SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
June 23, 1994
(Date of earliest event reported)
NATIONAL HEALTH LABORATORIES HOLDINGS INC.
(Exact name or registrant as specified in its charter)
Delaware 1-11353 13-3757370
(State or other (Commission (I.R.S. Employer
jurisdiction or File Identification
organization) Number) Number)
4225 Executive Square
Suite 805
La Jolla, California 92037
(Address of principal executive offices) (Zip Code)
(619) 657-9382
(Registrant's telephone number, including area code)
Page 1 of 12
Exhibit Index is on page 11 of this filing
2
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 22, 1994, National Health Laboratories
Incorporated (the "Company" or "NHL"), the predecessor in
interest of National Health Laboratories Holdings Inc.,
announced that N Acquisition Corp. (the "Purchaser"), a
wholly owned subsidiary of NHL, had accepted for payment
8,361,409 shares of common stock, par value $.01 per share
(the "Shares"), of Allied Clinical Laboratories, Inc., a
Delaware corporation ("Allied"), representing in excess of
99% of all outstanding Shares and constituting all the
Shares tendered as of Midnight, New York City time, on June
21, 1994, pursuant to the Purchaser's tender offer for all
outstanding Shares for a price of $21.50 per Share net to
the seller in cash. 2,768,815 shares of those tendered were
delivered pursuant to the Stock Option Agreements, each
dated as of May 3, 1994, as amended by the Amendments
thereto, each dated as of June 7, 1994, among NHL, the
Purchaser, and Haywood D. Cochrane, Jr. (264,773 shares) and
Warburg, Pincus Capital Company, L.P. (2,504,042 shares),
respectively. On June 23, 1994, the Purchaser paid for such
Shares using the proceeds of the credit facility established
pursuant to the Credit Agreement dated as of June 21, 1994,
among NHL Intermediate Holdings Corp. II, the banks,
financial institutions and other institutional lenders
listed on the signature pages thereof, Citicorp USA Inc., as
administrative agent and certain co-agents for the Lenders
thereunder, thereby becoming the beneficial owner of in
excess of 90% of all Shares then outstanding.
On June 23, 1994, the effective date of the merger
contemplated by the tender offer described above (the
"Merger"), the Purchaser was merged with and into Allied
pursuant to Section 253 of the Delaware General Corporation
Law, with Allied continuing as the surviving corporation and
as a wholly-owned subsidiary of NHL with 100 shares of
common stock outstanding. On June 23, 1994, NHL announced
that the Merger transaction had been completed, at which
time all shares of Allied common stock ceased to be
outstanding and traded, and each Share thereafter
represented a right to receive $21.50 per Share.
The total purchase price for the Allied
acquisition of $190.7 million, including aggregate related
acquisition costs of $6.0 million, has been allocated to the
tangible and identifiable intangible assets and liabilities
of Allied based upon management's preliminary estimates of
their fair value with the remainder allocated to cost in
excess of assets acquired. The allocation of purchase price
Page 2 of 12
Exhibit Index is on page 11 of this filing
3
for the Allied acquisition is subject to revision when
additional information concerning asset and liability
valuations is obtained. In management's opinion, the asset
and liability valuations for the Allied acquisition will not
be materially different from the pro forma financial data
presented. For purposes of presenting pro forma results, no
changes in revenues or expenses have been made to reflect
the result of any modification to operations that might have
been made had the Merger been consummated on the assumed
effective dates of the Merger. The pro forma expenses
include the recurring costs which are directly attributable
to the Merger, such as interest expense and the related tax
effects thereof and the change in depreciation and
amortization expenses resulting from the allocation of the
purchase cost.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
a. Financial Statements of Allied.
For a statement of Allied's financial condition,
see the financial statements included in Allied's Annual
Report on Form 10-K for the year ended December 31, 1993 and
Allied's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994, which are incorporated herein by reference.
b. Pro Forma Financial Information.
PRO FORMA FINANCIAL DATA
The following unaudited pro forma financial data
of the Company are based on the historical consolidated
financial statements of the Company and Allied adjusted to
give effect to the Merger. The Pro Forma Condensed Combined
Consolidated Statement of Earnings Data and Other Data for
the year ended December 31, 1993 and the three months ended
March 31, 1994 give effect to the Merger as if it had
occurred on January 1, 1993. The Pro Forma Condensed
Combined Consolidated Balance Sheet Data give effect to the
Merger as if it had occurred on March 31, 1994. The pro
forma adjustments are based upon available information and
certain assumptions that management believes are reasonable.
The pro forma financial data do not purport to represent
what the Company's results of operations or financial
position would actually have been had the Merger in fact
occurred on January 1, 1993 or March 31, 1994, or to project
the Company's results of operations or financial position
for or at any future period or date. The pro forma
financial data should be read in conjunction with the
historical consolidated financial statements of the Company
and Allied incorporated by reference herein. See "Exhibits".
Page 3 of 12
Exhibit Index is on page 11 of this filing
4
PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET
As of March 31, 1994
Actual Pro Forma Pro Forma
Company Allied Adjustments Combined
(Dollars in Millions)
Assets
Current assets:
Cash and cash
equivalents . . . . . . $ 29.4 $ 3.3 $(190.7) $ 32.7
(26.4)
(11.6)
228.7
Temporary investments . --- 1.4 --- 1.4
Accounts receivable, net 139.4 39.9 (4.0) 175.3
Prepaid expenses and
other . . . . . . . . 26.5 5.5 --- 32.0
Deferred income taxes . 20.2 2.3 --- 22.5
Income taxes receivable 0.9 --- 0.9
------- ------- ------- -------
Total current assets 216.4 52.4 (4.0) 264.8
Property, plant and
equipment, net . . . . . 105.6 33.3 (6.4) 132.5
Intangible assets, net . 294.1 55.7 211.1 505.2
(55.7)
Other assets, net . . . . 16.3 2.6 26.4 51.4
(2.6)
11.6
(2.9)
------- ------- ------- -------
Total assets . . . . $ 632.4 $ 144.0 $ 177.5 $ 953.9
======= ======= ======= =======
Liabilities and
Stockholders' Equity
Current liabilities:
Current portion of
capital lease
obligations . . . . . $ --- $ 0.7 $ --- $ 0.7
Accounts payable . . . 38.4 6.1 --- 44.5
Dividend payable . . . 6.8 --- --- 6.8
Government note, current
portion . . . . . . . 16.0 --- --- 16.0
Acquisition contingent
payments, current portion 13.4 --- 4.8 18.2
Accrued expenses and other 49.4 10.1 6.0 64.2
(1.3)
------- ------- -------- -------
Total current
liabilities . . . 124.0 16.9 9.5 150.4
Revolving Credit Facility --- --- 152.7 152.7
Term Facility . . . . . . --- --- 400.0 400.0
Other senior bank
indebtedness . . . . . 324.0 --- (324.0) ---
Allied Convertible Notes --- 24.0 --- 24.0
Capital lease obligations 9.8 0.4 --- 10.2
Government note . . . . . 7.0 --- --- 7.0
Acquisition contingent
payments . . . . . . . . 13.5 --- 11.6 25.1
Deferred income taxes . . 5.0 7.7 --- 12.7
Other liabilities . . . . 7.0 0.3 1.5 31.3
22.5
------- ------- -------- -------
Total liabilities . 490.3 49.3 273.8 813.4
------- ------- -------- -------
Stockholders' equity:
Common stock . . . . . 1.0 0.1 (0.1) 1.0
Additional paid-in
capital . . . . . . . 226.3 64.7 (64.7) 226.3
Retained earnings . . . 203.3 29.9 (29.9) 201.7
(1.6)
Minimum pension liability
adjustment . . . . . . (2.4) --- (2.4)
Treasury stock, at cost (286.1) --- --- (286.1)
--------- ------- -------- -------
Total stockholders'
equity . . . . . . 142.1 94.7 (96.3) 140.5
-------- ------- -------- -------
Total liabilities
and stockholders'
equity . . . . . $ 632.4 $ 144.0 $ 177.5 $ 953.9
======== ======= ======== =======
See accompanying Notes to Pro Forma Condensed Combined
Consolidated Balance Sheet.
Page 4 of 12
Exhibit Index is on page 11 of this filing
5
[FN]
Notes to Pro Forma Condensed Combined Consolidated Balance
Sheet
Reflects the purchase price of Allied of $190.7
million, including aggregate related acquisition costs
of $6.0 million.
Reflects the establishment of an escrow account to
provide for payment in full of the $24.0 million
outstanding principal amount of the Allied Convertible
Notes and $2.4 million representing related interest
and other expenses.
Reflects the repayment of an existing revolving credit
facility of $324.0 million and borrowings under the
Revolving Credit Facility of $152.7 million and the
Term Facility of $400.0 million; and the payment of
estimated related fees and expenses of $11.6 million
which have been capitalized as deferred financing costs
and included in the caption "Other assets."
Reflects the estimated allocation of the purchase price
paid to the net assets of Allied based upon the fair
market values of such net assets.
(Dollars in Millions)
Estimated Allied acquisition cost . . . . $190.7
Less historical book value of Allied's net
assets at March 31, 1994 . . . . . . . . (94.7)
Elimination of Allied's pre-acquisition
goodwill . . . . . . . . . . . . . . . . 55.7
Write-down of Allied's property, plant and
equipment . . . . . . . . . . . . . . . . 6.4
Record liability for Allied's future
payments on acquisitions . . . . . . . . 16.4
Other adjustments to Allied's net
assets . . . . . . . . . . . . . . . . . 36.6
-------
Allied Acquisition goodwill . . . . . . . $211.1
=======
Reflects the write-off of $2.9 million ($1.6 million
after-tax) of deferred financing costs related to the
repayment of an existing revolving credit facility.
Page 5 of 12
Exhibit Index is on page 11 of this filing
6
PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENT OF EARNINGS
As of December 31, 1994
Actual Pro Forma Pro Forma
Company Allied Adjustments Combined
(Dollars in Millions)
Net sales . . . . . . . . . $760.5 $163.0 $ $923.5
Cost of sales . . . . . . . 444.5 109.9 (1.0) 553.4
------ ------ ------- ------
Gross profit . . . . . 316.0 53.1 1.0 370.1
Selling, general and
administrative expenses . 121.4 34.3 -- 155.7
Amortization of intangibles
and other assets . . . . 9.1 3.2 5.3 17.6
------ ------ ------- ------
Operating income . . 185.5 15.6 (4.3) 196.8
Other income (expenses):
Other gains and expenses,
net . . . . . . . . . . 15.3 -- -- 15.3
Investment income . . . . 1.2 0.5 -- 1.7
Interest expense . . . . (10.9) (2.1) (19.7) (32.7)
------ ------ ------- ------
5.6 (1.6) (19.7) (15.7)
------ ------ ------- ------
Earnings before income
taxes . . . . . . . . . 191.1 14.0 (24.0) 181.1
Provision for income taxes 78.4 5.6 (9.8) 74.2
------ ------ ------ ------
Three Months Ended March 31, 1994
Actual Pro Forma Pro Forma
Company Allied Adjustments Combined
(Dollars in Millions)
Net sales . . . . . . . . . $185.0 $ 46.2 $ $231.2
Cost of sales . . . . . . . 132.3 31.6 (0.3) 163.6
------ ------ ------- ------
Gross profit . . . . . 52.7 14.6 0.3 67.6
Selling, general and 31.0 9.6 -- 40.6
administrative expenses . .
Amortization of intangibles
and other assets . . . . . 3.1 1.0 1.3 5.4
Gain on disposition of
regional assets . . . . . . -- (0.7) -- (0.7)
------ ------ ------- ------
Operating income . . . 18.6 4.7 (1.0) 22.3
Other income (expenses):
Investment income . . . 0.2 0.0 -- 0.2
Interest expense . . . (4.5) (0.5) (3.9) (8.9)
------ ------ ------- ------
(4.3) (0.5) (3.9) (8.7)
------ ------ ------- ------
Earnings before income
taxes . . . . . . . . . . . 14.3 4.2 (4.9) 13.6
Provision for income taxes 6.2 1.7 (2.1) 5.8
------ ------ ------- ------
Net earnings . . . . . $ 8.1 $ 2.5 $ (2.8) $ 7.8
====== ====== ======= ======
Page 6 of 12
Exhibit Index is on page 11 of this filing
7
Notes to Pro Forma Condensed Combined Consolidated Statement
of Earnings
Reflects the effect of purchase accounting adjustments
made as a result of the Allied acquisition as follows:
Three
Months
Year Ended Ended
December 31, 1993 March 31, 1994
(Dollars in Millions)
Reduction in depreciation and amortization of
leasehold improvements $(1.0) $(0.3)
Increase in amortization
of goodwill . . . . . . 5.3 1.3
===== =====
$ 4.3 $ 1.0
===== =====
The following reflects increased interest expense based
upon the pro forma debt capitalization of NHL
Intermediate Holdings Corp. II, an indirect, wholly-
owned subsidiary of the Company ("the Issuer") after
giving effect to the Merger:
Three
Months
Year Ended Ended
December 31, 1993 March 31, 1994
(Dollars in Millions)
Interest on Issuer
indebtedness:
Revolving Credit
Facility . . . . . $ (6.8) $(1.9)
Term Facility . . . . (17.8) (4.9)
Commitment fee on unused
portion of Revolving
Credit Facility . . . . (0.7) (0.2)
Amortization of deferred
financing costs . . . . (2.0) (0.5)
Elimination of interest
expense on repaid debt 6.9 3.4
Elimination of commitment
fees on repaid debt . . 0.3 0.0
Elimination of
amortization of deferred
financing costs on
repaid debt . . . . . . 0.4 0.2
====== =====
$(19.7) $(3.9)
====== =====
In calculating interest expense, the following assumed
interest rates were used:
Three
Year Ended Months
December 31, 1993 Ended
March 31, 1994
Revolving Credit Facility 4.4% 4.9%
Term Facility . . . . . . 4.4 4.9
Commitment fee on unused
portion of Revolving
Credit Facility . . . . 0.4 0.4
Page 7 of 12
Exhibit Index is on page 11 of this filing
8
An increase or decrease in the interest rate of one-quarter
of one percent (0.25%) with respect to the pro forma debt
capitalization of the Issuer would increase or decrease
interest expense as follows:
Three
Months
Year Ended Ended
December 31, 1993 March 31, 1994
(Dollars in Millions)
Revolving Credit Facility $0.4 $0.1
Term Facility . . . . . . 1.0 0.25
Reflects the change in the provision for income taxes
as a result of the pro forma adjustments. Such tax
adjustments were based on the historical effective tax
rates used for the Company's consolidated financial
statements.
Page 8 of 12
Exhibit Index is on page 11 of this filing
9
c. Exhibits
2(a) Agreement and Plan of Merger dated as of
May 3, 1994.
2(b) Agreement dated as of June 7, 1994,
among the Purchaser, Parent and the
Company.
20 Press Release dated June 22, 1994.
99(a) Stock Option Agreement dated as of May
3, 1994, among NHL, N Acquisition Corp.
and Warburg, Pincus Capital Company,
L.P.
99(b) Amendment dated as of June 7, 1994, to
Stock Option Agreement dated as of
May 3, 1994, among the Purchaser, Parent
and Warburg, Pincus Capital Company,
L.P.
99(c) Stock Option Agreement dated as of May
3, 1994, among NHL, N Acquisitions Corp.
and Haywood D. Cochrane, Jr.
99(d) Amendment dated as of June 7, 1994, to
Stock Option Agreement dated as of
May 3, 1994, among the Purchaser, Parent
and Haywood D. Cochrane, Jr.
99(e) Credit Agreement dated as of June 21,
1994, among NHL Intermediate Holdings
Corp. II, the banks, financial
institutions and other institutional
lenders listed on the signature pages
thereof, Citicorp USA Inc., as
administrative agent and certain co-
agents for the lenders thereunder.
Page 9 of 12
Exhibit Index is on page 11 of this filing
10
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
NATIONAL HEALTH LABORATORIES
HOLDINGS INC.,
by /s/ Michael L. Jeub
------------------------------
Name: Michael L. Jeub
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
Date: July 7, 1994
Page 10 of 12
Exhibit Index is on page 11 of this filing
11
EXHIBIT INDEX
Exhibit
Number Exhibit
2(a) Agreement and Plan of Merger dated as of May 3,
1994 (incorporated herein by reference to
Exhibit (c)(1) of Schedule 14D-1 and Schedule 13D
("Schedule 14D-1 and Schedule 13D") of the Company
and the Purchaser filed with the Securities and
Exchange Commission (the "Commission") on May 9,
1994)
2(b) Agreement dated as of June 7, 1994, among the
Purchaser, Parent and the Company (incorporated
herein by reference to Exhibit (c)(7) of Amendment
No. 2 to Schedule 14D-1 and Schedule 13D
("Amendment No. 2") of the Company and the
Purchaser filed with the Commission on June 8,
1994)
20 Press Release, dated June 22, 1994 (incorporated
herein by reference to Exhibit (a)(15) of
Amendment No. 3 to Schedule 14D-1 and Schedule 13D
of the Company and the Purchaser filed with the
Commission on June 22, 1994)
99(a) Stock Option Agreement dated as of May 3, 1994,
among NHL, N Acquisition Corp. and Warburg, Pincus
Capital Company, L.P. (incorporated herein by
reference to Exhibit (c)(2) of Schedule 14D-1 and
Schedule 13D)
99(b) Amendment dated as of June 7, 1994, to Stock
Option Agreement dated as of May 3, 1994, among
the Purchaser, Parent and Warburg, Pincus Capital
Company, L.P. (incorporated herein by reference to
Exhibit (c)(8) of Amendment No. 2 to
Schedule 14D-1 and Schedule 13D)
99(c) Stock Option Agreement dated as of May 3, 1994,
among NHL, N Acquisition Corp. and Haywood
D. Cochrane (incorporated herein by reference to
Exhibit (c)(3) of Schedule 14D-1 and Schedule 13D)
Page 11 of 12
Exhibit Index is on page 11 of this filing
12
Exhibit
Number Exhibit
99(d) Amendment dated as of June 7, 1994, to Stock
Option Agreement dated as of May 3, 1994, among
the Purchaser, Parent and Haywood D. Cochrane, Jr.
(incorporated herein by reference to
Exhibit (c)(9) of Amendment No. 2
99(e) Credit Agreement dated as of June 21, 1994, among
NHL Intermediate Holdings Corp. II, the banks,
financial institutions and other institutional
lenders listed on the signature pages thereof,
Citicorp USA Inc., as administrative agent and
certain co-agents for the lenders thereunder
Page 12 of 12
Exhibit Index is on page 11 of this filing
Exhibit 99(e)
$750,000,000
CREDIT AGREEMENT
Dated as of June 21, 1994
Among
NHL INTERMEDIATE HOLDINGS CORP. II,
as Borrower,
THE BANKS NAMED HEREIN,
as Banks and
CITICORP USA, INC.,
as Administrative Agent
and
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY,
NATIONSBANK OF NORTH CAROLINA, N.A.
and
TORONTO DOMINION (TEXAS), INC.,
as Co-Agents
2
i
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms . . . . . . . . . 2
SECTION 1.02. Computation of Time Periods . . . . . . 29
SECTION 1.03. Accounting Terms . . . . . . . . . . . 29
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances . . . . . . . . . . . . . 29
SECTION 2.02. Making the Advances . . . . . . . . . . 30
SECTION 2.03. Repayment . . . . . . . . . . . . . . . 32
SECTION 2.04. Reduction of the Commitments . . . . . 34
SECTION 2.05. Prepayments . . . . . . . . . . . . . . 35
SECTION 2.06. Interest . . . . . . . . . . . . . . . 36
SECTION 2.07. Interest Rate Determination . . . . . . 37
SECTION 2.08. Fees . . . . . . . . . . . . . . . . . 38
SECTION 2.09. Increased Costs . . . . . . . . . . . . 38
SECTION 2.10. Illegality . . . . . . . . . . . . . . 40
SECTION 2.11. Payments and Computations . . . . . . . 41
SECTION 2.12. Taxes . . . . . . . . . . . . . . . . . 42
SECTION 2.13. Sharing of Payments, Etc . . . . . . . 45
SECTION 2.14. Removal of Bank . . . . . . . . . . . . 46
SECTION 2.15. Conversion of Advances . . . . . . . . 46
SECTION 2.16. Letters of Credit . . . . . . . . . . . 47
SECTION 2.17. Defaulting Lenders . . . . . . . . . . 51
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.02. Conditions Precedent to Each Borrowing 61
SECTION 3.03. Determinations Under Section 3.01 . . . 62
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower . . . . . . . . . . . . . . . . . . . . 62
3
ii
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants . . . . . . . . . 70
(a) Compliance with Laws, Etc . . . . . . . . . 70
(b) Compliance with Environmental Laws . . . . . 70
(c) Maintenance of Insurance. . . . . . . . . . 70
(d) Preservation of Corporate Existence, Etc. . 71
(e) Visitation Rights . . . . . . . . . . . . . 71
(f) Keeping of Books. . . . . . . . . . . . . . 71
(g) Maintenance of Properties, Etc. . . . . . . 71
(h) Tender Offer . . . . . . . . . . . . . . . . . 71
(i) Termination of Financing Statements. . . . . . 73
(j) Performance of Material Contracts. . . . . . 73
(k) Cash Concentration Accounts. . . . . . . . . 73
(l) Interest Rate Hedging. . . . . . . . . . . . 73
(m) Merger. . . . . . . . . . . . . . . . . . . 74
(n) Activities of the Company. . . . . . . . . . 76
(o) Real Estate Collateral. . . . . . . . . . . 76
(p) Net Worth. . . . . . . . . . . . . . . . . . 78
(q) EBITDA to Interest Expense. . . . . . . . . 78
(r) Debt to EBITDA. . . . . . . . . . . . . . . 79
(s) Fixed Charge Coverage Ratio. . . . . . . . . 80
(t) Reporting Requirements. . . . . . . . . . . 81
(u) Monthly Financial Statements. . . . . . . . 85
(v) Transactions with Affiliates. . . . . . . . 85
(w) Use of Proceeds. . . . . . . . . . . . . . . 86
(x) Corporate Separateness. . . . . . . . . . . 86
SECTION 5.02. Negative Covenants. . . . . . . . . . 87
(a) Liens, Etc. . . . . . . . . . . . . . . . . 87
(b) Lease Obligations. . . . . . . . . . . . . . 88
(c) Mergers, Etc. . . . . . . . . . . . . . . . 89
(d) Sales, Etc. of Assets. . . . . . . . . . . . 89
(e) Dividends, Repurchases, Etc. . . . . . . . . 90
(f) Investments. . . . . . . . . . . . . . . . . 91
(g) Change in Nature of Business. . . . . . . . 92
(h) Acquisitions. . . . . . . . . . . . . . . . 93
(i) Accounting Changes. . . . . . . . . . . . . 94
(j) Debt. . . . . . . . . . . . . . . . . . . . 94
(k) Charter Amendments. . . . . . . . . . . . . 95
(l) Prepayments, Etc. of Debt. . . . . . . . . . 95
(m) Amendment, Etc. of Tax Agreement. . . . . . 95
(n) Cancellation, Etc. of Certain Material
Contracts. . . . . . . . . . . . . . . . . . 96
(o) Negative Pledge. . . . . . . . . . . . . . . 96
(p) Partnerships. . . . . . . . . . . . . . . . 96
(q) Capital Expenditures. . . . . . . . . . . . 96
4
iii
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. . . . . . . . . . . . 97
SECTION 6.02. Actions in Respect of the Letters of
Credit Upon Default. . . . . . . . . . . . . . . 101
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. . . . . . . . 101
SECTION 7.02. Administrative Agent's Reliance, Etc. . 102
SECTION 7.03. Citicorp and Affiliates. . . . . . . . 102
SECTION 7.04. Lender Credit Decision. . . . . . . . . 102
SECTION 7.05. Indemnification. . . . . . . . . . . . 103
SECTION 7.06. Successor Administrative Agent. . . . . 103
SECTION 7.07. Co-Agents. . . . . . . . . . . . . . . 104
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. . . . . . . . . . . . 104
SECTION 8.02. Notices, Etc. . . . . . . . . . . . . . 105
SECTION 8.03. No Waiver; Remedies. . . . . . . . . . 105
SECTION 8.04. Costs; Expenses. . . . . . . . . . . . 105
SECTION 8.05. Right of Set-off. . . . . . . . . . . . 107
SECTION 8.06. Binding Effect. . . . . . . . . . . . . 107
SECTION 8.07. Assignments and Participations. . . . . 108
SECTION 8.08. Governing Law; Submission to
Jurisdiction. . . . . . . . . . . . . . . . . . . 111
SECTION 8.09. No Liability of the Issuing Bank. . . . 112
SECTION 8.10. Execution in Counterparts. . . . . . . 112
SECTION 8.11. WAIVER OF JURY TRIAL. . . . . . . . . . 112
5
iv
Schedule I - List of Commitments and Applicable Lending
Offices
Schedule II - Surviving Debt
Schedule III - Properties Subject to Environmental
Assessment Reports
Schedule IV - List of Subsidiaries
Schedule V - List of Authorizations, Etc.
Schedule VI - List of Taxable Years
Schedule VII - List of Existing Debt
Schedule VIII - List of Owned Real Property
Schedule IX - List of Certain Leases of Real Property
Schedule X - List of Investments
Schedule XI - List of Intellectual Property
Schedule XII - List of Mortgaged Property
Schedule XIII - List of Existing Liens
Exhibit A-1 - Form of Term A Note
Exhibit A-2 - Form of Term B Note
Exhibit A-3 - Form of Revolving Credit Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Notice of Borrowing
Exhibit D - Terms of New Debt Securities
Exhibit E - Form of Security Agreement
Exhibit F - Form of Pledge Agreement
Exhibit G - Form of Guaranty
Exhibit H - Form of Subsidiary Guaranty
Exhibit I - Form of Holdings Agreement
6
v
Exhibit J-1 - Form of NHL Solvency Certificate
Exhibit J-2 - Form of the Company Solvency Certificate
Exhibit K - Form of Escrow Agreement
Exhibit L-1 - Opinion of James G. Richmond
Exhibit L-2 - Opinion of Paul, Weiss, Rifkind, Wharton &
Garrison
Exhibit M - Form of Mortgage
Exhibit N - Form of Confidentiality Letter
Exhibit O - Form of Opinion of Company Counsel
7
CREDIT AGREEMENT dated as of June 21, 1994 among NHL
INTERMEDIATE HOLDINGS CORP. II, a Delaware corporation (the
"Borrower"), the banks, financial institutions and other
institutional lenders (the "Banks") listed on the signature
pages hereof and CITICORP USA, INC. ("Citicorp"), as
administrative agent (the "Administrative Agent") for the
Lenders hereunder, and THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY, NATIONSBANK OF NORTH CAROLINA, N.A. and
TORONTO DOMINION (TEXAS), INC., as co-agents (the "Co-Agents").
PRELIMINARY STATEMENTS
(1) National Health Laboratories Incorporated, a
Delaware corporation and a wholly-owned subsidiary of the
Borrower ("NHL"), organized N Acquisition Corp., a Delaware
corporation (the "Purchaser"), to acquire control of Allied
Clinical Laboratories, Inc., a Delaware corporation (the
"Company").
(2) Pursuant to the Agreement and Plan of Merger
dated as of May 3, 1994 (the "Merger Agreement") among NHL, the
Purchaser and the Company, the Purchaser proposes to purchase
pursuant to an Offer to Purchase dated May 9, 1994 (as it may be
amended in accordance with this Agreement, the "Offer to
Purchase") the shares of the Company's outstanding common stock,
$.01 par value (the "Company Stock"), for $21.50 in cash per
share (the "Tender Offer"), and promptly thereafter to
consummate a merger (the "Merger") with the Company in which the
Company will be the surviving corporation (the "Surviving
Corporation").
(3) The Borrower has requested that the Lenders lend
to it up to $750,000,000 in order to pay to the holders of the
Company Stock (other than the Purchaser and its Affiliates (as
hereinafter defined)) the cash consideration for their shares in
the Tender Offer, finance the Merger, pay transaction fees and
expenses, refinance certain Existing Debt (as hereinafter
defined) of the Company and NHL and provide financing for
general corporate purposes of NHL and its Subsidiaries (as
hereinafter defined). The Lenders have indicated their
willingness to agree to lend such amounts on the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements contained herein, the
parties hereto hereby agree as follows:
8
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Acquisitions" has the meaning set forth in Section
5.02(h).
"Administrative Agent" has the meaning specified in
the recital of parties to this Agreement.
"Administrative Agent's Account" means the account of
the Administrative Agent maintained by the Administrative Agent
with Citibank at 399 Park Avenue, New York, New York 10043,
Account No. 36852248.
"Advance" means a Revolving Credit Advance, a Term A
Advance, a Term B Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is
under common control with such Person or is a director or
officer of such Person. For purposes of this definition, the
term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more
of the Voting Stock of such Person or to direct or cause
direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by contract or otherwise.
"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 Eurodollar Lending
Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means (i) during the period from
the First Closing through the consummation of the Merger, (a)
with respect to Eurodollar Rate Advances, 2.0% per annum, and
(b) with respect to Base Rate Advances, of 1% per annum, and
(ii) thereafter, with respect to Eurodollar Rate Advances or
Base Rate Advances, as the case may be, the applicable
percentage set forth in the chart below based upon the
Performance Level of the Borrower determined by reference to the
most recent financial statements delivered to the Administrative
Agent pursuant to Section 5.01(t)(i) and (ii); provided,
however, that the Applicable Margin for all Advances shall be
decreased by 1/4 of
9
1% per annum (but in no event shall the Applicable Margin be
less than 0% per annum) on the date (such date being the
"Threshold Date") that the Net Cash Proceeds from the issuance
of $200,000,000 of New Debt Securities is applied to prepay the
Term Advances pursuant to Section 2.05(b)(i) whether or not an
aggregate of $200,000,000 of Net Cash Proceeds has been
received.
Eurodollar
Performance Base Rate Rate
Level Margin Margin
Level I 0.00% 1.25%
Level II 0.25% 1.50%
Level III 0.50% 1.75%
Level IV 0.75% 2.00%
"Appropriate Lender" means, at any time, with respect
to any of the Letter of Credit, Revolving Credit, Term A or Term
B Facilities, a Lender which has a Commitment with respect to
such Facility at such time.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee of such
Lender, and accepted by the Administrative Agent, in
substantially the form of Exhibit B hereto.
"Available Amount" of any Letter of Credit means, at
any time, the maximum amount available to be drawn under such
Letter of Credit at such time (assuming compliance at such time
with all conditions to drawing).
"Bank" has the meaning specified in the recital of
parties to this Agreement.
"Base Rate" means a fluctuating interest rate per
annum in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if
there is no nearest 1/4 of 1%, to the next higher 1/4 of
1%) of (i) 1/2 of 1% per annum, plus (ii) the rate obtained
by
10
dividing (A) the latest three-week moving average of
secondary market morning offering rates in the United
States for three-month certificates of deposit of major
United States money market banks, such three-week moving
average (adjusted to the basis of a year of 360 days) being
determined weekly on each Monday (or, of such day is not a
Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank
on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended
or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of
deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the
average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal
Reserve System (or any successor thereto) for determining
the maximum reserve requirement (including, but not limited
to, any emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities
consisting of or including (among other liabilities) three-
month U.S. dollar non-personal time deposits in the United
States, plus (iii) the average during such three-week
period of the annual assessment rates estimated by Citibank
for determining the then current annual assessment payable
by Citibank to the Federal Deposit Insurance Corporation
(or any successor thereto) for insuring U.S. dollar
deposits of Citibank in the United States; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears
interest as provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with Citibank at 399 Park Avenue, New
York, New York 10043, Account No. 40646949.
"Borrowing" means a Revolving Credit Borrowing, a Term
A Borrowing or a Term B Borrowing.
"Business Day" means a day of the year on which
dealings are carried on in the London interbank market and banks
are open for business in London and not required or authorized
to close in New York City.
11
"Calculation Period" means each twelve month period
ending on an anniversary of the First Closing.
"Capital Expenditures" means, for any period, the sum,
without duplication, of (a) all expenditures during such period
for equipment, fixed assets, real property or improvements, or
for replacements or substitutions therefor or additions thereto,
that have a useful life of more than one year plus (b) the
aggregate principal amount of all Debt (including obligations
under Capitalized Leases) assumed or incurred in connection with
any such expenditures.
"Capitalized Leases" has the meaning specified in
clause (e) of the definition of Debt.
"Cash Collateral Account" has the meaning specified in
the Security Agreement.
"Cash Equivalents" means any of the following, to the
extent owned by the Borrower or its Subsidiaries free and clear
of all Liens and having a maturity not greater than [180] days
from the date of issuance thereof: (a) direct obligations of
the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the Government of the
United States, (b) insured certificates of deposit of or time
deposits with any commercial bank that is a Lender or a member
of the Federal Reserve System, issues (or the parent of which
issues) commercial paper rated as described in clause (c), is
organized under the laws of the United States or any State
thereof and has combined capital and surplus of at least $1
billion, (c) commercial paper in an aggregate amount of not more
than $10,000,000 per issuer outstanding at any time, issued by
any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then
equivalent grade) by Moody's Investors Services, Inc. or "A-1"
(or the then equivalent grade) by Standard & Poor's Ratings
Group or (d) shares of money market mutual or similar funds
having assets in excess of $100,000,000 and which invest
exclusively in assets satisfying the requirements of clauses (a)
through (c) of this definition.
"Cash Interest Expense" means, for any fiscal period
of the Borrower, interest expense net of interest income on all
Debt of the Borrower and its Subsidiaries, as determined for
such period without duplication on a Consolidated basis for the
Borrower and its Subsidiaries and in accordance with GAAP and
including, without limitation, to the extent not otherwise
included in accordance with GAAP, (a) interest expense in
respect of Debt resulting from Advances, (b) the interest
component of obligations under leases that have been or should
be, in
12
accordance with GAAP, recorded as Capitalized Leases,
(c) commissions, discounts and other fees and charges payable in
connection with letters of credit, (d) the net payment, if any,
payable in connection with interest rate hedge agreements and
other interest rate protection contracts and (e) fees paid
pursuant to Section 2.08(a), but excluding, in each case, (x)
amortization of original issue discount, (y) the interest
portion of any deferred payment obligation and (z) other
interest not payable in cash.
"CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980.
"Change of Control" means any acquisition of Control
of the Borrower after the date hereof by any Person or two or
more Persons acting in concert who would constitute a "group"
within the meaning of Section 13(d)(3) of the Exchange Act
(other than Mafco or any of its Affiliates or a group consisting
of such Persons).
"Citibank" means Citibank, N.A., a national banking
association and an affiliate of Citicorp.
"Citicorp" has the meaning specified in the recital of
parties to this Agreement.
"Co-Agents" has the meaning specified in the recital
of parties to this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and
the rulings issued thereunder.
"Collateral" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is
intended to be subject to any Lien in favor of the
Administrative Agent, the Lenders or the Issuing Bank.
"Collateral Documents" means the Security Agreement,
the Pledge Agreement and the Mortgages.
"Commitment" means a Revolving Credit Commitment, a
Term A Commitment, a Term B Commitment or a Letter of Credit
Commitment.
"Company" has the meaning specified in the Preliminary
Statements.
"Company Stock" has the meaning specified in the
Preliminary Statements.
13
"Consolidated" for any Person refers to the
consolidation of the financial statements of such Person and its
Subsidiaries in accordance with GAAP.
"Consummation of the Tender Offer" means the first
date on which shares accepted in the Tender Offer are paid for.
"Control" by any Person or Persons of any other Person
means (a) beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Exchange
Act) by such Person or Persons, directly or indirectly, of
Voting Stock of such other Person (or other securities
convertible into such Voting Stock) representing 51% or more of
the combined voting power of all Voting Stock of such other
Person or (b) control by such Person or Persons, by contract or
otherwise, or entry by such Person or Persons into a contract or
agreement that, upon consummation, will result in the
acquisition by such Person or Persons of control, over Voting
Stock of such other Person (or other securities convertible into
such securities) representing 51% or more of the combined voting
power of all Voting Stock of such other Person.
"Conversion", "Convert" and "Converted" each refers to
a conversion of Advances of one Type into Advances of the other
Type pursuant to Section 2.07, 2.10 or 2.15.
"Debt" of any Person means, without duplication, (a)
all indebtedness of such Person for borrowed money; (b) all
Obligations of such Person for the deferred purchase price of
property or services (other than trade payables not overdue by
more than 60 days incurred in the ordinary course of such
Person's business); (c) all Obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments; (d)
all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property);
(e) all Obligations of such Person as lessees under leases that
have been or should be, in accordance with GAAP, recorded as
capital leases ("Capitalized Leases"); (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter
of credit or similar facilities; (g) all Obligations of such
Person to purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of such Person or any warrants,
rights or options to acquire such capital stock; (h) all Debt of
others referred to in clauses (a) through (g) above guaranteed
directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through
an agreement (i) to pay or purchase such Debt or to advance or
14
supply funds for the payment or purchase of such Debt, (ii) to
purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Debt or to assure the holder
of such Debt against loss, (iii) to supply funds to or in any
other manner invest in the debtor (including any agreement to
pay for property or services irrespective of whether such
property is received or such services are rendered) or (iv)
otherwise to assure a creditor against loss; and (i) all Debt
referred to in clauses (a) through (h) above secured by (or for
which the holder of such Debt has an existing right, contingent
or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable
for the payment of such Debt.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender
at any time, the amount of any Advance required to be made by
such Lender to the Borrower pursuant to Section 2.01 at or prior
to such time which has not been so made as of such time;
provided, however, any Advance made by the Administrative Agent
for the account of such Lender pursuant to Section 2.02(c) shall
not be considered a Defaulted Advance even if, at such time,
such Lender shall not have reimbursed the Administrative Agent
therefor as provided in Section 2.02(c). In the event that a
portion of a Defaulted Advance shall be deemed made pursuant to
Section 2.17(a), the remaining portion of such Defaulted Advance
shall be considered a Defaulted Advance originally required to
be made pursuant to Section 2.01 on the same date as the
Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender
at any time, any amount required to be paid by such Lender to
the Administrative Agent or any other Lender hereunder or under
any other Loan Document at or prior to such time which has not
been so paid as of such time, including, without limitation, any
amount required to be paid by such Lender to (a) the Issuing
Bank pursuant to Section 2.16(c) to purchase a portion of a
Letter of Credit Advance made by the Issuing Bank, (b) the
Administrative Agent pursuant to Section 2.02(c) to reimburse
the Administrative Agent for the amount of any Advance made by
the Administrative Agent for the account of such Lender, (c) any
other Lender pursuant to Section 2.13 to purchase any
participation in Advances owing to such other Lender and (d) the
Administrative Agent pursuant to Section 7.05 to reimburse the
Administrative Agent for such Lender's ratable share of any
amount required to
15
be paid by the Lenders to the Administrative Agent as provided
therein. In the event that a portion of a Defaulted Amount
shall be deemed paid pursuant to Section 2.17(b), the remaining
portion of such Defaulted Amount shall be considered a Defaulted
Amount originally required to be made hereunder or under any
other Loan Document on the same date as the Defaulted Amount so
deemed paid in part.
"Defaulting Lender" means, at any time, any Lender
that, at such time,
(a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take or be the subject of any action or proceeding of a type
described in Section 6.01(e).
"dollars" and the sign "$" each means lawful money of
the United States.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender,
or such other office of such Lender as such Lender may from time
to time specify to the Borrower and the Administrative Agent.
"EBIT" means, for any fiscal period of the Borrower,
net income (or net loss) plus the sum of (a) interest expense
net of interest income, (b) income tax expense and (c)
extraordinary losses included in net income, less extraordinary
gains included in net income, in each case determined for such
period without duplication on a Consolidated basis for the
Borrower and its Subsidiaries and in accordance with GAAP.
"EBITDA" means, for any fiscal period of the Borrower,
EBIT plus (a) depreciation expense, (b) amortization expense and
(c) non-cash write-offs and write-downs of amortizable and
depreciable items, in each case determined for such period
without duplication on a Consolidated basis for the Borrower and
its Subsidiaries and in accordance with GAAP.
"Eligible Assignee" means (a) any commercial bank
organized under the laws of the United States, or any State
thereof, and having total assets in excess of $1,000,000,000;
(b) any savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and
having a net worth determined in accordance with GAAP in excess
of $250,000,000; (c) any commercial bank organized under the
laws of any other country that is a member of the Organization
for Economic Cooperation and Development ("OECD") or has
concluded special lending arrangements with the International
Monetary Fund Associated with its General Arrangements to
Borrow, or a
16
political subdivision of any such country, and having total
assets in excess of $1,000,000,000, so long as such bank is
acting through a branch or agency located in the United States,
in the Cayman Islands or in the country in which it is organized
or another country that is described in this clause (c); (d) the
central bank of any country that is a member of the OECD; (e)
any finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust
or other entity) that (i) is not affiliated with the Borrower,
(ii) is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and
(iii) has total assets in excess of $250,000,000; and (f) any
other Person (other than an Affiliate of the Borrower) approved
by the Administrative Agent and the Borrower, such approval not
to be unreasonably withheld.
"Environmental Action" means any administrative,
regulatory or judicial action, suit, demand, demand letter,
claim, notice of non-compliance or violation, investigation,
proceeding, consent order or consent agreement based upon or
arising out of any Environmental Law or any Environmental
Permit, including without limitation (a) any claim by any
governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant
to any Environmental Law and (b) any claim by any third party
seeking damages, contribution, or injunctive relief arising from
alleged injury or threat of injury to health, safety or the
environment.
"Environmental Law" means any federal, state or local
law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award relating to the environment,
health or safety including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Resource Conservation and Recovery Act, the
Hazardous Materials Transportation Act, the Clean Water Act, the
Toxic Substances Control Act, the Clean Air Act, the Safe
Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide and Rodenticide Act and the Occupational
Safety and Health Act.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required
under any Environmental Law.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and ruling issued thereunder.
"ERISA Affiliate" of any Person means any other Person
that for purposes of Title IV of ERISA is a member of such
17
Person's controlled group, or under common control with such
Person, within the meaning of Section 414 of the Code.
"ERISA Event" with respect to any Person means (a) the
occurrence of a reportable event, within the meaning of Section
4043 of ERISA, with respect to any Plan of such Person or any of
its ERISA Affiliates unless the 30-day notice requirement with
respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any
of its ERISA Affiliates of a notice of intent to terminate such
Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA; (d) the
withdrawal by such Person or any of its ERISA Affiliates from a
Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to
make a payment to a Plan described in Section 302(f)(1) of
ERISA; (f) the adoption of an amendment to a Plan of such Person
or any of its ERISA Affiliates requiring the provision of
security to such Plan, pursuant to Section 307 of ERISA; or (g)
the institution by the PBGC of proceedings to terminate a Plan
of such Person or any of its ERISA Affiliates, pursuant to
Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that would
constitute grounds for the termination of, or the appointment of
a trustee to administer, such Plan; provided, however, that an
event described in clause (a), (c) or (d) of this definition, or
in clause (b) of this definition solely with respect to a
standard termination under Section 4041(b) of ERISA, shall be an
ERISA Event only if such event is reasonably likely to result in
a material liability of such Person or any of its ERISA
Affiliates.
"Escrow Agreement" has the meaning specified in
Section 3.01(i)(xxi).
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
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 of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative
Agent.
18
"Eurodollar Rate" means, for any Interest Period for
each Eurodollar Rate Advance comprising part of the same
Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the average (rounded upward to
the nearest whole multiple of 1/100 of 1% per annum, if such
average is not such a multiple) of the rate per annum at which
deposits in U.S. dollars are offered by the principal office of
Citibank in London, England to prime banks in the London
interbank market at 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 by (b) a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage for such Interest Period.
The Eurodollar Rate for each Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing shall be
determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the Administrative
Agent from Citibank two Business Days before the first day of
such Interest Period, subject, however, to the provisions of
Section 2.07.
"Eurodollar Rate Advance" means an Advance that bears
interest as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender for
any Interest Period for any Eurodollar Rate Advance means the
reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest
Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal
reserve requirement) for such Lender with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
"Events of Default" has the meaning specified in
Section 6.01.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Existing Debt" means Debt of the Borrower, NHL, the
Company and their respective Subsidiaries outstanding
immediately prior to the Tender Offer.
"Facility" means the Revolving Credit Facility, the
Term Facility or the Letter of Credit Facility.
19
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"First Closing" means the date of the initial
Borrowing.
"Fixed Charge Ratio" means, with respect to any period
of four fiscal quarters, a ratio of (A) EBITDA, less the
aggregate amount of cash Capital Expenditures made during such
period, less the amount of any payments made by the Borrower and
its Subsidiaries pursuant to the Tax Agreement to (B) the sum of
(i) interest payable on, and amortization of debt discount in
respect of, all Debt during such period, plus (ii) dividends
paid during such period in compliance with the terms of Section
5.02(e)(ii), (iv) or (v), plus (iii) scheduled amortization
payments of all Debt (other than Debt of NHL payable to the
United States of America in connection with the investigations
with the Office of the Inspector General regarding billing
practices) and all amounts required to be paid in respect of
contingent purchase price payments in connection with Permitted
Acqusitions, in each case payable during such period by the
Borrower and its Subsidiaries.
"Funded Debt of any Person means Debt for borrowed
money of such Person that by its terms matures more than one
year after the date of its creation or matures within one year
from such date but is renewable or extendible, at the option of
such Person, to a date more than one year after such date or
arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period
of more than one year after such date.
"GAAP means generally accepted accounting principles
in the United States of America as in effect as of the date of,
and used in, the preparation of the audited consolidated
financial statements referred to in Section 4.01(f), except that
(A) with respect to (x) the preparation of any financial
statement required to be furnished pursuant to clause (i) or
(ii) of Section 5.01(t) and (y) changes to financial statement
presentation and accounting policies contemplated by Section
5.02(i), "GAAP shall mean such principles as in effect from
time to time in the United States of America and (B) with
respect to
20
the definition of Fixed Charge Ratio, the definition of Interest
Coverage Ratio, the definition of Leverage Ratio and the
covenants contained in Section 5.01(q), (r) and (s), "GAAP"
shall, for any period prior to the consummation of the Merger
apply to the Borrower and its Subsidiaries (other than the
Company and its Subsidiaries) combined with the Company and its
Subsidiaries.
"Guarantor" means NHL Intermediate Holdings Corp. I, a
Delaware corporation.
"Guaranty" has the meaning specified in Section
3.01(i)(x).
"Hazardous Materials" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is
or could become friable, urea formaldehyde foam insulation and
radon gas, (b) any substances defined as or included in the
definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import,
under any Environmental Law and (c) any other substance exposure
to which is regulated under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or
collar agreements, interest rate future or option contracts,
currency swap agreements, currency future or option contracts
and other similar agreements.
"Indemnified Party" has the meaning specified in
Section 8.04(c).
"Initial Date" means, for purposes of Section 2.12,
in the case of the Administrative Agent and each Bank, the date
of its execution and delivery of this Agreement and, in the case
of each Lender other than a Bank, the date of the Assignment and
Acceptance pursuant to which it becomes a Lender.
"Interest Coverage Ratio" means, with respect to any
fiscal quarter, the ratio of EBITDA to Cash Interest Expense, in
each case in the aggregate for the four fiscal quarters ended at
the end of such fiscal quarter.
"Interest Period" means, for each Eurodollar Rate
Advance comprising part of the same Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or the
date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and,
21
thereafter, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last
day of the periods elected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period
shall be one, two, three or six months as the Borrower may, upon
notice received by the Administrative Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the
first day of such Interest Period, select; provided, however,
that:
(i) the Borrower may not select any Interest Period
which ends after any principal repayment installment date
unless, after giving effect to such selection, the
aggregate principal amount of Base Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end
on or prior to such principal repayment installment date
shall be at least equal to the aggregate principal amount
of such Advances due and payable on or prior to such dates;
(ii) 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 that,
if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next
preceding Business Day; and
(iii) whenever the first day of any Interest
Period occurs on a day in a calendar month for which there
is no numerically corresponding day in the calendar month
that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest
Period, such Interest Period shall end on the last Business
Day of such succeeding calendar month.
"Investment" in any Person means any loan or advance
to such Person, any purchase or other acquisition of any capital
stock, warrants, rights, options, debt obligations or other
securities of such Person, any capital contribution to such
Person or any other investment in such Person, including,
without limitation, any arrangement pursuant to which the
investor incurs Debt of the types referred to in clauses (h) and
(i) of the definition of "Debt" in respect of such Person.
"Issuing Bank" means Citibank, N.A., or such other
designee of Citicorp as Citicorp may designate.
22
"Large Acquisition" means an Acquisition the Purchase
Price of which is equal to or greater than $10,000,000 but less
than or equal to $25,000,000.
"Large Acquisition Basket" means, for any Calculation
Period, (x) $75,000,000 if the Threshold Date has not occurred
and (y) $100,000,000 if the Threshold Date has occurred.
"L/C Cash Collateral Account" has the meaning
specified in the Security Agreement.
"L/C Related Documents" has the meaning specified in
Section 2.16(d).
"Lenders" means the Banks listed on the signature
pages hereof and each Eligible Assignee that shall become a
party hereto pursuant to Section 8.07 and each assignee that
shall become a party hereto pursuant to Section 2.14.
"Letter of Credit" has the meaning specified in
Section 2.16(a).
"Letter of Credit Advance" means an advance made by
the Issuing Bank or any Revolving Credit Lender pursuant to
Section 2.16(c).
"Letter of Credit Agreement" has the meaning specified
in Section 2.16(b).
"Letter of Credit Commitment" means, with respect to
the Issuing Bank at any time, the amount set forth opposite the
Issuing Bank's name on Schedule I hereto under the caption
"Letter of Credit Commitment" or, if the Issuing Bank has
entered into one or more Assignments and Acceptances, set forth
for the Issuing Bank in the Register maintained by the
Administrative Agent pursuant to Section 8.07(c) as the Issuing
Bank's "Letter of Credit Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.04.
"Letter of Credit Facility" means the amount of the
Letter of Credit Commitment of the Issuing Bank.
"Level I" means, as of any date of determination, that
the Borrower maintained for the last fiscal quarter for which
financial statements have been delivered to the Administrative
Agent (i) an Interest Coverage Ratio greater than or equal to
5:1 and (ii) a Leverage Ratio of less than or equal to 2.5:1.
"Level II" means, as of any date of determination,
that (i) the performance of the Borrower does not meet the
23
requirements of Level I and (ii) the Borrower maintained for the
last fiscal quarter for which financial statements have been
delivered to the Administrative Agent (x) an Interest Coverage
Ratio of greater than or equal to 4:1 and (y) a Leverage Ratio
of less than or equal to 3:1.
"Level III" means, as of any date of determination,
that (i) the performance of the Borrower does not meet the
requirements of Level I or Level II and (ii) the Borrower
maintained for the last fiscal quarter for which financial
statements have been delivered to the Administrative Agent (x)
an Interest Coverage Ratio of greater than or equal to 3.5:1 and
(y) a Leverage Ratio of less than or equal to 3.5:1.
"Level IV" means, as of any date of determination,
that the performance of the Borrower does not meet the
requirements of Level I, Level II or Level III.
"Leverage Ratio" means, with respect to any fiscal
quarter, the ratio of (i) the total Funded Debt of the Borrower
and its Subsidiaries as of the last day of such period to (ii)
Consolidated EBITDA of the Borrower and its Subsidiaries, in
each case in the aggregate for the four fiscal quarters ended at
the end of such fiscal quarter.
"Lien" means any lien, security interest or other
charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the
lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real
property.
"Loan Documents" means this Agreement, the Notes, the
Guaranty, the Subsidiary Guaranty, the Collateral Documents, the
Public Holdings Agreement, the Escrow Agreement and each Letter
of Credit Agreement.
"Loan Parties" means the Borrower, the Guarantor and
the Subsidiary Guarantors.
"Mafco" means Mafco Holdings Inc., a Delaware
corporation.
"Margin Stock" has the meaning specified in Regulation
U of the Board of Governors of the Federal Reserve System and
any successor regulations thereto, as in effect from time to
time.
"Material Adverse Change" means, with respect to any
Person, a material adverse change in the condition (financial
or otherwise), operations, assets, business or prospects of such
24
Person and its Subsidiaries, taken as a whole; provided,
however, that for purposes of Section 3.01, Section 3.02(a)(i)
and Section 4.01 such term shall exclude, with respect to the
Company, any such change or effect resulting from (i) the
subpoena received by the Company in 1993 from the Office of
Inspector General and the United States Attorneys Office for the
Southern District of California relating to Medicare billing
practices, and any developments, investigations or charges
relating to the Company and its Subsidiaries arising therefrom
or relating thereto, (ii) the subpoena received by the Company
in April of 1994 relating to Medicare billing practices at the
clinical laboratory located in Cincinnati, Ohio, and any
developments, investigations or charges relating to the Company
and its Subsidiaries arising therefrom or relating thereto,
(iii) the assessment from the Internal Revenue Service relating
to the amortization by the Company of intangible assets for the
years 1989, 1990 and 1991, or any future assessment relating to
the Company based on the same issue for subsequent years, and
any developments relating to the Company and its Subsidiaries
arising therefrom or relating thereto, (iv) any change in laws,
rules and regulations (federal, state or local) or reimbursement
practices, including, without limitation, changes relating to
Medicare, Medicaid, CHAMPUS program, and carrier billing
practices, so long as the same are not, in the aggregate,
material to NHL and its Subsidiaries taken as a whole, or (v)
changes relating to the cancellation, termination or non-renewal
by customers (including, without limitation, (x) doctors that
refer specimens to the Company and (y) hospitals, health
maintenance organizations, preferred provider organizations and
the laboratories which the Company manages) of the Company or
any of its Subsidiaries of their relationships with the Company
or any of its Subsidiaries or the voluntary termination by
existing general managers, sales managers or sales
representatives from and after the date of the public
announcement of the Merger Agreement, unless and to the extent
such cancellations, terminations or non-renewals are directly
attributable to factors other than the transactions contemplated
by the Merger Agreement, so long as the same are not, in the
aggregate, material to NHL and its Subsidiaries taken as a
whole.
"Material Adverse Effect" means, with respect to any
Person, a material adverse effect upon (a) the condition
(financial or otherwise), operations, assets, business or
prospects of such Person and its Subsidiaries, taken as a whole,
or (b) the ability of a Loan Party to perform its obligations
under any Loan Document, or (c) the rights and remedies of the
Administrative Agent or any Lender under any Loan Document;
provided, however, that for purposes of Section 3.01, Section
3.02(a)(i) and Section 4.01 hereof, such term shall exclude,
with respect to the Company, any such change or effect resulting
from (i) the subpoena received by the Company in 1993 from the Office
25
of Inspector General and the United States Attorneys Office for
the Southern District of California relating to Medicare billing
practices, and any developments, investigations or charges
relating to the Company and its Subsidiaries arising therefrom
or relating thereto, (ii) the subpoena received by the Company
in April of 1994 relating to Medicare billing practices at the
clinical laboratory located in Cincinnati, Ohio, and any
developments, investigations or charges relating to the Company
and its Subsidiaries arising therefrom or relating thereto,
(iii) the assessment from the Internal Revenue Service relating
to the amortization by the Company of intangible assets for the
years 1989, 1990 and 1991, or any future assessment relating to
the Company based on the same issue for subsequent years, and
any developments relating to the Company and its Subsidiaries
arising therefrom or relating thereto, (iv) any change in laws,
rules and regulations (federal, state or local) or reimbursement
practices, including, without limitation, changes relating to
Medicare, Medicaid, CHAMPUS program, and carrier billing
practices, so long as the same are not, in the aggregate,
material to NHL and its Subsidiaries taken as a whole, or (v)
changes relating to the cancellation, termination or non-renewal
by customers (including, without limitation, (x) doctors that
refer specimens to the Company and (y) hospitals, health
maintenance organizations, preferred provider organizations and
the laboratories which the Company manages) of the Company or
any of its Subsidiaries of their relationships with the Company
or any of its Subsidiaries or the voluntary termination by
existing general managers, sales managers or sales
representatives from and after the date of the public
announcement of the Merger Agreement, unless and to the extent
such cancellations, terminations or non-renewals are directly
attributable to factors other than the transactions contemplated
by the Merger Agreement, so long as the same are not, in the
aggregate, material to NHL and its Subsidiaries taken as a
whole.
"Material Contract" means, as to the Borrower or any
of its Subsidiaries, each contract to which such Person is a
party which is either (a) a lease of real properties or a
contract for the purchase or sale of goods or services
(i) which, if lost, would not be replaceable promptly by
commercially reasonable substitutes and (ii) the loss of which,
if not so replaced, would be reasonably likely to have a
Material Adverse Effect (in the case of clause (a) of the
definition of Material Adverse Effect, the term "Person" shall
mean the Borrower), or (b) any other contract (i) involving
aggregate consideration payable to or by such Person of
$10,000,000 or more or (ii) the loss of which would be
reasonably likely to have a Material Adverse Effect (in the case
of clause (a) of the definition of Material Adverse Effect, the
term "Person" shall mean the Borrower).
26
"Materially Different Business" means a business or
line of business that is materially different from the business
carried on as of the date hereof by the Borrower and its
Subsidiaries taken as a whole.
"Maximum Acquisition Basket" means (x) $150,000,000 if
the Threshold Date has not occurred and (y) $200,000,000 if the
Threshold Date has occurred.
"Merger" has the meaning specified in the Preliminary
Statements.
"Merger Agreement" has the meaning specified in the
Preliminary Statements.
"Mortgage Policy" has the meaning specified in Section
5.01(o)(ii) .
"Mortgages" has the meaning specified in Section
5.01(o).
"Multiemployer Plan" of any Person means a
multiemployer plan, as defined in Section 4001(a)(3) of ERISA,
which is subject to Title IV of ERISA, and to which such Person
or any of its ERISA Affiliates is making or accruing an
obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" of any Person means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, which
is subject to Title IV of ERISA, and (a) that is maintained for
employees of such Person or any of its ERISA Affiliates and at
least one Person other than such Person and its ERISA Affiliates
or (b) that was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.
"Net Cash Proceeds" means, with respect to any sale,
lease, transfer or other disposition of any asset or the sale or
issuance by any Person of any Debt or capital stock, any
securities convertible into or exchangeable for capital stock or
any warrants, rights or options to acquire capital stock, the
aggregate amount of cash received from time to time by or on
behalf of such Person in connection with such transaction after
deducting therefrom only (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees and
expenses, finder's fees, accountants' fees and expenses and
other similar fees, expenses and commissions, (b) the amount of
taxes
27
payable or estimated in good faith to be payable in connection
with or as a result of such transaction and (c) the amount of
any Debt that, by the terms of such transaction or the terms of
such Debt, is required to be repaid upon such disposition, in
each case to the extent, but only to the extent, that the
amounts so deducted are payable to a Person that is not an
Affiliate (other than such amounts that are payable by the
Borrower and its Subsidiaries to an Affiliate pursuant to the
Tax Agreement) and are properly attributable to such transaction
or to the asset that is the subject thereof.
"Net Income" means, for any Person in any period, the
net income of such Person and its Subsidiaries on a Consolidated
basis for such period, as determined in accordance with GAAP.
"New Debt Documents" means the agreements, indentures
and instruments pursuant to which the New Debt Securities are
issued, as they may be amended in accordance with this
Agreement.
"New Debt Securities" means the long-term fixed rate
senior unsecured Debt of the Borrower that contains the term and
conditions set forth in Exhibit D hereto and other terms and
conditions satisfactory to the Required Lenders.
"NHL" has the meaning specified in the Preliminary
Statements.
"Nonratable Assignment" means an assignment by a
Lender pursuant to Section 8.07(a) of a portion of its rights
and obligations under this Agreement, other than an assignment
of a uniform, and not a varying, percentage of all of the rights
and obligations of the Lenders under and in respect of all of
the Facilities.
"Note" means a Revolving Credit Note, a Term A Note or
a Term B Note.
"1994 Credit Agreement" means the $50,000,000 Credit
Agreement dated as of April 7, 1994 between NHL and Citicorp, as
the same may be amended, supplemented or otherwise modified from
time to time.
"1993 Credit Agreement" means the $350,000,000 Credit
Agreement dated as of August 27, 1993 among NHL, the lenders
party thereto and Citicorp, as agent and arranger, and Banque
Paribas, The Long Term Credit Bank of Japan, Ltd., Los Angeles
Agency, NationsBank of North Carolina, N.A., and The Toronto-
Dominion Bank, as co-agents, as the same may have been and may
be amended, supplemented or otherwise modified from time to
time.
28
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of Issuance" has the meaning specified in
Section 2.16(b)(i).
"Obligation" means, with respect to any Person, any
payment, performance or other obligation of such Person of any
kind, including, without limitation, any liability of such
Person on any claim, whether or not the right of any creditor to
payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by
any proceeding referred to in Section 6.01(e). Without limiting
the generality of the foregoing, the Obligations of the Loan
Parties under the Loan Documents include (a) the obligation to
pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities
and other amounts payable by any Loan Party under any Loan
Document and (b) the obligation to reimburse any amount in
respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"Offer to Purchase" has the meaning specified in the
Preliminary Statements.
"Other Taxes" has the meaning specified in
Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation,
or any successor agency or entity performing substantially the
same functions.
"Performance Level" means Level I, Level II, Level III
or Level IV.
"Permitted Acquisition" means any Acquisition
permitted under Section 5.02(h).
"Permitted Encumbrances" has the meaning specified in
the Mortgages.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
29
"Plan" means a Single Employer Plan or a Multiple
Employer Plan.
"Pledge Agreement" has the meaning specified in
Section 3.01(i)(ix).
"Preferred Stock" means, with respect to any
corporation, capital stock issued by such corporation that is
entitled to a preference or priority over any other capital
stock issued by such corporation upon any distribution of such
corporation's assets, whether by dividend or upon liquidation.
"Pro Rata Share" of any amount means, with respect to
any Revolving Credit Lender (but not in any such Lender's
capacity as an Issuing Bank) at any time, the product of (a) a
fraction the numerator of which is the amount of such Lender's
Revolving Credit Commitment at such time and the denominator of
which is the Revolving Credit Facility at such time times
(b) such amount.
"Proxy Statement" means the Proxy Statement mailed to
the Company's shareholders in connection with the Merger.
"Public Holdings" means National Health Laboratories
Holdings Inc., a Delaware corporation.
"Public Holdings Agreement" has the meaning specified
in Section 3.01(i)(xii).
"Purchase Price" means, with respect to any
Acquisition or proposed Acquisition, the consideration paid or
to be paid for such Acquisition in cash and property (including,
without limitation, all liabilities assumed, Debt incurred and
equity issued by the Borrower or any of its Subsidiaries in
connection with such Acquisition).
"Redeemable" means, with respect to any capital stock,
Debt or other right or Obligation, any such right or Obligation
that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not
solely within the control of the issuer or (b) is redeemable at
the option of the holder.
"Register" has the meaning specified in Section
8.07(c).
"Related Documents" means the Merger Agreement, the
Offer to Purchase, the New Debt Documents and the Tax Agreement.
30
"Required Lenders" means at any time Lenders holding
at least a majority of the sum of (a) the aggregate principal
amount of the Advances outstanding at such time, (b) the
aggregate Available Amount of all Letters of Credit outstanding
at such time, (c) the aggregate unused Term A Commitments and
(d) the aggregate unused Term B Commitments plus the aggregate
unused Revolving Credit Commitments at such time (provided that,
for purposes hereof, neither the Borrower, nor any of its
Affiliates, if a Lender, shall be included in (a) the Lenders
holding such amount of the Advances or having such amount of the
Commitments or (b) determining the aggregate unpaid principal
amount of the Advances or the total Commitments); provided,
however, if any Lender shall be a Defaulting Lender at such
time, there shall be excluded from the determination of Required
Lenders at such time (i) the aggregate principal amount of the
Advances made by such Lender and outstanding at such time, (ii)
if such Lender shall be the Issuing Bank, the aggregate
Available Amount of all Letters of Credit issued by such Lender
and outstanding at such time and (iii) the aggregate commitments
of such Lender under all the Facilities at such time. For
purposes of this definition, the Available Amount of each Letter
of Credit shall be considered to be owed to the Revolving Credit
Lenders ratably in accordance with their respective Revolving
Credit Commitments.
"Revolving Credit Advance" has the meaning specified
in Section 2.01(c).
"Revolving Credit Borrowing" means a borrowing
consisting of simultaneous Revolving Credit Advances of the same
Type made by the Revolving Credit Lenders.
"Revolving Credit Commitment" means, with respect to
any Revolving Credit Lender at any time, the amount set forth
opposite such Lender's name on Schedule I hereto under the
caption "Revolving Credit Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, set forth
for such Lender in the Register maintained by the Administrative
Agent pursuant to Section 8.07(c) as such Lender's "Revolving
Credit Commitment", as such amount may be reduced at or prior to
such time pursuant to Section 2.04.
"Revolving Credit Facility" means, at any time, the
aggregate amount of the Revolving Credit Lenders' Revolving
Credit Commitments at such time.
"Revolving Credit Lender" means any Lender that has a
Revolving Credit Commitment.
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Revolving Credit Lender, in
31
substantially the form of Exhibit A-3 hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting
from the Revolving Credit Advances made by such Lender.
"Security Agreement" has the meaning specified in
Section 3.01(i)(viii).
"Single Employer Plan" of any Person means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, which
is subject to Title IV of ERISA, and (a) that is maintained for
employees of such Person or any of its ERISA Affiliates and no
Person other than such Person and its ERISA Affiliates or (b) in
respect of which such Person or any of its ERISA Affiliates
could have liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated.
"Small Acquisition" means any Acquisition the Purchase
Price of which is less than $10,000,000.
"Small Acquisition Basket" means, for any Calculation
Period, $50,000,000.
"Solvent" and "Solvency" mean, with respect to any
Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value
of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property
would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the
amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit
issued under the Letter of Credit Facility, other than a Trade
Letter of Credit.
"Stockholders Equity" means stockholders equity of
the Borrower and its Subsidiaries on a Consolidated basis, as
determined in accordance with GAAP, plus the aggregate amount of
dividends paid by the Borrower since the date hereof that were
applied or set apart to be applied to the repurchase by Public
32
Holdings of its capital stock; provided, however that the
aggregate amount of dividends paid by the Borrower since the
date hereof that were applied or set apart to be applied to the
repurchase by Public Holdings of its capital stock shall not be
added back for purposes of determining whether or not the
Borrower is in compliance with the financial covenant test set
forth in 5.02(e)(iv).
"Subsidiary" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in
which) more than 50% of (a) the Voting Stock of such
corporation, (b) the interest in the capital or profits of such
partnership or joint venture or (c) the beneficial interest in
such trust or estate 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.
"Subsidiary Guarantors" means all Subsidiaries of the
Borrower that are organized under the laws of a state of the
United States of America (other than, prior to the consummation
of the Merger, the Company and its Subsidiaries).
"Subsidiary Guaranty" has the meaning specified in
Section 3.01(i)(xi).
"Surviving Debt" has the meaning specified in Section
3.01(d).
"Surviving Debt Agreement" means any agreement or
instrument setting forth the terms and conditions of any
Surviving Debt.
"Tax Agreement" means the Tax Agreement dated as of
January 1, 1994 among Public Holdings, the Guarantor, the
Borrower and NHL, as it may be amended in accordance with the
terms of this Agreement.
"Tax Certificate" has the meaning specified in Section
5.01(t)(xiii).
"Taxes" has the meaning specified in Section 2.12(a).
"Term A Advance" has the meaning specified in
Section 2.01(a).
"Term A Borrowing" means a borrowing consisting of
simultaneous Term A Advances of the same Type made by the Term A
Lenders.
33
"Term A Commitment" means, with respect to any Term A
Lender at any time, the amount set forth opposite such Lender's
name on Schedule I hereto under the caption "Term A Commitment"
or, if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to
Section 8.07(c) as such Lender's "Term A Commitment", as such
amount may be reduced at or prior to such time pursuant to
Section 2.04.
"Term A Facility" means, at any time, the aggregate
amount of the Term A Lenders' Term A Commitments at such time.
"Term A Lender" means any Lender that has a Term A
Commitment.
"Term A Note" means a promissory note of the Borrower
payable to the order of any Term A Lender, in substantially the
form of Exhibit A-1 hereto, evidencing the indebtedness of the
Borrower to such Lender resulting from the Term A Advance made
by such Lender.
"Term B Advance" has the meaning specified in Section
2.01(b).
"Term B Borrowing" means a borrowing consisting of
simultaneous Term B Advances of the same Type made by the Term B
Lenders.
"Term B Commitment" means, with respect to any Term B
Lender at any time, the amount set forth opposite such Lender's
name on Schedule I hereto under the caption "Term B Commitment"
or, if such Lender has entered into one or more Assignments and
Acceptances set forth for such Lender in the Register maintained
by the Administrative Agent pursuant to Section 8.07 (c) as such
Lender's "Term B Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.04.
"Term B Facility" means, at any time, the aggregate
amount of the Term B Lenders' Term B Commitments at such time.
"Term B Lender" means any Lender that has a Term B
Commitment.
"Term B Note" means a promissory note of the Borrower
payable to the order of any Term B Lender, in substantially the
form of Exhibit A-2 hereto, evidencing the indebtedness of the
Borrower to such Lender resulting from the Term B Advance made
by such Lender.
34
"Termination Date" means the earlier of (a) December
31, 2000 or (b) the date of termination in whole of the
Commitments pursuant to Section 2.04 or 6.01.
"Threshold Date" has the meaning specified in the
definition of "Applicable Margin."
"Total Commitment" means, with respect to each Lender
at any time, the aggregate of such Lender's Term A Commitment,
Term B Commitment and Revolving Credit Commitment at such time.
"Trade Letter of Credit" means any Letter of Credit
that is issued under the Letter of Credit Facility for the
benefit of a supplier of inventory to the Borrower or any of its
Subsidiaries to effect payment for such inventory, the
conditions to drawing under which include the presentation to
the Issuing Bank of negotiable bills of lading, invoices and
related documents sufficient, in the judgment of the Issuing
Bank, to create a valid and perfected Lien on such inventory.
"Type" refers to the distinction between Advances
bearing interest at the Base Rate and Advances bearing interest
at the Eurodollar Rate.
"Unfunded Pension Liabilities" with respect to any
Plan means the excess, if any, of its accumulated benefit
obligation, as determined in accordance with Statement of
Financial Accounting Standards No. 87 or any successor thereto
(based on interest, mortality and other relevant actuarial
assumptions used to fund such Plan as of its most recent
actuarial valuation), over the fair market value of its assets
(as of such date).
"Unused Revolving Credit Commitment" means, with
respect to any Revolving Credit Lender (but not in any such
Lender's capacity as an Issuing Bank) at any time, (a) such
Lender's Revolving Credit Commitment at such time, minus (b) the
sum of (i) the aggregate principal amount of all Revolving
Credit Advances and Letter of Credit Advances made by such
Lender under the Revolving Credit Facility and outstanding at
such time, plus (ii) such Lender's Pro Rata Share of (A) the
aggregate Available Amount of all Letters of Credit outstanding
at such time and (B) the aggregate principal amount of all
Letter of Credit Advances made by the Issuing Bank pursuant to
Section 2.16(c) and outstanding at such time other than any such
Letter of Credit Advance which, at or prior to such time, has
been assigned in part to such Revolving Credit Lender pursuant
to Section 2.16(c).
"Voting Stock" means capital stock issued by a
corporation, or equivalent interests in any other Person, the
35
holders of which are ordinarily, in the absence of
contingencies,
36
entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the
right so to vote has been suspended by the happening of such a
contingency.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA.
"Withdrawal Liability" has the meaning specified in
Part I of Subtitle E of Part IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but
excluding".
SECTION 1.03. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Term A
Advances. Each Term A Lender severally agrees, on the terms and
conditions hereinafter set forth, to make up to two advances
(each a "Term A Advance") on any Business Day during the period
from the date hereof until October 15, 1994 in an aggregate
amount not to exceed such Lender's Term A Commitment on such
Business Day; provided, however, that the first Term A Advance
shall be made on the date of the repayment of the 1993 Credit
Agreement and the 1994 Credit Agreement and the second Term A
Advance, if any, shall be made on the date of the Consummation
of the Tender Offer. Amounts borrowed under this Section
2.01(a) and repaid or prepaid may not be reborrowed.
(b) The Term B Advances. Each Term B Lender
severally agrees, on the terms and conditions hereinafter set
forth, to make up to three advances (each a "Term B Advance") on
any Business Day during the period from the date hereof until
October 15, 1994 in an aggregate amount not to exceed such
Lender's Term B Commitment on such Business Day ; provided,
however, that the first Term B Advance shall be made on the date
of the repayment of the 1993 Credit Agreement and the 1994
Credit Agreement, the second Term B Advance shall be made on the
date of the Consummation of the Tender Offer and the third Term
B Advance, if any, shall be made on the date of the consummation
of the Merger.
37
Amounts borrowed under this Section 2.01(b) and repaid or
prepaid may not be reborrowed.
(c) The Revolving Credit Advances. Each Revolving
Credit Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a "Revolving
Credit Advance") to the Borrower from time to time on any
Business Day during the period from the date hereof until the
Termination Date in an aggregate amount not to exceed at any
time outstanding such Lender s Revolving Credit Commitment on
such Business Day. Each Revolving Credit Borrowing shall be in
an aggregate amount not less than $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall consist of
Advances made on the same day by the Revolving Credit Lenders
ratably according to their respective Revolving Credit
Commitments. Within the limits of each Revolving Credit
Lender s Unused Revolving Credit Commitment in effect from time
to time, the Borrower may borrow, prepay pursuant to Section
2.05(a) and reborrow under this Section 2.01(c).
SECTION 2.02. Making the Advances. (a) Except as
otherwise provided in Section 2.16, each Borrowing shall be made
on notice given not later than 11:00 A.M. (New York City time)
on the first Business Day prior to the date of a proposed Base
Rate Borrowing or the third Business Day prior to the date of a
proposed Eurodollar Rate Borrowing, by the Borrower to the
Administrative Agent, which shall give to each Appropriate
Lender prompt notice thereof by telecopier, telex or cable.
Each such notice of a Borrowing (a "Notice of Borrowing") shall
be by telecopier, telex or cable, and, with respect to a Notice
of Borrowing by telex or cable, confirmed immediately thereafter
in writing, in substantially the form of Exhibit C hereto,
specifying therein the requested (i) date of such Borrowing,
(ii) Facility under which such Borrowing is to be made, (iii)
Type of Advances comprising such Borrowing, (iv) aggregate
amount of such Borrowing and (v) Interest Period for each
Eurodollar Rate Advance included in such Borrowing. In the case
of a proposed Borrowing comprised of Eurodollar Rate Advances,
the Administrative Agent shall promptly notify the Borrower and
each Appropriate Lender of the applicable interest rate under
Section 2.06(a)(ii). Each Appropriate Lender shall, before
12:00 Noon (New York City time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office
to the Administrative Agent at the Administrative Agent s
Account, in same day funds, such Lender s ratable portion of
such Borrowing. After the Administrative Agent s receipt of
such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such
funds available by crediting the Borrower s Account; provided,
however, that in the case of any Revolving Credit Borrowing, the
Administrative Agent
38
shall first make a portion of such funds equal to the aggregate
principal amount of any Letter of Credit Advances made by the
Issuing Bank, and by any other Revolving Credit Lender and
outstanding on the date of such Revolving Credit Borrowing, plus
interest accrued and unpaid thereon to and as of such date,
available to the Issuing Bank and such other Revolving Credit
Lenders for repayment of such Letter of Credit Advances.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. The Borrower shall indemnify each
Appropriate Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before
the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when
such Advance, as a result of such failure, is not made on such
date.
(c) Unless the Administrative Agent shall have
received notice from an Appropriate Lender prior to the date of
any Borrowing under a Facility under which such Lender has a
Commitment that such Lender will not make available to the
Administrative Agent such Lender s ratable portion of such
Borrowing, the Administrative Agent may assume, or at its option
request confirmation from such Lender, that such Lender has made
such portion available to the Administrative Agent on the date
of such Borrowing in accordance with subsection (a) of this
Section 2.02 and the Administrative Agent may, in reliance upon
such assumption or confirmation (as the case may be), make
available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made
such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the
date such amount is repaid to the Administrative Agent, at (i)
in the case of the Borrower, the interest rate applicable at
such time under Section 2.06 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the cost
(expressed as a rate per annum) to the Administrative Agent of
funding such Lender s ratable portion; provided that, upon the
request of such Lender, the Administrative Agent shall provide
such Lender with a certificate as to the calculation of such
amount. If such Lender shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall
constitute such Lender s Advance as part of such Borrowing for
purposes of this Agreement.
39
(d) The failure of any Lender to make the Advance to
be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
(e) The Borrower may not request a Borrowing
comprised of Eurodollar Rate Advances or, pursuant to Section
2.15, convert Base Rate Advances into Eurodollar Rate Advances
or select a new Interest Period for existing Eurodollar Rate
Advances if, after the making or Conversion of such Advances or
the selection of such Interest Period, the number of outstanding
Borrowings comprised of Eurodollar Rate Advances and having
different Interest Periods (whether of different duration or
commencing on different dates) would exceed ten.
SECTION 2.03. Repayment. (a) Term A Advances. The
Borrower shall repay to the Administrative Agent for the ratable
account of the Term A Lenders the outstanding principal amount
of the Term A Advances on the following dates in the amounts
indicated:
Date Amount
September 30, 1994 $ 3.750 million
December 31, 1994 3.750 million
March 31, 1995 7.500 million
June 30, 1995 7.500 million
September 30, 1995 7.500 million
December 31, 1995 7.500 million
March 31, 1996 9.375 million
June 30, 1996 9.375 million
September 30, 1996 9.375 million
December 31, 1996 9.375 million
March 31, 1997 11.250 million
June 30, 1997 11.250 million
September 30, 1997 11.250 million
December 31, 1997 11.250 million
March 31, 1998 13.125 million
June 30, 1998 13.125 million
September 30, 1998 13.125 million
December 31, 1998 13.125 million
March 31, 1999 15.000 million
June 30, 1999 15.000 million
September 30, 1999 15.000 million
December 31, 1999 15.000 million
March 31, 2000 16.875 million
June 30, 2000 16.875 million
40
September 30, 2000 16.875 million
December 31, 2000 16.875 million
(b) Term B Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term B
Lenders the outstanding principal amount of the Term B Advance
on the following dates in the amounts indicated:
Date Amount
September 30, 1994 $1.250 million
December 31, 1994 1.250 million
March 31, 1995 2.500 million
June 30, 1995 2.500 million
September 30, 1995 2.500 million
December 31, 1995 2.500 million
March 31, 1996 3.125 million
June 30, 1996 3.125 million
September 30, 1996 3.125 million
December 31, 1996 3.125 million
March 31, 1997 3.750 million
June 30, 1997 3.750 million
September 30, 1997 3.750 million
December 31, 1997 3.750 million
March 31, 1998 4.375 million
June 30, 1998 4.375 million
September 30, 1998 4.375 million
December 31, 1998 4.375 million
March 31, 1999 5.000 million
June 30, 1999 5.000 million
September 30, 1999 5.000 million
December 31, 1999 5.000 million
March 31, 2000 5.625 million
June 30, 2000 5.625 million
September 30, 2000 5.625 million
December 31, 2000 5.625 million
(c) Revolving Credit Advances. The Borrower shall
repay to the Administrative Agent for the ratable account of the
Revolving Credit Lenders the aggregate principal amount of the
Revolving Credit Advances on the earlier of June 30, 1999 and
the Termination Date.
(d) Letter of Credit Advances. The Borrower shall
repay to the Administrative Agent for the account of the Issuing
Bank and each other Revolving Credit Lender which has made a
Letter of Credit Advance the outstanding principal amount of
each Letter of Credit Advance made by each of them on demand.
41
SECTION 2.04. Reduction of the Commitments. (a)
Optional. The Borrower shall have the right, upon at least
three Business Days prior notice to the Administrative Agent,
to (i) terminate in whole or reduce ratably in part the unused
portions of the Term and Letter of Credit Commitments and the
Unused Revolving Credit Commitment and (ii) in connection with
the repayment of all outstanding Advances under this Agreement
and the permanent reduction of the Commitments hereunder,
terminate in whole the used portion of the Letter of Credit
Commitments if the aggregate amount on deposit in the L/C Cash
Collateral Account is equal to the aggregate Available Amount of
all then outstanding Letters of Credit; provided that each
partial reduction of a Facility (i) shall be in an aggregate
amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and (ii) shall be made ratably among the
Appropriate Lenders in accordance with their Commitments with
respect to such Facility.
(b) Mandatory. (i) The Revolving Credit Facility
shall be permanently reduced on the following dates to the
amounts indicated:
Date Amount
December 31, 1997 $ 300 million
June 30, 1998 250 million
December 31, 1998 200 million
June 30, 1999 0 million
(ii) The Revolving Credit Facility shall, to the
extent that no Term A or Term B Advance is outstanding, be
permanently reduced upon the date of receipt of the Net Cash
Proceeds from (A) the sale, lease, transfer or other disposition
of any assets of the Borrower or any of its Subsidiaries (other
than sales, leases, transfers or other dispositions permitted by
Section 5.02(d) (other than Section 5.02(d)(vii)) and (B) the
sale and issuance by the Borrower or any of its Subsidiaries of
any Debt (other than the New Debt Securities and other Debt
permitted to be sold and issued pursuant to Section 5.02(j)) by
the amount by which such Net Cash Proceeds exceed the aggregate
principal amount of Term A Advances and Term B Advances
outstanding on the date of such receipt.
(iii) The Revolving Credit Facility shall be
permanently reduced upon the date of receipt of the Net Cash
Proceeds in excess of $200,000,000 from the sale and issuance by
the Borrower of New Debt Securities by an amount equal to the
product of (x) such Net Cash Proceeds and (y) a fraction the
numerator of which is the aggregate Revolving Credit Commitments
on the date of such receipt and the denominator of which is the
42
sum of the aggregate Revolving Credit Commitments plus the
aggregate Term A Advances then outstanding plus the aggregate
Term B Advances then outstanding.
SECTION 2.05. Prepayments. (a) Optional. The
Borrower may, upon at least one Business Day s notice to the
Administrative Agent, in the case of Base Rate Advances, and
three Business Days notice to the Administrative Agent, in the
case of Eurodollar Rate Advances, stating the proposed date and
aggregate principal amount of the prepayment, and if such notice
is given, the Borrower shall, prepay the outstanding principal
amounts of the Advances comprising part of the same Borrowing in
whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount so prepaid;
provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount not less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof (or, if the
aggregate principal amount of all Advances that constitute part
of such Borrowing is less, such aggregate principal amount) and
(y) in the event any such prepayment of Eurodollar Rate Advances
is not made on the last day of an Interest Period, the Borrower
shall be obligated to reimburse the Lenders in respect thereof
pursuant to Section 8.04(b). Each such prepayment of any Term A
Advances or Term B Advances shall be applied to the installment
thereof in inverse order of maturity.
(b) Mandatory. (i) The Borrower shall (A) on the
date of receipt by the Borrower or any of its Subsidiaries of
the Net Cash Proceeds from the sale, lease, transfer or other
disposition of any assets of the Borrower or any of its
Subsidiaries (other than sales, leases, transfers or other
dispositions permitted by Section 5.02(d) (other than Section
5.02(d)(vii))) and (B) on the date of receipt of the first
$200,000,000 of Net Cash Proceeds from the sale and issuance by
the Borrower of the New Debt Securities, prepay an aggregate
principal amount of the Advances comprising part of the same
Borrowings equal to the amount of such Net Cash Proceeds. Each
such prepayment shall be applied first, to the Term B Facility
and to the installments thereof ratably and second, to the Term
A Facility and to the installments thereof ratably.
(ii) The Borrower shall, on the date of receipt of the
Net Cash Proceeds in excess of $200,000,000 from the sale and
issuance by the Borrower of the New Debt Securities, prepay an
aggregate principal amount of the Advances comprising part of
the same Borrowings in an amount equal to the product of (x)
such Net Cash Proceeds and (y) a fraction the numerator of which
is the sum of the aggregate Term A Advances then outstanding
plus the aggregate Term B Advances then outstanding on the date
of such receipt and the denominator of which is the sum of the
aggregate
43
Revolving Credit Commitments plus the aggregate Term A Advances
then outstanding plus the aggregate Term B Advances then
outstanding. Each such prepayment shall be applied first, to
the Term B Facility and to the installments thereof ratably and
second, to the Term A Facility and the installments thereof
ratably.
(iii) The Borrower shall, on the date of receipt of
the Net Cash Proceeds from the sale and issuance by the Borrower
or any of its Subsidiaries of any Debt (other than the New Debt
Securities and other Debt permitted to be sold and issued
pursuant to Section 5.02(j)), prepay an aggregate principal
amount of the Advances comprising part of the same Borrowings
equal to the amount of such Net Cash Proceeds. Each such
prepayment shall be applied first, to the Term B Facility and
the installments thereof in inverse order of maturity and
second, to the Term A Facility and the installments thereof in
inverse order of maturity.
(iv) The Borrower shall, on each Business Day, pay to
the Administrative Agent for deposit in the L/C Cash Collateral
Account an amount sufficient to cause the aggregate amount on
deposit in such Account to equal the amount by which the
aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such
Business Day.
(v) The Borrower shall, on each Business Day, prepay
an aggregate principal amount of the Revolving Credit Advances
comprising part of the same Borrowings equal to the amount by
which (A) the aggregate principal amount of the Revolving Credit
Advances plus the aggregate Available Amount of all Letters of
Credit then outstanding exceeds (B) the Revolving Credit
Facility on such Business Day.
(vi) All prepayments under this subsection (b) shall
be made together with accrued interest to the date of such
prepayment on the principal amount prepaid.
SECTION 2.06. Interest. (a) Ordinary Interest. The
Borrower shall pay interest on the unpaid principal amount of
each Advance owing to each Lender from the date of such Advance
until such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at
all times to the sum of the Base Rate in effect from time
to time plus the Applicable Margin in effect from time to
time, payable in arrears quarterly on the last Business Day
of
44
each March, June, September and December during such
periods and on the date such Base Rate Advance shall be
Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as
such Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during each Interest Period for such
Advance to the sum of the Eurodollar Rate for such Interest
Period plus the Applicable Margin in effect from time to
time, payable in arrears on the last day of such Interest
Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such
Interest Period every three months from the first day of
such Interest Period.
(b) Default Interest. The Borrower shall pay on
demand interest on the unpaid principal amount of each Advance
that is not paid when due and on the unpaid amount of all
interest, fees and other amounts then due and payable hereunder
that is not paid when due from the due date thereof to the date
paid, at a rate per annum equal at such time to (i) in the case
of any amount of principal, 2% per annum above the rate of
interest per annum required to be paid on such Advance
immediately prior to the date on which such amount became due
and payable and (ii) in the case of all other amounts, 2% per
annum above the rate per annum required to be paid on Base Rate
Advances pursuant to clause (a)(i) above.
SECTION 2.07. Interest Rate Determination. (a) The
Administrative Agent shall give prompt notice to the Borrower
and each Lender of the applicable interest rate determined by
the Administrative Agent for purposes of Section 2.06(a), and
the applicable rate, if any, furnished by Citibank for the
purpose of determining the applicable interest rate under
Section 2.06(a).
(b) If Citibank cannot furnish timely information to
the Administrative Agent for determining the Eurodollar Rate,
the Administrative Agent shall forthwith notify the Borrower and
each Lender that the interest rate cannot be determined for such
Eurodollar Rate Advances, whereupon (i) each such Eurodollar
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 to
Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the
Borrower that Citibank has determined that the circumstances
causing such suspension no longer exist.
(c) If the Required Lenders notify the Administrative
Agent that the Eurodollar Rate for any Interest Period for such
45
Eurodollar Rate Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their pro rata
shares of such Eurodollar Rate Advances for such Interest
Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each such Eurodollar
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 to
Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the
Borrower that such Lenders have determined that the
circumstances causing such suspension no longer exist.
(d) If the Borrower shall fail to select the duration
of any Interest Period for any Eurodollar Rate Advances in
accordance with the provisions contained in the definition of
"Interest Period" in Section 1.01, the Administrative Agent will
forthwith so notify the Borrower and the Lenders and the
Interest Period for such Eurodollar Rate Advances will be one
month.
SECTION 2.08. Fees. (a) Commitment Fee. The
Borrower agrees to pay to the Administrative Agent for the
account of the Lenders a commitment fee on the average daily
unused portion of each Appropriate Lender s Term A Commitment,
on the average daily unused portion of each Appropriate Lender's
Term B Commitment and on the average daily Unused Revolving
Credit Commitment of such Lender from the date hereof, in the
case of each Bank, and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender,
in the case of each other Lender, until the Termination Date at
a rate equal to (i) 1/2 of 1% per annum during any period in
which the Performance Level of the Borrower is at Level III or
Level IV or (ii) 3/8 of 1% per annum during any other period, in
each case payable in arrears on the date of the initial
Borrowing, thereafter quarterly on the last Business Day of each
March, June, September and December commencing June 30, 1994,
and the Termination Date.
(b) Other Fees. The Borrower shall pay to the
Administrative Agent for its own account such fees as are set
forth in the fee letter dated May 3, 1994 between the Borrower
and Citibank, as the same may be amended or otherwise modified
from time to time.
SECTION 2.09. Increased Costs. (a) Except as to
taxes, levies, imposts, deductions, charges, withholdings or
liabilities with respect thereto (it being understood that the
Borrower shall not have any liability for any taxes, levies,
imposts, deductions, charges, withholdings or liabilities with
respect thereto, except as provided in Section 2.12), if, due to
46
either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements
included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance
by any Lender with any guideline or request from any central
bank or other governmental authority in any case introduced,
changed, interpreted or requested after the date hereof (whether
or not having the force of law), there shall be (x) imposed,
modified or deemed applicable any reserve, special deposit or
similar requirement against assets held by, or letters of credit
or guarantees issued by, or deposits in or for the account of,
any Lender or (y) imposed on any Lender any other condition
relating to this Agreement or the Advances made by it, and the
result of any event referred to in clause (x) or (y) shall be to
increase the cost to such Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Advances, then the
Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent) made
within 60 days after the first date on which such Lender has
actual knowledge that it is entitled to make demand for payment
under this Section 2.09(a), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost; provided,
however, that if such Lender fails to so notify the Borrower
within such 60-day period, such increased cost shall commence
accruing on such later date on which the Lender notifies the
Borrower; provided further that, before making any such demand,
such Lender agrees to use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of
such a designation would avoid the need for, or reduce the
amount of, such increased cost and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate as to the amount of such increased cost,
submitted to the Borrower and the Administrative Agent by such
Lender, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender determines that compliance with any
law or regulation or any guideline or request from any central
bank or other governmental or monetary authority in regard to
capital adequacy (whether or not having the force of law)
including, without limitation, any guideline contemplated by the
report dated July 1988 entitled "International Convergence of
Capital Management and Capital Standards" issued by the Bank
Committee on Banking Regulations and Supervisory Practices, in
any case in which such law, regulation, guideline or request
became effective or was made after the date hereof, has or would
have the effect of reducing the rate of return on the capital
of, or maintained by, such Lender or any corporation controlling
such Lender as a consequence of such Lender s Advances or
Commitments
47
hereunder and other commitments of this type, by increasing the
amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender, to a level
below that which such Lender or any corporation controlling such
Lender could have achieved but for such adoption, effectiveness,
change or compliance (taking into account such Lender s or such
corporation s policies with respect to capital adequacy), then
the Borrower shall, from time to time, pay such Lender, upon
demand by such Lender (with a copy of such demand to the
Administrative Agent) made within 60 days after the first date
on which such Lender has actual knowledge that it is entitled to
make demand for payment under this Section 2.09(b) of such
reduction in return, such additional amount as may be specified
by such Lender as being sufficient to compensate such Lender for
such reduction in return, to the extent that such Lender
reasonably determines such reduction to be attributable to the
existence of such Lender s commitment to lend hereunder;
provided however, that if such Lender fails to so notify the
Borrower within such 60-day period, such amounts shall commence
accruing on such later date on which the Lender notifies the
Borrower. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be
conclusive and biding for all purposes, absent manifest error.
SECTION 2.10. Illegality. Notwithstanding any other
provision of this Agreement, if the introduction of or any
change in or in the interpretation of any law or regulation
makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its
Eurodollar Lending Office to perform its obligations hereunder
to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, then, upon written notice by
such Lender to the Borrower (with a copy to the Administrative
Agent), (i) each Eurodollar Rate Advance of such Lender will
automatically Convert into a Base Rate Advance and (ii) the
obligation of such Lender to make, or to Convert Base Rate
Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer
exist; provided, however, that, before making any such demand,
such Lender shall designate a different Eurodollar Lending
Office if the making of such a designation would avoid the need
for giving such notice and demand and would not, in the judgment
of such Lender, be otherwise disadvantageous to such Lender.
For purposes of this Section 2.10, a notice to the
Borrower by a Lender shall be effective with respect to any
Advance on the last day of the then current Interest Period for
such Advance; provided, however, that, if it is not lawful for
such Lender to maintain such Advance until the end of the
48
Interest Period applicable thereto, then the notice to the
Borrower shall be effective upon receipt by the Borrower.
SECTION 2.11. Payments and Computations. (a) The
Borrower shall make each payment hereunder and under the Notes
not later than 11:00 A.M. (New York City time) on the day when
due in U.S. dollars to the Administrative Agent at the
Administrative Agent s Account in same day funds. The
Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or
interest or commitment fees ratably (other than amounts payable
pursuant to Section 2.09 or 2.12) to the Lenders for the account
of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any
Lender to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms
of this Agreement. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(d), from and after the
effective date specified in such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under
the Notes 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.
(b) The Borrower hereby authorizes each Lender, if
and to the extent payment of principal, interest or fees owed to
such Lender is not made when due hereunder or under the Note or
Notes held by such Lender, to charge from time to time against
any or all of the Borrower s accounts with such Lender any
amount so due.
(c) All computations of interest based on the
Eurodollar Rate or the Federal Funds Rate shall be made by the
Administrative Agent, on the basis of a year of 360 days, and
all computations of interest based on the Base Rate and of
commitment fees shall be made by the Administrative Agent on the
basis of a year of 365 or 366 days, as the case may be, 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 commitment fees are payable. Each determination by
the Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under any Note
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
49
computation of payment of interest or commitment fee, as the
case may be; provided, however, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances
to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to the Lenders hereunder or under any Note that
the Borrower will not make such payment in full, the
Administrative Agent may assume, or at its option request
confirmation from the Borrower, that the Borrower has made such
payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full
to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from
the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent,
at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for
application to the Obligations under the Loan Documents under
circumstances for which the Loan Documents do not specify the
Advances or the Facility to which, or the manner in which, such
funds are to be applied, the Administrative Agent may, but shall
not be obligated to, elect to distribute such funds to each
Lender ratably in accordance with such Lender's proportionate
share of the principal amount of all outstanding Advances and
the Available Amount of all Letters of Credit then outstanding,
in repayment or prepayment of such of the outstanding Advances
or other Obligations owed to such Lender, and for application to
such principal installments, as the Administrative Agent shall
direct.
SECTION 2.12. Taxes. (a) Any and all payments by
the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.11, 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, in the case of each
Lender and the Administrative Agent, (i) taxes imposed on its
income, and franchise taxes and backup withholding taxes imposed
on it, by the United States or the jurisdiction under the laws
of which such Lender or the Administrative Agent (as the case
may be) is organized or any political subdivision or taxing
authority thereof or therein, (ii) taxes imposed on its income,
and
50
franchise taxes imposed on it, by the jurisdiction of such
Lender s or the Administrative Agent s principal office or
Applicable Lending Office or any political subdivision or taxing
authority thereof or therein and (iii) United States withholding
tax payable with respect to payments hereunder under laws
(including, without limitation any statute, treaty, ruling,
determination or regulation) in effect on the Initial Date with
respect to such Lender or the Administrative Agent, but not
excluding any United States withholding tax payable as a result
of any change in such laws occurring after the Initial Date (all
such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or
under any Note to any Lender or the Administrative Agent, (i)
the sum payable shall be increased as may be necessary so that
after making all required deductions of Taxes (including
deductions of Taxes applicable to additional sums payable under
this Section 2.12) such Lender or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would
have received had no such deductions of Taxes been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law;
provided, however, that any such Lender shall designate a
different Eurodollar Lending Office if, in the judgment of such
Lender, such designation would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect
of any sum payable hereunder to such Lender or the
Administrative Agent and would not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any
payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative 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 2.12)
paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect
thereto; provided that, in the event such Lender or the
Administrative Agent, as the case may be, successfully contests
the assessment of such Taxes or Other Taxes or any liability
arising therefrom
51
or with respect thereto, such Lender or the Administrative Agent
shall refund, to the extent of any refund thereof made to such
Lender or the Administrative Agent, any amounts paid by the
Borrower under this Section 2.12(c) in respect of such Taxes,
Other Taxes or liabilities arising therefrom or with respect
thereto. Each Lender and the Administrative Agent agree that it
will contest such Taxes, Other Taxes or liabilities if (i) the
Borrower furnishes to it an opinion of reputable tax counsel
acceptable to such Lender or the Administrative Agent to the
effect that such Taxes or Other Taxes were wrongfully or
illegally imposed and (ii) such Lender or the Administrative
Agent determines, in its sole discretion, that it would not be
disadvantaged or prejudiced in any manner whatsoever as a result
of such contest. This indemnification shall be made within 30
days from the date such Lender or the Administrative Agent (as
the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Administrative Agent, at
its address referred to in Section 8.02, appropriate evidence of
payment thereof. If no Taxes are payable in respect of any
payment hereunder or under the Notes by the Borrower from an
account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, the
Borrower will furnish to the Administrative Agent, at such
address, a certificate from each appropriate taxing authority,
or an opinion of counsel acceptable to the Administrative Agent,
in either case stating that such payment is exempt from or not
subject to Taxes. For purposes of this Section 2.12, the terms
United States" and "United States person" shall have the
meanings specified in Section 7701 of the Code.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States and the Administrative
Agent, if organized under the laws of a jurisdiction outside the
United States, shall, on or prior to the Initial Date and from
time to time thereafter if requested in writing by the Borrower
or the Administrative Agent (but only so long thereafter as such
Lender or the Administrative Agent remains lawfully able to do
so), provide the Borrower and (in the case of any such Lender
other than the Administrative Agent) the Administrative Agent
with two duly completed copies of Internal Revenue Service form
1001 or 4224, as appropriate, or any successor form prescribed
by the Internal Revenue Service, certifying that such Lender or
the Administrative Agent is entitled to benefits under an income
tax treaty to which the United States is a party that reduces
the rate of withholding tax on payments under this Agreement or
the Notes or certifying that the income receivable pursuant to
this Agreement or the Notes is effectively connected with the
conduct of a trade or business in the United States.
52
(f) For any period with respect to which the
Administrative Agent or a Lender has failed to provide the
Borrower with the appropriate forms described in subsection (e)
above (other than if such failure is due to a change in law
occurring after the date on which such person was originally
required to provide such forms, or if such forms are otherwise
not required under subsection (e) above), the Administrative
Agent or such Lender shall not be entitled to increased payments
or indemnification under subsection (a) or (c) above with
respect to Taxes imposed by the United States; provided,
however, that should the Administrative Agent or a Lender become
subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as the
Administrative Agent or such Lender shall reasonably request to
assist the Lender to recover such Taxes if, in the judgment of
the Borrower such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect
of any sum payable hereunder to the Administrative Agent or such
Lender and would not, in the judgment of the Borrower, be
disadvantageous to the Borrower.
(g) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.12 shall
survive the payment in full of principal and interest hereunder
and under the Notes.
(h) If a Lender shall change its Applicable Lending
Office other than (i) at the request of the Borrower or (ii) at
a time when such change would not result in this Section 2.12
requiring the Borrower to make a greater payment than if such
change had not been made, such Lender shall not be entitled to
receive any greater payment under this Section 2.12 than such
Lender would have been entitled to receive had it not changed
its Applicable Lending Office.
SECTION 2.13. Sharing of Payments, Etc. If any
Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on
account of the Advances owing to it (other than pursuant to
Section 2.09 or 2.12) in excess of its ratable share of payments
on account of the Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such
participations in the Advances owing to them as shall be
necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that, if
all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each
Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such
recovery together with an amount
53
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 in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.13
may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.14. Removal of Bank. In the event that any
Lender demands payment of costs or additional amounts pursuant
to Section 2.09 or Section 2.12 or asserts pursuant to Section
2.10 that it is unlawful for such Lender to make Eurodollar Rate
Advances, then (subject to such Lender's right to rescind such
demand or assertion within 10 days after the notice from the
Borrower referred to below) the Borrower may, upon 20 days'
prior written notice to such Lender and the Administrative
Agent, elect to cause such Lender to assign its Advances and
Commitments in full to an assignee institution selected by the
Borrower that meets the criteria of an Eligible Assignee and is
reasonably satisfactory to the Administrative Agent, so long as
such Lender receives payment in full of the outstanding
principal amount of all Advances made by it and all accrued and
unpaid interest thereon and all other amounts due and payable to
such Lender as of the date of such assignment (including without
limitation amounts owing pursuant to Section 2.09 or 2.12), and
in such case such Lender agrees to make such assignment, and
such assignee shall agree to accept such assignment and assume
all obligations of such Lender hereunder, in accordance with
Section 8.07.
SECTION 2.15. Conversion of Advances. (a) Optional.
The Borrower may on any Business Day, upon notice given to the
Administrative Agent not later than noon (New York City time) on
the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.07 and
2.09, Convert all or any portion of the Advances of one Type
comprising the same Borrowing into Advances of the other Type;
provided, however, that any Conversion of Eurodollar Rate
Advances into Base Rate Advances shall be made on, and only on,
the last day of an Interest Period for such Eurodollar Rate
Advances, and any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be subject to the limitation set
forth in Section 2.02(e) and in an amount not less than
$10,000,000. Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the
54
initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the
aggregate unpaid principal amount of Eurodollar Rate Advances
comprising any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than $10,000,000, such Advances
shall automatically Convert into Base Rate Advances.
(ii) Upon the occurrence and during the continuance of
any Event of Default (or, in the case of any involuntary
proceeding described in Section 6.01(e), a Default), (A) each
Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base
Rate Advance and (B) the obligation of the Lenders to make, or
to Convert Advances into, Eurodollar Rate Advances shall be
suspended.
SECTION 2.16. Letters of Credit. (a) The Letter of
Credit Facility. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit
(the "Letters of Credit") for the account of the Borrower from
time to time on any Business Day during the period from the date
of the initial Borrowing until 60 days before June 30, 1999
(i) in an aggregate Available Amount for all Letters of Credit
not to exceed at any time the Issuing Bank's Letter of Credit
Commitment and (ii) in an Available Amount for each such Letter
of Credit not to exceed the Unused Revolving Credit Commitments
of the Revolving Credit Lenders on such Business Day. No Letter
of Credit shall have an expiration date (including all rights of
the Borrower or the beneficiary to require renewal) later than
the earlier of 30 days before the Termination Date and, in the
case of a Standby Letter of Credit, one year after the date of
issuance thereof, but may by its terms be renewable annually
with the consent of the Issuing Bank, and, in the case of a
Trade Letter of Credit, 60 days after the date of issuance
thereof. Within the limits of the Letter of Credit Facility,
and subject to the limits referred to above, the Borrower may
request the issuance of Letters of Credit under this
Section 2.16(a), repay any Letter of Credit Advances resulting
from drawings thereunder pursuant to Section 2.16(c) and request
the issuance of additional Letters of Credit under this
Section 2.16(a).
(b) Request for Issuance. (i) Each Letter of Credit
shall be issued upon notice, given not later than 11:00 A.M.
(New York City time) on the tenth Business Day prior to the date
of the proposed issuance of such Letter of Credit, by the
Borrower to the Issuing Bank, which shall give to the
Administrative Agent and each Revolving Credit Lender prompt
notice thereof by telex, telecopier or cable. Each such notice
55
of issuance of a Letter of Credit (a "Notice of Issuance") shall
be by telex, telecopier or cable, confirmed immediately in
writing, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount
of such Letter of Credit, (C) expiration date of such Letter of
Credit, (D) name and address of the beneficiary of such Letter
of Credit and (E) form of such Letter of Credit, and shall be
accompanied by such application and agreement for letter of
credit (a "Letter of Credit Agreement") as the Issuing Bank may
specify to the Borrower for use in connection with such
requested Letter of Credit. If the requested form of such
Letter of Credit is acceptable to the Issuing Bank and the
Administrative Agent in their sole discretion, the Issuing Bank
will, upon fulfillment of the applicable conditions set forth in
Article III, make such Letter of Credit available to the
Borrower at its office referred to in Section 8.02 or as
otherwise agreed with the Borrower in connection with such
issuance. In the event and to the extent that the provisions of
any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.
(ii) The Issuing Bank shall furnish (A) to the
Administrative Agent on the first Business Day of each week a
written report summarizing issuance and expiration dates of
Letters of Credit issued during the previous week and drawings
during such week under all Letters of Credit, (B) to each
Revolving Credit Lender on the first Business Day of each month
a written report summarizing issuance and expiration dates of
Letters of Credit issued during the preceding month and drawings
during such month under all Letters of Credit and (C) to the
Administrative Agent and each Revolving Credit Lender on the
first Business Day of each calendar quarter a written report
setting forth the average daily aggregate Available Amount
during the preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the
Issuing Bank of a draft drawn under any Letter of Credit shall
constitute for all purposes of this Agreement the making by the
Issuing Bank of a Letter of Credit Advance, which shall be a
Base Rate Advance, in the amount of such draft. Upon written
demand by the Issuing Bank, with a copy of such demand to the
Administrative Agent and the Borrower, each other Revolving
Credit Lender shall purchase from the Issuing Bank, and the
Issuing Bank shall sell and assign to each such other Revolving
Credit Lender, such other Lender's Pro Rata Share of such
outstanding Letter of Credit Advance as of the date of such
purchase, by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of
the Issuing Bank, by deposit to the Administrative Agent's
Account, in same day funds, an amount equal to the portion of
the
56
outstanding principal amount of such Letter of Credit Advance to
be purchased by such Lender. The Borrower hereby agrees to each
such sale and assignment. Each Revolving Credit Lender agrees
to purchase its Pro Rata Share of an outstanding Letter of
Credit Advance on (i) the Business Day on which demand therefor
is made by the Issuing Bank, provided notice of such demand is
given not later than 11:00 A.M. (New York City time) on such
Business Day or (ii) the first Business Day next succeeding such
demand if notice of such demand is given after such time. Upon
any such assignment by the Issuing Bank to any other Revolving
Credit Lender of a portion of a Letter of Credit Advance, the
Issuing Bank represents and warrants to such other Lender that
the Issuing Bank is the legal and beneficial owner of such
interest being assigned by it free and clear of adverse claims,
but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance,
the Loan Documents or any Loan Party. If and to the extent that
any Revolving Credit Lender shall not have so made the amount of
such Revolving Credit Advance available to the Administrative
Agent, such Revolving Credit Lender agrees to pay to the
Administrative Agent forthwith on demand such amount together
with interest thereon, for each day from the date of demand by
the Issuing Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such amount for the
account of the Issuing Bank on any Business Day, such amount so
paid in respect of principal shall constitute a Letter of Credit
Advance made by such Lender on such Business Day for purposes of
this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by the Issuing Bank shall be
reduced by such amount on such Business Day.
(d) Obligations Absolute. The Obligations of the
Borrower under this Agreement, any Letter of Credit Agreement
and any other agreement or instrument relating to any Letter of
Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, any of the other Loan Documents, any Letter of
Credit Agreement, any Letter of Credit or any other
agreement or instrument relating thereto (this Agreement
and all of the other foregoing being, collectively, the
"L/C Related Documents");
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations
57
of the Borrower in respect of any L/C Related Document or
any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or
other right that the Borrower may have at any time against
any beneficiary or any transferee of a Letter of Credit (or
any Persons for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other
Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated
transaction;
(iv) any statement or any other document presented
under a 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;
(v) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of
Credit except for any payment made upon the Issuing Bank's
gross negligence or willful misconduct;
(vi) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment
or waiver of or consent to departure from the Guaranty or
any other guarantee, for all or any of the Obligations of
the Borrower in respect of the L/C Related Documents; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including,
without limitation, any other circumstance that might
otherwise constitute a defense available to, or a discharge
of, the Borrower or a guarantor.
(e) Compensation. (i) The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit
Lender a commission on such Lender's Pro Rata Share of the
average daily aggregate Available Amount of all Letters of
Credit outstanding from time to time at a rate per annum equal
to the Applicable Margin for Eurodollar Rate Advances in effect
from time to time payable in arrears quarterly on the last
Business Day of each March, June, September and December,
commencing June 30, 1994, and on the Termination Date.
(ii) The Borrower shall pay to the Issuing Bank, for
its own account, a fronting and issuance fee on the average
daily aggregate Available Amount of all Letters of Credit
outstanding from time to time at the rate of 1/8 of 1% per
annum, payable in
58
arrears quarterly on the last Business Day of each March, June,
September and December, commencing June 30, 1994, and on the
Termination Date.
SECTION 2.17. Defaulting Lenders. (a) In the event
that, at any one time, (i) any Lender shall be a Defaulting
Lender, (ii) such Defaulting Lender shall owe a Defaulted
Advance to the Borrower and (iii) the Borrower shall be required
to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the
Borrower may, so long as no Default shall occur or be continuing
at such time and to the fullest extent permitted by applicable
law, set off and otherwise apply the Obligation of the Borrower
to make such payment to or for the account of such Defaulting
Lender against the Obligation of such Defaulting Lender to make
such Defaulted Advance. In the event that the Borrower shall so
set off and otherwise apply the Obligation of the Borrower to
make any such payment against the Obligation of such Defaulting
Lender to make any such Defaulted Advance on any date, the
amount so set off and otherwise applied by the Borrower shall
constitute for all purposes of this Agreement and the other Loan
Documents an Advance by such Defaulting Lender made on such date
under the Facility pursuant to which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01.
Such Advance shall be a Base Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part
of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to Section
2.01, even if the other Advances comprising such Borrowing shall
be Eurodollar Advances on the date such Advance is deemed to be
made pursuant to this subsection (a). The Borrower shall notify
the Administrative Agent at any time the Borrower reduces the
amount of the Obligation of the Borrower to make any payment
otherwise required to be made by it hereunder or under any other
Loan Document as a result of the exercise by the Borrower of its
right set forth in this subsection (a) and shall set forth in
such notice (A) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender
and (B) the amount set off and otherwise applied in respect of
such Defaulted Advance pursuant to this subsection (a). Any
portion of such payment otherwise required to be made by the
Borrower to or for the account of such Defaulting Lender which
is paid by the Borrower, after giving effect to the amount set
off and otherwise applied by the Borrower pursuant to this
subsection (a), shall be applied by the Agent as specified in
subsection (b) or (c) of this Section 2.17.
(b) In the event that, at any one time, (i) any
Lender shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Amount to the Administrative Agent or any
of the
59
other Lenders and (iii) the Borrower shall make any payment
hereunder or under any other Loan Document to the Administrative
Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such
other Lenders and to the fullest extent permitted by applicable
law, apply at such time the amount so paid by the Borrower to or
for the account of such Defaulting Lender to the payment of each
such Defaulted Amount to the extent required to pay such
Defaulted Amount. In the event that the Administrative Agent
shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so
applied by the Administrative Agent shall be retained by the
Administrative Agent or distributed by the Administrative Agent
to such other Lenders, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the
Administrative Agent and such other Lenders and, if the amount
of such payment made by the Borrower shall at such time be
insufficient to pay all Defaulted Amounts owing at such time to
the Administrative Agent and the other Lenders, in the following
order of priority:
(i) first, to the Administrative Agent for any
Defaulted Amount then owing to the Administrative Agent;
and
(ii) second, to any other Lenders for any Defaulted
Amounts then owing to such other Lenders, ratably in
accordance with such respective Defaulted Amounts then
owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account
of such Defaulting Lender remaining, after giving effect to the
amount applied by the Administrative Agent pursuant to this
subsection (b), shall be applied by the Administrative Agent as
specified in subsection (c) of this Section 2.17.
(c) In the event that, at any one time, (i) any
Lender shall be Defaulting Lender, (ii) such Defaulting Lender
shall not owe a Defaulted Advance or a Defaulted Amount and
(iii) the Borrower, the Administrative Agent or any other Lender
shall be required to pay or distribute any amount hereunder or
under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower or such other Lender shall
pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by
applicable law, in escrow or the Administrative Agent shall, to
the fullest extent permitted by applicable law, hold in escrow
such amount otherwise held by it. Any funds held by the
60
Administrative Agent in escrow under this subsection (c) shall
be deposited by the Administrative Agent in an account with
Citibank, in the name and under the control of the
Administrative Agent, but subject to the provisions of this
subsection (c). The terms applicable to such account, including
the rate of interest payable with respect to the credit balance
of such account from time to time, shall be Citibank's standard
terms applicable to escrow accounts maintained with it. Any
interest credited to such account from time to time shall be
held by the Administrative Agent in escrow under, and applied by
the Administrative Agent from time to time in accordance with
the provisions of, this subsection (c). The Administrative
Agent shall, to the fullest extent permitted by applicable law,
apply all funds so held in escrow from time to time to the
extent necessary to make any Advances required to be made by
such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents
to the Administrative Agent or any other Lender, as and when
such Advances or amounts are required to be made or paid and, if
the amount so held in escrow shall at any time be insufficient
to make and pay all such Advances and amounts required to be
made or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount
then due and payable by such Defaulting Lender to the
Administrative Agent hereunder;
(ii) second, to any other Lenders for any amount then
due and payable by such Defaulting Lender to such other
Lenders hereunder, ratably in accordance with such
respective amounts then due and payable to such other
Lenders; and
(iii) third, to the Borrower for any Advance then
required to be made by such Defaulting Lender pursuant to a
Commitment of such Defaulting Lender.
In the event that such Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the
Administrative Agent in escrow at such time with respect to such
Defaulting Lender shall be distributed by the Administrative
Agent to such Defaulting Lender and applied by such Defaulting
Lender to the Obligations owing to such Lender at such time
under this Agreement and the other Loan Documents ratably in
accordance with the respective amounts of such Obligations
outstanding at such time.
(d) The rights and remedies against a Defaulting
Lender under this Section 2.17 are in addition to other rights
and remedies which the Borrower may have against such Defaulting
61
Lender with respect to any Defaulted Advance and which the
Administrative Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Lender to make an Advance on
the occasion of the initial Borrowing is subject to the
following conditions precedent:
(a) The Company's Board of Directors shall have
approved the Tender Offer and the Merger and recommended
that its shareholders tender their Company Stock pursuant
to the Tender Offer, and such recommendation shall not have
been withdrawn or qualified in a manner adverse to NHL or
the Purchaser.
(b) The Merger Agreement shall be in full force and
effect and shall not have been terminated, all Company
Stock owned by Affiliates of the Purchaser shall have been
contributed to the Purchaser, and all Company Stock held by
the Purchaser shall be free and clear of all Liens.
(c) The Lenders shall be satisfied with the corporate
and legal structure and capitalization of each Loan Party
and each of its Subsidiaries, including the terms and
conditions of the charter, bylaws and each class of capital
stock of each Loan Party and each such Subsidiary and of
each agreement or instrument relating to such structure or
capitalization.
(d) The Lenders shall be satisfied (i) that all
Existing Debt, other than the Debt identified on part I of
Schedule II (the "Surviving Debt"), has been prepaid,
redeemed or defeased in full or otherwise satisfied and
extinguished, (ii) that all Debt under the 1994 Credit
Agreement and the 1993 Credit Agreement has been prepaid
and that the commitments under such 1994 Credit Agreement
and the 1993 Credit Agreement have been terminated and
(iii) with the terms of the Escrow Agreement pursuant to
which up to $26,402,136 of the Term A Advances shall have
been set aside for the repayment of the Surviving Debt
listed in part II of Schedule II; the Surviving Debt
Agreements shall be in form and substance reasonably
satisfactory to the Lenders.
62
(e) Before giving effect to the Tender Offer and the
other transactions contemplated by this Agreement, there
shall have occurred no Material Adverse Change since
December 31, 1993 relating to (i) NHL or (ii) the Company.
(f) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party, the
Company or any of their Subsidiaries pending or threatened
before any court, governmental agency or arbitrator that
(i) would be reasonably likely to have a Material Adverse
Effect (in the case of clause (a) of the definition of
Material Adverse Effect, the term "Person" shall mean NHL
or the Company) or (ii) purports to affect the legality,
validity or enforceability of the Tender Offer or the
Merger, this Agreement, any Note, any other Loan Document,
any Related Document or the consummation of the
transactions contemplated hereby and thereby, and there
shall have been no material adverse change in the status,
or financial effect on NHL or the Company, of (A) the
investigations with the Office of the Inspector General
regarding billing practices at NHL or the Company or (B)
the shareholders' suits brought against NHL from that
described in the information provided to the Lenders prior
to their commitment to the Facilities.
(g) The Lenders have been given such access to the
management, records, books of account, contracts and
properties of NHL, the Company and its Subsidiaries as they
shall have requested.
(h) The Borrower shall have paid all accrued fees and
expenses of the Administrative Agent and the Lenders
(including the reasonable fees and expenses of special and
local counsel to the Administrative Agent).
(i) The Administrative Agent shall have received on
or before the date of the initial Borrowing the following,
each dated as of the date of the initial Borrowing (unless
otherwise specified), in form and substance satisfactory to
the Administrative Agent (unless otherwise specified) and
(except for the Notes) in sufficient copies for each Lender:
(i) the Notes to the order of the Lenders;
(ii) certified copies of the resolutions of the
board of directors of the Borrower, the Purchaser,
each other Loan Party (other than the Company and its
Subsidiaries) and Public Holdings approving the Tender
Offer, the Merger, this Agreement, the Notes, each
other Loan Document and each Related Document to which
63
it is or is to be a party, and of all documents
evidencing other necessary corporate action and
governmental approvals, if any, with respect to the
Tender Offer, the Merger, this Agreement, the Notes,
each other Loan Document and each Related Document;
(iii) a certificate of the Secretary or an
Assistant Secretary of the Borrower, each other Loan
Party (other than the Company and its Subsidiaries)
and Public Holdings certifying the names and true
signatures of the officers of the Borrower, the
Company, such other Loan Party and Public Holdings
authorized to sign this Agreement, the Notes, each
other Loan Document and each Related Document to which
they are or are to be parties and the other documents
to be delivered hereunder and thereunder;
(iv) a copy of the Charter of the Borrower, the
Company, each other Loan Party and Public Holdings and
each amendment thereto, certified (as of a date
reasonably near the date of the initial Borrowing) by
the Secretary of State of the State of Delaware as
being a true and correct copy thereof;
(v) a copy of a certificate of the Secretary of
State of the State of Delaware, dated reasonably near
the date of the initial Borrowing, listing the Charter
of the Borrower, the Company, each other Loan Party
and Public Holdings and each amendment thereto on file
in his office and certifying that (A) such amendments
are the only amendments to the Borrower's, the
Company's, such other Loan Party's or Public Holdings'
Charter on file in his office, (B) the Borrower, the
Company, each other Loan Party and Public Holdings
have paid all franchise taxes to the date of such
certificate and (C) the Borrower, the Company, each
other Loan Party and Public Holdings are duly
incorporated and in good standing under the laws of
the State of Delaware;
(vi) a certificate of the Borrower, each other
Loan Party (other than the Company and its
Subsidiaries) and Public Holdings signed on behalf of
the Borrower, such other Loan Party and Public
Holdings by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the
date of the initial Borrowing (the statements made in
such certificate shall be true on and as of the date
of the initial Borrowing), certifying as to (A) the
absence of any amendments to the Charter of the
Borrower, such other Loan Party or Public Holdings
since the date of
64
the Secretary of State's certificate referred to in
subclause (v) above, (B) a true and correct copy of
the bylaws of the Borrower, such other Loan Party and
Public Holdings as in effect on the date of the
initial Borrowing, (C) the due incorporation and good
standing of the Borrower, such other Loan Party and
Public Holdings, as a corporation organized under the
laws of the State of Delaware, and the absence of any
proceeding for the dissolution or liquidation of the
Borrower, such other Loan Party or Public Holdings,
(D) the truth in all material respects of the
representations and warranties contained in this
Agreement as though made on and as of the date of the
initial Borrowing and (E) the absence of any event
occurring and continuing, or resulting from the
initial Borrowing, that constitutes a Default;
(vii) a certificate of NHL to the effect that no
information provided by NHL to the Administrative
Agent or any Lender contained or contains any material
misstatement of fact or omitted or omits to state any
material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading except that, as to the
financial model included therein, such certificate
shall be limited to a statement that such model was
prepared in good faith by NHL's management based on
assumptions believed to be reasonable when made and
may be further qualified by a statement to the effect
that because assumptions as to future results are
inherently subject to uncertainty and contingencies
beyond NHL's control, actual results of NHL may be
higher or lower;
(viii) A security agreement in substantially the
form of Exhibit E (as amended from time to time in
accordance with its terms, the "Security Agreement"),
duly executed by the Borrower and each of its
Subsidiaries (other than the Company and its
Subsidiaries) organized under the laws of a state of
the United States of America, together with:
(A) certificates representing the Pledged
Shares referred to therein accompanied by undated
stock powers executed in blank and instruments
evidencing the Pledged Debt referred to therein
indorsed in blank,
(B) acknowledgment copies or stamped
receipt copies of proper financing statements,
duly filed on or before the day of the initial
Borrowing
65
under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may
deem necessary or desirable in order to perfect
and protect the Liens created by the Security
Agreement, covering the Collateral described in
the Security Agreement,
(C) completed requests for information,
dated on or before the date of the initial
Borrowing, listing the financing statements
referred to in clause (B) above and all other
effective financing statements filed in the
jurisdictions referred to in clause (B) above
that name the Borrower or the Company or any of
their respective Subsidiaries as debtor, together
with copies of such other financing statements,
(D) evidence of the completion of all other
recordings and filings of or with respect to the
Security Agreement that the Administrative Agent
may deem necessary or desirable in order to
perfect and protect the Liens created thereby,
(E) evidence of the insurance required by
the terms of the Security Agreement,
(F) copies of the Assigned Agreement
referred to in the Security Agreement, together
with a consent to such assignment, in
substantially the form of Exhibit B to the
Security Agreement, duly executed by each party
to such Assigned Agreement other than the
Borrower or any of its Subsidiaries,
(G) the Lockbox Letters referred to in the
Security Agreement, duly executed by the Borrower
or the applicable Subsidiary, as the case may be,
and
(H) evidence that all other action that the
Administrative Agent may deem necessary or
desirable in order to perfect and protect the
Liens created by the Security Agreement has been
taken.
(ix) A pledge agreement in substantially the form
of Exhibit F (as amended from time to time in
accordance with its terms, the "Pledge Agreement"),
duly executed by the Guarantor, together with
certificates representing the Pledged Shares referred
66
to therein accompanied by undated stock powers
executed in blank;
(x) A guaranty in substantially the form of
Exhibit G (as amended from time to time in accordance
with its terms, the "Guaranty"), duly executed by the
Guarantor;
(xi) A guaranty in substantially the form of
Exhibit H (as amended from time to time in accordance
with its terms, the "Subsidiary Guaranty"), duly
executed by the Subsidiary Guarantors;
(xii) An agreement in substantially the form of
Exhibit I (as amended from time to time in accordance
with its terms, the "Public Holdings Agreement"), duly
executed by Public Holdings;
(xiii) Certified copies of each of the Merger
Agreement, Offer to Purchase and the Tax Agreement
duly executed by the parties thereto and in form and
substance satisfactory to the Lenders, together with
all agreements, instruments and other documents
delivered in connection therewith;
(xiv) Such financial, business and other
information regarding each Loan Party, the Company and
their Subsidiaries as the Lenders shall have
reasonably requested, including, without limitation,
information as to possible contingent liabilities, tax
matters, environmental matters, obligations under
ERISA and Welfare Plans, collective bargaining
agreements and other arrangements with employees,
annual financial statements of both NHL and the
Company dated December 31, 1993, interim financial
statements of both NHL and the Company dated the end
of the most recent fiscal quarter for which financial
statements are available, pro forma financial
statements as to the Borrower and forecasts prepared
by management of NHL, in form and substance
satisfactory to the Lenders, of balance sheets, income
statements and cash flow statements on a quarterly
basis for the first year following the day of the
initial Borrowing and on an annual basis for each year
thereafter until the Termination Date;
(xv) Certificates, in substantially the forms of
Exhibit J-1 and J-2, attesting to the Solvency of NHL
and the Company after giving effect to the Tender
Offer, the Merger and the other transactions
contemplated hereby, executed on behalf of NHL and the
67
Company by the chief financial officer of NHL and an
appropriate officer of the Borrower, respectively;
(xvi) An environmental assessment report, in form
and substance satisfactory to the Lenders, from an
environmental consulting firm acceptable to the
Lenders, with respect to the properties specified on
Schedule III hereto;
(xvii) A letter, in form and substance
satisfactory to the Administrative Agent, from the
Borrower to KPMG Peat Marwick, its independent
certified public accountants, advising such
accountants that the Administrative Agent and the
Lenders have been authorized to exercise all rights of
the Borrower to require such accountants to disclose
any and all financial statements and any other
information of any kind that they may have with
respect to the Borrower and its Subsidiaries and
directing such accountants to comply with any
reasonable request of the Administrative Agent or any
Lender for such information;
(xvii) A letter, in form and substance
satisfactory to the Administrative Agent, from KPMG
Peat Marwick, the Borrower's independent Certified
Public Accountants, to the Administrative Agent,
acknowledging that the Lenders have relied and will
rely upon the financial statements of the Borrower
examined by such accountants in determining whether to
enter into, and to take action or refrain from taking
action under, the Loan Documents.
(xix) Evidence of insurance naming the
Administrative Agent as insured and loss payee with
such responsible and reputable insurance companies or
associations, and in such amounts and covering such
risks, as is satisfactory to the Lenders;
(xx) Certified copies of all Material Contracts
of the Company and its Subsidiaries;
(xxi) An escrow agreement in substantially the
form of Exhibit K (as amended from time to time in
accordance with its terms, the "Escrow Agreement"),
duly executed by the Borrower, the Administrative
Agent and Citibank, N.A. as escrow agent;
(xxii) A voting trust agreement, duly executed by
Public Holdings, the Guarantor and , as voting
68
trustee, in form and substance satisfactory to the
Administrative Agent, and a voting trust agreement,
duly executed by the Guarantor, the Borrower and , as
voting trustee, in form and substance satisfactory to
the Administrative Agent;
(xxiii) a favorable opinion of James G. Richmond
Esq., Executive Vice President and General Counsel of
the Borrower, of Paul, Weiss, Rifkind, Wharton &
Garrison, special New York counsel for the Borrower,
and of Cravath, Swaine & Moore, special New York
counsel for NHL substantially in the forms of
Exhibits L-1, L-2 and L-3 hereto, respectively, and
as to such other matters as any Lender through the
Administrative Agent may reasonably request; and
(xxiv) a favorable opinion of Shearman &
Sterling, counsel for the Administrative Agent, in
form and substance satisfactory to the Administrative
Agent.
SECTION 3.02. Conditions Precedent to Each Borrowing.
The obligation of each Appropriate Lender to make an Advance
(other than a Letter of Credit Advance) on the occasion of each
Borrowing (including the initial Borrowing) resulting in an
increase in the aggregate amount of outstanding Advances, and
the right of the Borrower to request the issuance of Letters of
Credit, shall be subject to the further 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 or Notice of Issuance and the
acceptance by the Borrower of the proceeds of such Borrowing or
of such Letter of Credit shall constitute a representation and
warranty by the Borrower that on the date of such Borrowing or
issuance such statements are true):
(i) The representations and warranties contained in
Section 4.01 are correct in all material respects on and as
of the date of such Borrowing or issuance, before and after
giving effect to such Borrowing or issuance and to the
application of the proceeds therefrom, as though made on
and as of such date; and
(ii) No event has occurred and is continuing, or would
result from such Borrowing or issuance or from the
application of the proceeds therefrom, which constitutes a
Default,
and (b) the Administrative Agent shall have received such other
certificates, opinions and other documents as any Lender through
the Administrative Agent may reasonably request in order to
69
confirm (i) the accuracy of the Borrower's representations and
warranties, (ii) the Borrower's timely compliance with the
terms, covenants and agreements set forth in this Agreement,
(iii) the absence of any Default and (iv) the absence of any
event of the type referred to in Section 2.10.
SECTION 3.03. Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified
in Section 3.01, each Lender shall be deemed to have consented
to, approved or accepted or to be satisfied with each document
or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lenders unless
an officer of the Administrative Agent responsible for the
transactions contemplated by this Agreement shall have received
notice from such Lender prior to the initial Borrowing
specifying its objection thereto and such Lender shall not have
made available to the Administrative Agent such Lender's ratable
portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so
qualify or be licensed would not have a Material Adverse
Effect (in the case of clause (a) of the definition of
Material Adverse Effect, the term "Person" shall mean the
Borrower) and (iii) has all requisite corporate power and
authority to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to
be conducted. All of the outstanding capital stock of the
Borrower has been validly issued, is fully paid and non-
assessable and is owned by the Guarantor free and clear of
all Liens except for the Liens created by the Collateral
Documents.
(b) Set forth on Schedule IV hereto is a complete and
accurate list of all Subsidiaries of each Loan Party,
showing as of the date hereof (as to each such Subsidiary)
the jurisdiction of its incorporation, the number of shares
70
of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the
outstanding shares of each such class owned (directly or
indirectly) by such Loan Party and the number of shares
covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date
hereof. All of the outstanding capital stock of all of
such Subsidiaries has been validly issued, is fully paid
and non-assessable and is owned by such Loan Party or one
or more of its Subsidiaries free and clear of all Liens,
except those created by the Collateral Documents. Each
such Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified
and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify
or be licensed except where the failure to so qualify or be
licensed would not have a Material Adverse Effect (in the
case of clause (a) of the definition of Material Adverse
Effect, the term "Person" shall mean the Borrower) and
(iii) has all requisite corporate power and authority to
own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each
Loan Party of this Agreement, the Notes, each Loan Document
and each Related Document to which it is or is to be a
party, and the consummation of the Tender Offer and the
Merger and the other transactions contemplated hereby, are
within such Loan Party's corporate powers, have been duly
authorized by all necessary corporate action, and do not
(i) contravene such Loan Party's charter or by-laws,
(ii) violate any law (including, without limitation, the
Exchange Act), rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or
result in the breach of, or constitute a default under, any
loan agreement, contract, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries or any of its or
their properties, the effect of which conflict, breach or
default is reasonably likely to have a Material Adverse
Effect (in the case of clause (a) of the definition of
Material Adverse Effect, the term "Person" shall mean the
Borrower) or (iv) except for the liens created by the
Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the
properties of the Borrower or any of its Subsidiaries.
None of the
71
Borrower and its Subsidiaries is in violation of any such
law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach
of which would be reasonably likely to have a Material
Adverse Effect (in the case of clause (a) of the definition
of Material Adverse Effect, the term "Person" shall mean
the Borrower).
(d) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority
or regulatory body is required for (i) the due execution,
delivery and performance by any Loan Party of this
Agreement or the Notes or any other Loan Document or any
Related Document to which it is or is to be a party or for
the consummation of the Tender Offer or the Merger or the
other transactions contemplated hereby, (ii) the grant by
any Loan Party of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance
of the Liens created by the Collateral Documents (including
the first priority nature thereof) or (iv) the exercise by
the Administrative Agent or any Lender of its rights under
the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for
the authorizations, approvals, actions, notices and filings
listed on Schedule V, all of which (other than as described
in such Schedule) have been duly obtained, taken, given or
made and are in full force and effect. All applicable
waiting periods in connection with the Merger and the other
transactions contemplated hereby have expired without any
action having been taken by any competent authority
restraining, preventing or imposing materially adverse
conditions upon the Merger or the rights of the Loan
Parties or their Subsidiaries freely to transfer or
otherwise dispose of, or to create any Lien on, any
properties now owned or hereafter acquired by any of them.
(e) This Agreement has been, and each of the Notes,
each other Loan Document and each Related Document when
delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement
is, and each of the Notes, each other Loan Document and
each Related Document when delivered hereunder will be, the
legal, valid and binding obligations of each Loan Party
party thereto, enforceable against such Loan Party in
accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditor's
rights generally.
72
(f) Each of (i) the audited Consolidated balance
sheet of NHL as at December 31, 1993 and the related
audited Consolidated statements of earnings, cash flows and
stockholders' equity of NHL for the fiscal year then ended
and (ii) the unaudited Consolidated balance sheets of NHL
as of March 31, 1994 and the related unaudited Consolidated
statement of earnings, cash flows and stockholders' equity
of NHL for the fiscal quarter then ended, copies of all of
which have been furnished to each Lender, fairly present
the financial condition of NHL and its Subsidiaries as at
such date and the results of the operations of NHL and its
Subsidiaries for the period ended on such date, all in
accordance with GAAP, subject in the case of clause (ii) to
normal year-end audit adjustments and to the absence of
footnotes. Since December 31, 1993, there has been no
Material Adverse Change relating to NHL.
(g) Each of (i) the audited Consolidated balance
sheet of the Company as at December 31, 1993 and the
related audited Consolidated statements of earnings, cash
flows and stockholders' equity of the Company for the
fiscal year then ended and (ii) the unaudited Consolidated
balance sheets of the Company as of March 31, 1994 and the
related unaudited Consolidated statement of earnings, cash
flows and stockholders' equity of the Company for the
fiscal quarter then ended, copies of all of which have been
furnished to each Lender, fairly present the financial
condition of the Company and its subsidiaries as at such
date and the results of the operations of the Company and
its Subsidiaries for the period ended on such date, all in
accordance with GAAP, subject in the case of clause (ii) to
normal year-end audit adjustments and to the absence of
footnotes. Since December 31, 1993, there has been no
Material Adverse Change relating to the Company.
(h) The Consolidated pro forma balance sheet of the
Borrower and its Subsidiaries as at May 31, 1994, and the
related Consolidated pro forma statement of income and cash
flows of the Borrower and its Subsidiaries for the five
months then ended, certified by the chief financial officer
of the NHL, copies of which have been furnished to each
Lender, fairly present the Consolidated pro forma financial
condition of the Borrower and its Subsidiaries as at such
date and the Consolidated pro forma results of operations
of the Borrower and its Subsidiaries for the period ended
on such date, in each case giving effect to the Tender
Offer, the Merger and the other transactions contemplated
hereby, all in accordance with GAAP.
73
(i) The Consolidated forecasted balance sheets,
income statements and cash flows statements of the Borrower
and its Subsidiaries delivered to the Lenders pursuant to
Section 3.01(i)(xiv) or 5.01(t)(v) were prepared in good
faith on the basis of the assumptions stated therein, which
assumptions were fair in the light of conditions existing
at the time of delivery of such forecasts, and represented,
at the time of delivery, the Borrower's best estimate of
its future financial performance.
(j) There is no pending or threatened action,
proceeding, governmental investigation or arbitration
affecting any Loan Party, the Company or any of their
Subsidiaries before any court, governmental agency or
arbitrator, which is reasonably likely to have a Material
Adverse Effect (in the case of clause (a) of the definition
of Material Adverse Effect, the term "Person" shall mean
the Borrower) or that purports to affect the legality,
validity or enforceability of the Tender Offer, the Merger,
this Agreement, any Note, any other Loan Document or any
Related Document or the consummation of the transactions
contemplated hereby or thereby.
(k) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying
Margin Stock and no proceeds of any Advance will be used to
purchase or carry any Margin Stock, except in connection
with the Tender Offer and the Merger, Permitted
Acquisitions and in connection with the repurchase by
Public Holdings of capital stock, or to extend credit to
others for the purpose of purchasing or carrying any Margin
Stock.
(l) The Borrower and its ERISA Affiliates are in
compliance in all material respects with the applicable
provisions of ERISA and the Code with respect to each Plan
thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Borrower
or any of its ERISA Affiliates. The amount of all Unfunded
Pension Liabilities under all Plans of the Borrower and its
ERISA Affiliates does not exceed $20,000,000. None of the
Borrower or any of its ERISA Affiliates has made
contributions or incurred any Withdrawal Liability to any
Multiemployer Plan within the past five years, and it is
not reasonably expected that such contributions shall be
made or required or that such liability shall be incurred
in any such case in amounts or under circumstances that
would be reasonably likely to result in a material
liability to the Borrower or any of its ERISA Affiliates.
Schedule B (Actuarial Information) to the 1992 annual
report (Form 5500 Series) for each Plan of the Borrower and
each of its ERISA
74
Affiliates, copies of which have been filed with the
Internal Revenue Service and furnished to the Lenders, is
complete and accurate in all material respects and fairly
presents the funding status of such Plan, and since the
date of such Schedule B there has been no material adverse
change in such funding status. The Borrower and its
Subsidiaries have no material liability with respect to
"expected postretirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards
No. 106.
(m) Neither the Borrower nor any of its Subsidiaries
currently maintains or contributes to any Welfare Plan
which provides post-retirement medical or life insurance
benefits other than pursuant to Section 4980B of the Code
or Section 601 through 608 of ERISA.
(n) The operations and properties of the Guarantor
and each of its Subsidiaries comply with all Environmental
Laws, all necessary Environmental Permits have been
obtained and are in effect for the operations and
properties of the Borrower and its Subsidiaries and the
Borrower and its Subsidiaries are in compliance with all
such Environmental Permits, except, as to all of the above,
where the failure to do so would not be reasonably likely
to have a Material Adverse Effect (in the case of clause
(a) of the definition thereof, the term "Person" shall mean
the Borrower); and no circumstances exist that are
reasonably likely to (i) form the basis of an Environmental
Action against the Guarantor or any of its Subsidiaries or
any of their respective properties or (ii) cause any such
property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental
Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the
case of clause (a) of the definition thereof, the term
"Person" shall mean the Borrower).
(o) The Guarantor and each of its Subsidiaries has
filed, has caused to be filed or has been included in all
tax returns (Federal, state, local and foreign) required to
be filed and has paid all taxes shown thereon to be due,
together with applicable interest and penalties.
(p) The Company has filed Federal tax returns or the
taxable years 1989, 1990, 1991 and 1992, and the Company
has
75
filed an application to extend the time to file the 1993
Federal tax return. The Company has not executed a consent
with the Internal Revenue Service to extend the time to
assess any taxes beyond the otherwise applicable statute of
limitation.
(q) The aggregate unpaid amount, as of the date
hereof, of adjustments to the Federal income tax liability
of the Company proposed by the Internal Revenue service
under notices of proposed adjustment or assessment received
by the Company does not exceed $900,000. No issues have
been raised by the Internal Revenue Service that, in the
aggregate, would be reasonably likely to have a Material
Adverse Effect (in the case of clause (a) of the definition
thereof, the term "Person" shall mean the Borrower).
(r) The aggregate unpaid amount, as of the date
hereof, of adjustments to the state, local and foreign tax
liability of the Company and its Subsidiaries proposed by
all state, local and foreign taxing authorities under
notices of proposed adjustment or assessment received by
the Company (other than amounts arising from adjustments to
Federal income tax returns) does not exceed $200,000. No
issues have been raised by such taxing authorities that, in
the aggregate, would be reasonably likely to have a
Material Adverse Effect (in the case of clause (a) of the
definition thereof, the term "Person" shall mean the
Borrower).
(s) The Merger will constitute a reorganization under
Section 368 of the Internal Revenue Code of 1986, as
amended. The Merger will not be taxable to the Company,
any of its Subsidiaries, any Loan Party or any of its
subsidiaries.
(t) The Company and its Subsidiaries do not have, as
of the date hereof, net operating loss carryforwards for
U.S. Federal income tax purposes.
(u) Neither any Loan Party nor any of its
Subsidiaries is an "investment company," or an "affiliated
person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of
Credit, nor the application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other
transactions contemplated hereby, will violate any
provision of such Act or any rule, regulation or order of
the Securities and Exchange Commission thereunder.
76
(v) The Guarantor, the Borrower, the Company and each
Subsidiary Guarantor is, individually and together with its
Subsidiaries, Solvent.
(w) Set forth on Schedule VI hereto is a complete and
accurate list of all Existing Debt (other than Surviving
Debt) and all existing Debt of NHL and its Subsidiaries
prior to the consummation of the Tender Offer, showing as
of the date hereof the principal amount outstanding
thereunder.
(x) Set forth on Schedule II hereto is a complete and
accurate list of all Surviving Debt, showing as of the date
hereof the principal amount outstanding thereunder.
(y) Set forth on Schedule VII hereto is a complete
and accurate list of all real property owned by the
Guarantor, the Company or any of their Subsidiaries,
showing as of the date hereof the street address, county or
other relevant jurisdiction, state, record owner and book
and estimated fair value thereof. The Guarantor, the
Company or such Subsidiary has good, marketable and
insurable fee simple title to such real property which is
to be the subject of a Mortgage pursuant to Section
5.01(o), free and clear of all Liens, other than Liens
created or permitted by the Loan Documents.
(z) Set forth on Schedule VIII hereto is a complete
and accurate list of all leases of real property requiring
monthly payment of at least $10,000 under which the
Guarantor, the Company or any of their Subsidiaries is the
lessee, showing as of the date hereof the street address,
county or other relevant jurisdiction, state, lessor,
lessee, expiration date and annual rental cost thereof.
Each such lease is the legal, valid and binding obligation
of the lessor thereof, enforceable in accordance with its
terms.
(aa) Set forth on Schedule IX hereto is a complete and
accurate list of all Investments held by the Guarantor, the
Company or any of their Subsidiaries, showing as of the
date hereof the amount, obligor or issuer and maturity, if
any, thereof.
(bb) Set forth on Schedule X hereto is a complete and
accurate list of all patents, trademarks, trade names,
service marks and copyrights, and all applications therefor
and licenses thereof, of the Guarantor, the Company or any
of their Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number,
the date of registration and the expiration date.
77
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
Advance shall remain unpaid, any Letter of Credit shall be
outstanding and shall not be fully cash collateralized pursuant
to Section 2.04 or Section 6.02 or any Lender shall have any
Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause
each of its Subsidiaries to comply, in all material
respects with all applicable laws, rules, regulations and
orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes,
assessments and governmental charges imposed upon it or
upon its property except to the extent contested in good
faith), the failure to comply with which would,
individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall mean
the Borrower).
(b) Compliance with Environmental Laws. Comply and
cause each of its Subsidiaries and all lessees and all
other Persons occupying its properties to comply, in all
material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and
properties; obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct,
and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake
any cleanup, removal, remedial or other action necessary to
remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all
Environmental Laws; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to
undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being
contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to
such circumstances.
(c) Maintenance of Insurance. Maintain, and cause
each of its Subsidiaries to maintain, insurance with
responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates.
78
(d) Preservation of Corporate Existence, Etc.
Preserve and maintain, and cause each of its Subsidiaries
to preserve and maintain, its corporate existence, rights
(charter and statutory) and franchises; provided, however,
that the Purchaser and the Company may consummate the
Merger and any wholly-owned Subsidiary may consummate any
other merger or consolidation permitted under Section
5.02(c); provided further that, neither the Borrower nor
any of its Subsidiaries shall be required to preserve any
right or franchise if the Board of Directors of the
Borrower or such Subsidiary shall determine that the
preservation thereof is not longer desirable in the conduct
of the business of the Borrower or such Subsidiary, as the
case may be, and that the loss thereof is not
disadvantageous in any material respect to the Borrower,
such Subsidiary or the Lenders.
(e) Visitation Rights. At any reasonable time and
from time to time, upon reasonable prior notice permit the
Administrative Agent or any of the Lenders or any agents or
representatives thereof, to the extent reasonably requested
to examine and make copies of and abstracts from the
records and books of account of, and visit the properties
of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower
and any of its Subsidiaries with any of their officers or
directors and with their independent certified public
accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account,
in which full and correct entries shall be made of all
financial transactions and the assets and business of the
Borrower and each such Subsidiary to the extent necessary
to permit the preparation of the financial statements
required to be delivered hereunder.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain
and preserve, all of its properties that are used or useful
in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(h) Tender Offer. Cause the Consummation of the
Tender Offer to occur as soon as practicable after the
initial Borrowing but in no event later than the 20th day
thereafter on the following terms and conditions:
(i) the Tender Offer shall have been consummated
strictly in accordance with the terms of the Merger
Agreement and the Offer to Purchase, without any
79
waiver or amendment to which the Administrative Agent
or the
80
Required Lenders shall have objected within a
reasonable period after being notified of such waiver
of amendment by the Borrower, and in compliance with
all applicable laws; the Company's Board of Directors
shall have approved the Tender Offer and the Merger
and recommend that its Shareholders tender their
Company Stock pursuant to the Tender Offer, and such
recommendation shall have not been withdrawn or
qualified in a manner adverse to NHL or the Purchaser;
(ii) The Administrative Agent shall have received
on or before the date of the Consummation of the
Tender Offer the following, each dated as of the date
of the Consummation of the Tender Offer, in form and
substance satisfactory to the Administrative Agent
(unless otherwise specified) and in sufficient copies
for each Lender:
(w) certified copies of the resolutions of
the board of directors of the Company and each of
its Subsidiaries approving the Tender Offer, the
Merger, each Loan Document and each Related
Document to which it is or is to be a party, and
of all documents evidencing other necessary
corporate action and governmental approvals, if
any, with respect to the Tender Offer, the
Merger, each Loan Document and each Related
Document;
(x) a certificate of the Secretary or an
Assistant Secretary of the Company and each of
its Subsidiaries certifying the names and true
signatures of the officers of the Company and
such Subsidiary authorized to sign each Loan
Document and each Related Document to which they
are or are to be parties and the other documents
to be delivered hereunder and thereunder;
(y) a certificate of the Company and each
of its Subsidiaries signed on behalf of the
Company and such Subsidiary by its President or a
Vice President and its Secretary or any Assistant
Secretary, dated as of the date of the
Consummation of the Tender Offer (the statements
made in such certificate shall be true on and as
of the date of the Consummation of the Tender
Offer), certifying as to (A) the absence of any
amendments to the Charter of the Company or such
Subsidiary since the date of the Secretary of
State's certificate referred to in
Section 3.01(i)(v), (B) a true and correct copy
81
of the bylaws of the Company or such Subsidiary
as in effect on the date of the Consummation of
the Tender Offer, (C) the due incorporation and
good standing of the Company or such Subsidiary,
as a corporation organized under the laws of the
State of Delaware, and the absence of any
proceeding for the dissolution or liquidation of
the Company or such Subsidiary, (D) the truth in
all material respects of the representations and
warranties contained in Loan Documents as though
made on and as of the date of the Consummation of
the Tender Offer and (E) the absence of any event
occurring and continuing, or resulting from the
Consummation of the Tender Offer, that
constitutes a Default; and
(z) a revised Schedule XII describing, in
addition to the Liens described on such Schedule
as of the date hereof, the Liens existing on the
date of the Consummation of the Tender Offer upon
or in any property of the Company or any
Subsidiary of the Company.
(i) Termination of Financing Statements. Upon the
request of the Administrative Agent, and at the expense of
the Borrower, within 10 days after such request, furnish to
the Administrative Agent proper termination statements on
Form UCC-3 covering such financing statements as the
Administrative Agent may reasonably request that were
listed in the completed requests for information referred
to in Section 3.01(i)(viii)(C).
(j) Performance of Material Contracts. Cause each of
its Subsidiaries to perform and observe all the terms and
provisions of each Material Contract to be performed or
observed by it; provided, however, that none of the
Borrower's Subsidiaries shall be required to perform any
such obligation that is being contested in good faith and
by proper proceeding and as to which appropriate reserves
are being maintained.
(k) Cash Concentration Accounts. (i) Maintain main
cash concentration accounts with Citibank and (ii)
maintain Lockbox Accounts into which all proceeds of
Collateral are paid with Citibank or one or more banks
acceptable to the Administrative Agent.
(l) Interest Rate Hedging. If the Threshold Date has
not occurred on or prior to December 31, 1994, enter into
prior to December 31, 1994, and maintain at all times
82
thereafter, interest rate Hedge Agreements with Persons
acceptable to the Required Lenders, covering a notional
amount of not less than 35% of the outstanding Advances at
such time and providing for such Persons to make payments
thereunder for a period of no less than 3 years to the
extent of increases in interest rates based on LIBOR.
(m) Merger. Cause the Purchaser to consummate the
Merger on or prior to the 150th day following the
Consummation of the Tender Offer on the following terms and
conditions:
(i) The Merger Agreement shall be in full force and
effect, without any waiver or amendment to which
the Administrative Agent or the Required Lenders
shall have objected within a reasonable period
after being notified of such waiver or amendment
by the Borrower; the Merger as described in the
Proxy Statement shall conform to the terms of the
merger set forth in the Merger Agreement; and the
Proxy Statement and all other documentation
relating to the Merger shall be in form and
substance reasonably satisfactory to the Lenders;
(ii) The Merger shall have been consummated in
compliance with all applicable laws, and in
accordance with the terms of the Merger Agreement
and the Proxy Statement, without any waiver or
amendment to which the Administrative Agent or
the Required Lenders shall have objected within a
reasonable period after being notified of such
waiver or amendment by the Borrower;
(iii) The Company's Board of Directors shall have
approved the Merger and recommended that its
shareholders vote in favor of the Merger, and
such recommendation shall not have been withdrawn
or qualified in a manner adverse to the Borrower,
the Company or the Lenders;
(iv) All governmental and third-party consents and
approvals necessary in connection with the Merger
shall have been obtained (without the imposition
of any material conditions that are not
reasonably acceptable to the Lenders) and shall
remain in effect; all applicable waiting periods
shall have expired or been terminated without any
action being taken by any competent authority;
and no law or regulation shall be applicable in
the reasonable judgment of the Lenders that
restrains,
83
prevents or imposes materially adverse conditions
upon the Merger; and
(v) The Administrative Agent shall have received on
or before the consummation of the Merger the
following, each dated such day, in form and
substance reasonably satisfactory to the Lenders
in sufficient copies for each Lender: (A) a
security agreement supplement in substantially
the form of Exhibit C to the Security Agreement,
duly executed by the Company and each of its
Subsidiaries organized under the laws of one of
the states of the United States of America,
together with (1) certificates representing the
Pledged Shares referred to therein accompanied by
undated stock powers executed in blank and
instruments evidencing the Pledged Debt referred
to therein endorsed in blank, (2) acknowledgment
copies of proper financing statements, duly filed
on or before the consummation of the Merger under
the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary
or desirable in order to perfect and protect the
Liens created by the Security Agreement in
respect of the property and assets of the Company
and its Subsidiaries, (3) evidence of the
completion of all other recordings and filings of
or with respect to the Security Agreement that
the Administrative Agent may deem necessary or
desirable in order to perfect and protect the
Liens created thereby in respect of the property
and assets of the Company, (4) the Lockbox
Letters referred to in the Security Agreement
relating to the Company and its Subsidiaries, and
(5) evidence that all other action that the
Administrative Agent may deem necessary or
desirable in order to perfect and protect the
Liens created by the Security Agreement in
respect of the property and assets of the Company
and its Subsidiaries have been taken; (B) a
subsidiary guaranty supplement in substantially
the form of Exhibit A to the Subsidiary Guaranty
duly executed by the Company and each of its
Subsidiaries organized under the laws of one of
the states of the United States; (C) a favorable
opinion of counsel for the Company reasonably
satisfactory to the Required Lenders, in form and
substance reasonably satisfactory to the Required
Lenders and as to such other matters as any
Lender through the Administrative Agent may
reasonably request; (D) a favorable opinion of
84
Cravath, Swaine & Moore, special New York counsel
to the Borrower to the effect that the Merger has
become effective in accordance with the Merger
Agreement and the General Corporation Law of the
State of Delaware; and (E) certified copies of a
certificate of merger or other confirmation from
the Secretary of State of the State of Delaware
reasonably satisfactory to the Lenders of the
consummation of the Merger.
(n) Activities of the Company. From and after the
date on which Persons designated or approved by the
Borrower shall constitute a majority of the board of
directors of the Company until the consummation of the
Merger, cause the Company (i) to perform and observe each
of its obligations and covenants in the Merger Agreement,
(ii) not to issue any securities, rights or options other
than (x) the issuance of any common stock of the Company
pursuant to the Note Agreement dated as of December 1, 1991
relating to the 7.375% Convertible Senior Subordinated
Notes of the Company or (y) the issuance of stock, stock
options or stock-based awards pursuant to a stock plan of
the Company or any Subsidiary of the Company and (iii) not
to declare or make any dividends or distributions to
shareholders as such.
(o) Real Estate Collateral. On or prior to the 180th
day following the consummation of the Tender Offer, the
Administrative Agent shall have received deeds of trust,
trust deeds, mortgages, leasehold mortgages and leasehold
deeds of trust in substantially the form of Exhibit M and
covering the properties listed on Schedule XI or such other
properties as the Required Lenders may approve (as amended
from time to time in accordance with their terms, the
"Mortgages"), duly executed by NHL, the Company and their
respective subsidiaries, as the case may be, together with:
(i) evidence that counterparts of the Mortgages
have been duly recorded on or before such day in all
filing or recording offices that the Administrative
Agent may deem necessary or desirable in order to
create a valid first and subsisting Lien on the
property described therein in favor of the Lenders and
that all filing and recording taxes and fees have been
paid,
(ii) fully paid American Land Title Association
Lender's Extended Coverage title insurance policies
(the "Mortgage Policies") in form and substance, with
endorsements and in amounts acceptable to the
Administrative Agent, issued, coinsured and reinsured
85
by title insurers acceptable to the Administrative
Agent, insuring the Mortgages to be valid first and
subsisting Liens on the property described therein,
free and clear of all defects (including, but not
limited to, mechanics' and materialmen's Liens) and
encumbrances, excepting only Permitted Encumbrances,
and providing for such other affirmative insurance
(including indorsements for future advances under the
Loan Documents and for mechanics' and materialmen's
Liens) and such coinsurance and direct access
reinsurance as the Administrative Agent may deem
necessary or desirable,
(iii) for each property described in a Mortgage
and which is either owned in fee by a Loan Party or
that is a free-standing leasehold property, American
Land Title Association form surveys, dated or brought
to date no more than 120 days before such day
certified to the Administrative Agent and the issuer
of the Mortgage Policies in a manner reasonably
satisfactory to the Administrative Agent by a land
surveyor duly registered and licensed in the States in
which the property described in such surveys is
located and reasonably acceptable to the
Administrative Agent, showing all buildings and other
improvements, any off-site improvements, the location
of any easements, parking spaces, rights of way,
building set-back lines and other dimensional
regulations and the absence of encroachments, either
by such improvements or on to such property, and other
defects, other than encroachments and other defects
acceptable to the Administrative Agent,
(iv) an appraisal of each of the properties
described in the Mortgages (for which an appraisal is
required by the Federal Financial Institutions Reform,
Recovery and Enforcement Act of 1989 as determined by
the Administrative Agent) complying with the
requirements of the Federal Financial Institutions
Reform, Recovery and Enforcement Act of 1989,
(v) engineering, soils and other reports as to
the properties described in the Mortgages, in form and
substance and from professional firms acceptable to
the Administrative Agent,
(vi) the Assignments of Leases and Rents referred
to in the Mortgages, duly executed by the Borrower,
86
(vii) such consents and agreements of lessors and
other third parties, and such estoppel letters and
other confirmations, as the Administrative Agent may
deem necessary or desirable, and
(viii) evidence of the insurance required by the
terms of the Mortgages.
(p) Net Worth. Maintain, at the end of each fiscal
quarter, Stockholders' Equity of not less than
$125,000,000, plus the aggregate amount of capital
contributions made to the Borrower's capital from the date
hereof, plus 65% of the cumulative Net Income of the
Borrower for the period beginning June 1, 1994 and ending
on such last day of such fiscal quarter.
(q) EBITDA to Interest Expense. Maintain as of the
end of each fiscal quarter of the Borrower an Interest
Coverage Ratio of not less than the ratio set forth below
for such fiscal quarter:
Four Fiscal Quarters Ratio
Ending in
September 1994 4.5:1
December 1994 4.5:1
March 1995 4.5:1
June 1995 4.5:1
September 1995 4.5:1
December 1995 4.5:1
March 1996 5.0:1
June 1996 5.0:1
September 1996 5.0:1
December 1996 5.0:1
March 1997 5.5:1
June 1997 5.5:1
September 1997 5.5:1
December 1997 5.5:1
March 1998 6.0:1
June 1998 6.0:1
September 1998 6.0:1
December 1998 6.0:1
87
Four Fiscal Quarters Ratio
Ending in
March 1999 6.0:1
June 1999 6.0:1
September 1999 6.0:1
December 1999 6.0:1
March 2000 6.0:1
June 2000 6.0:1
September 2000 6.0:1
December 2000 6.0:1
(r) Debt to EBITDA. Maintain at the end of each fiscal
quarter of the Borrower a ratio of Consolidated Debt of the
Borrower and its Subsidiaries as of the end of such fiscal
quarter to EBITDA in the aggregate for the four fiscal quarters
then ended of not more than the ratio set forth below for such
fiscal quarter:
Four Fiscal Quarters Ratio
Ending in
September 1994 4.25:1
December 1994 4.00:1
March 1995 3.50:1
June 1995 3.50:1
September 1995 3.50:1
December 1995 3.50:1
March 1996 3.00:1
June 1996 3.00:1
September 1996 3.00:1
December 1996 3.00:1
March 1997 2.50:1
June 1997 2.50:1
September 1997 2.50:1
December 1997 2.50:1
March 1998 2.00:1
June 1998 2.00:1
September 1998 2.00:1
88
Four Fiscal Quarters Ratio
Ending in
December 1998 2.00:1
March 1999 2.00:1
June 1999 2.00:1
September 1999 2.00:1
December 1999 2.00:1
March 2000 2.00:1
June 2000 2.00:1
September 2000 2.00:1
December 2000 2.00:1
(s) Fixed Charge Coverage Ratio. Maintain at the end
of each fiscal quarter of the Borrower a Fixed Charge Ratio
of not less than the ratio set forth below for each period
set forth below:
Four Fiscal Quarters Ratio
Ending in
September 1994 1.00:1
December 1994 1.15:1
March 1995 1.20:1
June 1995 1.25:1
September 1995 1.25:1
December 1995 1.30:1
March 1996 1.30:1
June 1996 1.30:1
September 1996 1.30:1
December 1996 1.30:1
March 1997 1.40:1
June 1997 1.40:1
September 1997 1.40:1
December 1997 1.40:1
March 1998 1.60:1
June 1998 1.60:1
September 1998 1.60:1
89
Four Fiscal Quarters Ratio
Ending in
December 1998 1.60:1
March 1999 1.70:1
June 1999 1.70:1
September 1999 1.70:1
December 1999 1.70:1
March 2000 1.80:1
June 2000 1.80:1
September 2000 1.80:1
December 2000 1.80:1
(t) Reporting Requirements. Furnish to the Lenders
through the Administrative Agent:
(i) as soon as available and in any event within
50 days after the end of each of the first three
quarters of each fiscal year of the Borrower,
Consolidated balance sheets of the Borrower as of the
end of such quarter and Consolidated statements of
earnings, cash flows and stockholders' equity of the
Borrower for the period commencing at the end of the
previous fiscal year and ending with the end of such
quarter, certified (subject to normal year-end audit
adjustment and the absence of footnotes) on behalf of
the Borrower by the chief financial officer of the
Borrower;
(ii) as soon as available and in any event within
105 days after the end of each fiscal year of the
Borrower, a copy of the annual report on Form 10-K for
such year for the Borrower and its Subsidiaries,
containing financial statements for such year
certified in a manner reasonably acceptable to the
Required Lenders by KPMG Peat Marwick or other
independent public accountants reasonably acceptable
to the Required Lenders;
(iii) together with each delivery of financial
statements pursuant to clauses (i) and (ii) above,
(A) a certificate executed on behalf of the Borrower
by a senior officer of the Borrower stating that no
Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Borrower
has taken and proposes to take with respect thereto
and
90
(B) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the
Borrower in determining compliance with the covenants
contained in Sections 5.01(p), (q), (r) and (s);
(iv) as soon as possible and in any event within
five days after knowledge of the occurrence of each
Default continuing on the date of such statement, a
statement executed on behalf of the Borrower by the
chief financial officer of the Borrower setting forth
details of such Default and the action which the
Borrower has taken and proposes to take with respect
thereto;
(v) as soon as available and in any event no
later than 15 days before the end of each fiscal year
of the Borrower, forecasts prepared by management of
the Borrower, in form satisfactory to the
Administrative Agent, of balance sheets, income
statements and cash flow statements on a quarterly
basis for the fiscal year following such fiscal year
than ending and on an annual basis for each fiscal
year thereafter until the Termination Date;
(vi) promptly after the sending or filing
thereof, copies of all reports which the Borrower
sends to any of its public security holders, and
copies of all Forms 10-K, 10-Q and 8-K, Schedules l3E-
4 (including all exhibits filed therewith) and
registration statements, and any other filings and
statements that the Borrower or any Subsidiary files
with the Securities and Exchange Commission or any
national securities exchange;
(vii) promptly and in any event within (A) ten
days after the filing or receiving thereof, copies of
all reports and notices with respect to each Plan of
the Borrower or any of its ERISA Affiliates which the
Borrower or any of its ERISA Affiliates files under
ERISA with the Internal Revenue Service or the PBGC or
the U.S. Department of Labor or which the Borrower or
any of its ERISA Affiliates receives from the PBGC,
other than a notice described in clause (D) of this
Section 5.01(t)(vii), (B) ten days after the Borrower
or any of its ERISA Affiliates knows or has reason to
know that any ERISA Event with respect to the Borrower
or any of its ERISA Affiliates has occurred, a
statement of the chief financial officer of the
Borrower describing such ERISA Event and the action,
if any, that the Borrower or such ERISA Affiliate
proposes
91
to take with respect thereto, (C) ten days after
receipt thereof by the Borrower or any of its ERISA
Affiliates from the sponsor of a Multiemployer Plan of
the Borrower or any of its ERISA Affiliates, a copy of
each notice received by any such Person concerning the
imposition of Withdrawal Liability upon such Person,
the reorganization or termination of such
Multiemployer Plan, or the amount of the liability
incurred, or that may be incurred, by the Borrower or
any of its ERISA Affiliates in connection with any
such event and (D) five Business Days after receipt
thereof by the Borrower or any of its ERISA
Affiliates, copies of each notice from the PBGC
stating its intention to terminate any Plan of the
Borrower or any of its ERISA Affiliates or to have a
trustee appointed to administer any such Plan;
(viii) in the event of any change in GAAP from
the date of the financial statements referred to in
Section 4.01(f) and upon delivery of any financial
statement required to be furnished under clauses (i)
or (ii) of this Section 5.01(t), a statement of
reconciliation conforming any information contained in
such financial statement with GAAP as in effect on th
date of the financial statements referred to in
Section 4.01(f);
(ix) promptly upon any officer of the Borrower
obtaining knowledge thereof, written notice of (A) the
institution or non-frivolous threat of any action,
suit, proceeding, governmental investigation or
arbitration against or affecting the Borrower or any
of its Subsidiaries or any property of the Borrower or
any of its Subsidiaries (any such action, suit,
proceeding, investigation or arbitration being a
"Proceeding") or (B) any material development in any
Proceeding that is already pending, where such
Proceeding or development has not previously been
disclosed by the Borrower hereunder and would be
reasonably likely to have a Material Adverse Effect
(in the case of clause (a) of the definition of
Material Adverse Effect, the term "Person" shall mean
the Borrower); together in each case with such other
information as any Lender through the Administrative
Agent may reasonably request to enable the Lenders and
their counsel to evaluate such matters;
(x) promptly after the furnishing thereof, copies
of any statement or report furnished to any other
holder of the securities of the Guarantor or of any of
its Subsidiaries pursuant to the terms of any
92
indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lenders
pursuant to any other clause of this Section 5.01(t);
(xi) promptly upon receipt thereof, copies of
all notices, requests and other documents received by
the Guarantor or any of its Subsidiaries under or
pursuant to any Related Document and, from time to
time upon request by the Administrative Agent, such
information and reports regarding the Related
Documents as the Administrative Agent may reasonably
request;
(xii) within 10 days after receipt, copies of all
Revenue Administrative Agent Reports (Internal Revenue
Service Form 886), or other written proposals of the
Internal Revenue Service, that propose, determine or
otherwise set forth positive adjustments to the
Federal income tax liability of the affiliated group
(within the meaning of Section 1504(a)(1) of the
Internal Revenue Code) of which the Borrower is a
member aggregating $5,000,000 or more;
(xiii) promptly, and in any event within five
Business Days after the due date (with extensions) for
filing the final Federal income tax return in respect
of each taxable year, a certificate of the Borrower (a
"Tax Certificate"), signed on behalf of the Borrower
by the President or the chief financial officer of the
Borrower, stating that the common parent of the
affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of
which the Borrower is a member has paid to the
Internal Revenue Service or other taxing authority the
full amount that such affiliated group is required to
pay in respect of Federal income tax for such year and
that the Borrower and its Subsidiaries have received
any amounts payable to them, and have not paid amounts
in respect of taxes (Federal, state, local or foreign)
in excess of the amount they are required to pay,
under the Tax Agreement in respect of such taxable
year;
(xiv) promptly after the occurrence thereof,
notice of any condition or occurrence on any property
of the Guarantor or any of its Subsidiaries that
results in a material noncompliance by the Guarantor
or any of its Subsidiaries with any Environmental Law
or Environmental Permit or would be reasonably likely
to (i) form the basis of an Environmental Action
against the Guarantor or any of its Subsidiaries or
any such property that would be reasonably likely to
have a
93
Material Adverse Effect (in the case of clause (a) of
the definition of Material Adverse Effect, the term
"Person" shall mean the Borrower) or (ii) cause any
such property to be subject to any restrictions on
ownership, occupancy, use or transferability under any
Environmental Law or Environmental Permit or would be
reasonably likely to (i) form the basis of an
Environmental Action against any Loan Party or any of
its Subsidiaries or such property that could have a
Material Adverse Effect (in the case of clause (a) of
the definition of Material Adverse Effect, the term
"Person" shall mean the Borrower) or (ii) cause any
such property to be subject to any restrictions on
ownership, occupancy, use or transferability under any
Environmental Law; and
(xv) such other information respecting the
condition (financial or otherwise), operations, assets
or business of the Borrower or any of its Subsidiaries
as any Lender through the Administrative Agent may
from time to time reasonably request.
(u) Monthly Financial Statements. During the period
from the date of the Consummation of the Tender Offer
through the one year anniversary of such date, the Borrower
will furnish to the Administrative Agent as soon as
available, and in any event within 30 days after the end of
each calendar month, a consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such month
and consolidated statements of income and cash flows and
divisional operational results of the Borrower and its
Subsidiaries for the period commencing at the end of the
previous month and ending with the end of such month, duly
certified on behalf of the Borrower by the chief financial
officer of the Borrower (but which need not include a GAAP
certification).
(v) Transactions with Affiliates. Conduct, and cause
each of its Subsidiaries to conduct, all transactions
otherwise permitted under this Agreement with any of their
Affiliates (other than the Borrower or any of its
Subsidiaries) on terms that are fair and reasonable and no
less favorable to the Borrower or such Subsidiary than it
would obtain in a comparable arm's-length transaction with
a Person that is not an Affiliate; provided, however, that
for purposes of this Section 5.01(v), the term "Affiliate"
shall not include any officer or director of the Borrower
or such Subsidiary, as the case may be, who does not
possess directly or indirectly the power to vote 5% or more
of the Voting Stock of the Borrower or its Subsidiaries;
provided
94
further that nothing in this Section 5.01(v) shall restrict
the ability of the Borrower and its Subsidiaries from
making the payments required to be made by the Borrower and
its Subsidiaries under the Tax Agreement.
(w) Use of Proceeds. Use the proceeds of the
Advances as follows: (i) to finance the purchase by the
Purchaser of all of the shares of the Company Stock
tendered in the Tender Offer, (ii) to finance the Merger,
(iii) to prepay amounts outstanding under the 1993 Credit
Agreement and the 1994 Credit Agreement on the date of the
initial Borrowing hereunder, (iv) to refinance certain
Existing Debt of the Company and NHL, (v) to pay
transaction costs and expenses and (v) for the general
corporate purposes of the Borrower and its Subsidiaries.
(x) Corporate Separateness. Take, and cause each of
its Subsidiaries to take, the following actions:
(i) pay all of its obligations, indebtedness and
expenses (except, in each case, to the extent
contested in good faith and by proper proceedings and
as to which appropriate reserves are being maintained)
and not encourage creditors of the Borrower or such
Subsidiary, as the case may be, to look to Public
Holdings for such payment;
(ii) maintain adequate capitalization for
purposes of conducting the business it proposes to
conduct;
(iii) maintain a business office or offices which
are plainly identified to the public as being separate
from the business offices of Public Holdings, and
maintain a mailing address in its own name and not in
the name of Public Holdings;
(iv) keep its corporate records and books of
account separate from those of Public Holdings;
(v) maintain its bank accounts separate from
those of Public Holdings and not commingle any of its
funds with those of Public Holdings;
(vi) prepare financial statements separate from
those of Public Holdings;
(vii) observe appropriate corporate formalities
with respect to all transactions and dealings between
Public Holdings on the one hand and the Borrower and
its Subsidiaries on the other, and properly reflect
all
95
such transactions and dealings in the Borrower's or
such Subsidiary's accounting records.
(viii) ensure that all transfers of assets
between Public Holdings on the one hand and the
Borrower and its Subsidiaries on the other are in
compliance with Section 5.01(v) or by way of capital
contribution;
(ix) hold itself out to the public (including
each of the creditors of the Borrower, its
Subsidiaries and Public Holdings) as a corporate
entity separate and distinct from Holdings;
(x) not become a debtor of Public Holdings and
not have Public Holdings guarantee any Debt or other
liability of the Borrower or any of its Subsidiaries;
and
(xi) not guarantee any Debt or other liability of
Public Holdings.
SECTION 5.02. Negative Covenants. So long as any
Advance shall remain unpaid, any Letter of Credit shall be
outstanding and shall not be fully cash collateralized pursuant
to Section 2.04 or Section 6.02 or any Lender shall have any
Commitment hereunder, the Borrower will not:
(a) Liens, Etc. Create or suffer to exist, or permit
any of its Subsidiaries to create or suffer to exist, any
Lien, upon or with respect to any of its properties (other
than treasury stock and Margin Stock), whether now owned or
hereafter acquired, or sign or file, or permit its
Subsidiaries to sign or file, under the Uniform Commercial
Code of any jurisdiction, a financing statement that names
the Borrower or any of its Subsidiaries as debtor, or sign,
or permit any of its Subsidiaries to sign, any security
agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, other
than the following Liens: (i) Liens created by the Loan
Documents; (ii) the Liens described on Schedule XII; (iii)
Liens upon or in any property of the Subsidiaries of the
Borrower (other than Liens upon or in property acquired as
part of a Permitted Acquisition securing Funded Debt
incurred in connection with such Permitted Acquisition)
created at the time of acquisition of such property or
improvements thereto to secure the purchase price of such
property or to secure indebtedness incurred solely for the
purpose of financing the acquisition of such property or
any subsequent improvements thereto provided such Liens do
not
96
extend to any other property of such Subsidiaries; (iv)
Liens existing on such property at the time of its
acquisition (other than any such Lien created in
contemplation of such acquisition); (v) Liens securing Debt
incurred to refinance Debt referred to in clause (iii) or
(iv) above, provided that such Liens are limited to the
same property securing the Debt so refinanced, the
principal amount of such Debt shall not be greater than the
principal amount of the Debt so refinanced, and any direct
or contingent obligor of the Debt secured thereby have not
been changed; (vi) mechanics', materialmen's, carriers' and
similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of
more than 30 days or which are being contested in good
faith and by proper proceedings and as to which appropriate
reserves are being maintained; (vii) deposits or Liens to
secure the performance of letters of credit, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of like nature incurred in the ordinary
course of business; (viii) Liens securing Capitalized
Leases; (ix) Liens for taxes, assessments and governmental
charges or levies not yet due and payable or which are
being contested in good faith and by proper proceedings and
as to which appropriate reserves are being maintained; (x)
Permitted Encumbrances; and (xi) judgment or other similar
Liens, provided that there shall be no period of more than
10 consecutive days during which a stay of enforcement of
the related judgment shall not be in effect.
(b) Lease Obligations. Create, incur, assume or
suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any obligations
as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback
transaction, or (ii) for the rental or hire of other real
or personal property of any kind under leases or agreements
to lease having an original term of one year or more that
would cause the direct and contingent liabilities of the
Borrower and its Subsidiaries, on a Consolidated basis, in
respect of all such obligations in any period set forth
below to exceed the amount set forth below for such period:
Year Ending In Amount
December 1994 $40,000,000
December 1995 $50,000,000
December 1996 $55,000,000
December 1997 $60,000,000
December 1998 $65,000,000
December 1999 $70,000,000
97
December 2000 $75,000,000
(c) Mergers, Etc. Merge into or consolidate with any
Person or permit any Person to merge into it, or permit any
of its Subsidiaries to do so, except that (i) the Borrower
and its Subsidiaries may consummate the Merger and (ii) any
wholly-owned Subsidiary of the Borrower may merge into or
consolidate with any other Subsidiary of the Borrower
provided that, in the case of any such consolidation, the
Person formed by such consolidation shall be a wholly-owned
Subsidiary of the Borrower; provided, however, that in each
case, immediately after giving effect thereto, no event
shall occur and be continuing that constitutes a Default.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets
or grant any option or other right to purchase, lease or
otherwise acquire any Collateral other than in the ordinary
course of its business, except (i) sales in the ordinary
course of its business, (ii) dispositions of obsolete, worn
out or surplus property disposed of in the ordinary course
of business, (iii) sales, leases, transfers or other
dispositions of assets by a wholly-owned Subsidiary of the
Borrower with any other wholly-owned Subsidiary of the
Borrower, (iv) in a transaction authorized by
subsection (c) of this Section, (v) the disposition of
Margin Stock for cash in an amount equal to the fair value
of such Margin Stock on the date of such disposition,
provided that such cash is invested in and held as Cash
Equivalents, (vi) sales of assets for cash and for fair
value in an aggregate amount not to exceed $10,000,000 in
any year, (vii) the sale of any asset by any Subsidiary of
the Borrower (other than a bulk sale of Inventory and a
sale of Receivables other than delinquent accounts for
collection purposes only) so long as (A) the purchase price
paid to the Borrower or such Subsidiary for such asset
shall be no less than the fair market value of such asset
at the time of such sale, (B) the purchase price for such
asset shall be paid to the Borrower or such Subsidiary
solely in cash and (C) the aggregate purchase price paid to
the Borrower and all of its Subsidiaries for such asset an
all other assets sold by the Borrower and its Subsidiaries
during the same Fiscal Year pursuant to this clause (v)
shall not exceed $25,000,000 and (D) the Borrower shall, on
the date of such sale, prepay the Advances pursuant to, and
in the order of priority set forth in, Section 2.05(b)(ii)
in an aggregate principal amount equal to the Net Cash
Proceeds received by the Borrower or such Subsidiary from
the sale of such asset and (viii) so long as no Default
shall occur and be continuing, the grant
98
of any option or other right to purchase any asset in a
transaction which would be permitted under the provisions
of the next preceding clause (vii); provided, however,
that, notwithstanding the foregoing, (x) the Purchaser
shall not, prior to the consummation of the Merger, sell,
lease, transfer or otherwise dispose of any of its assets
to NHL or the Borrower and (y) none of the Borrower's
Subsidiaries shall sell, lease, transfer or otherwise
dispose of any of its assets to the Borrower other than the
payment by such Subsidiary of cash dividends to the
Borrower.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise
acquire for value any of its capital stock or any warrants,
rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its
stockholders as such, make any distribution of assets,
capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any
capital stock or warrants, rights or options to acquire
such capital stock, or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for
value any capital stock of the Borrower or any warrants,
rights or options to acquire such capital stock or to issue
or sell any capital stock or any warrants, rights or
options to acquire such capital stock (other than to the
Borrower), except that the Borrower may:
(i) declare and deliver dividends and
distributions payable only in Common Stock or
warrants, rights or options to acquire Common Stock;
(ii) declare and pay cash dividends to its
stockholders in an amount not to exceed in any fiscal
year the lesser of (x) the amount of dividends paid by
Public Holdings to its public stockholders in such
fiscal year in accordance with the past practices of
NHL and (y) 25% of net income of the Borrower for the
fiscal year immediately preceding the year in which
such dividend is paid in the case of each fiscal year
during the period from the date hereof through
December 31, 2000, provided that the Borrower has not
previously paid any dividend pursuant to clauses (iii)
or (iv) below;
(iii) declare and pay cash dividends to its
stockholders in an amount not to exceed $50,000,000
during the period from the date hereof through
December 31, 2000 in connection with the repurchase by
Public Holdings of its Common Stock, provided that
after
99
giving effect to any such dividend and the related
repurchase of common stock the Stockholders' Equity of
the Borrower shall be at least $100,000,000;
(iv) declare and pay cash dividends in addition
to those referred to in clause (iii) above to its
stockholders in an amount not to exceed $50,000,000
during the period from the date hereof through
December 31, 2000 in connection with the repurchase by
Public Holdings of its Common Stock, provided that (x)
at the time of each such payment the long-term senior
unsecured debt of the Borrower is rated at least BB+
by Standard & Poor's Ratings Group and at least Ba1 by
Moody's Investors Service, Inc. and (y) after giving
effect to any such dividend, the ratio of Consolidated
Debt of the Borrower and its Subsidiaries as of the
date of such payment to the sum of Consolidated Debt
of the Borrower and its Subsidiaries as of such date
plus Stockholders' Equity as of such date is not more
than .55 to 1;
(v) declare and pay cash dividends to its
stockholders in an amount not ot exceed the amount
necessary from time to tto pay actual expenses to
Persons that are not Affiliates that are incidental to
Public Holdings being a public reporting but non-
operating corporation, provided that, on and after the
date on which Public Holdings holds assets other than
the capital stock of the Guarantor, such amounts shall
not, in the aggregate, exceed $250,000 in any calendar
year;
provided, however, that, at the time of the payment
referred to in clauses (ii), (iii), (iv) and (v) and after
giving effect to such payment (and, in the case of clauses
(iii) and (iv) thereof, the repurchase by Public Holdings
of its Common Stock), no Default shall have occurred and be
continuing; provided further that no payment referred to in
clause (ii), (iii) or (iv) shall be made unless the
Threshold Date shall have occurred on or prior to the 120th
day following the consummation of the Tender Offer.
(f) Investments. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person,
other than Investments (i) by the Purchaser in the Company
as contemplated by the Offer to Purchase and the Merger
Agreement, (ii) by the Borrower or the Company in any of
their respective wholly-owned Subsidiaries or by any
wholly-owned Subsidiary of the Borrower or the Company in
any other wholly-owned Subsidiary of the Borrower, (iii) in
any
100
officer, director or employee of the Borrower (other than
Ronald O. Perelman) in the ordinary course of business
consistent with past practice, (iv) that are Permitted
Acquisitions, (v) Investments by the Borrower and its
Subsidiaries in Cash Equivalents and in Hedge Agreements in
an aggregate notional amount not to exceed at any time
outstanding an amount equal to 100% of the aggregate
outstanding Advances at such time, (vi) Investments by the
Borrower in the Company prior to the consummation of the
Merger in an amount not to exceed the amount necessary to
repay in full the Company's 7.375% Convertible Senior
Subordinated Notes due December 15, 2006, provided that
such Investment is applied to the repayment of such
Convertible Senior Subordinated Notes and (vii) other
Investments in an aggregate amount invested at any one time
outstanding not to exceed $10,000,000; provided, however,
that each Subsidiary of the Borrower must execute and
deliver to the Administrative Agent a security agreement
supplement in substantially the form of Exhibit C to the
Security Agreement and a subsidiary guaranty supplement in
substantially the form of Exhibit A to the Subsidiary
Guaranty.
(g) Change in Nature of Business. Make, or permit
any of its Subsidiaries to make, any material change in the
nature of the business carried on at the date hereof by the
Borrower, the Company and their Subsidiaries taken as a
whole, except that, subject to the limitations set forth in
Section 5.02(f), the Borrower and its subsidiaries may
acquire (i) Control of any Person, or all or substantially
all of the assets of any Person, substantially all the
business of which consists of businesses that are not
Materially Different Businesses, (ii) any other assets
which the Borrower or such Subsidiary would not use in a
Materially Different Business, or (iii) Control of any
Person, substantially all the business of which consists of
Materially Different Businesses, or other assets which
constitute or would be used by the Borrower or such
Subsidiary in a Materially Different Business, as long as
(x) the consideration paid by the Borrower for any such
acquisition pursuant to this clause (iii), together with
the aggregate consideration paid for all previous
acquisitions pursuant to this clause (iii) during the term
of this Agreement, does not exceed 20% of Consolidated
total assets of the Borrower as of the last day of the
fiscal quarter next preceding the date of such acquisition
and (y) after giving effect thereto, no Default shall have
occurred and be continuing.
101
(h) Acquisitions. Make or permit any of its
Subsidiaries to make acquisitions outside the ordinary
course of business of assets of or equity in any Person
("Acquisitions") other than the following: (i) the
Acquisition of the Company; (ii) Investments permitted by
the terms of Section 5.02(f) (other than clause (iv)
thereof); (iii) a Small Acquisition if the sum of the
Purchase Price for such Small Acquisition plus the
aggregate Purchase Price for all other Small Acquisitions
in the current Calculation Period does not exceed the Small
Acquisition Basket; and (iv) Small Acquisitions in any
Calculation Period that are made in excess of the Small
Acquisition Basket for such Calculation Period and Large
Acquisitions if the following conditions are met: (A)
prior to such proposed Acquisition, the Borrower shall have
delivered to the Administrative Agent and the Lenders
Consolidated pro forma financial statements of the Borrower
(including a balance sheet and statements of earnings, cash
flows and stockholders' equity) as at the end of and for
the most recent period of four fiscal quarters ending at
least 45 days prior to the delivery of such financial
statements, which financial statements shall (a) be
certified (subject to normal year-end audit adjustments and
the absence of footnotes) on behalf of the Borrower by the
chief financial officer of the Borrower, (b) give effect to
all Acquisitions (including such proposed Acquisition) made
or proposed to be made since the beginning of such period
and (c) not give effect to the pretax charge to earnings
for the fiscal quarter ended December 31, 1992 on account
of the settlement of certain governmental claims, (B) the
sum of the Purchase Price of such Small Acquisition or
Large Acquisition, as the case may be, plus the aggregate
Purchase Price of all other Acquisitions made in the
current Calculation Period pursuant to this clause (iv)
does not exceed the Large Acquisition Basket, and (C) the
pro forma financial statements delivered pursuant to clause
(iv)(A) above show (x) the Interest Coverage Ratio for such
period is greater than 4:1 and (y) a ratio of Consolidated
Debt of the Borrower and its Subsidiaries as at the end of
such period to EBITDA for such period is less than 4:1;
provided, however, that (x) the aggregate Purchase Price of
all Acquisitions made pursuant to this Section 5.02(h)
during any Calculation Period shall not exceed (i)
$75,000,000 if the Threshold Date has not occurred and (ii)
$100,000,000 if the Threshold Date has occurred, and (y)
the aggregate Purchase Price of all Acquisitions made
pursuant to this Section 5.02(h) during the term hereof
shall not exceed the Maximum Acquisition Basket; provided
further that, at the time of the making of any Acquisition
and after giving effect to such Acquisition, no Default
shall have occurred and be continuing.
102
(i) Accounting Changes. Make or permit, or permit
any of its Subsidiaries to make or permit, any change in
accounting policies affecting (i) the presentation of
financial statements or (ii) reporting practices, except in
either case as required or permitted by GAAP.
(j) Debt. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume
or suffer to exist, any Debt other than:
(i) in the case of the Borrower,
(A) Debt under the Loan Documents,
(B) Debt in respect of the New Debt
Securities; and
(ii) in the case of any of its Subsidiaries,
(A) Debt owed to the Borrower or to a
wholly-owned Subsidiary of the Borrower or,
in the case of a Subsidiary of the Company,
to the Company or a wholly-owned Subsidiary
of the Company, in each case evidenced by a
promissory note in form acceptable to the
Administrative Agent and pledged to the
Lenders pursuant to the Security Agreement,
(B) Debt secured by Liens permitted by
Section 5.02(a)(iii) or (viii) not to exceed
in the aggregate (i) in the case of Section
5.02(a)(iii), $20,000,000, and (2) in the
case of Section 5.02(a)(viii), $15,000,000,
(C) the Surviving Debt,
(D) endorsement of negotiable instruments
for deposit or collection or similar
transactions in the ordinary course of
business,
(E) unsecured trade payables of the kind
included in clause (b) of the definition of
Debt,
(F) unsecured contingent obligations
arising in connection with a Permitted
Acquisition in an aggregate principal amount
not to exceed $50,000,000 at any time
outstanding, provided that each such
contingent obligation shall
103
not exceed an amount equal to 35% of the
Purchase Price of the related Permitted
Acquisition;
(G) Debt of a Subsidiary existing at the
time such Subsidiary is acquired and Debt
secured by Liens permitted by Section
5.02(a)(iv) in an aggregate principal amount
not to exceed $20,000,000 at any time
outstanding and any refunding or
refinancing, in whole or in part, of any
such Debt, provided that the principal
amount of such Debt shall not be increased
above the principal amount thereof
outstanding immediately prior to such
refunding or refinancing and the maturity
date of such refunding or refinancing shall
not be shortened as a result of or in
connection with such refunding or
refinancing, and
(H) other Debt in an aggregate principal
amount not to exceed $10,000,000 at any time
outstanding.
(k) Charter Amendments. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or
bylaws.
(l) Prepayments, Etc. of Debt. Prepay, redeem,
purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any
payment in violation of any subordination terms of, any
Debt, other than (i) the prepayment of the Advances in
accordance with the terms of this Agreement, (ii) regularly
scheduled or required repayments or redemptions of
Surviving Debt and (iii) the prepayment of the Company's
7.375% Convertible Senior Subordinated Notes due December
15, 2006 as contemplated by the Escrow Agreement, or amend,
modify or change in any manner any term or condition of any
Surviving Debt or the New Debt Securities, or permit any of
its Subsidiaries to do any of the foregoing other than to
prepay any Debt payable to the Borrower.
(m) Amendment, Etc. of Tax Agreement. Cancel or
terminate the Tax Agreement or consent to or accept any
cancellation or termination thereof, amend, modify or
change in any manner any term or condition of or give any
consent, waiver or approval thereunder, waive any default
under or any breach of any term or condition of any Tax
Agreement or agree in any manner to any other amendment,
modification or
104
change of any term or condition of the Tax Agreement, or
permit any of its Subsidiaries to do any of the foregoing;
provided, however, that the addition of a new "Subsidiary"
(as such term is defined in the Tax Agreement) as a party
to the Tax Agreement upon its becoming a member of the "NHL
Group" (as such term is defined in the Tax Agreement) or
the deletion of a party from the Tax Agreement upon its
ceasing to be a member of the NHL Group shall not be
considered an amendment, modification or change in any
manner of the Tax Agreement.
(n) Cancellation, Etc. of Certain Material Contracts.
Permit any of its Subsidiaries to cancel or terminate any
Material Contract of the type described in clause (a) of
the definition thereof or consent to or accept any
cancellation or termination thereof, in each case prior to
the scheduled expiration thereof.
(o) Negative Pledge. Enter into or suffer to exist,
or permit any of its Subsidiaries to enter into or suffer
to exist, any agreement prohibiting or conditioning the
creation or assumption of any Lien upon any of its property
or assets other than (i) in favor of the Administrative
Agent and the Lenders or (ii) in connection with (A) any
Surviving Debt and any Debt outstanding on the date such
Subsidiary first becomes a Subsidiary, (B) the New Debt
Securities or (C) any Debt permitted by Section 5.02(j)
secured by a Lien on specific property so long as such
prohibition or conditions relates solely to the specific
property securing such Debt.
(p) Partnerships. Become a general partner in any
general or limited partnership, or permit any of its
Subsidiaries to do so, other than through a single-purpose
Subsidiary established for the sole purpose of entering
into such partnership so that the liability of the Borrower
and its Subsidiaries with respect to such partnership will
be limited to their investment in such Subsidiary.
(q) Capital Expenditures. Not make, or permit any of
its Subsidiaries to make, any Capital Expenditures that
would cause the aggregate of all such Capital Expenditures
made by the Borrower and its Subsidiaries in any period set
forth below to exceed the amount set forth below for such
period:
105
7-month Period
Ending In Amount
December 1994 $ 28,000,000
Year Ending In Amount
December 1995 35,000,000
December 1996 40,000,000
December 1997 40,000,000
December 1998 40,000,000
December 1999 40,000,000
December 2000 40,000,000
; provided, however, that if in any period specified above the
amount of Capital Expenditures set forth above for such period
exceeds the amount of Capital Expenditures actually made by the
Borrower and its Subsidiaries in such period, the Borrower and
its Subsidiaries shall be entitled to make additional Capital
Expenditures in the next period specified above in an amount of
up to the amount of such excess; provided further that the
amount of Capital Expenditures actually made by the Borrower and
its Subsidiaries in the seven-month period ending in December
1994 shall not exceed $20,000,000 unless the amount in excess of
$20,000,000 shall be used in connection with the Capital
Expenditures set forth on Schedule XIII and the Borrower shall
have delivered a certificate to the Administrative Agent as to
the use of such excess amounts in reasonable detail.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of,
or interest on, any Advance or any fees payable to the
Administrative Agent or any Lender hereunder, in each case
when the same becomes due and payable, or any Loan Party
shall fail to make any other payment hereunder within five
Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by any Loan
Party or Public Holdings under or in connection with any
106
Loan Document shall prove to have been incorrect in any
material respect when made or confirmed; or
(c) (i) The Borrower shall fail to perform or observe
any term, covenant or agreement contained in Sections
5.01(h), 5.01(i), 5.01(m), 5.01(n), 5.01(o), 5.01(p),
5.01(q), 5.01(r), 5.01(s), 5.01(t), 5.01(u), 5.01(x) or
5.02, or (ii) any Loan Party or Public Holdings shall fail
to perform or observe any other term, covenant or agreement
contained in any Loan Document on its part to be performed
or observed if such failure shall remain unremedied for 30
days after written notice thereof shall have been given to
the Borrower by the Administrative Agent or any Lender; or
(d) Any Loan Party or any of its Subsidiaries or
Public Holdings shall fail to pay any principal of or
premium or interest on any Debt which is outstanding in a
principal amount of at least $10,000,000 in the aggregate
(but excluding Debt outstanding hereunder) of such Loan
Party or such Subsidiary or Public Holdings (as the case
may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after
the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt (other
than the Surviving Debt listed in Part II of Schedule II)
and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the
effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or
any such Debt (other than the Surviving Debt listed in Part
II of Schedule II) shall be declared to be due and
payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made,
in each case prior to the stated maturity thereof; or
(e) Any Loan Party or any of its Subsidiaries or
Public Holdings shall generally not pay its debts as such
debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding
shall be instituted by or against any Loan Party or any of
its Subsidiaries or Public Holdings seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian
or other
107
similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a
period of 45 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an
order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or any
Loan Party or any of its Subsidiaries or Public Holdings
shall take any corporate action to authorize any of the
actions set forth above in this Section 6.01(e); or
(f) Any judgment or order for the payment of money in
excess of $10,000,000 shall be rendered against any Loan
Party or any of its Subsidiaries or Public Holdings and
there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in
effect unless such judgment or order shall have been
vacated, satisfied or dismissed or bonded pending appeal;
provided, however, that any such judgment or order shall
not be an Event of Default under this Section 6.01(f) if
and for so long as (i) the entire amount of such judgment
or order is covered by a valid and binding policy of
insurance between the defendant and the insurer covering
payment thereof and (ii) such insurer, which shall be rated
at least "A" by A.M. Best Company, has been notified of,
and has not disputed the claim made for payment of the
amount of such judgment or order; or
(g) Any non-monetary judgment or order shall be
rendered against any Loan Party or any of its Subsidiaries
or Public Holdings that is reasonably likely to have a
Material Adverse Effect (in the case of clause (a) of the
definition of Material Adverse Effect, the term "Person"
shall mean the Borrower) and there shall be any period of
10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless such judgment or
order shall have been vacated, satisfied, discharged or
bonded pending appeal; or
(h) A Change of Control shall occur; or
(i) Any ERISA Event shall have occurred with respect
to the Borrower or any of its ERISA Affiliates and such
ERISA Event, together with any and all other ERISA Events
that shall have occurred with respect to the Borrower or
any of its ERISA Affiliates, is reasonably likely to result
in a liability of the Borrower and its ERISA Affiliates
with respect to any Plan of the Borrower or any of its
ERISA Affiliates in excess of $20,000,000; or
108
(j) The Borrower or any of its ERISA Affiliates shall
have been notified by the sponsor of a Multiemployer Plan
of the Borrower or any of its ERISA Affiliates that it has
incurred Withdrawal Liability to such Multiemployer Plan in
an amount that, when aggregated with all other amounts
required to be paid to Multiemployer Plans by the Borrower
and its ERISA Affiliates as Withdrawal Liability
(determined as of the date of such notification), exceeds
$20,000,000 or requires payments exceeding $1,000,000 per
annum; or
(k) The Borrower or any of its ERISA Affiliates shall
have been notified by the sponsor of a Multiemployer Plan
of the Borrower or any of its ERISA Affiliates that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as
a result of such reorganization or termination the
aggregate annual contributions of the Borrower and its
ERISA Affiliates to all Multiemployer Plans that are then
in reorganization or being terminated have been or will be
increased over the amounts contributed to such
Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in
which such reorganization or termination occurs by an
amount exceeding $1,000,000; or
(l) any provision of any Loan Document after delivery
thereof pursuant to Section 3.01 shall for any reason cease
to be valid and binding on or enforceable against any Loan
Party party to it or Public Holdings, or any such Loan
Party or Public Holdings shall so state in writing; or
(m) any Collateral Document after delivery thereof
pursuant to Section 3.01 or Section 5.01(o) shall for any
reason (other than pursuant to the terms thereof) cease to
create a valid and perfected first priority Lien on the
Collateral purported to be covered thereby;
then, and in any such event, the Administrative Agent (i) shall
at the request, or may with the consent, of the Required
Lenders, by notice to the Borrower, declare the obligation of
each Lender to make Advances to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request,
or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the Notes, all interest thereon and all
other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided,
however, that, in the event of an actual or deemed entry of an
order for relief with respect to the Borrower under the Federal
Bankruptcy Code, (A) the obligation of each Lender to make
Advances shall automatically be terminated and (B) the Notes,
all such interest
109
and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the
Borrower.
SECTION 6.02. Actions in Respect of the Letters of
Credit Upon Default. If any Event of Default shall have
occurred and be continuing and the Administrative Agent shall
have taken the action described in Section 6.01(ii), the
Administrative Agent may make demand upon the Borrower to, and
forthwith upon such demand the Borrower will, pay to the
Administrative Agent on behalf of the Lenders in same day funds
at the Administrative Agent's office designated in such demand,
for deposit in the L/C Cash Collateral Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent determines
that any funds held in the L/C Cash Collateral Account are
subject to any right or claim of any Person other than the
Administrative Agent and the Lenders or that the total amount of
such funds is less than the aggregate Available Amount of all
Letters of Credit, the Borrower will, forthwith upon demand by
the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in the L/C Cash
Collateral Account, an amount equal to the excess of (a) such
aggregate Available Amount over (b) the total amount of funds,
if any, then held in the L/C Cash Collateral Account that the
Administrative Agent determines to be free and clear of any such
right and claim.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each Lender
hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by the
Loan Documents (including, without limitation, enforcement or
collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions
shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent shall not be
required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to
give to each Lender prompt notice of each notice and other
report given to it by the Borrower pursuant to the terms of this
Agreement.
110
SECTION 7.02. Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors,
officers, agents or employees, shall be liable for any action
taken or omitted to be taken by it or them under or in
connection with the Loan Documents, except for its or their own
gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, the Administrative Agent: (i)
may treat the payee of any Note as the holder thereof until the
Administrative Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 8.07; (ii) may consult with legal counsel
(including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants
or experts; (iii) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (iv)
shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of the Loan Documents on the part of the Borrower or
to inspect the property (including the books and records) of the
Borrower; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any
lien or security interest created or purported to be created
under or in connection with the Loan Documents or any other
instrument or document furnished pursuant hereto; and (vi) shall
incur no liability under or in respect of the Loan Documents by
acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopier, telegram, cable or
telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 7.03. Citicorp and Affiliates. With respect
to its Commitments, the Advances made by it and the Note issued
to it, Citicorp shall have the same rights and powers under the
Loan Documents as any other Lender and may exercise the same as
though it were not the Administrative Agent and the term
"Lender" or "Lenders" shall, unless otherwise expressly
indicated, include Citicorp hereunder in its individual
capacity. Citicorp and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any
kind of business with, the Borrower, any of its Subsidiaries and
any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Citicorp were not the
Administrative Agent and without any duty to account therefor to
the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance
upon
111
the Administrative Agent or any other Lender and based on the
financial statements referred to in Section 4.01(f) and such
other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05. Indemnification. The Lenders agree to
indemnify the Administrative Agent (to the extent not reimbursed
by the Borrower), ratably according to the respective principal
amounts of the Advances then owing to each of them (or if no
Advances are at the time outstanding or if any Advances are then
owing to Persons which are not Lenders, ratably according to the
respective amounts of their Commitments), from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any action
taken or omitted by the Administrative Agent under the Loan
Documents, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of unpaid fees
owing to the Administrative Agent, and any out-of-pocket
expenses (including counsel fees) incurred by the Administrative
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, any
Loan Document, to the extent that the Administrative Agent is
not paid such fees, or the Administrative Agent is not
reimbursed for such expenses, by the Borrower.
SECTION 7.06. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint, with the consent of the
Borrower, a successor Administrative Agent which shall be a
Lender, or if no Lender consents to act as Administrative Agent
hereunder, an institution that would be permitted to be an
Eligible Assignee hereunder. If no successor Administrative
Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the
retiring
112
Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent,
then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall
be a commercial bank that is acceptable to the Borrower (which
shall not unreasonably withhold its approval). Upon the
acceptance of any appointment as Administrative Agent thereunder
by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under
the Loan Documents. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the
provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent.
SECTION 7.07. Co-Agents. Each Lender hereby
acknowledges that each of the Co-Agents has no liability
hereunder other than in its capacity as Lender.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement or the Notes, nor
consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and
signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no
amendment, waiver or consent shall, unless in writing and signed
by each of the Lenders affected thereby (other than any Lender
which is, at such time, a Defaulting Lender), do any of the
following: (i) waive any of the conditions specified in Section
3.01 or, in the case of the initial Borrowing, 3.02, (ii) change
the definition of the term "Required Lenders", (iii) release any
material portion of the Collateral (other than the release of
any of the Escrowed Property (as defined in the Escrow
Agreement) pursuant to the terms of the Escrow Agreement so long
as no Event of Default has occurred or is continuing) or permit
the creation, incurrence, assumption or existence of any Lien on
any material portion of the Collateral other than the Liens
created by the Collateral Documents and the Liens permitted by
Section 5.02(a) or (iv) amend this Section 8.01 and (b) no
amendment, waiver or consent shall, unless in writing and signed
by the Required Lenders and each Lender that has a Commitment
affected by such amendment, waiver or consent, (i) increase the
Commitment of such Lender or subject such Lender to any
additional obligations, (ii) reduce the principal of, or
interest on, the Notes held by such Lender or any fees or other
amounts payable hereunder to such
113
Lender or (iii) postpone any date fixed for any mandatory
reduction in the Commitment of such Lender or for any payment of
principal of, or interest on, the Notes held by such Lender or
any fees or other amounts payable hereunder to such Lender or
(iv) change the order of application of any prepayment set forth
in Section 2.05 in any manner that materially affects such
Lender; provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank in
addition to the Lenders required above to take such action,
affect the rights or obligations of the Issuing Bank; and
provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action,
affect the rights or duties of the Administrative Agent under
this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable
communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Borrower, at its address at 4225
Executive Square, Suite 800, La Jolla, California 92037,
Attention: Vice President--Finance; if to any Bank at its
Domestic Lending Office on Schedule I hereto; if to any other
Lender, at the address specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the
Administrative Agent, at its address at 1 Court Square, Long
Island City, New York, New York 10043, Attention: Andrew
Homolo, with a copy to Citibank, N.A., 399 Park Avenue, New
York, New York 10043, Attention: Steven Victorin; or, as to the
Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the
Borrower and the Administrative Agent. All such notices and
communications shall be effective (i) when received, if mailed
or delivered or telecopied (including machine acknowledgment),
or (ii) when delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company,
respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or VII shall not be
effective until received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the
part of any Lender, or the Administrative Agent to exercise, and
no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower
agrees to pay on demand all reasonable out-of-pocket costs and
114
expenses of the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification
and amendment of the Loan Documents and the other documents to
be delivered hereunder (including, without limitation, (A) all
due diligence, transportation, computer, duplication, appraisal,
audit and insurance expenses and fees and expenses of
consultants engaged with the prior consent of the Borrower
(which consent shall not be unreasonably withheld) and (B) the
reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent with respect thereto, with respect to
advising the Administrative Agent as to its rights and
responsibilities, or the protection or preservation of rights or
interests, under the Loan Documents, with respect to
negotiations with the Borrower or with other creditors of the
Borrower arising out of any Default or any events or
circumstances that may give rise to a Default and with respect
to presenting claims in, monitoring or otherwise participating
in any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally and any proceeding
ancillary thereto). The Borrower further agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Lenders in connection with the
enforcement of the Loan Documents and the other documents to be
delivered hereunder, whether in action, suit, litigation, any
bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally or otherwise (including, without
limitation, the reasonable fees and reasonable expenses of
counsel for the Administrative Agent and each Lender with
respect thereto) and expenses in connection with the enforcement
of rights under this Section 8.04(a).
(b) If any payment of principal of any Eurodollar
Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for
such Advance, as a result of a payment or Conversion pursuant to
Section 2.11 or 2.15, acceleration of the maturity of the Notes
pursuant to Section 6.01 or for any other reason, the Borrower
shall, upon demand by such Lender (with a copy of such demand to
the Administrative Agent), pay to the Administrative 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, including,
without limitation, any 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.
(c) The Borrower agrees to indemnify and hold
harmless the Administrative Agent and each Lender and each of
their affiliates and their officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out
of or in connection with or by
115
reason of (or in connection with the preparation for a defense
of) any investigation, litigation or proceeding arising out of,
related to or in connection with this Agreement and the
transactions contemplated hereby, whether or not an Indemnified
Party is a party thereto, whether or not the transactions
contemplated hereby are consummated and whether or not any such
claim, investigation, litigation or proceeding is brought by the
Borrower or any other person, except (i) to the extent such
claim, damage, loss, liability or expense (x) is found in a
final, non-appealable judgment by a court of competent
jurisdiction (a "Final Judgment") to have resulted from such
Indemnified Party's gross negligence or willful misconduct or
(y) arises from any legal proceedings commenced against any
Lender by any other Lender (in its capacity as such and not as
Administrative Agent), and (ii) in the case of any litigation
brought by the Borrower (A) seeking a judgment against any
Indemnified Party for any wrongful act or omission of such
Indemnified Party and (B) in which a Final Judgment is rendered
in the Borrower's favor against such Indemnified Party, the
provisions of this paragraph will not be available to provide
indemnification for any damage, loss, liability or expense
incurred by such Indemnified Party in connection with such
litigation described in clause (i) or (ii) of this Section
8.04(c).
SECTION 8.05. Right of Set-off. Upon (i) the
occurrence and during the continuance of any Event of Default
and (ii) the making of the request or the granting of the
consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Lender is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower
to such Lender now or hereafter existing under this Agreement
and the Note or Notes held by such Lender, whether or not such
Lender shall have made any demand under this Agreement or such
Note or Notes and although such obligations may be unmatured.
Each Lender agrees promptly to notify the Borrower after any
such set-off and application shall be made by such Lender,
provided that the failure to give such notice shall not affect
the validity of such set-off and application; provided further
that no Lender shall exercise any such right of set-off or any
other right of set-off without the prior consent of the
Administrative Agent. The rights of each Lender under this
Section 8.05 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which
such Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall
become effective when it shall have been executed by the
Borrower
116
and the Administrative Agent and when the Administrative Agent
shall have been notified by each Bank that such Bank has
executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and each
Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written
consent of the Administrative Agent and the Required Lenders.
SECTION 8.07. Assignments and Participations. (a)
Each Lender may and, if demanded by the Borrower pursuant to
Section 2.14, will assign to one or more banks or other entities
all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of
its Commitment, the Advances owing to it and the Note or Notes
held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of one or more
Facilities (ii) the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than
$10,000,000 and shall be an integral multiple of $1,000,000 in
excess thereof, or shall be an assignment to another Lender or
an assignment of all of the assigning Lender's rights and
obligations hereunder and under the Notes, (iii) each such
assignment shall be to another Lender, an Affiliate of the
assigning Lender or to an Eligible Assignee, (iv) each such
assignment made as a result of a demand by the Borrower pursuant
to Section 2.14 shall be arranged by the Borrower after
consultation with the Administrative Agent and shall be either
an assignment of all of the rights and obligations of the
assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together
cover all of the rights and obligations of the assigning Lender
under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower
pursuant to Section 2.14 unless and until such Lender shall have
received one or more payments from either the Borrower or one or
more Eligible Assignees in an aggregate amount at least equal to
the aggregate outstanding principal amount of the Advances owin
to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts
payable to such Lender under this Agreement and (vi) the parties
to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing and
recordation fee of $3,000 from the assignee. Upon such
execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have
117
been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and (y)
the Lender assignor thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be
a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender 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 the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section
4.01(f) and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the Administrative
Agent, such 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) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that 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.
(c) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders
and the Commitment of, and principal amount of the Advances
owing under each Facility to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the
Borrower, the
118
Administrative 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. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing
that it is an Eligible Assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to
the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent in exchange for the
surrendered Note or Notes a new Note or Notes to the order of
such Eligible Assignee in an amount equal to the Commitment
under each Facility assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a
Commitment hereunder under such Facility, a new Note to the
order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be
dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A-1,
Exhibit A-2 or Exhibit A-3, as the case may be.
(e) Each Lender may sell participations to one or
more banks or other entities in or to all or a portion of its
rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances
owing to it and the Note or Notes held by it); provided,
however, that (i) such Lender's obligations under this Agreement
(including. without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement,
(iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations
under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to
any departure by the Borrower therefrom, except to the extent
that such amendment, waiver or consent would reduce or postpone
any date fixed for payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.
119
(f) Any Lender may, in connection with any assignment
or participation or proposed assignment or participation
pursuant to this Section 8.07, disclose to the assignee or
participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on
behalf of the Borrower; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or
participant shall agree pursuant to an agreement substantially
in the form of Exhibit N to preserve the confidentiality of any
confidential information relating to the Borrower received by it
from such Lender.
(g) Notwithstanding any other provision set forth in
this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to
it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
SECTION 8.08. Governing Law; Submission to
Jurisdiction. (a) This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the
State of New York.
(b) The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal
court of the United States of America sitting in New York City,
and any appellate court thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by
law, in such Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. Subject to
the foregoing and to paragraph (c) below, nothing in this
Agreement shall affect any right that any party hereto may
otherwise have to bring any action or proceeding relating to
this Agreement against any other party hereto in the courts of
any jurisdiction.
(c) The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York
State or Federal court and the defense of an inconvenient forum
to the maintenance of such action or proceeding in any such
court.
120
(d) The Borrower agrees that service of process may
be made on the Borrower by personal service of a copy of the
summons and complaint or other legal process in any such suit,
action or proceeding, or by registered or certified mail
(postage prepaid) to the address of the Borrower specified in
Section 8.02, or by any other method of service provided for
under the applicable laws in effect in the State of New York.
SECTION 8.09. No Liability of the Issuing Bank. The
Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect
to its use of such Letter of Credit. Neither the Issuing Bank
nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of
Credit or any acts or omissions of any beneficiary or transferee
in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure
of any documents to bear any reference or adequate reference to
the Letter of Credit; or (d) any other circumstances whatsoever
in making or failing to make payment under any Letter of Credit,
except that the Borrower shall have a claim against the Issuing
Bank, and the Issuing Bank shall be liable to the Borrower, to
the extent of any direct, but not consequential, damages
suffered by the Borrower that the Borrower proves were caused by
(i) the Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) the
Issuing Bank's willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of
the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear
on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the
contrary.
SECTION 8.10. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 8.11. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
121
ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT, OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
122
NHL INTERMEDIATE HOLDINGS CORP. II
By
-------------------------------
Name:
Title:
CITICORP USA, INC.,
as Administrative Agent
By
-------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY,
as Co-Agent
By
-------------------------------
Name:
Title:
NATIONSBANK OF NORTH CAROLINA,
N.A., as Co-Agent
By
-------------------------------
Name:
Title:
123
TORONTO DOMINION (TEXAS), INC.,
as Co-Agent
By
-------------------------------
Name:
Title:
Banks
CITICORP USA, INC.
By
-------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY
By
-------------------------------
Name:
Title:
NATIONSBANK OF NORTH CAROLINA, N.A.
By
-------------------------------
Name:
Title:
124
TORONTO DOMINION (TEXAS), INC.
By
-------------------------------
Name:
Title:
BANQUE PARIBAS
By
-------------------------------
Name:
Title:
By
-------------------------------
Name:
Title:
CONTINENTAL BANK N.A.
By
-------------------------------
Name:
Title:
NATIONAL WESTMINSTER BANK USA
By
-------------------------------
Name:
Title:
SHAWMUT BANK, N.A.
By
-------------------------------
Name:
Title:
125
THE FIRST NATIONAL BANK OF BOSTON
By
-------------------------------
Name:
Title:
THE SANWA BANK, LIMITED, LOS
ANGELES BRANCH
By
------------------------------
Name:
Title:
Issuing Bank
CITIBANK, N.A.
By
-----------------------------
Name:
Title:
126
THE FUJI BANK, LIMITED
By
------------------------------
Name:
Title:
NHL INTERMEDIATE HOLDINGS CORP. II
By /s/ James G. Richmond
-------------------------------
Title: Secretary
CITICORP USA, INC.,
as Administrative Agent
By /s/ Townsend L. Weekes Jr.
-------------------------------
Title: Authorized Representative
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY,
as Co-Agent
By /s/ Motokazi Uematsu
-------------------------------
Title: Deputy General Manager
NATIONSBANK OF NORTH CAROLINA,
N.A., as Co-Agent
By /s/ Mark E. Stephanz
-------------------------------
Title: Senior Vice President
127
TORONTO DOMINION (TEXAS), INC.,
as Co-Agent
By /s/ Warren Finlay
-------------------------------
Title: Vice President
Banks
CITICORP USA, INC.
By /s/ Townsend L. Weekes
-------------------------------
Title: Authorized Representative
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY
By /s/ Motokazu Uematsu
-------------------------------
Title: Deputy General Manager
NATIONSBANK OF NORTH CAROLINA, N.A.
By /s/ Mark E. Stephanz
-------------------------------
Title: Senior Vice President
128
TORONTO DOMINION (TEXAS), INC.
By /s/ Carole A. Clause
-------------------------------
Title: Vice President
BANQUE PARIBAS
By /s/ Eric Green
-------------------------------
Title: Vice President
By /s/
-------------------------------
Name:
Title:
CONTINENTAL BANK N.A.
By /s/ John Orecchio
-------------------------------
Title: Vice President
NATIONAL WESTMINSTER BANK USA
By /s/ Dilcia P. Hill
-------------------------------
Title: Assistant Vice President
By /s/ W. Wakefield Smith
-------------------------------
Title: Vice President
SHAWMUT BANK, N.A.
By /s/ Amy M. Tsokanis
----------------------------
Title: Vice President
129
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Richard D. Hill, Jr.
-------------------------------
Title: Vice President
THE SANWA BANK, LIMITED, LOS
ANGELES BRANCH
By /s/ John Merhaut
-------------------------------
Title: First Vice President &
Manager
Issuing Bank
CITIBANK, N.A.
By /s/ Townsend L. Weekes Jr.
-------------------------------
Title: Authorized Representative
130
THE FUJI BANK, LIMITED
By /s/ Katsunori Nozawa
-------------------------------
Title: Vice President & Manager
