EXHIBIT 4
CREDIT AGREEMENT
dated as of July 10, 1998
among
THE TIMKEN COMPANY,
as Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as Banks,
and
KEYBANK NATIONAL ASSOCIATION,
as Agent
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS 1
ARTICLE II. AMOUNT AND TERMS OF CREDIT 10
SECTION 2.1 AMOUNT AND NATURE OF CREDIT 10
SECTION 2.2 BORROWING PROCEDURES 16
SECTION 2.3 PAYMENT ON NOTES, ETC. 16
SECTION 2.4 PREPAYMENT 17
SECTION 2.5 FACILITY AND OTHER FEES; REDUCTION
OF COMMITMENT 18
SECTION 2.6 COMPUTATION OF INTEREST AND FEES;
DEFAULT RATE 18
SECTION 2.7 MANDATORY PREPAYMENT 18
SECTION 2.8 EXTENSION OF COMMITMENT 18
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO
EURODOLLAR LOANS; CAPITAL; TAXES 18
SECTION 3.1 RESERVES OR DEPOSIT REQUIREMENTS,
ETC. 18
SECTION 3.2 EURODOLLAR DEPOSITS UNAVAILABLE
OR INTEREST RATE UNASCERTAINABLE 19
SECTION 3.3 CHANGES IN LAW RENDERING EURODOLLAR
LOANS UNLAWFUL 19
SECTION 3.4 INDEMNITY 20
SECTION 3.5 CAPITAL ADEQUACY 20
SECTION 3.6 TAXES 21
ARTICLE IV. CONDITIONS PRECEDENT 22
SECTION 4.1 CONDITIONS TO INITIAL LOAN 22
SECTION 4.2 CONDITIONS TO EACH LOAN 23
ARTICLE V. COVENANTS 23
SECTION 5.1 INSURANCE 23
SECTION 5.2 MONEY OBLIGATIONS 23
SECTION 5.3 FINANCIAL STATEMENTS 24
SECTION 5.4 FINANCIAL RECORDS 24
SECTION 5.5 ERISA COMPLIANCE 25
SECTION 5.6 LEVERAGE RATIO 25
SECTION 5.7 LIENS 25
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SECTION 5.8 REGULATIONS U and X 27
SECTION 5.9 MERGER AND SALE OF ASSETS 27
SECTION 5.10 NOTICE 27
SECTION 5.11 ENVIRONMENTAL COMPLIANCE 27
SECTION 5.12 FIXED CHARGE COVERAGE 28
ARTICLE VI. REPRESENTATIONS AND WARRANTIES 29
SECTION 6.1 CORPORATE EXISTENCE; SUBSIDIARIES;
FOREIGN QUALIFICATION 29
SECTION 6.2 CORPORATE AUTHORITY 29
SECTION 6.3 COMPLIANCE WITH LAWS 29
SECTION 6.4 LITIGATION AND ADMINISTRATIVE
PROCEEDINGS 29
SECTION 6.5 TITLE TO ASSETS 29
SECTION 6.6 TAX RETURNS 30
SECTION 6.7 ENVIRONMENTAL LAWS 30
SECTION 6.8 EMPLOYEE BENEFITS PLANS 30
SECTION 6.9 CONSENTS OR APPROVALS 30
SECTION 6.10 FINANCIAL STATEMENTS 31
SECTION 6.11 REGULATIONS U and X 31
SECTION 6.12 ACCURATE AND COMPLETE STATEMENTS 31
SECTION 6.13 DEFAULTS 31
ARTICLE VII. EVENTS OF DEFAULT 31
SECTION 7.1 PAYMENTS 31
SECTION 7.2 CERTAIN COVENANTS 31
SECTION 7.3 OTHER COVENANTS 31
SECTION 7.4 REPRESENTATIONS AND WARRANTIES 32
SECTION 7.5 CROSS DEFAULT 32
SECTION 7.6 ERISA DEFAULT 32
SECTION 7.7 CHANGE IN CONTROL 32
SECTION 7.8 MONEY JUDGMENT 32
SECTION 7.9 INSOLVENCY 32
ARTICLE VIII. REMEDIES UPON DEFAULT 33
SECTION 8.1 OPTIONAL DEFAULTS 33
SECTION 8.2 AUTOMATIC DEFAULTS 33
SECTION 8.3 OFFSETS 33
SECTION 8.4 EQUALIZATION PROVISION 34
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ARTICLE IX. THE AGENT 34
SECTION 9.1 APPOINTMENT AND AUTHORIZATION 34
SECTION 9.2 NOTE HOLDERS 34
SECTION 9.3 CONSULTATION WITH COUNSEL 34
SECTION 9.4 DOCUMENTS 35
SECTION 9.5 AGENT AND AFFILIATES 35
SECTION 9.6 KNOWLEDGE OF DEFAULT 35
SECTION 9.7 ACTION BY AGENT 35
SECTION 9.8 NOTICES, DEFAULT, ETC. 35
SECTION 9.9 INDEMNIFICATION OF AGENT 35
SECTION 9.10 SUCCESSOR AGENT 36
ARTICLE X. MISCELLANEOUS 36
SECTION 10.1 BANKS' INDEPENDENT INVESTIGATION 36
SECTION 10.2 NO WAIVER; CUMULATIVE REMEDIES 36
SECTION 10.3 AMENDMENTS, CONSENTS 37
SECTION 10.4 NOTICES 37
SECTION 10.5 COSTS, EXPENSES AND TAXES 37
SECTION 10.6 INDEMNIFICATION 37
SECTION 10.7 OBLIGATIONS SEVERAL; NO FIDUCIARY
OBLIGATIONS 38
SECTION 10.8 EXECUTION IN COUNTERPARTS 38
SECTION 10.9 BINDING EFFECT; BORROWER'S ASSIGNMENT 38
SECTION 10.10 BANK ASSIGNMENTS/PARTICIPATIONS 38
SECTION 10.11 SEVERABILITY OF PROVISIONS; CAPTIONS 41
SECTION 10.12 INVESTMENT PURPOSE 41
SECTION 10.13 ENTIRE AGREEMENT 41
SECTION 10.14 GOVERNING LAW; SUBMISSION TO
JURISDICTION 41
SECTION 10.15 LEGAL REPRESENTATION OF PARTIES 42
SECTION 10.16 CONFIDENTIALITY 42
SECTION 10.17 JURY TRIAL WAIVER S-1
EXHIBIT A A-1
EXHIBIT B B-1
EXHIBIT C C-1
EXHIBIT D-1 D-1-1
EXHIBIT D-2 D-2-1
EXHIBIT D-3 D-3-1
EXHIBIT E E-1
EXHIBIT F F-1
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ANNEX 1 F-5
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This CREDIT AGREEMENT, dated as of July 10, 1998 (as
amended, waived or otherwisemodified from time to time,
this "Agreement") is among THE TIMKEN COMPANY, an Ohio
corporation (the "Borrower"), the banking institutions named
in Schedule 1 attached hereto and made a part hereof
(collectively, the "Banks" and individually, a "Bank") and
KEYBANK NATIONAL ASSOCIATION, as Agent for the Banks under
this Agreement (in such capacity, the "Agent").
WITNESSETH:
WHEREAS, Borrower and the Banks desire to establish a
credit facility in the aggregate principal amount
hereinafter set forth that will be made available to
Borrower upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
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):
"Adjusted Prime Rate" shall mean a rate per annum equal
to the greater of (a) the Prime Rate or (b) one-half of one
percent (0.5%) in excess of the Federal Funds Effective Rate.
Any change in the Adjusted Prime Rate shall be effective
immediately from and after such change in the Adjusted Prime
Rate.
"Advantage" shall mean any payment (whether made
voluntarily or involuntarily, by offset of any deposit or
other indebtedness or otherwise) received by any Bank in
respect of the Debt, if such payment results in that Bank
having less than its pro rata share of the Debt then
outstanding, than was the case immediately before such
payment.
"Agent Fee Letter"shall mean the Agent Fee Letter from
Agent to Borrower dated the Closing Date.
"Applicable Facility Fee Rate" shall mean a rate based
on the S&P Rating or the Moody's Rating, whichever is
higher, as follows:
Applicable Facility
S & P Rating Moody's Rating Fee Rate
A or higher A2 or higher 8.0 Basis Points
A- A3 9.0 Basis Points
BBB+ Baa1 10.0 Basis Points
BBB Baa2 12.5 Basis Points
BBB- or less Baa3 or less 17.5 Basis Points
Changes to the Applicable Facility Fee Rate shall be
immediately effective upon a change in the Moody's Rating or
the S&P Rating, as applicable; provided, however, that if at
any time there is a difference between the Moody's Rating
and the S&P Rating of greater than one (1) rating, then the
Applicable Facility Fee Rate then in effect shall be based
upon the average of (a) the number of basis points as
determined from the Moody's Rating, and (b) the number of
basis points as determined from the S&P Rating. The above
matrix does not modify or waive, in any respect, the rights
of the Banks to charge the Default Rate, or the rights and
remedies of Agent and the Banks pursuant to Articles VII or
VIII hereof.
"Applicable Eurodollar Margin" shall mean a margin
based on the S&P Rating or the Moody's Rating, whichever is
higher, as follows:
S & P Rating Moody's Rating Applicable
Eurodollar Margin
A- or higher A3 or higher 15.00 Basis Points
BBB+ Baa1 17.50 Basis Points
BBB Baa2 20.00 Basis Points
BBB- or less Baa3 or less 22.50 Basis Points
Changes to the Applicable Eurodollar Margin shall be
immediately effective upon a change in the Moody's Rating or
the S&P Rating, as applicable; provided, however, that if at
any time there is a difference between the Moody's Rating
and the S&P Rating of greater than one (1) rating, then the
Applicable Eurodollar Margin then in effect shall be based
upon the average of (a) the number of basis points as
determined from the Moody's Rating, and (b) the number of
basis points as determined from the S&P Rating. The above
matrix does not modify or waive, in any respect, the rights
of the Banks to charge the Default Rate, or the rights and
remedies of Agent and the Banks pursuant to Articles VII or
VIII hereof.
"Business Day" shall mean a day of the year on which
banks are not required or authorized to close in Cleveland,
Ohio, and, if the applicable Business Day relates to any
Eurodollar Loan, on which dealings are carried on in the
London interbank Eurodollar market.
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"Closing Date" shall mean the effective date of this
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, together with the rules and regulations promulgated
thereunder.
"Commitment" shall mean the obligation hereunder of the
Banks to make Loans pursuant to the Revolving Credit
Commitment, up to the Total Commitment Amount (or such
lesser amount as shall be determined pursuant to Section
2.5).
"Commitment Percentage" shall mean, for each Bank, the
percentage set forth opposite such Bank's name under the
column headed "Commitment Percentage" as described in
Schedule 1 .
"Commitment Period" shall mean the period from the
Closing Date to June 30, 2003, or such earlier date on which
the Commitment shall have been terminated pursuant to
Article VIII.
"Company(ies)" shall mean individually, Borrower or a
Consolidated Subsidiary, and collectively, Borrower and all
Consolidated Subsidiaries.
"Competitive Bid" shall mean an offer by a Bank to make
a Competitive Bid Loan in accordance with Section 2.1B.
"Competitive Bid Absolute Rate" shall have the meaning
set forth in Section 2.1B(d).
"Competitive Bid Absolute Rate Auction" shall mean a
solicitation of Competitive Bids setting forth Competitive
Bid Absolute Rates pursuant to Section 2.1B.
"Competitive Bid Absolute Rate Loan" shall mean a Loan
made by a Bank pursuant to a Competitive Bid Absolute Rate
Auction.
"Competitive Bid Eurodollar Auction" shall mean a
solicitation of Competitive Bids setting forth the
Competitive Bid Eurodollar Rates for a Eurodollar Loan
pursuant to Section 2.1B.
"Competitive Bid Eurodollar Loan" shall mean a Eurodollar
Loan made by a Bank pursuant to a Competitive Bid
Eurodollar Auction.
"Competitive Bid Eurodollar Rate" shall have the
meaning set forth in Section 2.1B(d).
"Competitive Bid Interest Period" shall mean:
(a) with respect to a Competitive Bid Eurodollar
Loan, a period of one (1) month, two (2) months, three
(3) months or six (6) months (as established through
the Competitive Bid Eurodollar Auction), commencing on
the applicable borrowing date of such Competitive Bid
Eurodollar Loan and ending on the Interest Adjustment
Date applicable thereto. Each Competitive Bid
3
Eurodollar Loan shall be repaid on the last day of the
Competitive Bid Interest Period applicable thereto; and
(b) with respect to a Competitive Bid Absolute
Rate Loan, the period commencing on the date of such
borrowing and ending such number of days thereafter
(but not less than seven (7) days and not greater than
one hundred eighty (180) days (as established through
the Competitive Bid Absolute Rate Auction)). Each
Competitive Bid Absolute Rate Loan shall be repaid on
the last day of the Competitive Bid Interest Period
applicable thereto.
"Competitive Bid Loan" shall mean a fixed rate Loan
(either a Competitive Bid Eurodollar Loan or a Competitive
Bid Absolute Rate Loan) granted to Borrower by a Bank in
accordance with Section 2.1B.
"Competitive Bid Rate Note" shall mean any Competitive
Bid Rate Note executed and delivered pursuant to Section
2.1B.
"Confidential Information" shall mean all information
about the Companies that has been furnished by any Company
to Agent or any Bank, whether furnished before or after the
Closing Date and regardless of the manner in which it is
furnished, but does not include any such information that
(a) is or becomes generally available to the public other
than as a result of a disclosure by Agent or such Bank not
permitted by this Agreement, (b) was available to Agent or
such Bank on a nonconfidential basis prior to its disclosure
to Agent or such Bank or (c) becomes available to Agent or
such Bank on a nonconfidential basis from a Person other
than any Company that is not, to the best of Agent's or such
Bank's knowledge, acting in violation of a confidentiality
agreement with a Company or is not otherwise prohibited from
disclosing the information to Agent or such Bank.
"Consolidated" shall mean, as applied to any financial
or accounting term with respect to any Person, such term
determined on a consolidated basis in accordance with GAAP
for such Person and all consolidated Subsidiaries thereof.
"Consolidated Depreciation, Obsolescence and Amortization
Charges" shall mean, for any period, the aggregate of all
depreciation, obsolescence and amortization charges allowable
on the fixed assets and leasehold improvements of
Borrower and its Consolidated Subsidiaries for such
period, as determined in accordance with GAAP.
"Consolidated Funded Indebtedness" shall mean the
Funded Indebtedness of Borrower and its Consolidated
Subsidiaries computed and Consolidated in accordance with
GAAP.
"Consolidated Net Pre-Tax Earnings" shall mean the
earnings (or losses) experienced by Borrower and its
Consolidated Subsidiaries computed and Consolidated in
accordance with GAAP; provided, that no noncash
extraordinary gains (or losses) experienced on or after the
Closing Date shall be taken into account for purposes of
this definition.
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"Consolidated Net Worth" shall mean, at any date, the
Consolidated net worth of Borrower and its Consolidated
Subsidiaries, determined as of such date in accordance with
GAAP.
"Consolidated Subsidiary" shall mean a Subsidiary that
is included in the Consolidated financial statements of
Borrower in accordance with GAAP.
"Controlled Group" shall mean a Company and each Person
required to be aggregated with a Company under Code Sections
414(b), (c), (m) or (o).
"Debt" shall mean, collectively, all indebtedness
incurred by Borrower to the Banks pursuant to this Agreement
and includes the principal of and interest on all Notes and
each extension, renewal or refinancing thereof in whole or
in part, the facility fees, other fees and any other amounts
payable by Borrower hereunder.
"Default Rate" shall mean a rate per annum equal to two
percent (2%) in excess of the Adjusted Prime Rate from time
to time in effect.
"Derived Eurodollar Rate" shall mean a rate per annum
equal to the sum of the Applicable Eurodollar Margin plus
the Eurodollar Rate.
"Dollar" and the sign "$" shall mean lawful money of
the United States of America.
"Environmental Laws" shall mean all provisions of law,
statutes, ordinances, rules, regulations, permits, licenses,
judgments, writs, injunctions, decrees, orders, awards and
standards promulgated by the government of the United States
of America or by any state or municipality thereof or by any
court, agency, instrumentality, regulatory authority or
commission of any of the foregoing concerning health, safety
and protection of, or regulation of the discharge of
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated pursuant thereto.
"ERISA Plan" shall mean an "employee benefit plan"
(within the meaning of ERISA Section 3(3)) that a Controlled
Group member at any time sponsors, maintains, contributes
to, has liability with respect to, or has an obligation to
contribute to such plan.
"Eurodollar" shall mean a Dollar denominated deposit in
a bank or bank branch outside of the United States.
"Eurodollar Loan" shall mean a Loan described in
Section 2.1A or 2. 1 B on which Borrower shall pay interest
at a rate based on the Eurodollar Rate.
"Eurodollar Rate" shall mean, for any Interest Period
5
or Competitive Bid Interest Period, as applicable, with
respect to a Eurodollar Loan, the quotient (rounded upwards,
if necessary, to the nearest one sixteenth of one percent
(1/16th of 1%)) of: (a) the per annum rate of interest,
determined by Agent (or, with respect to a Bank making a
Competitive Bid Eurodollar Loan, determined by such Bank) in
accordance with its usual procedures (which determination
shall be conclusive absent manifest error) as of
approximately 11:00 A.M. (London time) two (2) Business Days
prior to the beginning of such Interest Period pertaining to
such Eurodollar Loan, as provided by Reuters (or if such
rate is unavailable by Reuters, as provided by Telerate
Service, or, if unavailable by Reuters or Telerate Service,
as provided by Bloomberg) as the rate in the London
interbank market for Dollar deposits in immediately
available funds with a maturity comparable to such Interest
Period, divided by (b) a number equal to 1.00 minus the
Eurocurrency Reserve Percentage applicable to Agent (or,
with respect to a Bank making a Competitive Bid Eurodollar
Loan, applicable to such Bank). If such rate quotation is
not available for any reason, then the rate (for purposes of
clause (a) hereof) shall be the rate, determined by Agent
(or, with respect to a Bank making a Competitive Bid
Eurodollar Loan, determined by such Bank) as of
approximately 11:00 A.M. (London time) two (2) Business Days
prior to the beginning of such Interest Period pertaining to
such Eurodollar Loan, to be the average (rounded upwards, if
necessary, to the nearest one sixteenth of one percent
(1/16th of 1%)) of the per annum rates at which Dollar
deposits in immediately available funds in an amount
comparable to such Eurodollar Loan and with a maturity
comparable to such Interest Period are offered to the prime
banks by leading banks in the London interbank market. The
Eurodollar Rate shall be adjusted automatically on and as of
the effective date of any change in the Eurocurrency Reserve
Percentage.
"Eurocurrency Reserve Percentage" shall mean, for any
Interest Period or Competitive Bid Interest Period, as
applicable, in respect of any Eurodollar Loan, as of any
date of determination, the aggregate of the then stated
maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves), expressed as a
decimal, applicable to such Interest Period or Competitive
Bid Interest Period (if more than one (1) such percentage is
applicable, the daily average of such percentages for those
days in such Interest Period or Competitive Bid Interest
Period during which any such percentage shall be so
applicable) by the Board of Governors of the Federal Reserve
System, any successor thereto, or any other banking
authority, domestic or foreign, to which a Bank may be
subject in respect to Eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of
the Federal Reserve Board) or in respect of any other
category of liabilities including deposits by reference to
which the interest rate on Eurodollar Loans is determined or
any category of extension of credit or other assets that
include the Eurodollar Loans. For purposes hereof, such
reserve requirements shall include, without limitation,
those imposed under Regulation D of the Federal Reserve
Board, and the Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities subject to such reserve
requirements, without benefit of credits for proration,
exceptions or offsets which may be available from time to
time to any Bank under said Regulation D.
"Event of Default" shall mean an event or condition
that constitutes an event of default as defined in Article
VII.
6
"Federal Funds Effective Rate" shall mean for any day,
the rate per annum (rounded upward to the nearest 1/100 of
one percent) announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted
average of the rates on overnight federal funds transactions
arranged by federal funds brokers on the previous trading
day, as computed and announced by such Federal Reserve Bank
(or any successor) in substantially the same manner as such
Federal Reserve Bank computes and announces the weighted
average it refers to as the "Federal Funds Effective Rate"
as of the Closing Date.
"Financial Officer" shall mean any of the following:
chief executive officer, president, chief financial officer
or treasurer.
"Fixed Lease Charges" shall mean all lease expenses of
Borrower and its Consolidated, Subsidiaries (whether accrued
or paid in cash) arising from capital leases or operating
leases for production equipment as computed and Consolidated
in accordance with GAAP.
"Funded Indebtedness" shall mean all indebtedness
(including any renewal or extension of indebtedness in whole
or in part) that matures or remains unpaid more than twelve
(12) months after the date on which originally incurred and
shall include all Notes issued pursuant to this Agreement
and all other long-term indebtedness and all commercial
paper issued by Borrower or any of its Subsidiaries, but
shall not include any indebtedness that is subordinated to
the Debt pursuant to a subordination agreement in form and
substance as the Majority Banks may require.
"GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect from
time to time and set forth in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by any
successor entity as may be in general use by significant
segments of the accounting profession, that are applicable
to the circumstances as of the date of determination;
provided, however, that, either (a) upon notice by Borrower
to Agent that Borrower desires that any change to such
generally accepted accounting principles be disregarded for
purposes of this Agreement, or (b) upon notice by Agent to
Borrower that the Majority Banks have requested that any
such change be so disregarded, then such changes shall be so
disregarded and such generally accepted accounting
principles in effect immediately before the effectiveness of
the relevant change shall constitute "GAAP" for all purposes
under this Agreement unless and until such notice is
withdrawn by the party that submitted it.
"Interest Adjustment Date" shall mean the last day of
each Interest Period or Competitive Bid Interest Period, as
applicable.
"Interest Period" shall mean, with respect to any
Eurodollar Loan (other than a Competitive Bid Eurodollar
Loan), the period commencing on the date such Eurodollar
Loan is made and ending on the last day of such period as
selected by Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last
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day of the immediately preceding Interest Period and ending
on the last day of such period as selected by Borrower
pursuant to the provisions below. The duration of each
Interest Period for any such Eurodollar Loan shall be one
(1) month, two (2) months, three (3) months or six (6)
months, in each case as Borrower may select upon notice, as
set forth in Section 2.2, provided that (a) if Borrower
fails to so select the duration of any Interest Period,
Borrower shall be deemed to have converted such Eurodollar
Loan to a Prime Rate Loan; and (b) Borrower may not select
any Interest Period for such Eurodollar Loan that ends after
any date when principal is due on such Eurodollar Loan.
"Lien" shall mean any mortgage, security interest,
lien, charge, encumbrance on, pledge or deposit of, or
conditional sale or other title retention agreement with
respect to any property (real or personal) or asset.
"Loan" or "Loans" shall mean the loans made to Borrower
by the Banks in accordance with Section 2.1A or 2.1B.
"Loan Documents" shall mean this Agreement, each of the
Notes and any other documents entered into in connection
herewith, as any of the foregoing may from time to time be
amended, waived or otherwise modified.
"Majority Banks" shall mean the holders of at least
fifty-one percent (51%) of the Total Commitment Amount, or,
if the Commitment shall have been terminated, the holders of
at least fifty-one percent (51%) of the aggregate
outstanding principal amount of the Loans.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the business, operations, property, or
condition (financial or otherwise) of the Companies taken as
a whole, or (b) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights
and remedies of Agent or the Banks hereunder or thereunder.
"Moody's" shall mean Moody's Investors Service, Inc.
and its successors.
"Moody's Rating" shall mean the rating accorded to
Borrower's senior unsecured long-term debt by Moody's.
"Multiemployer Plan" shall mean a Pension Plan that is
subject to the requirements of Subtitle E of Title IV of
ERISA.
"Note" shall mean any Revolving Credit Note, any
Competitive Bid Rate Note, or any other note delivered
pursuant to this Agreement.
"Notice of Revolving Loan" shall mean a Notice of
Revolving Loan in the form of the attached Exhibit C.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation, or its successor.
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"Pension Plan" shall mean an ERISA Plan that is a
"pension plan" (within the meaning of ERISA Section 3(2)).
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated
organization, corporation, limited liability company,
institution, trust, estate, government or other agency
or political subdivision thereof or any other entity.
"Prime Rate" shall mean the interest rate established
from time to time by Agent as Agent's prime rate, which rate
is publicly announced as Agent's "prime rate"; the Prime
Rate may not be the lowest interest rate charged by Agent
for commercial or other extensions of credit. Each change
in the Prime Rate shall be effective immediately from and
after such change.
"Prime Rate Loan" shall mean a Loan described in
Section 2.1A on which Borrower shall pay interest at a rate
based on the Adjusted Prime Rate.
"Register" shall have the meaning set forth in Section
10.10A.
"Reportable Event" shall mean a reportable event as
that term is defined in Title IV of ERISA, except actions of
general applicability by the Secretary of Labor under
Section 110 of such Act.
"Revolving Credit Commitment" shall mean the obligation
hereunder of each Bank, during the Commitment Period, to
make Revolving Loans up to the aggregate amount set forth
opposite such Bank's name on Schedule 1 under the column
headed "Maximum Amount", as such amount may be reduced
pursuant to Section 2.5(c).
"Revolving Credit Note" shall mean any Revolving Credit
Note executed and delivered pursuant to Section 2.1A.
"Revolving Loan" shall mean a Loan granted to Borrower
by the Banks in accordance with Section 2.1A.
"S&P" shall mean Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc., or any successor to such
company.
"S&P Rating" shall mean the rating accorded to
Borrower's senior unsecured long-term debt by S&P.
"SEC" shall mean the Securities and Exchange
Commission, or any governmental body or agency succeeding to
any of its principal functions.
"Subsidiary" of Borrower or any of its Subsidiaries
shall mean (a) a corporation more than fifty percent (50%)
9
of the voting power or capital stock of which is owned,
directly or indirectly, by Borrower or by one or more other
Subsidiaries of Borrower or by Borrower and one or more
Subsidiaries of Borrower, (b) a partnership or limited
liability company of which Borrower, one or more other
Subsidiaries of Borrower or Borrower and one or more
Subsidiaries of Borrower, directly or indirectly, is a
general partner or managing member, as the case may be, or
otherwise has the power to direct the policies, management
and affairs thereof, or (c) any other Person (other than a
corporation) in which Borrower, one or more other
Subsidiaries of Borrower or Borrower and one or more
subsidiaries of Borrower, directly or indirectly, has at
least a majority ownership interest or the power to direct
the policies, management and affairs thereof.
"Total Commitment Amount" shall mean the obligation
hereunder of the Banks during the Commitment Period to make
Loans up to the maximum aggregate principal amount of Three
Hundred Million Dollars ($300,000,000), as such amount may
be reduced pursuant to Section 2.5(c).
"Unmatured Event of Default" shall mean an event or
condition that with the lapse of any applicable grace period
or the giving of notice or both would constitute, an Event
of Default.
"Wholly Owned Subsidiary" shall mean, with respect to
any Person, any corporation, limited liability company or
other entity all of the securities or other ownership
interest, or which having ordinary voting power to elect a
majority of the board of directors or other persons
performing similar functions are at the time directly or
indirectly owned by such Person.
"Withdrawal Liability" shall mean the liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
SECTION 2.1. AMOUNT AND NATURE OF CREDIT. Subject to
the terms and conditions of this Agreement, the Banks will
participate to the extent hereinafter provided in making
Loans to Borrower, in such aggregate amount as Borrower
shall request pursuant to the Commitment; provided, however,
that in no event shall the aggregate outstanding principal
amount of all Loans exceed the Total Commitment Amount. The
Loans shall be made as follows:
A. Revolving Loans.
Subject to the terms and conditions of this Agreement,
during the Commitment Period the Banks shall make a
Revolving Loan or Revolving Loans to Borrower in such amount
or amounts as Borrower may from time to time request, but
not exceeding in aggregate outstanding principal amount at
any time outstanding hereunder the Commitment, when such
Revolving Loans are combined with the aggregate outstanding
principal amount of all Competitive Bid Loans. Borrower
shall have the option, subject to the terms and conditions
set forth herein, to borrow hereunder up to the Total
10
Commitment Amount by means of any combination of (a) Prime
Rate Loans maturing on the last day of the Commitment
Period, bearing interest at the Adjusted Prime Rate from
time to time in effect, or (b) Eurodollar Loans maturing on
the last day of the Commitment Period, bearing interest at
the Derived Eurodollar Rate, fixed in advance of each
Interest Period (but subject to changes in the Applicable
Eurodollar Margin) as herein provided for each such Interest
Period.
Each Bank, severally agrees to participate in Revolving
Loans made hereunder during the Commitment Period on such
basis that (a) immediately after the completion of any
borrowing by Borrower, the aggregate principal amount then
outstanding on such Bank's Revolving Credit Note shall not
be in excess of such Bank's Revolving Credit Commitment, and
(b) such aggregate principal amount outstanding on such
Bank's Revolving Credit Note shall represent such Bank's
Commitment Percentage of the aggregate outstanding principal
amount of all Revolving Loans. Each Revolving Loan made by
the Banks shall be made pro rata according to the Banks'
respective Commitment Percentages.
Borrower shall pay interest on the unpaid principal
amount of Prime Rate Loans outstanding from time to time
from the date thereof until paid, commencing on September
30, 1998, and continuing on the last day of each succeeding
calendar quarter of each year and at the maturity thereof.
Borrower shall pay interest at a fixed rate for each
Interest Period, but subject to changes in the Applicable
Eurodollar Margin, on the unpaid principal amount of each
Eurodollar Loan outstanding from time to time from the date
thereof until paid, payable on each Interest Adjustment Date
with respect to an Interest Period (provided that if an
Interest Period exceeds three (3) months, the interest must
be paid every three (3) months, commencing three (3) months
from the beginning of such Interest Period).
At the request of Borrower, provided no Unmatured Event
of Default or Event of Default exists, the Banks shall
convert Prime Rate Loans to Eurodollar Loans or Eurodollar
Loans to Prime Rate Loans at any time, subject to the notice
and other provisions of Section 2.2 and in the case of a
conversion of Eurodollar Loans to Prime Rate Loans on any
date other than an Interest Adjustment Date, to the
indemnity provisions of Section 3.4. Each request for
Revolving Loans must either be for Prime Rate Loans or
Eurodollar Loans.
The obligation of Borrower to repay the Prime Rate
Loans and the Eurodollar Loans made by each Bank and to pay
interest thereon shall be evidenced by a Revolving Credit
Note of Borrower substantially in the form of Exhibit A,
with appropriate insertions, dated the Closing Date and
payable to the order of such Bank on the last day of the
Commitment Period in the principal amount of its Revolving
Credit Commitment, or, if less, the aggregate unpaid
principal amount of Revolving Loans made hereunder by such
Bank. Subject to the provisions of this Agreement, Borrower
shall be entitled under this Section 2.1A to borrow funds,
repay the same in whole or in part, and reborrow hereunder
at any time and from time to time during the Commitment
Period.
B. Competitive Bid Loans.
(a) The Competitive Bid Option. Subject to the terms
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and conditions of this Agreement, during the Commitment
Period, Borrower may request the Banks to submit offers to
make Competitive Bid Loans to Borrower from time to time in
amounts such that the aggregate amount of all Revolving
Loans and Competitive Bid Loans at any one time outstanding
shall not exceed the Total Commitment Amount. The Banks
may, but shall have no obligation to, make such offers and
Borrower may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section 2.1B.
(b) Competitive Bid Request. A request by Borrower to
obtain Competitive Bid Loans ("Competitive Bid Request")
shall be made by Borrower transmitting to Agent, by
facsimile transmission, a Competitive Bid Request,
substantially in the form of Exhibit D-1, so as to be
received (i) no later than 9:00 A.M. (Cleveland, Ohio time)
on the third Business Day immediately prior to the date of
the proposed borrowing, in the case of a Competitive Bid
Eurodollar Auction, or (ii) no later than 9:00 A.M.
(Cleveland, Ohio time) on the proposed date of borrowing, in
the case of a Competitive Bid Absolute Rate Auction (or, in
either case, such other time or date as to which Borrower
and Agent shall have mutually agreed and as to which Agent
shall have notified the Banks not later than the date of the
Competitive Bid Request for the first Competitive Bid
Eurodollar Auction or Competitive Bid Absolute Rate Auction
for which such change is to be effective) specifying:
(A) the proposed date of borrowing, which shall
be a Business Day;
(B) the amount of the Competitive Bid Loan
requested and that the Loan requested is a Competitive
Bid Loan;
(C) the duration of the Competitive Bid Interest
Period applicable thereto, which shall not be later
than the last day of the Commitment Period; and
(D) whether the Competitive Bids requested are to
set forth a Competitive Bid Eurodollar Rate or a
Competitive Bid Absolute Rate.
Borrower may request offers to make a Competitive Bid Loan
for no more than three (3) Competitive Bid Interest Periods
in any Competitive Bid Request under this Agreement.
(c) Invitation for Competitive Bids. Promptly upon
receipt of a Competitive Bid Request, Agent shall send to
the Banks by facsimile transmission an invitation for
Competitive Bids ("Invitation for Competitive Bids"),
substantially in the form of Exhibit D-2, which shall
constitute an invitation by Borrower to each Bank to submit
Competitive Bids offering to make the Competitive Bid Loans
to which such Competitive Bid Request relates in accordance
with this Section 2.1B.
(d) Submission and Contents of Competitive Bids. Each
Bank may submit a Competitive Bid containing an offer or
offers to make Competitive Bid Loans in response to any
12
Invitation for Competitive Bids. Each Competitive Bid must
comply with the requirements of this Section 2.1B and must
be submitted to Agent, by facsimile transmission, at its
offices specified on the signature page hereof or as
otherwise directed by Agent not later than (i) 10:30 A.M.
Cleveland, Ohio time) on the third Business Day prior to the
proposed date of borrowing, in the case of a Competitive Bid
Eurodollar Auction, or (ii) 10:30 A.M. Cleveland, Ohio time)
on the proposed date of borrowing, in the case of a
Competitive Bid Absolute Rate Auction (or, in either case,
such other time or date as to which Borrower and Agent shall
have mutually agreed and as to which Agent shall have
notified the Banks not later than the date of the
Competitive Bid Request for the first Competitive Bid
Eurodollar Auction or Competitive Bid Absolute Rate Auction
for which such change is to be effective); provided that any
Bank submitting a Competitive Bid (A) after 10:00 A.M.
(Cleveland, Ohio time) on such third Business Day prior to
the proposed date of borrowing, in the case of a Competitive
Bid Eurodollar Auction, or (B) 10:00 A.M. (Cleveland, Ohio
time) on the proposed date of borrowing, in the case of a
Competitive Bid Absolute Rate Auction, shall confirm Agent's
receipt of such Competitive Bid by telephone, and provided
further that Competitive Bids submitted by Agent (or any
affiliate of Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if Agent or such
affiliate notifies Borrower of the terms of the offer or
offers contained therein not later than fifteen (15) minutes
prior to the respective deadline for the other Banks, in the
case of either a Competitive Bid Eurodollar Auction or a
Competitive Bid Absolute Rate Auction. Any Competitive Bid
so made by any Bank under this Section 2.1B(d) shall be
irrevocable except with the written consent of Agent.
Each Competitive Bid shall be in substantially the form
of Exhibit D-3 and shall in any case specify:
(1) the proposed date of borrowing, and the
duration of each relevant Competitive Bid Interest
Period to be applicable thereto;
(2) the principal amount of the Competitive Bid
Loan for which each such offer is being made, which
principal amount may be greater than or less than the
Revolving Credit Commitment of the quoting Bank, must
be Five Million Dollars ($5,000,000), increased by
increments of One Million Dollars ($1,000,000), may not
exceed the principal amount of Competitive Bid Loans
for which offers were requested and may be subject to
an aggregate limitation as to the principal amount of
Competitive Bid Loans for which offers being made by
such quoting Bank may be accepted;
(3) in the case of a Competitive Bid Eurodollar
Auction, the rate of interest per annum expressed as a
percentage (specified to the nearest four (4) decimal
places) (the "Competitive Bid Eurodollar Rate") offered
for each such Competitive Bid Loan;
(4) in the case of a Competitive Bid Absolute
Rate Auction, the rate of interest per annum, expressed
as a percentage (specified to the nearest four (4)
decimal places) (the "Competitive Bid Absolute Rate")
offered for each such Competitive Bid Loan; and
(5) the identity of the quoting Bank.
13
A Competitive Bid may set forth up to three (3) separate
offers by the quoting Bank.
Any Competitive Bid shall be disregarded if it:
(w) is not substantially in conformity with
Exhibit D-3 hereto or does not specify all of the
information required by this Section 2.1B;
(x) except as permitted by Section 2.1B(e),
contains qualifying, conditional or similar language;
(y) proposes terms other than or in addition to
those set forth in the applicable Invitation for
Competitive Bids; or
(z) arrives after the time set forth in the first
paragraph of this Section 2.B(d).
(e) Notice to Borrower. Not later than (i) 11:00 A.M.
(Cleveland, Ohio time) on the third Business Day prior to
the proposed date of borrowing, in the case of a Competitive
Bid Eurodollar Auction, or (ii) 11:00 A.M. (Cleveland, Ohio
time) on the proposed date of borrowing, in the case of a
Competitive Bid Absolute Rate Auction (or, in either case,
such other time or date as to which Borrower and Agent shall
have mutually agreed and as to which Agent shall have
notified the Banks not later than the date of the
Competitive Bid Request for the first Competitive Bid
Eurodollar Auction or Competitive Bid Absolute Rate Auction
for which such change is to be effective), Agent shall
notify Borrower of the terms (A) of any Competitive Bid
submitted by a Bank that is in accordance with
Section 2.1B(d) and (B) of any Competitive Bid that amends,
modifies or is otherwise inconsistent with a previous
Competitive Bid submitted by such Bank with respect to the
same Competitive Bid. Any such subsequent Competitive Bid
shall be disregarded by Agent unless such subsequent
Competitive Bid is submitted solely to correct a manifest
error in such former Competitive Bid. Agent's notice to
Borrower shall specify (1) the aggregate principal amount of
Competitive Bid Loans for which offers have been received
for each Competitive Bid Interest Period specified in the
related Competitive Bid Request, (2) the respective
principal amounts and Competitive Bid Eurodollar Rates or
Competitive Bid Absolute Rates, as the case may be, so
offered and (3) if applicable, limitations on the aggregate
principal amount of Competitive Bid Loans for which offers
in any single Competitive Bid may be accepted.
(f) Acceptance and Notice by Borrower. Not later than
(i) 11:30 A.M. (Cleveland, Ohio time) on the third Business
Day prior to the proposed date of borrowing, in the case of
a Competitive Bid Eurodollar Auction, or (ii) 11:30 A.M.
(Cleveland, Ohio time) on the proposed date of borrowing, in
the case of a Competitive Bid Absolute Rate Auction (or, in
either case, such other time or date as to which Borrower
and Agent shall have mutually agreed and as to which Agent
shall have notified the Banks not later than the date of the
Competitive Bid Request for the first Competitive Bid
Eurodollar Auction or Competitive Bid Absolute Rate Auction
for which such change is to be effective), Borrower shall
notify Agent of its irrevocable acceptance or nonacceptance.
14
Such notice shall specify the aggregate principal amount of
offers for each Competitive Bid Interest Period that are
accepted. Borrower may accept any Competitive Bid in whole
or in part; provided that:
(A) the aggregate principal amount of each
Competitive Bid borrowing must be Ten Million Dollars
($10,000,000), increased by increments of One Million
Dollars ($1,000,000);
(B) acceptance of offers may be made only on the
basis of ascending Competitive Bid Eurodollar Rates or
Competitive Bid Absolute Rates, as the case may be; and
(C) Borrower may not accept any offer that is
described in the last paragraph of subpart (d) above or
that otherwise fails to comply with the requirements of
this Agreement.
Not later than (1) 12:00 P.M. (Cleveland, Ohio time) on the
third Business Day prior to the proposed date of borrowing,
in the case of a Competitive Bid Eurodollar Auction, or
(2) 12:00 P.M. (Cleveland, Ohio time) on the proposed date
of borrowing, in the case of a Competitive Bid Absolute Rate
Auction (or, in either case, such other time or date as to
which Borrower and Agent shall have mutually agreed and as
to which Agent shall have notified the Banks not later than
the date of the Competitive Bid Request for the first
Competitive Bid Eurodollar Auction or Competitive Bid
Absolute Rate Auction for which such change is to be
effective), Agent shall notify the Banks of Borrower's
acceptance or non-acceptance of the offers so notified to
Borrower pursuant to subpart (e) hereof.
(g) Allocation by Agent. If offers are made by
two (2) or more Banks with the same Competitive Bid
Eurodollar Rates or Competitive Bid Absolute Rates, as the
case may be, for a greater aggregate principal amount than
the amount in respect of which such offers are accepted for
the related Competitive Bid Interest Period, the principal
amount of Competitive Bid Loans in respect of which such
offers are accepted shall be allocated by Agent among such
Banks as nearly as possible (in multiples of Five Hundred
Thousand Dollars ($500,000), as Agent may deem as
appropriate) in proportion to the aggregate principal
amounts of such offers. Determinations by Agent of the
amounts of Competitive Bid Loans shall be conclusive in the
absence of manifest error.
(h) Evidence of Debt and Related Provisions. The
obligation of Borrower to repay the Competitive Bid Loans
made by each Bank and to pay interest thereon shall be
evidenced by a Competitive Bid Rate Note of Borrower
substantially in the form of Exhibit B hereto, with
appropriate insertions, dated the Closing Date and payable
to the order of such Bank on the last day of the Commitment
Period in the principal amount of the Total Commitment
Amount, or, if less, the aggregate unpaid principal amount
of Competitive Bid Loans made hereunder by such Bank. No
Competitive Bid Loan may be converted to a Revolving Loan
and the Bank making a Competitive Bid Loan shall have no
right to request that the other Banks share the risk of such
Competitive Bid Loan. A Bank's extension of credit to
Borrower in the form of a Competitive Bid Loan shall not
diminish such Bank's obligation to participate in any other
or future Revolving Loans to the full extent of such Bank's
Commitment Percentage. Anything herein to the contrary
15
notwithstanding, the extension of Competitive Bid Loans
shall be deemed to be usage of the Commitment, and all such
Competitive Bid Loans shall be subtracted from the Total
Commitment Amount for purposes of determining availability
for Loans under the Commitment.
SECTION 2.2. BORROWING PROCEDURES.
(a) Revolving Loans. With respect to each requested
Revolving Loan, Borrower shall furnish Agent with a Notice
of Revolving Loan no later than 11:00 A.M. (Cleveland, Ohio
time) on the proposed date of borrowing with respect to
Prime Rate Loans and no later than 11:00 A.M. (Cleveland,
Ohio time) three (3) Business Days prior to the proposed
date of borrowing with respect to Eurodollar Loans. Agent
shall notify each Bank of the date, amount and initial
Interest Period (if applicable) promptly upon the receipt of
such notice, and, in any event, by 2:00 P.M. (Cleveland,
Ohio time) on the date such notice is received. On the date
such Revolving Loan is to be made, each Bank shall provide
Agent, not later than 3:00 P.M. (Cleveland, Ohio time), with
the amount in federal or other immediately available funds,
required of it.
(b) Competitive Bid Loans. With respect to each
requested Competitive Bid Loan, Borrower shall comply with
the notice provisions set forth in Section 2.1B, and the
Bank or Banks making the Competitive Bid Loans shall provide
Agent, not later than 1:00 P.M. (Cleveland, Ohio time) on
the date that such Loan is to be made, with the amount (in
federal or other immediately available funds) required of
such Bank or Banks.
(c) Irrevocability; Minimum Loan Amounts. Each
request for a Loan shall be irrevocable and binding on
Borrower. Each Prime Rate Loan or Eurodollar Loan shall be
in an amount of not less than Five Million Dollars
($5,000,000), increased by increments of One Million Dollars
($1,000,000).
At no time shall Borrower request that Eurodollar Loans
or Competitive Bid Eurodollar Loans be outstanding for more
than eight (8) different Interest Periods or Competitive Bid
Interest Periods at any time, and, if Prime Rate Loans are
outstanding, then Eurodollar Loans and Competitive Bid
Eurodollar Loans shall be limited to seven (7) different
Interest Periods or Competitive Bid Interest Periods at any
one (1) time.
SECTION 2.3. PAYMENT ON NOTES, ETC. All payments of
principal, interest and facility and other fees shall be
made to Agent in immediately available funds for the account
of the Banks. Agent, on the Business Day such funds are
received, shall distribute to each Bank its ratable share of
the amount of principal, interest, and facility and other
fees received by it for the account of such Bank. Each Bank
shall record (a) any principal, interest or other payment,
and (b) the principal amount of the Prime Rate Loans and the
Eurodollar Loans and all prepayments thereof and the
applicable dates with respect thereto, by such method as
such Bank may generally employ; provided, however, that
failure to make any such entry shall in no way detract from
Borrower's obligations under each such Note. The aggregate
unpaid amount of Loans set forth on the records of Agent
shall be rebuttably presumptive evidence of the principal
16
and interest owing and unpaid on each Note. Whenever any
payment to be made hereunder, including without limitation
any payment to be made on any Note, shall be stated to be
due on a day that is not a Business Day, such payment shall
be made on the next succeeding Business Day and such
extension of time shall in each case be included in the
computation of the interest payable on such Note; provided,
however, that with respect to any Eurodollar Loan, if the
next succeeding Business Day falls in the succeeding
calendar month, such payment shall be made on the preceding
Business Day and the relevant Interest Period or Competitive
Bid Interest Period, as applicable, shall be adjusted
accordingly.
SECTION 2.4. PREPAYMENT. Borrower shall have the
right at any time or from time to time to prepay, on a pro
rata basis for each of the Banks, all or any part of the
principal amount of the Notes then outstanding as designated
by Borrower, plus interest accrued on the amount so prepaid
to the date of such prepayment. Each prepayment of a
Eurodollar Loan (other than a Competitive Bid Loan) shall be
in the aggregate principal amount of not less than Five
Million Dollars ($5,000,000). Each Prepayment of any
Competitive Bid Loan shall be in the full amount of such
Loan and all accrued but unpaid interest thereon except to
the extent the Bank that has made such Competitive Bid Loan
agrees to accept a partial prepayment. Borrower shall give
Agent notice of the prepayment of any Prime Rate Loans by
not later than 11:00 A.M. (Cleveland, Ohio time) on the
Business Day such prepayment is to be made and written
notice of the prepayment of any Eurodollar Loan or
Competitive Bid Loan not later than 1:00 P.M. (Cleveland,
Ohio time) three (3) Business Days before the Business Day
on which such prepayment is to be made. Subject to the
provisions of Section 3.4, prepayments of Loans shall be
without any premium or penalty.
SECTION 2.5. FACILITY AND OTHER FEES; REDUCTION OF
COMMITMENT.
(a) Borrower shall pay to Agent, for the ratable
account of the Banks, as a consideration for the Commitment
hereunder, a facility fee from the date hereof to and
including the last day of the Commitment Period equal to
(i) the Applicable Facility Fee Rate in effect on the date
that such facility fee is due, times (ii) the average daily
Total Commitment Amount during the preceding quarter (or
shorter period commencing on the date hereof or ending with
the last day of the Commitment Period), based on a year
having three hundred sixty (360) days and calculated for the
actual number of days elapsed. The facility fee shall be
payable in arrears on September 30, 1998, and on the last
day of each calendar quarter thereafter.
(b) Borrower shall pay to Agent, for its sole benefit,
on the Closing Date and on each anniversary of the Closing
Date, all fees set forth in the Agent Fee Letter.
(c) Borrower may at any time or from time to time
permanently reduce in whole or ratably in part the
Commitment of the Banks hereunder to an amount not less than
the aggregate principal amount of the Loans then outstanding
by giving Agent not fewer than five (5) Business Days'
notice, provided that any such partial reduction shall be in
an aggregate amount for all of the Banks of Five Million
Dollars ($5,000,000), increased by increments of One Million
Dollars ($1,000,000). Agent shall promptly notify each Bank
17
of the date of each such reduction and such Bank's
proportionate share thereof. After each such reduction, the
facility fees payable hereunder shall be calculated upon the
Total Commitment Amount as so reduced. If Borrower reduces
in whole the Commitment of the Banks, on the effective date
of such reduction (Borrower having prepaid in full the
unpaid principal balance, if any, of the Notes outstanding,
together with all interest and facility and other fees
accrued and unpaid) all of the Notes outstanding shall be
delivered to Agent marked "Canceled," and Agent shall
redeliver such Notes to Borrower. Any partial reduction in
the Commitment of the Banks shall be effective during the
remainder of the Commitment Period.
SECTION 2.6. COMPUTATION OF INTEREST AND FEES;
DEFAULT RATE. Interest on Loans and facility and other fees
and charges hereunder shall be computed on the basis of a
year having three hundred sixty (360) days and calculated
for the actual number of days elapsed. Anything herein to
the contrary notwithstanding, if an Event of Default has
occurred and is continuing, the outstanding principal amount
of each Loan shall bear interest at the Default Rate. In no
event shall the rate of interest hereunder exceed the rate
allowable by law.
SECTION 2.7. MANDATORY PREPAYMENT. If the aggregate
principal amount of all Loans outstanding at any time
exceeds the Total Commitment Amount, Borrower shall as
promptly as practicable, but in no event later than the next
Business Day, prepay an aggregate principal amount of the
Loans sufficient to bring the aggregate outstanding
principal amount of all Loans within the Commitment of the
Banks. Any prepayment of a Eurodollar Loan or a Competitive
Bid Eurodollar Loan pursuant to this Section 2.7 shall be
subject to the indemnity set forth in Section 3.4.
SECTION 2.8. EXTENSION OF COMMITMENT. Upon the
written request of Borrower received by Agent at least
sixty (60) days prior to any anniversary of the Closing Date
(prior to the last day of the Commitment Period), together
with the delivery of Borrower's audited financial statements
for the fiscal year most recently ended, the Banks shall
have the option of extending the Commitment for an
additional year. Each such extension shall require the
unanimous written consent of all of the Banks and shall be
upon such terms and conditions as may be agreed to by Agent,
Borrower and the Banks.
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO
EURODOLLAR LOANS;INCREASED CAPITAL; TAXES
SECTION 3.1. RESERVES OR DEPOSIT REQUIREMENTS, ETC.
If at any time any law, treaty or regulation (including,
without limitation, Regulation D of the Board of Governors
of the Federal Reserve System) or the interpretation thereof
by any governmental authority charged with the
administration thereof or any central bank or other fiscal,
monetary or other authority shall impose (whether or not
having the force of law), modify or deem applicable any
reserve and/or special deposit requirement (other than
reserves included in the Eurocurrency Reserve Percentage,
the effect of which is reflected in the interest rate(s) of
18
the Eurodollar Loan(s) in question) against assets held by,
or deposits in or for the amount of any Loans by, any Bank,
and the result of the foregoing is to increase the cost
(whether by incurring a cost or adding to a cost) to such
Bank of making or maintaining hereunder Eurodollar Loans or
to reduce the amount of principal or interest received by
such Bank with respect to such Eurodollar Loans, then,
within ten (10) days after Borrower's receipt of a
certificate as to such increased cost, Borrower shall pay to
such Bank from time to time on Interest Adjustment Dates
with respect to such Eurodollar Loans, as additional
consideration hereunder, additional amounts sufficient to
fully compensate such Bank for such increased cost. The
certificate as to the increased cost as a result of any
event mentioned in this Section 3.1, shall set forth the
calculations thereof in reasonable detail, shall be promptly
submitted by such Bank to Borrower and shall, if submitted
in good faith, in the absence of manifest error, be
conclusive and binding as to the amount thereof.
Notwithstanding any other provision of this Agreement, after
any such demand for compensation by any Bank, Borrower, upon
at least ten (10) Business Days' prior written notice to
such Bank through Agent, may prepay the affected Eurodollar
Loans in full or convert all Eurodollar Loans to Prime Rate
Loans regardless of the Interest Period or Competitive Bid
Interest Period of any thereof. Each Bank shall notify
Borrower as promptly as practicable (with a copy thereof
delivered to Agent) of the existence of any event that will
likely require the payment by Borrower of any such
additional amount under this Section 3.1.
SECTION 3.2. EURODOLLAR DEPOSITS UNAVAILABLE OR
INTEREST RATE UNASCERTAINABLE. In respect of any Eurodollar
Loans, if Agent shall have determined that Dollar deposits
of the relevant amount for the relevant Interest Period or
Competitive Bid Interest Period, as applicable, for such
Eurodollar Loans are not available to the Banks in the
applicable Eurodollar market or that, by reason of
circumstances affecting such market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate
applicable to such Interest Period or Competitive Bid
Interest Period, as the case may be, Agent shall promptly
give notice of such determination to Borrower and (a) any
notice of new Eurodollar Loans (or conversion of existing
Loans to Eurodollar Loans) previously given by Borrower and
not yet borrowed (or converted, as the case may be) shall be
deemed a notice to make Prime Rate Loans until the
circumstances giving rise to such notice no longer exist,
and (b) Borrower shall be obligated either to prepay, or to
convert to Prime Rate Loans, any outstanding Eurodollar
Loans on the last day of the then current Interest Period or
Competitive Bid Interest Period, as applicable, with respect
thereto.
SECTION 3.3. CHANGES IN LAW RENDERING EURODOLLAR
LOANS UNLAWFUL. If at any time any new law, treaty or
regulation, or any change in any existing law, treaty or
regulation, or any interpretation thereof by any
governmental or other regulatory authority charged with the
administration thereof, shall make it unlawful for any Bank
to fund any Eurodollar Loans which it is committed to make
hereunder with moneys obtained in the Eurodollar market, the
commitment of such Bank to fund Eurodollar Loans shall, upon
the happening of such event forthwith be suspended for the
duration of such illegality, and such Bank shall by written
notice to Borrower and Agent declare that its commitment
with respect to such Loans has been so suspended and, if and
when such illegality ceases to exist, such suspension shall
cease and such Bank shall similarly notify Borrower and
Agent. If any such change shall make it unlawful for any
Bank to continue in effect the funding in the applicable
19
Eurodollar market of any Eurodollar Loan previously made by
it hereunder, such Bank shall, upon the happening of such
event, notify Borrower, Agent and the other Banks thereof in
writing stating the reasons therefor, and Borrower shall, on
the earlier of (a) the last day of the then current Interest
Period or Competitive Bid Interest Period, as applicable or
(b) if required by such law, regulation or interpretation,
on such date as shall be specified in such notice, either
convert all Eurodollar Loans to Prime Rate Loans or prepay
all Eurodollar Loans to the Banks in full.
SECTION 3.4. INDEMNITY. Borrower shall indemnify
each Bank against any loss or reasonable expense that such
Bank may sustain or incur as a consequence of (a) any
failure of Borrower to borrow hereunder after a notice of
borrowing pursuant to Article II has been given or after
bids have been accepted or (b) any payment, prepayment or
conversion of any Eurodollar Loan or Competitive Bid Loan on
a day other than the last day of the Interest Period or
Competitive Bid Interest Period applicable thereto. Such
loss or reasonable expense shall be an amount equal to the
excess, if any, as reasonably determined by each Bank of
(i) its cost of obtaining the funds for the Loan being
prepaid, converted or not borrowed (based on the Eurodollar
Rate or, in the case of a Competitive Bid Loan, the
Competitive Bid Absolute Rate applicable thereto) for the
period from the date of such prepayment to the last day of
the Interest Period or Competitive Bid Interest Period, as
appropriate, for such Loan (or in the case of a failure to
borrow, the Interest Period or Competitive Bid Interest
Period, as appropriate, for the Loan that would have
commenced on the date of such failure to borrow) over
(ii) the amount of interest (as reasonably determined by
such Bank) that would be received by such Bank (net of any
applicable margin) in reemploying the funds so prepaid,
converted or not borrowed for such Interest Period or
Competitive Bid Interest Period, as the case may be. A
certificate of each Bank setting forth any amount or amounts
that such Bank is entitled to receive pursuant to this
Section 3.4 and the calculation of such amount or amounts in
reasonable detail shall be conclusive, if made in good
faith, absent manifest error.
SECTION 3.5. CAPITAL ADEQUACY. To the extent not
otherwise covered by this Article III, if any Bank shall
have determined, after the date hereof, that the adoption of
any applicable law, rule, regulation or guideline regarding
capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any
governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof,
or compliance by any Bank (or its lending office) with any
request or directive regarding capital adequacy (whether or
not having, the force of law) of any such authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its
lending office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on
such Bank's capital (or the capital of its holding company)
as a consequence of its obligations hereunder to a level
below that which such Bank (or its holding company) could
have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies or the
policies of its holding company with respect to capital
adequacy) by an amount deemed by such Bank to be material,
then from time to time, within ten (10) Business Days after
demand by such Bank (with a copy to Agent), Borrower shall
pay to such Bank such additional amount or amounts as shall
20
compensate such Bank (or its holding company) for such
reduction. Each Bank shall designate a different lending
office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. A certificate of any Bank claiming compensation
setting forth any amount or amounts that such Bank is
entitled to receive pursuant to this Section 3.5 and the
calculation of such amount or amounts in reasonable detail
shall be conclusive, if made in good faith, absent manifest
error. Failure on the part of any Bank to demand
compensation for any reduction in return on capital with
respect to any period shall not constitute a waiver of such
Bank's rights to demand compensation for any reduction in
return on capital in such period or in any other period.
SECTION 3.6. TAXES. If, by reason of any law,
regulation or requirement or in the interpretation thereof
by an official authority, or the imposition of any
requirement of any central bank whether or not having the
force of law, any Bank shall, with respect to this Agreement
or any transaction under this Agreement, be subjected to any
tax, levy, imposition, charge, fee, duty, deduction or
withholding of any kind whatsoever (other than (i) taxes
imposed on Agent's or any Bank's net income and franchise
taxes imposed on Agent or any Bank by the United States or
any jurisdiction in which Agent or such Bank has its
principal office or under the laws of which Agent or such
Bank is organized or any political subdivision or taxing
authority and (ii) United States withholding taxes payable
with respect to payments hereunder or under the Loan
Documents under laws (including any statute, treaty, ruling,
determination or regulation) in effect on the date hereof)
and if any such measures or any other similar measure shall
result in an increase in the cost to such Bank of making or
maintaining any Eurodollar Loan or to reduce the amount of
principal or interest received by such Bank with respect to
such Eurodollar Loans, then such Bank shall promptly notify
Borrower stating the reasons therefor. Borrower shall
thereafter pay to such Bank, within thirty (30) days after
the date such Bank makes written demand therefor, as
additional consideration hereunder, such additional amounts
as shall fully compensate such Bank for such increased cost
or reduction in the amount of principal or interest. A
certificate as to any such increased cost, setting forth the
calculations thereof, in reasonable detail, shall be
submitted by such Bank to Borrower and shall, if submitted
in good faith, in the absence of manifest error, be
conclusive and binding as to the amount thereof.
If any Bank receives such additional consideration from
Borrower pursuant to this Section 3.6, such Bank shall use
reasonable efforts to obtain the benefits of any refund,
deduction or credit for any taxes or other amounts on
account of which such additional consideration has been paid
and shall reimburse Borrower to the extent, but only to the
extent, that such Bank shall receive a refund of such taxes
or other amounts, together with any interest thereon, or an
effective net reduction in taxes or other governmental
charges (including any taxes imposed on or measured by the
total net income of such Bank) of the United States or any
state or subdivision thereof by virtue of any such deduction
or credit, after first giving effect to all other deductions
and credits otherwise available to such Bank. If, at the
time any audit of such Bank's income tax return is
completed, such Bank determines, based on such audit, that
it was not entitled to the full amount of any refund
reimbursed to Borrower as aforesaid or that its net income
taxes are not reduced by a credit or deduction for the full
amount of taxes reimbursed to Borrower as aforesaid,
Borrower, upon demand of such Bank, shall promptly pay to
21
such Bank the amount so refunded to which such Bank was not
so entitled, or the amount by which the net income taxes of
such Bank were not so reduced, as the case may be.
Each Bank that is organized under the laws of a
jurisdiction outside of the United States shall provide
Agent and Borrower with the forms prescribed by the Internal
Revenue Service of the United States certifying as to its
status for purposes of determining the applicability of any
exemption from United States withholding taxes with respect
to all payments to be made hereunder to such Bank or any
other documents satisfactory to Borrower and Agent
indicating that all payments to be made hereunder to such
Bank are subject to such tax at a rate reduced by an
applicable tax treaty. Such forms shall be provided to
Agent and Borrower on the Closing Date, if such Bank is a
party hereto on such date, and from time to time thereafter
(but only so long as such Bank remains legally able to do
so) if requested by Borrower or Agent or required by the
Internal Revenue Service of the United States. If Borrower
and Agent have not received such forms or such documents
validly indicating that payments hereunder are not subject
to United States withholding tax or are subject to such tax
at a rate reduced by an applicable tax treaty, Borrower or
Agent may, each in its sole discretion but without
duplication with each other, withhold taxes from such
payments at the applicable statutory rate in the case of
payments to or for any Bank organized under the laws of a
jurisdiction outside the United States.
Any Bank that sells any participation pursuant to
Section 10.10 shall give Borrower and Agent immediate notice
of such participation, setting forth the names of each of
the participants, the amounts of such participations and
indicating the country of residence of each of the
participants. Notwithstanding any other provision contained
herein to the contrary, Borrower and Agent shall be
entitled, each in its sole discretion but without
duplication with each other, to deduct and withhold United
States withholding taxes with respect to all payments to be
made hereunder to or for such Bank as may be required by
United States law due to such participations and neither
Borrower nor Agent shall be required to indemnify such Bank
with respect to such deductions or withholdings and such
Bank shall indemnify and hold harmless Borrower and Agent
from and against any tax, interest, penalty or other expense
that Borrower and Agent may incur as a consequence of any
failure to withhold United States taxes applicable because
of any participation arrangement that is not fully disclosed
to them as required hereunder.
ARTICLE IV. CONDITIONS PRECEDENT
SECTION 4.1. CONDITIONS TO INITIAL LOAN. The
obligation of the Banks to make the initial Loan is subject
to each of the following conditions:
(a) Agent shall have received, for the account of each
Bank, a Revolving Credit Note and a Competitive Bid Rate
Note executed by Borrower.
(b) Agent shall have received, with a counterpart for
each Bank, an officer's certificate certifying the names of
the officers of Borrower authorized to sign the Loan
22
Documents, together with the true signatures of such
officers and certified copies of (i) the resolutions of the
board of directors of Borrower evidencing approval of the
execution and delivery of the Loan Documents to which
Borrower is a party, and (ii) the Articles of Incorporation
of Borrower.
(c) Agent shall have received, with a counterpart for
each Bank, an opinion of counsel for Borrower in form and
substance satisfactory to Agent.
(d) Borrower shall have executed and delivered to
Agent the Agent Fee Letter.
(e) Borrower shall have paid the reasonable legal fees
and expenses of Agent in connection with the preparation and
negotiation of the Loan Documents.
(f) Borrower shall have terminated the Credit
Agreement, dated as of December 31, 1991, as amended, among
Borrower, KeyBank National Association (successor by merger
to AmeriTrust National Association), as Agent and the
banking institutions listed on Annex A attached thereto, and
the commitments established thereunder, which termination
shall be deemed to have occurred upon the payment in full of
the "Debt", as defined therein.
SECTION 4.2. CONDITIONS TO EACH LOAN. The obligation
of the Banks to make each Loan (including the initial Loan)
is subject to each of the following conditions:
(a) No Unmatured Event of Default or Event of Default
shall then exist or would result from the making or
conversion of the Loan.
(b) Each of the representations and warranties
contained in Article VI shall be true and correct in all
material respects with the same force and effect as if made
on and as of the date or conversion of such Loan, except to
the extent that any thereof expressly relate to an earlier
date.
Each request by Borrower for the making or conversion
of a Loan shall be deemed to be a representation and
warranty by Borrower as of the date of such request as to
the matters specified in clauses (a) and (b) above.
ARTICLE V. COVENANTS
Borrower agrees that, so long as the Commitment remains
in effect and thereafter until the principal of and interest
on all Notes and all other payments and fees due hereunder
shall have been paid in full, Borrower shall perform and
observe, and shall cause each other Company to perform and
observe, each of the following provisions:
SECTION 5.1. INSURANCE. Borrower and each Company
shall maintain insurance to such extent and against such
hazards and liabilities as is commonly maintained by
companies similarly situated.
23
SECTION 5.2. MONEY OBLIGATIONS. Borrower and each
Company shall pay in full (a) prior in each case to the date
when penalties would attach, all taxes, assessments and
governmental charges and levies (except only those so long
as and to the extent that the same shall be contested in
good faith by appropriate proceedings) for which it may be
or become liable or to which any or all of its properties
may be or become subject; (b) all of its wage obligations to
its employees in compliance with the Fair Labor Standards
Act (29 U.S.C. 206-207) or any comparable provisions; and
(c) all of its other obligations calling for the payment of
money (except only those so long as and to the extent that
the same shall be contested in good faith before such
payment becomes overdue).
SECTION 5.3. FINANCIAL STATEMENTS. Borrower shall
furnish to each Bank:
(a) within forty-five (45) days after the end of each
of the first three (3) quarter-annual periods of each fiscal
year of Borrower, balance sheets of Borrower as of the end
of such period and statements of income (loss),
stockholders' equity and cash flow for the quarter and
fiscal year to date periods, all prepared on a Consolidated
and consolidating basis, in accordance with GAAP, and in
form and detail satisfactory to the Banks and certified by a
Financial Officer of Borrower;
(b) within ninety (90) days after the end of each
fiscal year of Borrower, an annual audit report of Borrower
for that year prepared on a Consolidated basis in accordance
with GAAP and in form and detail satisfactory to the Banks
and certified by an independent public accountant
satisfactory to Agent, which report shall include balance
sheets and statements of income (loss), stockholders' equity
and cash flow for that period, together with a certificate
by the accountant setting forth the Unmatured Events of
Default and Events of Default coming to its attention during
the course of its audit;
(c) concurrently with the delivery of the financial
statements in clauses (a) and (b) above, a Compliance
Certificate in the form of Exhibit E;
(d) within ten (10) days of Agent's written request,
copies of all notices, reports, definitive proxy or other
statements and other documents sent by Borrower to its
shareholders, to the holders of any of its debentures or
bonds or the trustee of any indenture securing the same or
pursuant to which they are issued, or sent by Borrower (in
final form) to any securities exchange or over-the-counter
authority or system, or to the SEC or any similar federal
agency having regulatory jurisdiction over the issuance of
Borrower's securities; and
(e) within ten (10) days of Agent's written request,
such other information about the financial condition,
properties and operations of any Company as Agent may from
time to time reasonably request.
SECTION 5.4. FINANCIAL RECORDS. Each Company shall
at all times maintain true and complete records and books of
account in accordance with GAAP, and at all reasonable times
(during normal business hours, and upon prior written notice
24
to the Company in question) permit the Banks to examine that
Company's books and records and to make excerpts therefrom
and transcripts thereof.
SECTION 5.5. ERISA COMPLIANCE. No Company shall
incur any material accumulated funding deficiency within the
meaning of ERISA in connection with any Pension Plan subject
to Part 3 of Title I of ERISA, or any material liability to
the PBGC in connection with any Pension Plan subject to
Title IV of ERISA (other than for premium payments arising
in the ordinary course). Borrower shall furnish to the
Banks (a) as soon as possible and in any event within
thirty (30) days after any Company knows or has reason to
know that any Reportable Event with respect to any Pension
Plan subject to Title IV of ERISA has occurred that alone or
together with any other Reportable Event could reasonably be
expected to result in liability of Borrower to the PBGC in
an aggregate amount exceeding five percent (5%) of
Consolidated Net Worth, a statement of a Financial Officer
of such Company, setting forth details as to such Reportable
Event and the action that such Company proposes to take with
respect thereto, together with a copy of the notice of such
Reportable Event given to the PBGC if a copy of such notice
is available to such Company, and (b) promptly after receipt
thereof a copy of any notice such Company, or any member of
the Controlled Group may receive from the PBGC relating to
the intention of the PBGC to terminate any ERISA Plan or
ERISA Plans or to appoint a trustee to administer any such
ERISA Plan. Borrower shall furnish to the Banks as soon as
possible and in any event within thirty (30) days after
receipt thereof by Borrower or any member of the Controlled
Group from the sponsor of a Multiemployer Plan, a copy of
each notice received by Borrower or any member of the
Controlled Group concerning (i) the imposition of Withdrawal
Liability by a Multiemployer Plan in an amount exceeding
five percent (5%) of the Consolidated Net Worth, or (ii) a
determination that a Multiemployer Plan is, or is expected
to be, terminated or in reorganization, both within the
meaning of Title IV of ERISA, and which, in each case, is
expected to result in an increase in annual contributions of
Borrower or a member of the Controlled Group to such
Multiemployer Plan in an amount exceeding five percent (5%)
of the Consolidated Net Worth.
SECTION 5.6. LEVERAGE RATIO. The Companies shall not
suffer or permit, at any time, the ratio of (a) Consolidated
Funded Indebtedness, to (b) (i) Consolidated Funded
Indebtedness plus (ii) Consolidated Net Worth, to exceed
0.45 to 1.00, based upon the financial statements of the
Companies for the most recently completed fiscal quarter.
SECTION 5.7. LIENS. No Company shall create, assume
or suffer to exist any Lien upon any of its property or
assets whether now owned or hereafter acquired except:
(a) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings
and for which adequate reserves have been established in
accordance with GAAP;
(b) other statutory Liens incidental to the conduct of
its business or the ownership of its property and assets
which (i) were not incurred in connection with the borrowing
of money or the obtaining of advances or credit, and
25
(ii) which do not in the aggregate materially detract from
the value of its property or assets or materially impair the
use thereof in the operation of its business;
(c) Liens on property or assets of a Subsidiary to
secure obligations of such Subsidiary to Borrower or another
Subsidiary;
(d) any purchase money Lien on fixed assets of a
Company so long as such Lien attaches only to the property
being acquired;
(e) Liens on property or assets of the Companies in
existence on the Closing Date as described on Schedule 5.7
hereto;
(f) carrier's, warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in
the ordinary course of business which are not overdue for a
period of more than thirty (30) days or which are being
contested in good faith and by appropriate proceedings;
(g) pledges or deposits under workers' compensation,
unemployment insurance and other social security
legislation;
(h) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(i) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar
encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and
do not materially detract from the value of the real
property subject thereto or interfere with the ordinary
conduct of the business of Borrower or any of its
Subsidiaries;
(j) Liens arising in connection with advances or
progress payments under government contracts;
(k) any Lien existing on any property or asset prior
to the acquisition thereof by Borrower or any Subsidiary;
provided, however, that (i) such Lien is not created in
contemplation of or in connection with such acquisition and
(ii) such Lien does not apply to any other property or
assets of Borrower or any Subsidiary;
(l) Liens securing obligations with respect to
industrial revenue bonds or similar financing facilities;
(m) Liens securing indebtedness (other than
indebtedness described in clauses (a) through (l) above),
including Liens arising from judgments, decrees or
attachment in circumstances not constituting an Event of
Default under Section 7.8; provided that all such Liens for
all Companies under this clause (m) shall not at any time
secure amounts in excess of the aggregate principal amount
of Seventy-Five Million Dollars ($75,000,000);
26
(n) Liens on accounts receivable (and any other
property incidental thereto) incurred pursuant to a
receivables securitization or other receivables financing
program; and
(o) Liens renewing, extending or refunding any Lien
permitted by clauses (e) and (m) above, provided that the
principal amount secured thereby is not increased, and the
Lien is not extended to the other property or Person.
No Company shall enter into any contract or agreement that
would prohibit Agent or the Banks from acquiring a security
interest, mortgage or other Lien on, or a collateral
assignment of, any of the property or assets of Borrower
and/or any of its Subsidiaries.
SECTION 5.8. REGULATIONS U and X. No Company shall
take any action that would result in any noncompliance of
the Loans with Regulations U and X of the Board of Governors
of the Federal Reserve System.
SECTION 5.9. MERGER AND SALE OF ASSETS. Borrower
shall not merge or consolidate with any other Person or
sell, lease or transfer or otherwise dispose of all or a
substantial part of its assets to any Person, except that if
no Unmatured Event of Default or Event of Default shall
exist or result therefrom, (i) Borrower may merge with or
consolidate into. or acquire assets of any other Person,
provided that Borrower is the surviving corporation,
(ii) Borrower may transfer the stock of any Subsidiary of
Borrower to any Company, (iii) Borrower may transfer all or
a substantial part of its assets to any Subsidiary of
Borrower so long as such Subsidiary has executed and
delivered to Agent for the benefit of the Banks a Guaranty
of Payment of the Debt, in form and substance satisfactory
to Agent, and (iv) Borrower may transfer all or any portion
of its accounts receivable (and any property incidental
thereto) pursuant to a receivables securitization or other
receivables financing program.
SECTION 5.10. NOTICE. Borrower shall cause a
Financial Officer to promptly notify Agent and the Banks
whenever any Unmatured Event of Default or Event of Default
may occur hereunder or any other representation or warranty
made in Article VI hereof or elsewhere in this Agreement may
for any reason cease to be true and complete in any material
respect.
SECTION 5.11. ENVIRONMENTAL COMPLIANCE. Each Company
shall comply in all respects with any and all Environmental
Laws including, without limitation, all Environmental Laws
in jurisdictions in which any Company owns or operates a
facility or site, arranges for disposal or treatment of
hazardous substances, solid waste or other wastes, except to
the extent that failure to do so could not be reasonably
expected to have a Material Adverse Effect. Borrower shall
furnish to the Banks promptly after receipt thereof a copy
of any written notice any Company receives from any
governmental authority, private person or entity or
otherwise that any material litigation or proceeding that
could reasonably be expected to have a Material Adverse
Effect pertaining to any environmental, health or safety
matter has been filed or it threatened against such Company,
any real property in which such Company holds any interest
or any past or present operation of such Company. As used
in this Section 5.11, "litigation or proceeding" means any
27
demand, claim, notice, suit, suit in equity action,
administrative action, investigation or inquiry whether
brought by any governmental authority, private person or
entity or otherwise. Borrower shall defend, indemnify and
hold Agent and the Banks harmless against all costs,
expenses, claims, damages, penalties and liabilities of
every kind or nature whatsoever (including attorneys fees)
arising out of or resulting from the noncompliance of any
Company with any Environmental Law except to the extent that
such costs, expenses, claims, damages, penalties and
liabilities result from the gross negligence or willful
misconduct of Agent or the Banks.
SECTION 5.12. FIXED CHARGE COVERAGE. Borrower shall
not suffer or permit the sum of (a) Consolidated Net Pre-Tax
Earnings, (b) Consolidated Depreciation, Obsolescence and
Amortization Charges, (c) all interest expense of Borrower
and its Consolidated Subsidiaries attributable to the
immediately preceding twelve (12) month period, and (d) the
current portion of all Fixed Lease Charges to be less than
an amount equal to 2.0 times the sum, for Borrower and its
Consolidated Subsidiaries of (i) the current portion of long-
term obligations, (ii) the current portion of all Fixed
Lease Charges and (iii) interest expense attributable to the
immediately preceding twelve (12) month period; provided,
however, that this Section 5.12 shall have no application
unless and until such time as Borrower shall have purchased
common stock of Borrower for Defensive Purposes. A purchase
shall be for "Defensive Purposes" if (A) it occurs within
six (6) months after the occurrence of a Trigger Event, (B)
it is determined by the Board of Directors of Borrower to be
in response to a Trigger Event, and (C) such purchase,
together with all other such purchases within the six (6)
month period specified in clause (A), aggregates in value of
common stock purchased (shares being valued at the date of
purchase) no less than Five Million Dollars ($5,000,000).
In connection with. any purchase or purchases made within
the six (6) month period specified in clause (A) of the
preceding sentence having an aggregate value of Five Million
Dollars ($5,000,000) or more, the Board of Directors shall
determine whether or not such purchase or purchases are in
response to a Trigger Event, and Borrower shall, promptly
after completing any such purchase or purchases, certify to
the Banks the results of the Board of Directors'
determination and shall provide with such certificate a
summary of the reasons for such determination of the Board
of Directors. For purposes of this Section 5.12, "Trigger
Event" shall mean either (1) the filing, with respect to
Borrower, of (x) a Schedule 13D, including an intent to
acquire control of Borrower, (y) a Schedule 14D-1 relating
to a tender offer for twenty percent (20%) or more of the
stock of Borrower, or (z) a Schedule 14B (or any comparable
or successor schedule or form to those specified in clauses
(x) through (z)), by any Person other than (a) an
"affiliate" or "associate" (as such terms are defined by the
rules and regulations of the SEC) of Borrower, (b) a member
of the Timken family or (c) any entity the majority of the
beneficial owners of which are members of the Timken family
(each, an "Excluded Person") and other than in connection
with any agreement approved by Borrower's Board of Directors
(an "Excluded Agreement"), or (2) the effectiveness of a
registration statement (other than a registration statement
filed in connection with any Excluded Agreement) filed by
any Person other than an Excluded Person in connection with
any exchange offer relating to Borrower's stock.
28
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
SECTION 6.1. CORPORATE EXISTENCE; SUBSIDIARIES;
FOREIGN QUALIFICATION. Each Company is a corporation duly
organized, validly existing, and in good standing under the
laws of its state of incorporation and is duly qualified and
authorized to do business and is in good standing as a
foreign corporation in each jurisdiction where the character
of its property or its business activities makes such
qualification necessary, except where the failure to so
qualify could not reasonably be expected to have a Material
Adverse Effect.
SECTION 6.2. CORPORATE AUTHORITY. Borrower has the
right and power and is duly authorized and empowered to
enter into, execute and deliver the Loan Documents to which
it is a party and to perform and observe the provisions of
the Loan Documents. The Loan Documents to which Borrower is
a party have been duly authorized by all requisite corporate
action and are the valid and binding obligations of
Borrower, enforceable against Borrower in accordance with
their respective terms. The execution, delivery and
performance of the Loan Documents will not conflict with nor
result in any breach in any of the provisions of, or
constitute a default under, or result in the creation of any
Lien (other than Liens permitted under Section 5.7 of this
Agreement) upon any assets or property of Borrower under the
provisions of Borrower's Articles of Incorporation or
Regulations or any agreement by which Borrower is bound.
SECTION 6.3. COMPLIANCE WITH LAWS. No Company:
(a) is in violation of any federal, state, local,
or foreign applicable statutes, rules, regulations, and
orders including, without limitation, those relating to
environmental protection, occupational safety and
health, and equal employment practices, where such
violation could reasonably be expected to have a
Material Adverse Effect; and
(b) is in violation of or in default under any
material agreement to which it is a party or by which
its assets are subject or bound, where such violation
or default could reasonably be expected to have a
Material Adverse Effect.
SECTION 6.4. LITIGATION AND ADMINISTRATIVE
PROCEEDINGS. As of the Closing Date, there are no lawsuits,
actions, investigations, or other proceedings pending or, to
the knowledge of Borrower, threatened against Borrower or
any of its Subsidiaries, or in respect of which Borrower or
any of its Subsidiaries may have any liability, (a) that
involve any Loan Document or the Loans or (b) as to which
there is a reasonable possibility of an adverse
determination and that could, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
SECTION 6.5. TITLE TO ASSETS. Each Company has good
title to, or valid leasehold interests in, all its material
property, which property is free and clear of all Liens
29
except those permitted under Section 5.7 and except for
minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to
utilize such properties and assets for their intended
purposes.
SECTION 6.6. TAX RETURNS. All federal, state and
local tax returns and other reports required by law to be
filed in respect of the income, business, properties and
employees of Borrower have been filed and all taxes,
assessments, fees and other governmental charges which are
due and payable have been paid, except as otherwise
permitted herein or where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
SECTION 6.7. ENVIRONMENTAL LAWS. To the best of
Borrower's knowledge, after due inquiry, each Company is in
compliance with any and all Environmental Laws (including,
without limitation, all Environmental Laws in all
jurisdictions in which any Company owns or operates, or has
owned or operated, a facility or site, arranges or has
arranged for disposal or treatment of hazardous substances,
solid waste or other wastes where such violation could
reasonably be expected to have a Material Adverse Effect.
To the best of Borrower's knowledge, no litigation or
proceeding arising, under, relating to or in connection with
any Environmental Law is pending or threatened against any
Company, any real property in which any Company holds or has
held an interest or any past or present operation of any
Company that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
As used in this Section 6.7, "litigation or proceeding"
means any demand, claim, notice, suit, suit in equity,
action, administrative action, investigation or inquiry
whether brought by any governmental authority or private
Person.
SECTION 6.8. EMPLOYEE BENEFITS PLANS. Borrower and
each Controlled Group member is in compliance in all
material respects with the applicable provisions of ERISA.
No Reportable Event has occurred as to which Borrower or any
Controlled Group member was required to file a report with
the PBGC that could reasonably be expected to result in
termination by the PBGC of any ERISA Plan subject to Title
IV of ERISA, and the present value of the accumulated
benefit obligations under each ERISA Plan (as determined in
accordance with Statement of Accounting Standards No. 87,
"Employers Accounting for Pensions") did not, as of the last
annual valuation date applicable thereto for which a
valuation is available, exceed by a material amount the fair
market value of the assets of such ERISA Plan. Neither
Borrower nor any Controlled Group member has incurred any
Withdrawal Liability that materially and adversely affects
the financial position of the Companies taken as a whole.
Neither Borrower nor any Controlled Group member has
received any notification that any Multiemployer Plan is in
reorganization or has been terminated, within the meaning of
Title IV of ERISA, and, to Borrower's knowledge, no
Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, where such
reorganization or termination could reasonably be expected
to result in an increase in the contributions required to be
made to such Multiemployer Plan in an amount, the payment of
which could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.9. CONSENTS OR APPROVALS. No consent,
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approval or authorization of, or filing, registration or
qualification with, any governmental authority or any other
Person (other than those already obtained or completed), is
required to be obtained or completed by Borrower in
connection with the execution, delivery or performance by
Borrower of any of the Loan Documents.
SECTION 6.10. FINANCIAL STATEMENTS. The audited
Consolidated financial statements of the Companies for the
fiscal year ended December 31, 1997, and the interim
financial statements for the period ended March 31, 1998,
furnished to Agent and the Banks, are true and complete,
have been prepared in accordance with GAAP (subject, in the
case of such interim financial statements, to year-end
adjustments), and fairly present the Companies' financial
condition as of the date of such financial statements and
the results of their operations for the period then ended.
SECTION 6.11. REGULATIONS U and X. Borrower is not
engaged principally or as one of its important activities in
the business of extending credit for the purpose of
purchasing or carrying any "margin stock" (within the
meaning of Regulation U of the Board of Governors of the
Federal Reserve System of the United States of America).
Neither the borrowing of any Loans (or any conversion
thereof) nor the use of the proceeds of the Loans will
violate, or be inconsistent with, the provisions of
Regulation U or X of said Board of Governors.
SECTION 6.12. ACCURATE AND COMPLETE STATEMENTS.
Neither the Loan Documents nor any written statement made by
any Company in connection with any of the Loan Documents
contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained
therein or in the Loan Documents not misleading.
SECTION 6.13. DEFAULTS. No Unmatured Event of Default
or Event of Default exists hereunder, nor will any begin to
exist immediately after the execution and delivery hereof.
ARTICLE VII. EVENTS OF DEFAULT
Each of the following shall constitute an Event of
Default hereunder:
SECTION 7.1. PAYMENTS. If (a) the interest on any
Note, any facility or other fee or any other amount (other
than principal) payable hereunder shall not be paid in full
when due and payable, or within five (5) Business Days
thereafter, or (b) the principal of any Note shall not be
paid in full when due and payable.
SECTION 7.2. CERTAIN COVENANTS. If any Company shall
fail or omit to perform and observe Section 5.6, 5.7, 5.9 or
5.12.
SECTION 7.3. OTHER COVENANTS. If any Company shall
fail or omit to perform any agreement or other provision
(other than those referred to in Section 7.1 or 7.2 hereof)
31
contained in this Agreement or any Loan Document that such
Company is required to perform, and such failure or omission
shall not have been fully corrected within thirty (30) days
after the giving of written notice thereof to Borrower by
Agent or any Bank that the specified Unmatured Event of
Default is to be remedied.
SECTION 7.4. REPRESENTATIONS AND WARRANTIES. If any
representation, warranty or statement made in or pursuant to
this Agreement or any Loan Document or any other material
information furnished by any Company to the Banks or any
thereof or any other holder of any Note in connection with
the Loan Documents shall be false or erroneous in any
material respect when made.
SECTION 7.5. CROSS DEFAULT. If Borrower or any of
its Consolidated Subsidiaries shall default in the payment
of principal or interest due and owing upon any other
obligation for borrowed money in excess of the aggregate,
for all such obligations, of Seventy-Five Million Dollars
($75,000,000) beyond any period of grace provided with
respect thereto or in the performance or observance of any
other agreement, term or condition contained in any
agreement under which such obligation is created, if the
effect of such default is to allow the acceleration of the
maturity of such indebtedness or to permit the holder
thereof to cause such indebtedness to become due prior to
its stated maturity.
SECTION 7.6. ERISA DEFAULT. The occurrence of one or
more events or conditions specified in Section 5.5 that (a)
the Majority Banks determine could reasonably be expected to
have a Material Adverse Effect, or (b) results in a Lien on
any of the assets of any Company that the Majority Banks
determine could reasonably be expected to have a Material
Adverse Effect.
SECTION 7.7. CHANGE IN CONTROL. If any Person or
group shall acquire beneficial ownership (within the meaning
of Rule 13d-3 of the SEC under the Securities Exchange Act
of 1934, as then in effect) of forty percent (40%) or more
of the outstanding shares of the voting stock of Borrower.
SECTION 7.8. MONEY JUDGMENT. If a final judgment or
order for the payment of money shall be rendered against any
Company by a court of competent jurisdiction, which remains
unpaid or unstayed and undischarged for a period (during
which execution shall not be effectively stayed) of thirty
(30) days after the date on which the right to appeal has
expired, provided that the aggregate of all such judgments
shall exceed Seventy-Five Million Dollars ($75,000,000) in
the aggregate.
SECTION 7.9. INSOLVENCY. If any Company or any
Obligor shall (a) discontinue business (except for a Company
other than Borrower which discontinues business as a result
of the business strategy of Borrower), (b) generally not pay
its debts as such debts become due, (c) make a general
assignment for the benefit of creditors, (d) apply for or
consent to the appointment of a receiver, a custodial, a
32
trustee, an interim trustee or liquidator of all or
substantially all of its assets, (e) be adjudicated a debtor
or have entered against it an order for relief under Title
11 of the United States Code, as the same may be amended
from time to time, (f) file a voluntary petition in
bankruptcy or file a petition or an answer seeking
reorganization or an arrangement with creditors or seeking
to take advantage of any other law (whether federal or
state) relating to relief of debtors, or admit (by answer,
by default or otherwise) the material allegations of a
petition filed against it in any bankruptcy, reorganization,
insolvency or other proceeding (whether federal or state)
relating to relief of debtors, or (g) suffer or permit to
continue unstayed and in effect for sixty (60) consecutive
days any judgment, decree or order entered by a court of
competent jurisdiction, which approves a petition seeking
its reorganization or appoints a receiver, custodian,
trustee, interim trustee or liquidator of all or a
substantial part of its assets.
ARTICLE VIII. REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference
herein or elsewhere:
SECTION 8.1. OPTIONAL DEFAULTS. If any Event of
Default referred to in Section 7.1 through Section 7.8
hereof occurs, the Majority Banks shall have the right in
their discretion, by directing Agent on behalf of the Banks,
upon written notice to Borrower, to:
(a) terminate the Commitment and the credits hereby
established, if not theretofore terminated, and, immediately
upon such election, the obligations of Banks, and each
thereof, to make any further Loan or Loans hereunder
immediately shall be terminated, and/or
(b) accelerate the maturity of all of the Debt (if the
Debt is not already due and payable), whereupon all of the
Debt shall become and thereafter be immediately due and
payable in full without any presentment or demand and
without any further or other notice of any kind, all of
which are hereby waived by Borrower.
SECTION 8.2. AUTOMATIC DEFAULTS. If any Event of
Default referred to in Section 7.9 shall occur:
(a) the Commitment and the credits hereby established
shall automatically and immediately terminate, if not
previously terminated, and no Bank thereafter shall be under
any obligation to grant any further Loan or Loans hereunder,
and
(b) the principal of and interest on any Notes then
outstanding, and all of the Debt shall thereupon become and
thereafter be immediately due and payable in full (if it be
not already due and payable), all without any presentment,
demand or notice of any kind, which are hereby waived by
Borrower.
SECTION 8.3. OFFSETS. If any Event of Default
referred to in Section 7.9 exists or if the maturity of the
Notes is accelerated pursuant to Section 8.1 or 8.2, each
33
Bank shall have the right at any time to set off against,
and to appropriate and apply toward the payment of, any and
all Debt then owing by Borrower to that Bank (including,
without limitation, any participation purchased or to be
purchased pursuant to Section 8.4), whether or not the same
shall then have matured, any and all deposit balances and
all other indebtedness then held or owing by that Bank to or
for the credit or account of Borrower, all without notice to
or demand upon Borrower or any other person, all such
notices and demands being hereby expressly waived by
Borrower.
SECTION 8.4. EQUALIZATION PROVISION. Each Bank
agrees with the other Banks that if it, at any time, shall
obtain any Advantage over the other Banks or any thereof in
respect of the Debt (except under Article III and except as
to Competitive Bid Loans), it shall purchase from the other
Banks, for cash and at par, such additional participation in
the Debt as shall be necessary to nullify the Advantage. If
any such Advantage resulting in the purchase of an
additional participation as aforesaid shall be recovered in
whole or in part from the Bank receiving the Advantage, each
such purchase shall be rescinded, and the purchase price
restored (but without interest unless the Bank receiving the
Advantage is required to pay interest on the Advantage to
the Person recovering the Advantage from such Bank) ratably
to the extent of the recovery. Each Bank further agrees
with the other Banks that if it at any time shall receive
any payment for or on behalf of Borrower on any indebtedness
owing by Borrower to that Bank by reason of offset of any
deposit or other indebtedness, it will apply such payment
first to any and all Debt owing by Borrower to that Bank
(including, without limitation, any participation purchased
or to be purchased pursuant to this Section 8.4 or any other
Section of this Agreement). Borrower agrees that any Bank
so purchasing a participation from the other Banks or any
thereof pursuant to this Section may exercise all its rights
of payment (including the right of set-off) with respect to
such participation as fully as if such Bank was a direct
creditor of Borrower in the amount of such participation.
ARTICLE IX. THE AGENT
The Banks authorize KeyBank National Association and
KeyBank National Association hereby agrees to act as agent
for the Banks in respect of this Agreement upon the terms
and conditions set forth elsewhere in this Agreement, and
upon the following terms and conditions:
SECTION 9.1. APPOINTMENT AND AUTHORIZATION. Each
Bank hereby irrevocably appoints and authorizes Agent to
take such action as agent on its behalf and to exercise such
powers hereunder as are delegated to Agent by the terms
hereof, together with such powers as are reasonably
incidental thereto. Neither Agent nor any of its directors,
officers, attorneys or employees shall be liable for any
action taken or omitted to be taken by it or them hereunder
or in connection herewith, except for its or their own gross
negligence or willful misconduct.
SECTION 9.2. NOTE HOLDERS. Agent may treat the payee
of any Note as the holder thereof until written notice of
transfer shall have been filed with it, signed by such payee
and in form satisfactory to Agent.
34
SECTION 9.3. CONSULTATION WITH COUNSEL. Agent may
consult with legal counsel selected by it and shall not be
liable for any action taken or suffered in good faith by it
in accordance with the opinion of such counsel.
SECTION 9.4. DOCUMENTS. Agent shall not be under any
duty to examine into or pass upon the validity,
effectiveness, genuineness or value of any Loan Documents or
any other writing furnished pursuant thereto or in
connection therewith or the value of any collateral obtained
hereunder, and Agent shall be entitled to assume that the
same are valid, effective and genuine and what they purport
to be.
SECTION 9.5. AGENT AND AFFILIATES. With respect to
the Loans, Agent shall have the same rights and powers
hereunder as any other Bank and may exercise the same as
though it were not the agent, and Agent and its affiliates
may accept deposits from, lend money to and generally engage
in any kind of business with any Company or affiliate
thereof.
SECTION 9.6. KNOWLEDGE OF DEFAULT. It is expressly
understood and agreed that Agent shall be entitled to assume
that no Unmatured Event of Default or Event of Default has
occurred and is continuing, unless Agent has been notified
by a Bank or Borrower in writing that such Bank or Borrower,
as the case may be, believes that an Unmatured Event of
Default or Event of Default has occurred and is continuing
and specifying the nature thereof.
SECTION 9.7. ACTION BY AGENT. So long as Agent shall
be entitled, pursuant to Section 9.6, to assume that no
Unmatured Event of Default or Event of Default shall have
occurred and be continuing, Agent shall be entitled to use
its discretion with respect to exercising or refraining from
exercising any rights which may be vested in it by, or with
respect to taking or refraining from taking any action or
actions which it may be able to take under or in respect of,
this Agreement. Agent shall incur no liability under or in
respect of this Agreement by acting upon any notice,
certificate, warranty or other paper or instrument believed
by it to be genuine or authentic or to be signed by the
proper party or parties, or with respect to anything which
it may do or refrain from doing in the reasonable exercise
of its judgment, or which may seem to it to be necessary or
desirable in the premises.
SECTION 9.8. NOTICES, DEFAULT, ETC. In the event
that Agent shall have acquired actual knowledge of any
Unmatured Event of Default or Event of Default, Agent shall
promptly notify the Banks and shall take such action and
assert such rights under this Agreement as the Majority
Banks shall direct and Agent shall inform the other Banks in
writing of the action taken. Agent may take such action and
assert such rights as it deems to be advisable, in its
discretion, for the protection of the interests of the
holders of the Notes.
SECTION 9.9. INDEMNIFICATION OF AGENT. The Banks
agree to indemnify Agent (to the extent not reimbursed by
Borrower), ratably according to their respective Commitment
Percentages 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 Agent in its capacity as agent in any way
relating to or arising out of this Agreement or any Loan
Document or any action taken or omitted by Agent with
respect to this Agreement or any Loan Document, provided
that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including
35
attorney fees) or disbursements resulting from Agent's gross
negligence, willful misconduct or from any action taken or
omitted by Agent in any capacity other than as agent under
this Agreement.
SECTION 9.10. SUCCESSOR AGENT. Agent may resign as
agent hereunder by giving not fewer than thirty (30) days'
prior written notice to Borrower and the Banks. If Agent
shall resign under this Agreement then either (a) the
Majority Banks shall appoint from among the Banks a
successor agent for the Banks (with the consent of Borrower
so long as an Event of Default has not occurred and which
consent shall not be unreasonably withheld), or (b) if a
successor agent shall not be so appointed and approved
within the thirty (30) day period following Agent's notice
to the Banks of its resignation, then Agent shall appoint a
successor agent who shall serve as agent until such time as
the Majority Banks appoint a successor agent. Upon its
appointment, such successor agent shall succeed to the
rights, powers and duties as agent, and the term "Agent"
shall mean such successor effective upon its appointment,
and the former agent's rights, powers and duties as agent
shall be terminated without any other or further act or deed
on the part of such former agent or any of the parties to
this Agreement.
ARTICLE X. MISCELLANEOUS
SECTION 10.1. BANKS' INDEPENDENT INVESTIGATION. Each
Bank, by its signature to this Agreement, acknowledges and
agrees that Agent has made no representation or warranty,
express or implied, with respect to the creditworthiness,
financial condition, or any other condition of any Company
or with respect to the statements contained in any
information memorandum furnished in connection herewith or
in any other oral or written communication between Agent and
such Bank. Each Bank represents that it has made and shall
continue to make its own independent investigation of the
creditworthiness, financial condition and affairs of the
Companies in connection with the extension of credit
hereunder, and agrees that Agent has no duty or
responsibility, either initially or on a continuing basis,
to provide any Bank with any credit or other information
with respect thereto (other than such notices as may be
expressly required to be given by Agent to the Banks
hereunder), whether coming into its possession before the
granting of the first Loans hereunder or at any time or
times thereafter.
SECTION 10.2. NO WAIVER; CUMULATIVE REMEDIES. No
omission or course of dealing on the part of Agent, any Bank
or the holder of any Note in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and
in addition to any other rights, powers or privileges held
by operation of law, by contract or otherwise.
36
SECTION 10.3. AMENDMENTS, CONSENTS. No amendment,
modification, termination, or waiver of any provision of any
Loan Document nor consent to any variance therefrom, shall
be effective unless the same shall be in writing and signed
by Borrower and the Majority Banks and then such waiver or
consent shall be effective only in the specific instance and
for the specific purpose for which given. Anything herein
to the contrary notwithstanding, without the unanimous
consent of the Banks, no agreement shall (a) increase the
Commitment, (b) extend the maturity of any Note or the
payment date of interest thereunder, (c) reduce the rate of
interest on the Notes, or in any amount of principal or
interest due on any Note, or the payment of facility or
other fees hereunder or any change in the manner of pro rata
application of any payments made by Borrower to the Banks
hereunder, (d) change any percentage voting requirement,
voting rights, or the Majority Banks definition in this
Agreement, or (e) amend this Section 10.3 or Section 8.4.
Notice of amendments or consents ratified by the Banks
hereunder shall immediately be forwarded by Borrower to all
Banks. Each Bank or other holder of a Note shall be bound
by any amendment, waiver or consent obtained as authorized
by this Section 10.3, regardless of its failure to agree
thereto.
SECTION 10.4. NOTICES. All notices, requests, demands
and other communications provided for hereunder shall be in
writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy, graphic scanning or
other telegraphic communications equipment of the sending
party, if to Borrower, to it at the address specified on the
signature pages of this Agreement, if to a Bank, to the
address of such Bank specified on the signature pages of
this Agreement, or, as to each party, at such other address
as shall be designated by such party in a written notice to
each of the other parties. All notices, requests, demands
and other communications provided for hereunder shall be
deemed to have been given on the date of receipt.
SECTION 10.5. COSTS, EXPENSES AND TAXES. Borrower
agrees to pay the reasonable out-of-pocket expenses incurred
by Agent in connection with the preparation of this
Agreement and the other Loan Documents as to which Borrower
and Agent have mutually agreed or in connection with
amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby
contemplated are consummated) or incurred by Agent or any
Bank in connection with the enforcement or protection of
their rights in connection with this Agreement and the other
Loan Documents or in connection with the Loans made or the
Notes issued hereunder, including the reasonable fees and
disbursements of special counsel for Agent, and, in
connection with any such amendment, modification or waiver
relating to any such enforcement or protection, the
reasonable fees and disbursements of any other counsel for
Agent or any Bank. Borrower further agrees that it shall
indemnify Agent and the Banks from and hold them harmless
against any documentary taxes, assessments or charges made
by any governmental authority by reason of the execution and
delivery of this Agreement or any of the other Loan
Documents.
SECTION 10.6. INDEMNIFICATION. Borrower agrees to
defend, indemnify and hold harmless Agent and the Banks from
and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
37
expenses (including reasonable attorney fees) or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent or any
Bank in connection with any investigative, administrative or
judicial proceeding (whether or not such Bank or Agent shall
be designated a party thereto) or any other claim by any
person or entity relating to or arising out of this
Agreement or any actual or proposed use of proceeds of the
Loans hereunder or any activities of any Company or any of
its affiliates; provided, however, that no Bank nor Agent
shall have the right to be indemnified under this Section
10.6 for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction. All
obligations provided for in this Section 10.6 shall survive
any termination of this Agreement.
SECTION 10.7. OBLIGATIONS SEVERAL; NO FIDUCIARY
OBLIGATIONS. The obligations of the Banks hereunder are
several and not joint. Nothing contained in this Agreement
and no action taken by Agent or the Banks pursuant hereto
shall be deemed to constitute the Banks a partnership,
association, joint venture or other entity. No default by
any Bank hereunder shall excuse the other Banks from any
obligation under this Agreement; but no Bank shall have or
acquire any additional obligation of any kind by reason of
such default. The relationship among Borrower and the Banks
with respect to the Loan Documents is and shall be solely
that of debtor and creditors, respectively, and neither
Agent nor any Bank has any fiduciary obligation toward
Borrower with respect to any such documents or the
transactions contemplated thereby.
SECTION 10.8. 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 and delivered shall be deemed to
be an original and all of which taken together shall
constitute but one and the same agreement.
SECTION 10.9. BINDING EFFECT; BORROWER'S ASSIGNMENT.
This Agreement shall become effective when it shall have
been executed by Borrower, Agent and by each Bank and
thereafter shall be binding upon and inure to the benefit of
Borrower, Agent and each of the Banks and their respective
successors and assigns, except that Borrower shall not have
the right to assign its rights hereunder or any interest
herein without the prior written consent of Agent and all of
the Banks.
SECTION 10.10. BANK ASSIGNMENTS/PARTICIPATIONS.
A. Assignments of Commitments. With the prior
written consent of Agent and Borrower, each Bank shall have
the right at any time or times to assign to another
financial institution, without recourse, all or a percentage
of all of the following: (a) that Bank's Commitment, (b) all
Loans made by that Bank, (c) that Bank's Notes, and (d) that
Bank's interest in any participation purchased pursuant to
Section 8.4; provided, however, in each such case, that the
38
assignor and the assignee shall have complied with the
following requirements:
(i) Prior Consent. No assignment may be
consummated pursuant to this Section 10.10 without the
prior written consent of Borrower and Agent (other than
an assignment by any Bank to any affiliate of such
Bank), which consent of Borrower and Agent shall not be
unreasonably withheld; provided, however, that,
Borrower's consent shall not be required if, at the
time of the proposed assignment, any Unmatured Event of
Default or Event of Default shall have occurred.
Anything herein to the contrary notwithstanding, any
Bank may at any time make a collateral assignment of
all or any portion of its rights under the Loan
Documents to a Federal Reserve Bank, and no such
assignment shall release such assigning Bank from its
obligations hereunder;
(ii) Minimum Amount. Each such assignment shall
be in a minimum amount of the lesser of Ten Million
Dollars ($10,000,000) of the assignor's Commitment or
the entire amount of the assignor's Commitment;
(iii) Assignment Fee; Assignment Agreement.
Unless the assignment shall be to an affiliate of the
assignor or the assignment shall be due to merger of
the assignor or for regulatory purposes, the assignor
shall remit to Agent, for its own account, an
administrative fee of Three Thousand Five Hundred
Dollars ($3,500). Unless the assignment shall be due
to merger of the assignor or a collateral assignment
for regulatory purposes, the assignor shall (A) cause
the assignee to execute and deliver to Borrower and
Agent an Assignment and Acceptance Agreement, in the
form of Exhibit F hereto (an "Assignment Agreement"),
and (B) execute and deliver, or cause the assignee to
execute and deliver, as the case may be, to Agent such
additional amendments, assurances and other writings as
Agent may reasonably require; and
(iv) Non-U.S. Assignee. If the assignment is to
be made to an assignee which is organized under the
laws of any jurisdiction other than the United States
or any state thereof, the assignor Bank shall cause
such assignee, at least five (5) Business Days prior to
the effective date of such assignment, (A) to represent
to the assignor Bank (for the benefit of the assignor
Bank, Agent and Borrower) that under applicable law and
treaties no taxes will be required to be withheld by
Agent, Borrower or the assignor with respect to any
payments to be made to such assignee in respect of the
Loans hereunder, (B) to furnish to the assignor (and,
in the case of any assignee registered in the Register,
Agent and Borrower) either (1) U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form
1001 or (2) United States Internal Revenue Service Form
W-8 or W-9, as applicable (wherein such assignee claims
entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder),
and (C) to agree (for the benefit of the assignor,
Agent and Borrower) to provide the assignor Bank (and,
in the case of any assignee registered in the Register,
Agent and Borrower) a new Form 4224 or Form 1001 or
Form W-8 or W-9, as applicable, upon the expiration or
obsolescence of any previously delivered form and
comparable statements in accordance with applicable
U.S. laws and regulations and amendments duly executed
39
and completed by such assignee, and to comply from time
to time with all applicable U.S. laws and regulations
with regard to such withholding tax exemption.
Upon satisfaction of the requirements specified in
clauses (i) through (iv) above, Borrower shall execute and
deliver (A) to Agent, the assignor and the assignee, the
consent or release (of all or a portion of the obligations
of the assignor) to be delivered by Borrower in connection
with the Assignment Agreement, and (B) to the assignee, an
appropriate Note or Notes. After delivery of the new Note
or Notes, the assignor's Note or Notes being replaced shall
be returned to Borrower marked "replaced".
Upon satisfaction of the requirements of set forth in
(i) through (iv) above, and any other condition contained in
this Section 10.10A, (1) the assignee shall become and
thereafter be deemed to be a "Bank" for the purposes of this
Agreement, (2) in the event that the assignor's entire
interest has been assigned, the assignor shall cease to be
and thereafter shall no longer be deemed to be a "Bank" and
(3) the signature pages hereto and Schedule 1 hereof shall
be automatically amended, without further action, to reflect
the result of any such assignment.
Agent shall maintain at its address referred to in
Section 10.4 a copy of each Assignment Agreement delivered
to it and a register (the "Register") for the recordation of
the names and addresses of the Banks and the Commitment of,
and principal amount of the Loans owing to, each Bank from
time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and Borrower,
Agent and the Banks may treat each financial institution
whose name is recorded in the Register as the owner of the
Loan recorded therein for all purposes of this Agreement.
The Register shall be available for inspection by Borrower
or any Bank at any reasonable time and from time to time
upon reasonable prior notice.
B. Sale of Participations. Each Bank shall have the
right at any time or times, upon notice to, but without the
consent of, Agent or Borrower, to sell one or more
participations or subparticipations to a financial
institution, as the case may be, in all or any part of (a)
that Bank's Commitment, (b) that Bank's Commitment
Percentage, (c) any Loan made by that Bank, (d) any Note
delivered to that Bank pursuant to this Agreement, and (e)
that Bank's participations, if any, purchased pursuant to
Section 8.4 or this Section 10.10B.
The provisions of Article III shall inure to the
benefit of each purchaser of a participation or
subparticipation, provided, however, that no participant or
subparticipant shall be entitled to receive any amount
pursuant to Article III greater than the Bank through which
such participant's subparticipant's claim is derived would
have been entitled to receive in the circumstances in which
such claim arises had no participation or subparticipation
been sold. Agent shall continue to distribute payments
pursuant to this Agreement as if no participation has been
sold.
If any Bank shall sell any participation or sub-
participation, that Bank shall, as between itself and the
purchaser, retain all of its rights (including, without
40
limitation, rights to enforce against Borrower the Loan
Documents) and duties pursuant to the Loan Documents,
including, without limitation, that Bank's right to approve
any waiver, consent or amendment pursuant to Section 10.3,
except if and to the extent that any such waiver, consent or
amendment would:
(i) reduce any fee or commission allocated to the
participation or subparticipation, as the case may be,
(ii) reduce the amount of any principal payment on
any Loan allocated to the participation or
subparticipation, as the case may be, or reduce the
principal amount of any Loan so allocated or the rate
of interest payable thereon, or
(iii) extend the time for payment of any
amount allocated to the participation or
subparticipation, as the case may be.
No participation or subparticipation shall operate as a
delegation of any duty of the seller thereof. Under no
circumstance shall any participation or subparticipation be
deemed a novation in respect of all or any part of the
seller's obligations pursuant to this Agreement.
SECTION 10.11. SEVERABILITY OF PROVISIONS; CAPTIONS.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
The several captions to Sections and subsections herein are
inserted for convenience only and shall be ignored in
interpreting the provisions of this Agreement.
SECTION 10.12. INVESTMENT PURPOSE. Each of the Banks
represents and warrants to Borrower that it is entering into
this Agreement with the present intention of acquiring any
Note issued pursuant hereto for investment purposes only and
not for the purpose of distribution or resale, it being
understood, however, that each Bank shall at all times
retain full control over the disposition of its assets.
SECTION 10.13. ENTIRE AGREEMENT. This Agreement, any
Note and any other agreement, document or instrument
attached hereto or referred to herein or executed on or as
of the date hereof integrate all the terms and conditions
mentioned herein or incidental hereto and supersede all oral
representations and negotiations and prior writings with
respect to the subject matter hereof.
SECTION 10.14. GOVERNING LAW; SUBMISSION TO
JURISDICTION. This Agreement, each of the Notes and any
Loan Document shall be governed by and construed in
accordance with the laws of the State of Ohio and the
respective rights and obligations of Borrower and the Banks
shall be governed by Ohio law, without regard to principles
of conflict of laws. Borrower hereby irrevocably submits to
the nonexclusive jurisdiction of any Ohio state or federal
court sitting in Cleveland, Ohio, over any action or
proceeding arising out of or relating to this Agreement or
any Loan Document, and Borrower hereby irrevocably agrees
41
that all claims in respect of such action or proceeding may
be heard and determined in such Ohio state or federal court.
Borrower, on behalf of itself and its Subsidiaries, hereby
irrevocably waives, to the fullest extent permitted by law,
any objection it may now or hereafter have to the laying of
venue in any action or proceeding in any such court as well
as any right it may now or hereafter have to remove such
action or proceeding, once commenced, to another court on
the grounds of FORUM NON CONVENIENS or otherwise. Borrower
agrees that a final, nonappealable 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.
SECTION 10.15. LEGAL REPRESENTATION OF PARTIES. The
Loan Documents were negotiated by the parties with the
benefit of legal representation and any rule of construction
or interpretation otherwise requiring this Agreement or any
other Loan Document to be construed or interpreted against
any party shall not apply to any construction or
interpretation hereof or thereof.
SECTION 10.16. CONFIDENTIALITY. Neither Agent nor any
Bank shall disclose any Confidential Information to any
Person without the written consent of Borrower, other than
(a) to Agent's or such Bank's affiliates, officers,
directors, employees, agents, attorneys, representatives and
advisors and to actual or prospective assignees and
participants, and that, in each case, are advised of the
confidential nature of such Confidential Information, (b) as
required by any law, rule or regulation or judicial process,
or (c) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking.
[Remainder of page left intentionally blank.]
42
SECTION 10.17. JURY TRIAL WAIVER. BORROWER, AGENT AND
EACH OF THE BANKS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their proper and
duly authorized officers as of the date first written above.
Address: 1835 Dueber Avenue THE TIMKEN COMPANY
Canton, Ohio 44706
By:
Gene E. Little,
Senior Vice
President - Finance
Address: Key Center KEYBANK NATIONAL ASSOCIATION,
127 Public Square as a Bank and as Agent
Cleveland, OH 44114-1306
Attention: Large Corporate By:
Lending Division Marianne T. Meil,
Vice President
Address: One Wall Street THE BANK OF NEW YORK
New York, NY 10286
By:
Name:
Title:
Address: 101 Central Plaza South BANK ONE, N.A.
Canton, OH 44702
By:
Name:
Title:
S-1
Address: Global Corporate Banking MELLON BANK, N.A.
Room 151-4401
One Mellon Bank Center By:
Pittsburgh, PA 15258-0001 Name:
Title:
Address: Hongkong & Shanghai Banking MARINE MIDLAND BANK
Corp. Group
190 South LaSalle Street By:
Suite 1100 Name:
Chicago, IL 60603 Title:
Address: NationsBank Corp. Center NATIONSBANK, N.A.
NC1-007-08-04
100 N. Tryon, 8th Floor By:
Charlotte, NC 28255 Name:
Title:
Address: 611 Woodward Avenue NBD BANK
Detroit MI 48226
By:
Name:
Title:
Address: 50 South LaSalle NORTHERN TRUST COMPANY
Chicago, IL 60675
By:
Name:
Title:
S-2
Address: 60 Wall Street REVOLVING COMMITMENT VEHICLE
New York, NY 10015 CORPORATION
By: Morgan Guaranty Trust Company
of New York, As Attorney in Fact
for Revolving Commitment Vehicle
Corporation
By:
Name:
Title:
Address: 245 Park Avenue-35th Floor ISTITUTO BANCARIO SAN PAOLO DI
New York, NY 10167 TORINO SPA
By:
Name:
Title:
Address: 220 Mark Avenue S. UNITED NATIONAL BANK AND
Canton, OH 44702 TRUST
By:
Name:
Title:
S-3
SCHEDULE 1
BANKING INSTITUTIONS COMMITMENT MAXIMUM
PERCENTAGE AMOUNT
KeyBank National Association 19.2899% $ 57,869,338
Bank One, N.A. 8.9822% $ 26,946,666
Marine Midland Bank 8.9822% $ 26,946,666
Mellon Bank, N.A. 8.9822% $ 26,946,666
NationsBank, N.A. 8.9822% $ 26,946,666
NBD Bank 8.9822% $ 26,946,666
Northern Trust Company 8.9822% $ 26,946,666
Revolving Commitment Vehicle 8.9822% $ 26,946,666
Corporation
The Bank of New York 8.0840% $ 24,252,000
Istituto Bancario San Paolo di 8.0840% $ 24,252,000
Torino Spa
United National Bank and Trust 1.6667% $ 5,000,000
Total Commitment Amount 100.00% $300,000,000
SCHEDULE 5.7
LIENS
1. $24,000,000 State of Ohio Solid Waste Revenue Bonds,
Series 1997 (The Timken Company Project), dated July 2,
1997.
2. $8,000,000 State of Ohio Multi-Modal Interchangeable
Rate Water Development Revenue Refunding Bonds, Series
1993 (The Timken Company Project), dated July 1, 1993.
3. $9,500,000 State of Ohio Multi-Modal Interchangeable
Rate Air Quality Development Revenue Refunding Bonds,
Series 1992, dated June 1, 1992.
4. $12,200,000 State of Ohio Multi-Modal Interchangeable
Rate Water Development Revenue Bonds, Series 1992,
dated June 1, 1992.
5. $17,000,000 State of Ohio Pollution Control Revenue
Refunding Bonds, Series 1990 (The Tenax Company
Project) (The Timken Company Guarantor), dated January
1, 1990.
EXHIBIT A
REVOLVING CREDIT NOTE
$ Cleveland, Ohio
July 10, 1998
FOR VALUE RECEIVED, the undersigned THE TIMKEN COMPANY
("Borrower") promises to pay on the last day of the
Commitment Period, as defined in the Credit Agreement (as
hereinafter defined), to the order of ______________________
("Bank") at the Main Office of KEYBANK NATIONAL ASSOCIATION,
Agent, 127 Public Square, Cleveland, Ohio 44114-1306 the
principal sum of
____________________________ AND 00/100 DOLLARS
or the aggregate unpaid principal amount of all Loans made
by Bank to Borrower pursuant to Section 2.1A of the Credit
Agreement, whichever is less, in lawful money of the United
States of America. As used herein, "Credit Agreement" means
the Credit Agreement dated as of July 10, 1998, among
Borrower, the banks named therein and, KeyBank National
Association, as Agent, as the same may from time to time be
restated, amended or otherwise modified. Capitalized terms
used herein shall have the meanings ascribed to them in the
Credit Agreement.
Borrower also promises to pay interest on the unpaid
principal amount of each Loan from time to time outstanding,
from the date of such Loan until the payment in full
thereof, at the rates per annum which shall be determined in
accordance with the provisions of Section 2.lA of the Credit
Agreement. Such interest shall be payable on each date
provided for in such Section 2.1A; provided, however, that
interest on any principal portion which is not paid when due
shall be payable on demand.
The portions of the principal sum hereof from time to
time representing Prime Rate Loans and Eurodollar Loans, and
payments of principal of any thereof, will be shown on the
records of Bank by such method as Bank may generally employ;
provided, however, that failure to make any such entry shall
in no way detract from Borrower's obligations under this
Note.
If this Note shall not be paid at maturity, whether
such maturity occurs by reason of lapse of time or by
operation of any provision for acceleration of maturity
contained in the Credit Agreement, the principal hereof and
the unpaid interest thereon shall bear interest, until paid,
at a rate per annum equal to the Default Rate. All payments
of principal of and interest on this Note shall be made in
immediately available funds.
This Note is one of the Revolving Credit Notes referred
to in the Credit Agreement. Reference is made to the Credit
Agreement for a description of the right of the undersigned
to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated
maturity, and other terms and conditions upon which this
Note is issued.
A-1
Except as expressly provided in the Credit Agreement,
Borrower expressly waives presentment, demand, protest and
notice of any kind.
JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE
BANKS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR
THE TRANSACTIONS RELATED THERETO.
THE TIMKEN COMPANY
By:_____________________________
Gene E. Little, Senior Vice
President - Finance
A-2
EXHIBIT B
COMPETITIVE BID RATE NOTE
$300,000,000.00 Cleveland, Ohio
July 10, 1998
FOR VALUE RECEIVED, the undersigned THE TIMKEN COMPANY
("Borrower") promises to pay on the last day of the
Commitment Period, as defined in the Credit Agreement (as
hereinafter defined), to the order of
______________________________ (the "Bank") at the Main
Office of KEYBANK NATIONAL ASSOCIATION, as Agent, 127 Public
Square, Cleveland, Ohio 44114-1306 the principal sum of
THREE HUNDRED MILLION AND 00/100 DOLLARS
or the aggregate unpaid principal amount of all Competitive
Bid Loans made by Bank to Borrower pursuant to Section 2.1B
of the Credit Agreement whichever is less, in lawful money
of the United States of America. As used herein, "Credit
Agreement" means the Credit Agreement dated as of July 10,
1998, among Borrower, the banks named therein and KeyBank
National Association, as Agent, as the same may from time to
time be restated, amended or otherwise modified.
Capitalized terms used herein shall have the meanings
ascribed to them in the Credit Agreement.
Borrower also promises to pay interest on the unpaid
principal amount of each Competitive Bid Loan from time to
time outstanding, from the date of such Competitive Bid Loan
until the payment in full thereof, at the rates per annum
which shall be determined in accordance with the provisions
of Section 2.1B of the Credit Agreement. Such interest
shall be payable on each date provided for in such Section
2.1B; provided, however, that interest on any principal
portion which is not paid when due shall be payable on
demand.
The portions of the principal sum hereof from time to
time representing Competitive Bid Absolute Rate Loans and
Competitive Bid Eurodollar Loans, and payments of principal
of any thereof, will be shown on the records of Bank by such
method as Bank may generally employ; provided, however, that
failure to make any such entry shall in no way detract from
Borrower's obligations under this Note.
If this Note shall not be paid at maturity, whether
such maturity occurs by reason of lapse of time or by
operation of any provision for acceleration of maturity
contained in the Credit Agreement the principal hereof and
the unpaid interest thereon shall bear interest, until paid,
at a rate per annum equal to the Default Rate. All payments
of principal of and interest on this Note shall be made in
immediately available funds.
This Note is one of the Competitive Bid Rate Note
referred to in the Credit Agreement. Reference is made to
the Credit Agreement for a description of the right of the
undersigned to anticipate payments hereof, the right of the
holder hereof to declare this Note due prior to its stated
B-1
maturity, and other terms and conditions upon which this
Note is issued.
Except as expressly provided in the Credit Agreement,
Borrower expressly waives presentment, demand, protest and
notice of any kind.
JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE
BANKS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR
THE TRANSACTIONS RELATED THERETO.
THE TIMKEN COMPANY
By:_____________________________
Gene E. Little, Senior Vice
President - Finance
B-2
EXHIBIT C
NOTICE OF REVOLVING LOAN
[Date]_____________, ______
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114-1306
Attention:
Ladies and Gentlemen:
The undersigned, THE TIMKEN COMPANY (the "Borrower"),
refers to the Credit Agreement, dated as of July 10, 1998
(the "Credit Agreement"; terms defined therein being used
herein as therein defined), among the undersigned, the
Banks, as defined in the Credit Agreement, and KeyBank
National Association, as Agent, and hereby gives you notice,
pursuant to Section 2.2A of the Credit Agreement that
Borrower hereby requests a Loan under the Credit Agreement,
and in the connection sets forth below the information
relating to the Loan (the "Proposed Loan") as required by
Section 2.2A of the Credit Agreement:
(a) The Business Day of the Proposed Loan is
______________, ______
(b) The amount of the Proposed Loan is
$________________.
(c) The Proposed Loan is to be a Prime Rate Loan
_____/Eurodollar Loan _____.
(Check one.)
(d) If the Proposed Loan is a Eurodollar Loan,the
Interest Period requested is one (1) month
_____, two (2) months _____, three (3) months
_____, six (6) months _____
(Check one.)
The undersigned, on behalf of Borrower, hereby
certifies that the following statements are true on the date
hereof, and will be true on the date of the Proposed Loan:
(i) the representations and warranties contained
in each Loan Document are correct, before and after
giving effect to the Proposed Loan and the application
of the proceeds therefrom, as though made on and as of
such date;
(ii) no event has occurred and is continuing, or
would result from such Proposed Loan, or the application
of proceeds therefrom, that constitutes an Unmatured Event
of Default or Event of Default; and
C-1
(iii) the applicable conditions set forth in
Article IV of the Credit Agreement have been satisfied.
Very truly yours,
THE TIMKEN COMPANY
By:
Title:
C-2
EXHIBIT D-1
Form of Competitive Bid Request
[Date]
To: KeyBank National Association
(the "Agent")
From: The Timken Company
Re: Credit Agreement, dated as of July 10, 1998 (as amended
and in effect from time to time the "Credit
Agreement"), among Borrower, the Banks parties thereto,
and Agent
We hereby give notice pursuant to Section 2.1B of the
Credit Agreement that we request Competitive Bids for the
following proposed Competitive Bid Borrowing(s):
Date of Borrowing:
Principal Amount****: $
Interest Period*****:
Such Competitive Bids should offer (circle one):
Competitive Bid Eurodollar Rate/Absolute Rate
THE TIMKEN COMPANY
By:
Title:
_______________
**** Amount must be $10,000,000 or a larger multiple of
$1,000,000 and may not exceed the Aggregate Commitment
Amount minus the aggregate principal amount of all
Loans outstanding.
***** Not less than one (1) month nor more than six (6)
months (Competitive Bid Eurodollar Auction) or not less
than seven (7) nor more than one hundred eighty (180))
days (Competitive Bid Absolute Rate Auction), subject
to the provisions of the definition of Interest Period.
Terms used herein have the meanings assigned to them in
the Credit Agreement.
D-1-1
EXHIBIT D-2
Form of Invitation for Competitive Bids
To: [Name of Bank]
Re: Invitation for Competitive Bids to
The Timken Company (the "Borrower")
Pursuant to Section 2.1B of the Credit Agreement dated
as of July 10, 1998, among Borrower, the Banks parties
thereto, and the undersigned, as Agent, as amended and in
effect from time to time, we are pleased on behalf of
Borrower to invite you to submit Competitive Bids to
Borrower for the following proposed Competitive Bid
Borrowing(s):
Date of Borrowing:
Maximum Principal Amount: $
Interest Period:
Such Competitive Bids should offer (circle one):
Competitive Bid Eurodollar Rate/Absolute Rate
Please respond to this invitation by no later than
10:30 a.m. on [date]******
KEYBANK NATIONAL ASSOCIATION,as Agent
By:
Authorized Officer
_______________
****** Insert the date of Borrowing (Competitive Bid
Absolute Rate Auction) or three (3) Business Days prior
to the date of Borrowing (Competitive Bid Eurodollar
Auction).
D-2-1
EXHIBIT D-3
Form of Competitive Bid
To: KeyBank National Association
Re: Competitive Bid to The Timken Company
(the "Borrower")
In response to your invitation on behalf of Borrower
dated _______________, _____, we hereby make the following
Competitive Bid on the following terms pursuant to the
Credit Agreement dated as of July 10, 1998 (as amended and
in effect from time to time, the "Credit Agreement"), among
Borrower, the Lenders parties thereto, and Agent, as amended
and in effect from time to time:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
Telephone Number:
Facsimile Number:
3. Date of Borrowing:
4. We hereby offer to make Competitive Bid Loan(s) in
the following principal amounts, for the following Interest
Periods, Or maturity date, as. the case may be, and at the
following rates:
Principal Interest Competitive Bid
Amount** Period*** Eurodollar Rate**** Absolute Rate****
$
$
$
[Provided, that the aggregate principal amount of Competitive Bid
Loans for which the above offers may be accepted shall not exceed
$ .]**
D-3-1
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable
conditions set forth in the Credit Agreement, irrevocably
obligates us to make the Competitive Bid Loan(s),for which
any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated: By:
Authorized Officer
______________
**Principal amount bid for each Interest Period may not
exceed principal amount requested. Specify aggregate
limitation if the sum of the individual offers exceeds the
amount the Lender is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
***Not less than one (1) month nor more than six (6)
months (Competitive Bid Eurodollar Auction) or not less than
seven (7) days nor more than one hundred eighty (180) days
(Competitive Bid Absolute Rate Auction), as specified in the
related invitation. No more than three (3) bids are
permitted.
****Specify rate of interest per annum expressed as a
percentage (to the nearest four (4) decimal points).
D-3-2
EXHIBIT E
COMPLIANCE CERTIFICATE
For Fiscal Quarter ended _________________
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected Chief Financial Officer of
THE TIMKEN COMPANY, an Ohio corporation (the "Borrower");
(2) I am familiar with the terms of that certain
Credit Agreement, dated as of July 10, 1998, among Borrower,
the Banks, as defined in the Credit Agreement, and KeyBank
National Association, as Agent (as the same may be amended,
restated or otherwise modified from time to time, the
"Credit Agreement", the terms defined therein and not
otherwise defined in this Certificate being used herein as
therein defined), and the terms of the other Loan Documents,
and I have made, or have caused to be made under my
supervision, a review in reasonable detail of the
transactions and condition of Borrower and its Subsidiaries
during the accounting period covered by the attached
financial statements;
(3) The review described in paragraph (2) above did
not disclose, and I have no knowledge of, the existence of
any condition or event which constitutes or constituted an
Unmatured Event of Default or Event of Default, at the end
of the accounting period covered by the attached financial
statements or as of the date of this Certificate;
(4) The representations and warranties made by
Borrower contained in each Loan Document are true and
correct in all material respects as though made on and as of
the date hereof; and,
(5) Set forth on Attachment I hereto are calculations
of the financial covenant set forth in Section 5.6 of the
Credit Agreement, which calculations show compliance with
the terms thereof.
IN WITNESS WHEREOF, I have signed this certificate the
_____ day of ____________, _____.
THE TIMKEN COMPANY
By:
Title:
E-1
EXHIBIT F
FORM OF
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This Assignment and Acceptance Agreement (this
"Assignment Agreement") between ______________________ (the
"Assignor") and ______________________ (the "Assignee") is
dated as of ________, 199_. The parties hereto agree as
follows:
1. Preliminary Statement. Assignor is a party to a
Credit Agreement, dated as of July 10, 1998 (which, as it
may from time to time be amended, restated or otherwise
modified is herein called the "Credit Agreement"), among THE
TIMKEN COMPANY, ("Borrower"), the banking institutions named
on Schedule 1 thereto (collectively, "Banks" and,
individually, "Bank"), and KEYBANK NATIONAL ASSOCIATION, as
agent for the Banks ("Agent"). Capitalized terms used
herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. Assignment and Assumption. Assignor hereby sells
and assigns to Assignee, and Assignee hereby purchases and
assumes from Assignor, an interest in and to Assignor's
rights and obligations under the Credit Agreement, effective
as of the Assignment Effective Date (as hereinafter
defined), equal to the percentage interest specified on
Annex 1 hereto (hereinafter, "Assignee's Percentage") of
Assignor's right, title and interest in and to (a) the
Commitment of Assignor as set forth on Annex 1 (hereinafter,
"Assigned Amount"), (b) any Loan made by Assignor which is
outstanding on the Assignment Effective Date, (c) any Note
delivered to Assignor pursuant to the Credit Agreement, and
(d) the Credit Agreement and the other Related Writings.
After giving effect to such sale and assignment and on and
after the Assignment Effective Date, Assignee shall be
deemed to have a "Commitment Percentage" under the Credit
Agreement equal to the Commitment Percentage set forth in
subpart I.C on Annex 1 hereto.
3. Assignment Effective Date. The Assignment
Effective Date (the "Assignment Effective Date") shall be
two (2) Business Days (or such other time agreed to by
Agent) after the following conditions precedent have been
satisfied:
(a) receipt by Agent of this Assignment Agreement,
including Annex 1 hereto, properly executed by Assignor and
Assignee and accepted and consented to by Agent and, if
necessary pursuant to Section 10.10A(i) of the Credit
Agreement, by Borrower;
(b) receipt by Agent from Assignor of a fee of Three
Thousand Five Hundred Dollars ($3,500), in accordance with
Section 10.10A of the Credit Agreement;
(c) receipt by Agent from Assignee of an
administrative questionnaire, or other similar document,
which shall include (i) the address for notices under the
Credit Agreement, (ii) the address of its Lending Office,
(iii) wire transfer instructions for delivery of funds by
Agent, (iv) and such other information as Agent shall
request; and
F-1
(d) receipt by Agent from Assignor or Assignee of any
other information required pursuant to Section 10.10 of the
Credit Agreement or otherwise necessary to complete the
transaction contemplated hereby.
4. Payment Obligations. In consideration for the
sale and assignment of Loans hereunder, Assignee shall pay
Assignor, on the Assignment Effective Date, an amount in
Dollars equal to Assignee's Percentage. Any interest, fees
and other payments accrued prior to the Assignment Effective
Date with respect to the Assigned Amount shall be for the
account of Assignor. Any interest, fees and other payments
accrued on and after the Assignment Effective Date with
respect to the Assigned Amount shall be for the account of
Assignee. Each of Assignor and Assignee agrees that it will
hold in trust for the other party any interest, fees or
other amounts which it may receive to which the other party
is entitled pursuant to the preceding sentence and to pay
the other party any such amounts which it may receive
promptly upon receipt thereof.
5. Credit Determination; Limitations on Assignor's
Liability. Assignee represents and warrants to Assignor,
Borrower, Agent and the other Banks (a) that it is capable
of making and has made and shall continue to make its own
credit determinations and analysis based upon such
information as Assignee deemed sufficient to enter into the
transaction contemplated hereby and not based on any
statements or representations by Assignor; (b) Assignee
confirms that it meets the requirements to be an assignee as
set forth in Section 10.10 of the Credit Agreement;
(c) Assignee confirms that it is able to fund the Loans as
required by the Credit Agreement; and (d) Assignee agrees
that it will perform in accordance with their terms all of
the obligations which by the terms of the Credit Agreement
and the Related Writings are required to be performed by it
as a Bank thereunder. It is understood and agreed that the
assignment and assumption hereunder are made without
recourse to Assignor and that Assignor makes no
representation or warranty of any kind to Assignee and shall
not be responsible for (i) the due execution, legality,
validity, enforceability, genuineness, sufficiency or
collectability of the Credit Agreement or any Related
Writings, (ii) any representation, warranty or statement
made in or in connection with the Credit Agreement or any of
the Related Writings, (iii) the financial condition or
creditworthiness of Borrower or any Guarantor, (iv) the
performance of or compliance with any of the terms or
provisions of the Credit Agreement or any of the Related
Writings, (v) inspecting any of the property, books or
records of Borrower or (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any
collateral securing or purporting to secure the Loans.
Neither Assignor nor any of its officers, directors,
employees, agents or attorneys shall be liable for any
mistake, error of judgment, or action taken or omitted to be
taken in connection with the Loans, the Credit Agreement or
the Related Writings, except for its or their own bad faith
or willful misconduct. Assignee appoints Agent to take such
action as agent on its behalf and to exercise such powers
under the Credit Agreement as are delegated to Agent by the
terms thereof.
6. Indemnity. Assignee agrees to indemnify and
hold Assignor harmless against any and all losses, cost and
expenses (including, without limitation, attorneys' fees)
and liabilities incurred by Assignor in connection with or
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arising in any manner from Assignee's performance or non-
performance of obligations assumed under this Assignment
Agreement.
7. Subsequent Assignments. After the Assignment
Effective Date, Assignee shall have the right pursuant to
Section 10.10 of the Credit Agreement to assign the rights
which are assigned to Assignee hereunder, provided that
(a) any such subsequent assignment does not violate any of
the terms and conditions of the Credit Agreement, any of the
Loan Documents, or any law, rule, regulation, order, writ,
judgment, injunction or decree and that any consent required
under the terms of the Credit Agreement or any of the Loan
Documents has been obtained, (b) the assignee under such
assignment from Assignor shall agree to assume all of
Assignor's obligations hereunder in a manner satisfactory to
Assignor and (c) Assignee is not thereby released from any
of its obligations to Assignor hereunder.
8. Reductions of Aggregate Amount of Commitments. If
any reduction in the Total Commitment Amount occurs between
the date of this Assignment Agreement and the Assignment
Effective Date, the percentage of the Total Commitment
Amount assigned to Assignee shall remain the percentage
specified in Section 1 hereof and the dollar amount of the
Commitment of Assignee shall be recalculated based on the
reduced Total Commitment Amount.
9. Acceptance of Agent and Borrower. This Assignment
Agreement is conditioned upon the acceptance and consent of
Agent and, if necessary pursuant to Section 10.10A of the
Credit Agreement, upon the acceptance and consent of
Borrower. The execution of this Assignment Agreement by
Agent and, if necessary, by Borrower is evidence of such
acceptance and consent.
10. Entire Agreement. This Assignment Agreement
embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and
understandings between the parties hereto relating to the
subject matter hereof.
11. Governing Law. This Assignment Agreement shall be
governed by the internal law, and not the law of conflicts,
of the State of Ohio.
12. Notices. Notices shall be given under this
Assignment Agreement in the manner set forth in the Credit
Agreement. For the purpose hereof, the addresses of the
parties hereto (until notice of a change is delivered) shall
be the address set forth under each party's name on the
signature pages hereof.
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IN WITNESS WHEREOF, the parties hereto have executed
this Assignment Agreement by their duly authorized officers
as of the date first above written.
ASSIGNOR:
Address: _____________________ ________________________________
_____________________
_____________________
Attn:_________________ By:______________________________
Phone: _______________ Title:___________________________
Fax:__________________
ASSIGNEE:
Address: _____________________ ________________________________
_____________________
_____________________
Attn:_________________ By:______________________________
Phone: _______________ Title:___________________________
Fax:__________________
Accepted and Consented to this ___ day
of ___, ____:
KEYBANK NATIONAL ASSOCIATION,
as Agent
By: __________________________
Title:________________________
Accepted and Consented to this ___ day
of ___, ____:
THE TIMKEN COMPANY
By: __________________________
Title:________________________
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ANNEX 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
On and after ___________, _____ (the "Assignment
Effective Date"), the Commitment of Assignee, and, if this
is less than an assignment of all of Assignor's interest,
Assignor, shall be as follows:
I. ASSIGNEE'S COMMITMENT
A. Assignee's Percentage __________%
B. Assigned Amount $__________
C. Assignee's Commitment Percentage
under the Credit Agreement __________%
II. ASSIGNOR'S COMMITMENT
A. Assignor's Commitment Percentage
under the Credit Agreement __________%
B. Assignor's Commitment Amount
under the Credit Agreement $__________
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