
non-contingent obligations to repurchase receivables and other
assets sold with recourse;
(b) All obligations of such Person for the deferred
purchase price of property or services (including obligations
under letters of credit and other credit facilities which
secure or finance such purchase price and obligations under
"synthetic" leases), but excluding trade accounts payable,
provided that (A) such accounts arise in the ordinary course
of business and are not evidenced by a note or similar
instrument and (B) no material part of any such account is
more than ninety (90) days past due (unless subject to a bona
fide dispute and for which adequate reserves have been
established);
(c) All obligations of such Person under conditional
sale or other title retention agreements with respect to
property acquired by such Person (to the extent of the value
of such property if the rights and remedies of the seller or
lender under such agreement in the event of default are
limited solely to repossession or sale of such property);
(d) All obligations of such Person as lessee under or
with respect to Capital Leases;
(e) All obligations of such Person, contingent or
otherwise, under or with respect to Surety Instruments;
(f) All obligations of such Person, contingent or
otherwise, under or with respect to Rate Contracts;
(g) All Guaranty Obligations of such Person with
respect to the obligations of other Persons of the types
described in CLAUSES (a) - (f) above and all other Contingent
Obligations of such Person; and
(h) All obligations of other Persons of the types
described in CLAUSES
(a) - (f) above to the extent secured by (or for which any
holder of such obligations has an existing right,
contingent or otherwise, to be secured by) any Lien in any
property (including accounts and contract rights) of such
Person, even though such Person has not assumed or become
liable for the payment of such obligations.
"INTEREST ACCOUNT" shall have the meaning given to that term
in SUBPARAGRAPH 2.06(b).
"INTEREST EXPENSES" shall mean, with respect to any Person for
any period, the sum, determined on a consolidated basis in accordance
with GAAP, of all interest accruing on the Indebtedness of such Person
during such period (including interest attributable to Capital Leases).
"INTEREST PERIOD" shall mean, with respect to any LIBOR Loan,
the time periods selected by Borrower pursuant to SUBPARAGRAPH 2.01(b)
or SUBPARAGRAPH 2.01(d) which commences on the first day of such Loan
or the effective date of any conversion and ends on the last day of
such time period, and thereafter, each subsequent time period selected
by Borrower pursuant to SUBPARAGRAPH 2.01(e) which commences on the
last day of the immediately preceding time period and ends on the last
day of that time period.
"INVESTMENT" of any Person shall mean any loan or advance of
funds by such Person to any other Person (other than advances to
employees of such Person for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business),
any purchase or other acquisition of any Equity Securities or
Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person
(including any Guaranty Obligations of such Person and any indebtedness
of such Person of the type described in CLAUSE (h) of the definition of
"Indebtedness" on behalf of any other Person); PROVIDED, HOWEVER, that
Investments shall not include (a) accounts receivable or other
indebtedness owed by customers of such Person which are current assets
and arose from sales of inventory in the ordinary course of such
Person's business for ordinary terms or (b) prepaid expenses of such
Person incurred and prepaid in the ordinary course of business.
"IRC" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"LENDERS" shall have the meaning given to that term in CLAUSE
(2) OF THE INTRODUCTORY PARAGRAPH.
"LIBO RATE" shall mean, with respect to any Interest Period
for the LIBOR Loans in any Borrowing consisting of LIBOR Loans, a rate
per annum equal to the quotient of (a) the arithmetic mean (rounded
upward if necessary to the nearest 1/16 of one percent) of the rates
per annum provided to Agent by each of the Reference Banks as the rate
at which Dollar deposits are offered to such Reference Bank in the
London interbank market on the second Business Day prior to the first
day of such Interest Period at or about
11:00 A.M. (London time) (for delivery on the first day of such
Interest Period) in an amount substantially equal to such Reference
Bank's LIBOR Loan in such Borrowing and for a term comparable to
such Interest Period, DIVIDED BY (b) one minus the Reserve
Requirement for such Loans in effect from time to time. If for any
reason any of the Reference Banks fails to provide Agent with a rate
on any day as provided in CLAUSE (a) of the preceding sentence,
Agent shall calculate the LIBO Rate based upon the rate(s) provided
by the remaining Reference Bank(s). The LIBO Rate shall be adjusted
automatically as to all LIBOR Loans then outstanding as of the
effective date of any change in the Reserve Requirement.
"LIBOR LOAN" shall mean, at any time, a Loan which then bears
interest as provided in CLAUSE (ii) OF SUBPARAGRAPH 2.01(c).
"LIEN" shall mean, with respect to any property, any security
interest, mortgage, pledge, lien, charge or other encumbrance in, of,
or on such property or the income therefrom, including, without
limitation, the interest of a vendor or lessor under a conditional sale
agreement, Capital Lease or other title retention agreement, or any
agreement to provide any of the foregoing, and the filing of any
financing statement or similar instrument under the Uniform Commercial
Code or comparable law of any jurisdiction.
"LOAN" shall have the meaning given to that term in
SUBPARAGRAPH 2.01(a).
"MARGIN STOCK" shall have the meaning given to that term in
Regulation U issued by the Federal Reserve Board, as amended from time
to time, and any successor regulation thereto.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (a) the business, assets, operations, prospects or financial or
other condition of Borrower and its Subsidiaries on a consolidated
basis; (b) the ability of Borrower to pay or perform the Obligations in
accordance with the terms of this Agreement and the other Credit
Documents; or (c) the rights and remedies of Agent or any Lender under
this Agreement, the other Credit Documents or any related document,
instrument or agreement.
"MATURITY" shall mean, with respect to any Loan, interest, fee
or other amount payable by Borrower under this Agreement or the other
Credit Documents, the date such Loan, interest, fee or other amount
becomes due, whether upon the stated maturity or due date, upon
acceleration or otherwise.
"MATURITY DATE" shall mean March 29, 2002 or, if such date is
extended from time to time pursuant to SUBPARAGRAPH 2.01(h), any later
date to which so extended.
"MATURITY DATE EXTENSION REQUEST" shall have the meaning given
to that term in SUBPARAGRAPH 2.01(h).
"MULTIEMPLOYER PLAN" shall mean any multiemployer plan within
the meaning of
section 3(37) of ERISA maintained or contributed to by Borrower or
any ERISA Affiliate.
"NET PROCEEDS" shall mean, with respect to any sale or
issuance of any Equity Security or the incurrence of any Indebtedness
by any Person, the aggregate consideration received by such Person from
such sale, issuance or incurrence LESS the sum of the actual amount of
the reasonable fees and commissions payable to Persons other than such
Person or any Affiliate of such Person, the reasonable legal expenses
and the other reasonable costs and expenses directly related to such
sale, issuance or incurrence that are to be paid by such Person.
"NOTICE OF BORROWING" shall have the meaning given to that
term in SUBPARAGRAPH 2.01(b).
"NOTICE OF CONVERSION" shall have the meaning given to that
term in SUBPARAGRAPH 2.01(d).
"NOTICE OF INTEREST PERIOD SELECTION" shall have the meaning
given to that term in SUBPARAGRAPH 2.01(e).
"OBLIGATIONS" shall mean and include, with respect to
Borrower, all loans, advances, debts, liabilities, and obligations,
howsoever arising, owed by Borrower to Agent or any Lender of every
kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising pursuant to the terms of this Agreement or any of the
other Credit Documents, including without limitation all interest,
fees, charges, expenses, attorneys' fees and accountants' fees
chargeable to Borrower or payable by Borrower hereunder or thereunder.
"PARTICIPANT" shall have the meaning given to that term in
SUBPARAGRAPH 8.05(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation,
or any successor thereto.
"PERMITTED INDEBTEDNESS" shall have the meaning given to
that term in SUBPARAGRAPH 5.02(a).
"PERMITTED LIENS" shall have the meaning given to that term
in SUBPARAGRAPH 5.02(b).
"PERSON" shall mean and include an individual, a partnership,
a corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint
venture, a trust or other entity or a Governmental Authority.
"PRICING GRID" shall mean SCHEDULE 1.01(a).
"PRIME RATE" shall mean the per annum rate publicly announced
by ABN from time to time at its Chicago office as its prime commercial
lending rate. The Prime Rate is determined by ABN from time to time as
a means of pricing credit extensions to some customers and is neither
directly tied to any external rate of interest or index nor necessarily
the lowest rate of interest charged by ABN at any given time for any
particular class of customers or credit extensions. Any change in the
Base Rate resulting from a change in the Prime Rate shall become
effective on the Business Day on which each change in the Prime Rate
occurs.
"PROPORTIONATE SHARE" shall mean, with respect to each Lender,
the percentage set forth under the caption "Proportionate Share"
opposite such Lender's name on SCHEDULE I, or, if changed, such
percentage as may be set forth for such Lender in the Register.
"RATE CONTRACTS" shall mean swap agreements (as that term is
defined in Section 101 of the Federal Bankruptcy Reform Act of 1978, as
amended) and any other agreements or arrangements designed to provide
protection against fluctuations in interest or currency exchange rates.
"REFERENCE BANKS" shall mean ABN, Sanwa and BNP.
"REGISTER" shall have the meaning given to that term in
SUBPARAGRAPH 8.05(d).
"RENTAL OBLIGATIONS" shall mean all present and future
obligations of Borrower or any of its Subsidiaries under rental
agreements or leases of real or personal property, other than (a)
obligations that can be terminated by the giving of notice without
liability to Borrower or such Subsidiary in excess of the liability for
rent due as of the date on which such notice is given and under which
no penalty or premium is paid as a result of any such termination, and
(b) current obligations in respect of Capital Leases or "synthetic
leases".
"REPORTABLE EVENT" shall have the meaning given to that term
in ERISA and applicable regulations thereunder.
"REQUIRED LENDERS" shall mean (a) at any time Loans are
outstanding, Lenders holding sixty-six and two-thirds percent (66 2/3%)
or more of the aggregate principal amount of such Loans and (b) at any
time no Loans are outstanding, Lenders whose Proportionate Shares equal
or exceed sixty-six and two-thirds percent (66 2/3%).
"REQUIREMENT OF LAW" applicable to any Person shall mean (a)
the Articles or Certificate of Incorporation and By-laws, Partnership
Agreement or other organizational or governing documents of such
Person, (b) any Governmental Rule applicable to such Person, (c) any
license, permit, approval or other authorization granted by any
Governmental Authority to or for the benefit of such Person or (d) any
judgment, decision or determination of any Governmental Authority or
arbitrator, in each case applicable to or binding upon such Person or
any of its property or to which such Person
or any of its property is subject.
"RESERVE REQUIREMENT" shall mean, with respect to any day in
an Interest Period for a LIBOR Loan, the aggregate of the reserve
requirement rates (expressed as a decimal) in effect on such day for
eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Federal Reserve Board) maintained
by a member bank of the Federal Reserve System. As used herein, the
term "reserve requirement" shall include, without limitation, any
basic, supplemental or emergency reserve requirements imposed on Lender
by any Governmental Authority.
"RESPONSIBLE OFFICER" shall mean, with respect to Borrower,
the Chairman, Chief Executive Officer, Chief Operating Officer,
President, Chief Financial Officer, Treasurer or General Counsel of
Borrower (or, if the titles are changed, the persons having similar
responsibilities for Borrower).
"SANWA" shall mean Sanwa Bank California, a California
banking corporation.
"SECURITY DOCUMENTS" shall mean and include the "Security
Agreement", the "Pledge Agreement", the "IP Security Agreement" (as
each such term is defined in the Existing Credit Agreement), and all
other instruments, agreements, certificates, opinions and documents
(including Uniform Commercial Code financing statements and fixture
filings and landlord waivers) previously delivered to Agent or any
Lender in connection with the Existing Credit Agreement, other than the
Guaranties.
"SUBSIDIARY" of any Person shall mean (a) any corporation of
which more than 50% of the issued and outstanding Equity Securities
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency) is
at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries, (b) any partnership, joint
venture, or other association of which more than 50% of the equity
interest having the power to vote, direct or control the management of
such partnership, joint venture or other association is at the time
owned and controlled by such Person, by such Person and one or more of
the other Subsidiaries or by one or more of such Person's other
Subsidiaries or (c) any other Person included in the Financial
Statements of such Person on a consolidated basis.
"SURETY INSTRUMENTS" shall mean all letters of credit
(including standby and commercial), banker's acceptances, bank
guaranties, shipside bonds, surety bonds and similar instruments.
"TANGIBLE NET WORTH" shall mean, with respect to Borrower and
its Subsidiaries at any time, the remainder at such time, determined on
a consolidated basis in accordance with GAAP, of (a) the total assets
of Borrower and its Subsidiaries MINUS (b) the sum (without limitation
and without duplication of deductions) of (i) the total liabilities of
Borrower and its Subsidiaries, (ii) all reserves established by
Borrower and its Subsidiaries for anticipated losses and expenses (to
the extent not deducted in calculating total assets in CLAUSE (a)
above), (iii) all intangible assets of Borrower and its Subsidiaries
(to the extent included in calculating total assets in CLAUSE (a)
above), including, without limitation, goodwill (including any amounts,
however designated on the balance sheet, representing the cost of
acquisition of businesses and investments in excess of underlying
tangible assets), trademarks, trademark rights, trade name rights,
copyrights, patents, patent rights, licenses, unamortized debt
discount, marketing expenses, organizational expenses, non-compete
agreements and deferred research and development and (iv) all loans
owed to Borrower and its Subsidiaries by officers, directors and
employees of Borrower and its Subsidiaries.
"TAXES" shall have the meaning given to such term in
SUBPARAGRAPH 2.10(a).
"TOTAL COMMITMENT" shall mean, at any time, Seventy Five
Million Dollars ($75,000,000) or, if such amount is reduced pursuant to
SUBPARAGRAPH 2.02(a), the amount to which so reduced and in effect at
such time.
"TYPE" shall mean, with respect to any Loan or Borrowing at
any time, the classification of such Loan or Borrowing by the type of
interest rate it then bears, whether an interest rate based upon the
Base Rate or the LIBO Rate.
"UBOC" shall mean Union Bank of California, a California
banking corporation.
"UNUSED COMMITMENT" shall mean, at any time, the remainder of
(a) the Total Commitment at such time minus (b) the aggregate principal
amount of all Loans outstanding at such time.
1.2. GAAP. Unless otherwise indicated in this Agreement or any other
Credit Document, all accounting terms used in this Agreement or any other Credit
Document shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP. If GAAP
changes during the term of this Agreement such that any covenants contained
herein would then be calculated in a different manner or with different
components, Borrower, the Lenders and Agent agree to negotiate in good faith 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 GAAP;
PROVIDED, HOWEVER, that, until Borrower, the Lenders and Agent so amend this
Agreement, all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.
1.3. HEADINGS. Headings in this Agreement and each of the other
Credit Documents are for convenience of reference only and are not part of the
substance hereof or thereof.
1.4. PLURAL TERMS. All terms defined in this Agreement or any other
Credit Document in the singular form shall have comparable meanings when used in
the plural form and VICE VERSA.
1.5. TIME. All references in this Agreement and each of the other
Credit Documents to a time of day shall mean San Francisco, California time,
unless otherwise indicated.
1.6. GOVERNING LAW. This Agreement and each of the other Credit
Documents (unless otherwise provided in such other Credit Documents) shall be
governed by and construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
1.7. CONSTRUCTION. This Agreement is the result of negotiations
among, and has been reviewed by, Borrower, each Lender, Agent and their
respective counsel. Accordingly, this Agreement shall be deemed to be the
product of all parties hereto, and no ambiguity shall be construed in favor
of or against Borrower, any Lender or Agent.
1.8. ENTIRE AGREEMENT. This Agreement and each of the other Credit
Documents, taken together, constitute and contain the entire agreement of
Borrower, the Lenders and Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter hereof.
1.9. CALCULATION OF INTEREST AND FEES. All calculations of interest
and fees under this Agreement and the other Credit Documents for any period (a)
shall include the first day of such period and exclude the last day of such
period and (b) shall be calculated on the basis of a year of 360 days for actual
days elapsed, except that during any period any Loan bears interest based upon
the Prime Rate, such interest shall be calculated on the basis of a year of 365
or 366 days, as appropriate, for actual days elapsed.
1.10. OTHER INTERPRETIVE PROVISIONS. References in this Agreement to
"Recitals," "Sections," "Paragraphs," "Subparagraphs," "Exhibits" and
"Schedules" are to recitals, sections, paragraphs, subparagraphs, exhibits and
schedules herein and hereto unless otherwise indicated. References in this
Agreement and each of the other Credit Documents to any document, instrument or
agreement (a) shall include all exhibits, schedules and other attachments
thereto, (b) shall include all documents, instruments or agreements issued or
executed in replacement thereof, and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified and
supplemented from time to time and in effect at any given time. References in
this Agreement and each of the other Credit Documents to any statute or other
law (i) shall include any successor statute or law, (ii) shall include all rules
and regulations promulgated under such statute or law (or any successor statute
or law), and (iii) shall mean such statute or law (or successor statute or law)
and such rules and regulations, as amended, modified, codified or reenacted from
time to time and in effect at any given time. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement or any other
Credit Document shall refer to this Agreement or such other Credit Document, as
the case may be, as a whole and not to any particular provision of this
Agreement or such other Credit Document, as the case may be. The words "include"
and "including" and words of similar import when used in this Agreement or any
other Credit Document shall not be construed to be limiting or exclusive. In the
event of any inconsistency between the terms of this Agreement and the terms of
any other Credit Document, the terms of this Agreement shall govern.
SECTION II. CREDIT FACILITY.
2.1. REVOLVING LOAN FACILITY.
(a) LOAN AVAILABILITY. Subject to the terms and conditions of
this Agreement (including the amount limitations set forth in PARAGRAPH
2.02 and the conditions set forth in SECTION III), each Lender
severally agrees to advance to Borrower from time to time during the
period beginning on the Closing Date and ending on the Maturity Date
such loans as Borrower may request under this PARAGRAPH 2.01
(individually, a "LOAN"); PROVIDED, HOWEVER, that (i) the aggregate
principal amount of all Loans made by such Lender at any time
outstanding shall not exceed such Lender's Commitment at such time and
(ii) the aggregate principal amount of all Loans made by all Lenders at
any time outstanding shall not exceed the Total Commitment at such
time. All Loans shall be made on a pro rata basis by the Lenders in
accordance with their respective Proportionate Shares, with each
Borrowing to be comprised of a Loan by each Lender equal to such
Lender's Proportionate Share of such Borrowing. Except as otherwise
provided herein, Borrower may borrow, repay and reborrow Loans until
the Maturity Date.
(b) NOTICE OF BORROWING. Borrower shall request each Borrowing
by delivering to Agent an irrevocable written notice in the form of
EXHIBIT A, appropriately completed (a "NOTICE OF BORROWING"), which
specifies, among other things:
(i) The principal amount of the requested Borrowing,
which shall be in the amount of (A) $100,000 or an integral
multiple of $50,000 in excess thereof in the case of a
Borrowing consisting of Base Rate Loans; or (B) $400,000 or an
integral multiple of $100,000 in excess thereof in the case of
a Borrowing consisting of LIBOR Loans;
(ii) Whether the requested Borrowing is to consist of
Base Rate Loans or LIBOR Loans;
(iii) If the requested Borrowing is to consist of
LIBOR Loans, the initial Interest Period selected by Borrower
for such Loans in accordance with SUBPARAGRAPH 2.01(e); and
(iv) The date of the requested Borrowing, which shall
be a Business Day;
Borrower shall give each Notice of Borrowing to Agent at least three
(3) Business Days before the date of the requested Borrowing in the
case of a Borrowing consisting of LIBOR Loans with Interest Periods of
one month or longer and on or before the date of the requested
Borrowing in the case of any other Borrowing. Each Notice of Borrowing
shall be delivered by first-class mail or facsimile to Agent at the
office or facsimile number and during the hours specified in PARAGRAPH
8.01; PROVIDED, HOWEVER, that Borrower shall promptly deliver to Agent
the original of any Notice of Borrowing initially delivered by
facsimile. Agent shall promptly notify each Lender of the contents of
each Notice of Borrowing and of the amount and Type of (and, if
applicable, the Interest Period for) each Loan to be made by such
Lender as part of the requested Borrowing.
(c) LOAN INTEREST RATES. Borrower shall pay interest on the
unpaid principal amount of each Loan from the date of such Loan until
the maturity thereof, at one of the following rates per annum:
(i) During such periods as such Loan is a Base Rate
Loan, at a rate per annum equal to the Base Rate PLUS the
Applicable Margin therefor, such rate to change from time to
time as the Applicable Margin or Base Rate shall change; and
(ii) During such periods as such Loan is a LIBOR
Loan, at a rate per annum equal at all times during each
Interest Period for such LIBOR Loan to the LIBO Rate for such
Interest Period PLUS the Applicable Margin therefor, such rate
to change from time to time during such Interest Period as the
Applicable Margin shall change.
All Loans in each Borrowing shall, at any given time prior to maturity,
bear interest at one, and only one, of the above rates. The number of
Borrowings consisting of LIBOR Loans shall not exceed seven (7) at any
time.
(d) CONVERSION OF LOANS. Borrower may convert any Borrowing
from one Type of Borrowing to the other Type; PROVIDED, HOWEVER, that
any conversion of a Borrowing consisting of LIBOR Loans into a
Borrowing consisting of Base Rate Loans shall be made on, and only on,
the last day of an Interest Period for such LIBOR Loans. Borrower shall
request such a conversion by an irrevocable written notice to Agent in
the form of EXHIBIT B, appropriately completed (a "NOTICE OF
CONVERSION"), which specifies, among other things:
(i) The Borrowing which is to be converted;
(ii) The Type of Borrowing into which such Borrowing
is to be converted;
(iii) If such Borrowing is to be converted into a
Borrowing consisting of LIBOR Loans, the initial Interest
Period selected by Borrower for such Loans in accordance with
SUBPARAGRAPH 2.01(e); and
(iv) The date of the requested conversion, which
shall be a Business Day.
Borrower shall give each Notice of Conversion to Agent at least three
(3) Business Days before the date of the requested conversion in the
case of a conversion into a Borrowing consisting of LIBOR Loans with
Interest Periods of one month or more and on or before the date of the
requested conversion in the case of a conversion into any other
Borrowing. Each Notice of Conversion shall be delivered by first-class
mail or facsimile to Agent at the office or to the facsimile number and
during the hours specified in PARAGRAPH 8.01; PROVIDED, HOWEVER, that
Borrower shall promptly deliver to Agent the original of any Notice of
Conversion initially delivered by facsimile. Agent shall promptly
notify each Lender of the contents of each Notice of Conversion.
(e) LIBOR LOAN INTEREST PERIODS.
(i) The initial and each subsequent Interest Period
selected by Borrower for a LIBOR Loan shall be one (1) week,
two (2) weeks, one (1) month, two (2) months, th
