105
PROCEDURES LETTER-FLOATING AND FIXED RATE LOANS
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60690
Gentlemen:
Oil-Dri Corporation of America, a Delaware corporation (the "COMPANY")
hereby requests that borrowings under its $15,000,000 line of credit granted by
Harris Trust and Savings Bank be made and documented upon the following terms
and conditions.
All borrowings made by us under our line of credit from you shall bear
interest prior to maturity either (i) at a rate per annum which is equal at all
times to the rate from time to time announced by you as your prime commercial
rate, with any change in the interest rate on such borrowings by virtue of a
change in such prime commercial rate to be and become effective as of and on the
date of the relevant change in such prime commercial rate (such borrowings being
hereinafter collectively referred to as the "FLOATING RATE Loans" and
individually as a "FLOATING RATE LOAN") or (ii) at our request, if you so agree,
at a short term fixed rate of interest on and subject to the terms hereinafter
set forth (such borrowings being hereinafter collectively referred to as the
"FIXED RATE LOANS" and individually as a "FIXED RATE LOAN"). The Floating Rate
Loans and the Fixed Rate Loans are sometimes hereinafter collectively referred
to as the "LOANS" and individually as a "LOAN".
You will from time to time receive telephonic requests for Fixed Rate
Loans from any one of the persons authorized to borrow on our behalf under the
terms of this letter, each such request to specify the amount and term of the
requested Fixed Rate Loan. If you are willing to make a Fixed Rate Loan
available to us for the amount and for the term requested, you shall advise the
requesting person of the interest rate at which you are prepared to make such
Fixed Rate Loan and if the person acting on our behalf indicates that such rate
is acceptable, the Loan shall be deemed consummated. Each Fixed Rate Loan shall
be in a minimum amount of $1,000,000.00 and shall mature upon demand, but prior
to demand, shall mature on the last day of the period for which the interest
rate applicable to such Fixed Rate Loan shall have been fixed (each such period
being hereinafter referred to as an "INTEREST PERIOD".) We acknowledge and agree
that you have no obligation to quote rates or to make or refund any Fixed Rate
Loan after receiving a request therefor from us and that any Fixed Rate Loan
made by you to us shall be subject to such other terms and conditions as are
mutually agreed upon between you and us.
106
We agree that no Fixed Rate Loan may be voluntarily prepaid prior to its
express maturity date. In the event you shall incur any loss, cost or expense
(including, without limitation, any loss of profit and any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by you to fund or maintain any Fixed Rate Loan or the relending or
reinvesting of such deposits or amounts paid or prepaid by us) as a result of
any payment, (whether voluntary or as a result of a demand hereunder) of a Fixed
Rate Loan on a date other than the last day of the Interest Period applicable
thereto, then upon your demand, we shall pay you such amounts as will reimburse
you for such loss, cost or expense. If you make such a claim for compensation,
you shall provide to us a certificate setting forth the amount of such loss,
cost or expense in reasonable detail and such certificates shall be conclusive
and binding on us as to the amount thereof except in the case of manifest error.
All borrowings made by us under our line of credit from you shall be
payable on demand but if no demand is made, each such borrowing shall
automatically mature (i) on the last day of the Interest Period applicable
thereto in the case of Fixed Rate Loans and (ii) in the case of Floating Rate
Loans, on the interest payment date next following the date the Floating Rate
Loan is made, provided that, the Floating Rate Loans will automatically be
refunded with new Floating Rate Loans maturing on demand but if no demand is
made, then on the interest payment date next following the date such new
Floating Rate Loan is made, unless the line of credit has been terminated or
expired or you have advised us that you do not desire to effect such a renewal.
Interest on all borrowings hereunder shall be computed on the basis of a
year of 360 days and actual days elapsed and shall be payable, in the case of
Floating Rate Loans, on the 25th day of each month, and in the case of Fixed
Rate Loans, on the last day of their Interest Period and, if such Interest
Period is longer than three (3) months, every three (3) months after the Loan is
made, and, in the case of all Loans, upon demand.
In the event that the Company fails to pay any portion of a Loan when due
(whether by lapse of time, upon demand or otherwise), such unpaid amount shall
thereafter bear interest, which the Company hereby promises to pay at your
offices in Chicago, Illinois, at a rate per annum which is equal at all times to
the greater of (i) the rate per annum determined by adding three percent (2%) to
the rate applicable to such Loan prior to maturity or, (ii) the rate per annum
determined by adding three percent (2%) to the rate from time to time announced
by you as your prime commercial rate.
All borrowings hereunder shall be made against and evidenced by a
promissory note of the Company payable to your order in the aggregate principal
amount of $15,000,000, such note to mature upon demand, and to be otherwise in
the form of Exhibit A attached hereto (the "NOTE"). All borrowings made
hereunder, the status of such borrowings as Floating Rate Loans or Fixed Rate
Loans, the rates of interest and Interest Periods applicable to Fixed Rate Loans
and the repayment of any principal of the borrowings hereunder shall be recorded
by you on your books and records or, at your option, endorsed on the reverse
side of the Note or on a schedule thereto and the unpaid principal balance,
status and interest rates at any time so recorded or endorsed shall be prima
facie evidence in any court or other proceedings brought to enforce the Note of
the amount remaining unpaid thereon, the interest rate applicable thereto and
the status of Loans evidenced thereby.
107
You agree until further notice that upon oral advice by telephone received
by you from time to time from authorized persons listed in this letter that we
wish to borrow money, you will, lend and deposit to our general account with
you, known as Account Number 367-985-9 (the "ACCOUNT") such sums of money as may
be mutually agreed upon. Each such request for a borrowing shall specify whether
we are requesting a Floating Rate Loan or a Fixed Rate Loan. We agree to confirm
such borrowings in writing by mailing on the same day a letter in the form
attached hereto as Exhibit B in the case of any Floating Rate Loan and in the
form attached hereto as Exhibit C in the case of a Fixed Rate Loan, in each case
signed by any one of the following: Richard M. Jaffee and Daniel S. Jaffee or
any two of Michael L. Goldberg, Joseph C. Miller, Ricahrd L. Pietrowski and
Brian P. Curtis . It is understood, however, that pending receipt of such letter
by you in the ordinary course of the mails, that any sums of money borrowed by
telephone on advice of an authorized person or a person purporting to be an
authorized person in accordance with the foregoing arrangement shall immediately
be credited to the Account, and we shall be obligated to repay to you the sums
so borrowed at the times and with the interest as set forth in this letter
notwithstanding that any such borrowing is not confirmed as contemplated above.
The persons authorized to give you telephonic instructions to lend money
and repay borrowings in accordance with the foregoing are RICHARD M. JAFFEE,
CHAIRMAN (SINGLY, BY TELEPHONE OR IN WRITING, INCLUDING BY TELECOPY OR OTHER
FACSIMILE MEANS); DANIEL S. JAFFEE, PRESIDENT AND CHIEF EXECUTIVE OFFICER
(SINGLY, BY TELEPHONE OR IN WRITING, INCLUDING BY TELECOPY OR OTHER FACSIMILE
MEANS); *JOSEPH C. MILLER, VICE CHAIRMAN; *MICHAEL L. GOLDBERG, EXECUTIVE VICE
PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY; *RICHARD L. PIETROWSKI,
TREASURER; BRIAN P. CURTIS, GENERAL COUNSEL AND ASSISTANT SECRETARY . In
accepting telephonic advices from any of such persons in accordance with the
terms of this Agreement, you shall be entitled to rely on advices given by any
person purporting to be any one of such persons and shall have no liability to
us on account of any action taken by you pursuant to such telephonic advices
provided you have acted in good faith in connection therewith. You are, of
course, authorized to lend money to us upon the written (including telecopies or
other facsimile) instructions of any person and/or employees authorized to
borrow funds by telephonic advice.
This Agreement and the arrangements and authorizations herein contemplated
shall remain in full force and effect, and shall be applicable to any renewals
of, or replacements or substitutions for, our present revolving line of credit
from you, unless and until you have received written notice from the Company of
the termination or modification of this Agreement at your office in Chicago,
Illinois or unless and until the Company has received such a notice at its
address as shown on your records from you; provided that no such termination or
modification by the Company shall affect any transaction which occurred prior to
the receipt of such notice by you nor shall any such termination or modification
become effective without your written consent unless and until all amounts which
shall have been borrowed hereunder shall have been repaid in full. This
Agreement and your acceptance of this Agreement as hereinafter contemplated do
not constitute any commitment on your part to make any credit available to the
Company, it being understood that the making of credit available to the Company
by you from time to time shall be under and pursuant to the line of credit
arrangement that this Company has with you and shall be subject to the terms and
conditions incidental to such line of credit. This Agreement and the rights and
remedies of the parties hereto shall be governed by the laws of Illinois.
*THE FOLLOWING OFFICERS AND/OR EMPLOYEES OF THE CORPORATION ARE AUTHORIZED AND
EMPOWERED TO GIVE INSTRUCTIONS TO LEND MONEY AND REPAY BORROWINGS BY MANUAL
SIGNATURE ONLY WITH A SIGNATURE OF ANY ONE OTHER INCLUDED.
108
THIS PROCEDURES LETTER REPLACES THAT PROCEDURES LETTER -FLOATING AND FIXED
RATE LOANS DATED APRIL 10, 1998 (THE "PRIOR LETTER") BETWEEN US, WHICH SHALL BE
NULL AND VOID AFTER THE DATE HEREOF. ALL OUTSTANDING BORROWINGS UNDER THE PRIOR
LETTER SHALL BE EVIDENCED BY THE NOTE REFERRED TO ABOVE; PROVIDED THAT NOTHING
CONTAINED HEREIN SHALL AFFECT OUR OBLIGATION TO REPAY OUTSTANDING BORROWINGS
UNDER THE PRIOR LETTER.
If you are in agreement with the foregoing, please sign in the appropriate
place on the enclosed counterpart and return such counterpart to us, whereupon
this letter shall become a binding agreement between you and us.
Dated this 29th day of January 1999.
Very truly yours,
OIL-DRI CORPORATION OF AMERICA
By:
---------------------------
Its:
----------------------
Accepted as of the date last above written.
HARRIS TRUST AND SAVINGS BANK
By:
---------------------------
Its Vice President
109
EXHIBIT A
UNSECURED
DEMAND NOTE
$15,000,000 January 29, 1999.
ON DEMAND, for value received, the undersigned, Oil-Dri Corporation of
America, a Delaware corporation (the "COMPANY"), promises to pay to the order of
HARRIS TRUST AND SAVINGS BANK (the "BANK") at its offices at 111 West Monroe
Street, Chicago, Illinois, the principal sum of Fifteen Million and 00/100
Dollars ($15,000,000), or, if less, so much thereof as may be advanced to the
Company hereon pursuant to the Procedures Letter hereinafter referred to.
This Note evidences both Floating Rate Loans and Fixed Rate Loans as such
terms are defined in that certain Procedures Letter-Floating and Fixed Rate
Loans bearing even date herewith (the "PROCEDURES LETTER") by and between the
Company and the Bank as the same may from time to time be amended, renewed or
extended and the Company hereby promises to pay interest on each Loan evidenced
hereby at the rate and time specified therefor in the Procedures Letter. All
capitalized terms used herein without definition shall have the same meanings
herein as such terms are defined in the Procedures Letter.
Each Loan made under the Procedures Letter by the Bank to the Company, any
repayment of principal hereon, the status of each such Loan as a Floating Rate
Loan or a Fixed Rate Loan, the interest rate and, in the case of the Fixed Rate
Loans, the Interest Period applicable thereto shall be endorsed by the holder
hereof on the reverse side of this Note or (so long as this Note is held by
Harris Trust and Savings Bank) recorded on the books and records of the holder
hereof and the Company agrees that in any action or proceeding instituted to
collect or enforce collection of this Note, the amount so endorsed on the
reverse side hereof or recorded on the books and records of Harris Trust and
Savings Bank shall be prima facie evidence of all such amounts.
THIS NOTE IS ISSUED IN SUBSTITUTION OF AND REPLACEMENT FOR AND EVIDENCES
THE INDEBTEDNESS OF THE UNDERSIGNED THAT WAS FORMERLY EVIDENCED BY THAT CERTAIN
UNSECURED NOTE DATED APRIL 10, 1998, PAYABLE TO THE ORDER OF THE BANK IN ITS
FACE PRINCIPAL AMOUNT OF $20,000,000.00.
This Note and the holder hereof are entitled to all the benefits provided
for under the Procedures Letter, to which reference is hereby made for a
statement thereof. The Company hereby waives presentment and notice of dishonor.
The Company agrees to pay to the holder hereof all expenses incurred or paid by
such holder, including attorney's fees and court costs, in connection with the
collection of this Note. It is agreed that this Note and the rights and remedies
of the holder hereof shall be construed in accordance with and governed by the
laws of Illinois.
OIL-DRI CORPORATION OF AMERICA
By:
-----------------------------------
Its:
------------------------------
110
EXHIBIT B
CONFIRMATION
(FLOATING RATE LOAN)
, 19
------------------- ---
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois
Attention: Patrick J. McDonnell 111/10W
Facsimile (312) 461-2591
Gentlemen:
This will confirm the telephone conversation Ms./Mr.___________________
had with your office today whereby we arranged under the Procedures Letter
currently in effect between us for a $__________ Floating Rate Loan. We promise
to pay such Floating Rate Loan, together with interest thereon as provided for
in the terms of such Procedures Letter.
It is our understanding that the proceeds of this Loan have been deposited
in our account with you, or if the foregoing Loan represents a refunding or
extension of an outstanding Loan, you have noted the same on your books.
Very truly yours,
OIL-DRI CORPORATION OF AMERICA
By:
------------------------------------
Its:
-------------------------------
111
EXHIBIT C
CONFIRMATION
(FIXED RATE LOAN)
, 19
------------------- ---
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois
Attention: Patrick J. McDonnell 111/10W
Facsimile (312) 461-2591
Gentlemen:
This will confirm the telephone conversation Ms./Mr.____________________
had with your office today whereby we arranged under the Procedures Letter
currently in effect between us for a $__________ Fixed Rate Loan bearing
interest at the rate of _____% per annum and maturing _____ days from this date.
We promise to pay such Loan, together with interest thereon on such maturity
date, all as provided for in the terms of the Procedures Letter.
It is our understanding that the proceeds of this Loan have been deposited
in our account with you, or if the foregoing Loan represents a refunding or
extension of an outstanding Loan, that the same and the new interest rate and
maturity has been noted on your books.
Very truly yours,
OIL-DRI CORPORATION OF AMERICA
By:
-----------------------------------
Authorized Signature