1
EXHIBIT 4B
[EXECUTION COPY]
$45,000,000
CREDIT AGREEMENT
dated as of
September 29, 1995
among
Quaker State Corporation,
The Banks Parties Hereto
and
Morgan Guaranty Trust Company of New York,
as Agent
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
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1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. References to Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2
THE CREDITS
2.1. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2. Method of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4. Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.7. Optional Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . 14
2.8. Method of Electing Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.9. Mandatory Termination of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.10. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.11. General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.12. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.13. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 3
CONDITIONS
3.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.2. Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. Corporate and Governmental Authorization; No Contravention . . . . . . . . . . . . . . . . 19
4.2. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.3. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.4. Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 5
COVENANTS
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ARTICLE 6
DEFAULTS
6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 7
THE AGENT
7.1. Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.3. Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.4. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.5. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.7. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.8. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1. Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . 25
8.2. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.5. Base Rate Loans Substituted for Affected Fixed Rate Loans . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 9
MISCELLANEOUS
9.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.2. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.3. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.4. Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.5. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.6. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.7. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.8. Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.9. Counterparts; Integration; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
EXHIBIT A - Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT B - Opinion of Counsel for the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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EXHIBIT C - Opinion of Special Counsel for the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT D - Assignment and Assumption Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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AGREEMENT dated as of September 29, 1995 among QUAKER STATE
CORPORATION, the BANKS from time to time parties hereto and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS. The following terms, as used
herein, have the following meanings:
"Adjusted CD Rate" has the meaning set forth in Section
2.5(b).
"Adjusted London Interbank Offered Rate" has the meaning
set forth in Section 2.5(c).
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the Agent and
submitted to the Agent (with a copy to the Company) duly completed by such
Bank.
"Agent" means Morgan Guaranty Trust Company of New York in
its capacity as agent for the Banks hereunder, and its successors in such
capacity.
"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Domestic Loans, its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Assessment Rate" has the meaning set forth in Section
2.5(b).
"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means the bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.6(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to
the higher of (i) the Prime Rate for such day and
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(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Loan which bears interest at
the Base Rate pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election or the provisions of Article 8 or (ii) an overdue amount
which was a Base Rate Loan immediately before it became overdue.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Company on the same day pursuant to Article 2, all of which Loans
are of the same type (subject to Article 8) and, except in the case of Base
Rate Loans, have the same initial Interest Period. A Borrowing is a "Domestic
Borrowing" if such Loans are Domestic Loans or a "Euro-Dollar Borrowing" if
such Loans are Euro-Dollar Loans. A Domestic Borrowing is a "CD Borrowing" if
such Domestic Loans are CD Loans or a "Base Rate Borrowing" if such Domestic
Loans are Base Rate Loans.
"CD Base Rate" has the meaning set forth in Section 2.5(b).
"CD Loan" means (i) a Loan which bears interest at a CD Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or (ii) an overdue amount which was a CD Loan immediately before it
became overdue.
"CD Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
"CD Rate" means a rate of interest determined pursuant to
Section 2.5(b) on the basis of an Adjusted CD Rate.
"CD Reference Bank" means Morgan Guaranty Trust Company of
New York.
"Closing Date" means the date on or after the Effective Date
on which the Agent shall have received the documents specified in or pursuant
to Section 3.1.
"Commitment" means, with respect to each Bank, the amount
set forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.7 or increased or
reduced pursuant to Section 9.6.
"Company" means Quaker State Corporation, a Delaware
corporation, and its successors.
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"Company's 1994 Form 10-K" means the Company's annual report
on Form 10-K for 1994, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Company's Latest Form 10-Q" means the Company's quarterly
report on Form 10-Q for the quarter ended June 30, 1995, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
"Consolidated Subsidiary" means at any date any Subsidiary
or other entity the accounts of which would be consolidated with those of the
Company in its consolidated financial statements if such statements were
prepared as of such date.
"Credit Agreement" has the meaning set forth in Section 1.2.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized
by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Company and the Agent; PROVIDED that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.5(b).
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 9.9.
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"Euro-Dollar Business Day" means any Domestic Business Day
on which commercial banks are open for international business (including
dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Company and the Agent.
"Euro-Dollar Loan" means (i) a Loan which bears interest at
a Euro-Dollar Rate pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a Euro-Dollar Loan
immediately before it became overdue.
"Euro-Dollar Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined
pursuant to Section 2.5(c) on the basis of an Adjusted London Interbank Offered
Rate.
"Euro-Dollar Reference Bank" means the principal London
office of Morgan Guaranty Trust Company of New York.
"Event of Default" has the meaning set forth in Section 6.1.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, PROVIDED that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions as determined by the
Agent.
"Fixed Rate Borrowing" means a CD Borrowing or a Euro-Dollar
Borrowing or both.
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"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or
both.
"Group of Loans" means at any time a group of Loans
consisting of (i) all Loans which are Base Rate Loans at such time, (ii) all
Euro-Dollar Loans having the same Interest Period at such time or (iii) all CD
Loans having the same interest period at such time, PROVIDED that, if a Loan of
any particular Bank is converted to or made as a Base Rate Loan pursuant to
Article 8, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been in if it had not been so converted or
made.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Interest Period" means: (1) with respect to each
Euro-Dollar Loan, the period commencing on the date of borrowing specified in
the applicable Notice of Borrowing or on the date specified in the applicable
Notice of Interest Rate Election and ending one, two, three or six months
thereafter, as the Company may elect in the applicable notice; PROVIDED that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall, subject to clause (c) below, end
on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Loan, the period commencing on
the date of borrowing specified in the applicable Notice of Borrowing or on the
date specified in the applicable Notice of Interest Rate Election and ending
30, 60, 90 or 180 days thereafter, as the Borrower may elect in the applicable
notice PROVIDED that:
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(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Loan" means a Domestic Loan or a Euro-Dollar Loan and
"Loans" means Domestic Loans, Euro-Dollar Loans or both.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.5(c).
"Maturity Date" means October 15, 1997, or, if such day is
not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Notes" means promissory notes of the Company, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Company to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" has the meaning set forth in Section
2.2.
"Notice of Interest Rate Election" has the meaning set forth
in Section 2.8.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.6(b).
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity
or organization, including a government or political subdivision or an agency
or instrumentality thereof.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly announced
by Morgan Guaranty Trust Company of New York in New York City from time to time
as its Prime Rate.
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"Reference Bank" means the CD Reference Bank or the
Euro-Dollar Reference Bank, as the context may require.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time and shall include
any successor or other regulations or official interpretations of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.
"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate amount of the Commitments or, if the Commitments shall
have been terminated, holding Notes evidencing at least 66 2/3% of the
aggregate unpaid principal amount of the Loans.
"Revolving Credit Period" means the period from and
including the Effective Date to but not including the Termination Date.
"Subsidiary" means, as to any Person, any corporation or
other entity of which securities or other ownership interests 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; unless otherwise specified, "Subsidiary" means a Subsidiary of the
Company.
"Termination Date" means September 28, 1996, or, if such day
is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business
Day.
"United States" means the United States of America,
including the States and the District of Columbia, but excluding its
territories and possessions.
SECTION 1.2. REFERENCES TO CREDIT AGREEMENT. References
herein to the "Credit Agreement" are to the Credit Agreement dated as of March
31, 1992 among the Company, Pittsburgh National Bank, Morgan Guaranty Trust
Company of New York, Marine Bank and Integra National Bank/North, and
Pittsburgh National Bank, as Agent, as amended by each of the amendments set
forth on Schedule I. For purposes of provisions of the Credit Agreement
incorporated herein by reference: (a) references to this "Agreement" or the
like and to the "Notes" or the like shall be deemed references to this
Agreement and the Notes issued hereunder, (b) references to the "Agent", any
one or more of the "Banks" or the "Required Banks" shall be deemed references
to the Agent, the Banks or the Required Banks
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hereunder, respectively, (c) references to a "Potential Default" or an "Event
of Default" shall be deemed references to a Default or an Event of Default
hereunder, respectively, and (d) each reference to a "Loan" or the like shall
be deemed a reference to a Loan or a Borrowing or Group of Loans hereunder, as
the context may require. Such incorporation by reference shall survive the
termination of the Credit Agreement. The incorporation by reference of any
provision of the Credit Agreement shall include any related definitions and
ancillary provisions.
ARTICLE 2
THE CREDITS
SECTION 2.1. COMMITMENTS TO LEND. During the Revolving
Credit Period, each Bank severally agrees, on the terms and conditions set
forth in this Agreement, to make loans to the Company from time to time in
amounts such that the aggregate principal amount of Loans by such Bank at any
one time outstanding shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate principal amount of
$5,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing
may be in the aggregate amount of the unused Commitments) and shall be made
from the several Banks ratably in proportion to their respective Commitments.
Within the foregoing limits, the Company may borrow under this Section, prepay
Loans to the extent permitted by Section 2.10 and reborrow at any time during
the Revolving Credit Period under this Section.
SECTION 2.2. METHOD OF BORROWING. (a) The Company shall
give the Agent notice (a "Notice of Borrowing") not later than 10:30 A.M. (New
York City time) on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
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(iii) whether the Loans comprising such Borrowing are to
bear interest initially at the Base Rate, a CD Rate or a Euro-Dollar
Rate; and
(iv) in the case of a Fixed Rate Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's ratable
share of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Company.
(c) Not later than 12:00 Noon (New York City time) on the
date of each Borrowing, each Bank shall make available its ratable share of
such Borrowing, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.1. Unless the Agent
determines that any applicable condition specified in Article 3 has not been
satisfied, the Agent will make the funds so received from the Banks available
to the Company at the Agent's aforesaid address.
(d) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to
the Agent such Bank's share of such Borrowing, the Agent may assume that such
Bank has made such share available to the Agent on the date of such Borrowing
in accordance with subsection (c) of this Section and the Agent may, in
reliance upon such assumption, make available to the Company on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and the Company severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Company until the date such amount is repaid to the Agent, at
(i) in the case of the Company, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.5 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.3. NOTES. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Applicable Lending Office
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in an amount equal to the aggregate unpaid principal amount of such Bank's
Loans.
(b) Each Bank may, by notice to the Company and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.1(a), the Agent shall forward such Note to such Bank. Each Bank shall record
the date, amount and type of each Loan made by it and the date and amount of
each payment of principal made by the Company with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; PROVIDED that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Company hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Company so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.
SECTION 2.4. MATURITY OF LOANS. Each Loan shall mature,
and the principal amount thereof shall be due and payable, on the Maturity
Date.
SECTION 2.5. INTEREST RATES. (a) Each Base Rate Loan
shall bear interest on the outstanding principal amount thereof, for each day
from the date such Loan is made until it becomes due, at a rate per annum equal
to the Base Rate for such day. Such interest shall be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31 and, with
respect to the principal amount of any Base Rate Loan converted to a CD Loan or
a Euro-Dollar Loan, on each date a Base Rate Loan is so converted. Any overdue
principal of or interest on any Base Rate Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 2% plus
the rate otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each day during
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each Interest Period applicable thereto, at a rate per annum equal to the sum
of the CD Margin for such day plus the Adjusted CD Rate applicable to such
Interest Period; PROVIDED that if any CD Loan shall, as a result of clause
(2)(b) of the definition of Interest Period, have an Interest Period of less
than 30 days, such CD Loan shall bear interest during such Interest Period at
the rate applicable to Base Rate Loans during such period. Such interest shall
be payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than 90 days, at intervals of 90 days after the first
day thereof. Any overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the higher of (i) the rate applicable to Base Rate Loans
for such day and (ii) the sum of the CD Margin plus the Adjusted CD Rate
applicable to such Loan at the date such payment was due.
The "Adjusted CD Rate" applicable to any Interest Period
means a rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the
rate of interest determined by the Agent to be the prevailing rate per annum
bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from the
CD Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of the CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect
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on such day, as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of new non-personal time deposits in
dollars in New York City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted CD Rate shall be
adjusted automatically on and as of the effective date of any change in the
Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment
rate in effect on such day which is payable by a member of the Bank Insurance
Fund classified as adequately capitalized and within supervisory subgroup "A"
(or a comparable successor assessment risk classification) within the meaning
of 12 C.F.R. Section 327.4(a) (or any successor provision) to the Federal
Deposit Insurance Corporation (or any successor) for such Corporation's (or
such successor's) insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted automatically on and as
of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar
Margin for such day plus the Adjusted London Interbank Offered Rate applicable
to such Interest Period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day thereof.
The "Adjusted London Interbank Offered Rate" applicable to
any Interest Period means a rate per annum equal to the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (i)
the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any
Interest Period means the rate per annum at which deposits in dollars are
offered to the Euro-Dollar Reference Bank in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of the Euro-Dollar Reference Bank to
which such Interest Period is
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to apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date of any
change in the Euro-Dollar Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin
for such day plus the quotient obtained (rounded upward, if necessary, to the
next higher 1/100 of 1%) by dividing (x) the rate per annum at which one day
(or, if such amount due remains unpaid more than three Euro-Dollar Business
Days, then for such other period of time not longer than three months as the
Agent may select) deposits in dollars in an amount approximately equal to such
overdue payment due to the Euro-Dollar Reference Bank are offered to the Euro-
Dollar Reference Bank in the London interbank market for the applicable period
determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8.1 shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day) and (ii) the sum of 2% plus the
Euro-Dollar Margin for such day plus the Adjusted London Interbank Offered Rate
applicable to such Loan at the date such payment was due.
(e) The Agent shall determine each interest rate applicable
to the Loans hereunder. The Agent shall give prompt notice to the Company and
the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
SECTION 2.6. FEES. During the Revolving Credit Period, the
Borrower shall pay to the Agent for the account
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of the Banks ratably in proportion to their Commitments a commitment fee at the
Commitment Fee Rate (determined daily in accordance with the Pricing Schedule)
on the daily amount by which the aggregate amount of the Commitments exceeds
the aggregate outstanding principal amount of the Loans. Such commitment fee
shall accrue from and including the Closing Date to but excluding the date of
termination of the Commitments in their entirety.
SECTION 2.7. OPTIONAL TERMINATION OR REDUCTION OF
COMMITMENTS. During the Revolving Credit Period, the Company may, upon notice
to the Agent not later than 10:30 A.M. (New York City time) on the effective
date of any such termination or reduction, (i) terminate the Commitments at any
time, if no Loans are outstanding at such time or (ii) ratably reduce from time
to time by an aggregate amount of $5,000,000 or a larger multiple of
$1,000,000, the aggregate amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans.
SECTION 2.8. METHOD OF ELECTING INTEREST RATES. (a) The
Loans included in each Borrowing shall bear interest initially at the type of
rate specified by the Company in the applicable Notice of Borrowing.
Thereafter, the Company may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject in each case to the
provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Company may elect
to convert such Loans to CD Loans as of any Domestic Business Day or
to Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Company may elect to
convert such Loans to Base Rate Loans or Euro-Dollar Loans or elect to
continue such Loans as CD Loans for an additional Interest Period,
subject to Section 2.12 in the case of any such conversion or
continuation effective on any day other than the last day of the then
current Interest Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Company may
elect to convert such Loans to Base Rate Loans or CD Loans or elect to
continue such Loans as Euro-Dollar Loans for an additional Interest
Period, subject to Section 2.12 in the case of any such conversion or
continuation effective on any day other than the last day of the then
current Interest Period applicable to such Loans.
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Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent not later than 10:30 A.M. (New York City time) on
the third Euro-Dollar Business Day before the conversion or continuation
selected in such notice is to be effective (unless the relevant Loans are to be
converted to Domestic Loans of the other type or are CD Rate Loans to be
continued as CD Rate Loans for an additional Interest Period, in which case
such notice shall be delivered to the Agent not later than 10:30 A.M. (New York
City time) on the second Domestic Business Day before such conversion or
continuation is to be effective). A Notice of Interest Rate Election may, if
it so specifies, apply to only a portion of the aggregate principal amount of
the relevant Group of Loans; PROVIDED that (i) such portion is allocated
ratably among the Loans comprising such Group and (ii) the portion to which
such Notice applies, and the remaining portion to which it does not apply, are
each $5,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if the Loans being converted are to be Fixed
Rate Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from
the Company pursuant to subsection (a) above, the Agent shall promptly notify
each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Company.
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(d) An election by the Company to change or continue the
rate of interest applicable to any Group of Loans pursuant to this Section
shall not constitute a "Borrowing" subject to the provisions of Section 3.2.
SECTION 2.9. MANDATORY TERMINATION OF COMMITMENTS. The
Commitments shall terminate on the Termination Date.
SECTION 2.10. OPTIONAL PREPAYMENTS. (a) Subject in the
case of any Fixed Rate Borrowing to Section 2.12, the Company may (i) upon
notice to the Agent not later than 10:30 A.M. (New York City time) on the date
of prepayment, prepay on any Domestic Business Day the Group of Base Rate
Loans, (ii) upon at least two Domestic Business Days' notice to the Agent,
prepay any Group of CD Loans or (iii) upon at least three Euro-Dollar Business
Days' notice to the Agent, prepay any Group of Euro-Dollar Loans, in each case
in whole at any time, or from time to time in part in amounts aggregating
$5,000,000 or any larger multiple of $1,000,000, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Group.
(b) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Company.
SECTION 2.11. GENERAL PROVISIONS AS TO PAYMENTS. (a) The
Company shall make each payment of principal of, and interest on, the Loans and
of fees hereunder, not later than 12:00 Noon (New York City time) on the date
when due, in Federal or other funds immediately available in New York City, to
the Agent at its address referred to in Section 9.1. The Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks. Whenever any payment of principal of, or
interest on, the Domestic Loans or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of,
or interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar
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Business Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be payable for such
extended time.
(b) Unless the Agent shall have received notice from the
Company prior to the date on which any payment is due to the Banks hereunder
that the Company will not make such payment in full, the Agent may assume that
the Company has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Company shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.12. FUNDING LOSSES. If the Company makes any
payment of principal with respect to any Fixed Rate Loan or any Fixed Rate Loan
is converted (pursuant to Article 2, 6 or 8 or otherwise) on any day other than
the last day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.5(d), or if the Company fails to
borrow, prepay, convert or continue any Fixed Rate Loans after notice has been
given to any Bank in accordance with Section 2.2(b), 2.10(b) or 2.8(c) the
Company shall reimburse each Bank within 15 days after demand for any resulting
loss or expense incurred by it (or by an existing or prospective Participant in
the related Loan), including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties, but excluding
loss of margin for the period after any such payment or conversion or failure
to borrow, prepay, convert or continue, PROVIDED that such Bank shall have
delivered to the Company a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest
error.
SECTION 2.13. COMPUTATION OF INTEREST AND FEES. Interest
based on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and facility fees shall be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed (including the first day but
excluding the last day).
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ARTICLE 3
CONDITIONS
SECTION 3.1. CLOSING. The closing hereunder shall occur
upon receipt by the Agent of the following documents, each dated the Closing
Date unless otherwise indicated:
(a) a duly executed Note for the account of each Bank dated
on or before the Closing Date complying with the provisions of Section
2.3;
(b) an opinion of in-house counsel for the Company,
substantially in the form of Exhibit B hereto and covering such
additional matters relating to the transactions contemplated hereby as
the Required Banks may reasonably request;
(c) an opinion of Davis Polk & Wardwell, special counsel
for the Agent, substantially in the form of Exhibit C hereto and
covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(d) evidence satisfactory to it that the commitments under
the Credit Agreement have terminated, all loans thereunder have been
repaid in full and all accrued fees and other amounts payable
thereunder (including, without limitation, any funding costs payable
pursuant to the Credit Agreement) have been paid in full;
(e) evidence satisfactory to it that the "Phase I upfront
fee" referred to in the letter dated September 22, 1995 among the
Company, the Bank and J.P. Morgan Securities Inc. has been paid in
full; and
(f) all documents the Agent may reasonably request relating
to the existence of the Company, the corporate authority for and the
validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent.
The Agent shall promptly notify the Company and the Banks of the Closing Date,
and such notice shall be conclusive and binding on all parties hereto.
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SECTION 3.2. BORROWINGS. The obligation of any Bank to
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:
(a) the fact that the Closing Date shall have occurred on
or prior to October 10, 1995;
(b) receipt by the Agent of a Notice of Borrowing as
required by Section 2.2;
(c) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed
the aggregate amount of the Commitments;
(d) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and
(e) the fact that the representations and warranties of the
Company contained in this Agreement shall be true on and as of the
date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Company on the date of such Borrowing as to the facts specified in clauses
(c), (d) and (e) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
SECTION 4.1. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by the Company of this
Agreement and the Notes are within the corporate powers of the Company, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any material provision of
applicable material law or regulation or of the certificate of incorporation or
by-laws of the Company or of any material agreement, judgment, injunction,
order, decree or other instrument binding upon the Company or any of its
Subsidiaries or result in the creation or imposition of any material lien on
any asset of the Company or any of its Subsidiaries.
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SECTION 4.2. BINDING EFFECT. This Agreement constitutes a
valid and binding agreement of the Company and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Company, in each case enforceable in accordance with
its terms.
SECTION 4.3. FINANCIAL INFORMATION. (a) The consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of December
31, 1994 and the related consolidated statements of income and cash flow for
the fiscal year then ended, reported on by Coopers & Lybrand L.L.P. and set
forth in the Company's 1994 Form 10-K, a copy of which has been delivered to
each of the Banks, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of the Company and
its Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of June 30, 1995 and the related
unaudited consolidated statements of income and cash flows for the six months
then ended, set forth in the Company's Latest Form 10-Q, a copy of which has
been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section, the
consolidated financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six month period (subject to normal year-end adjustments).
(c) Since June 30, 1995 no Material Adverse Change (as
defined in the Credit Agreement and incorporated herein by reference in
accordance with Section 1.2) has occurred.
SECTION 4.4. INCORPORATION BY REFERENCE. The Company
hereby makes for the benefit of the Agent and the Banks the representations and
warranties made by the Company in Sections 5.01(a), 5.01(e), 5.01(f) and
5.01(h) through (q) of the Credit Agreement, which representations and
warranties are incorporated herein by reference into this Article 4 as if fully
set forth herein.
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ARTICLE 5
COVENANTS
The Company agrees that, so long as any Bank has any
Commitment hereunder or any amount payable under any Note remains unpaid, the
Company will perform for the benefit of the Agent and the Banks the covenants
of the Company in Article VII of the Credit Agreement, which covenants are
hereby incorporated by reference into this Article 5 as if fully set forth
herein; PROVIDED that for purposes of this Article 5:
(i) Section 7.01(j) of the Credit Agreement shall be deemed
to read in its entirety as follows:
(j). USE OF PROCEEDS. The Company will use the proceeds of
Loans for general corporate purposes. None of the proceeds of the
Loans shall be used in any manner which would violate or cause any
Bank to be in violation of Regulations G, T or U of the Board of
Governors of the Federal Reserve System.
(ii) The term "Consolidated Tangible Net Worth" in Section
7.02(e) and (g) shall be deemed to read in its entirety as follows:
"CONSOLIDATED TANGIBLE NET WORTH" shall mean as of any date of determination
total stockholders equity less intangible assets of the Borrower and its
Subsidiaries as of such date (excluding from the Borrower's intangible assets
up to $50,000,000 of the intangible assets acquired pursuant to the acquisition
by the Borrower of Slick Fifty), determined and consolidated in accordance with
GAAP.
(iii) The dollar amount "$1,000,000" in clause (ii) of
Section 7.02(h) shall be deemed to be "$6,000,000".
(iv) The ratio "1.5 : 1.0" in Section 7.02(k) shall be
deemed to be "1.4 : 1".
ARTICLE 6
DEFAULTS
SECTION 6.1. EVENTS OF DEFAULT. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) the Company shall fail to pay when due any principal of
any Loan or shall fail to pay within five days of the date when due
any interest, any fees or any other amount payable hereunder;
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(b) any of the "Events of Defaults" set forth in Article
VIII of the Credit Agreement, which are hereby incorporated by
reference into this Article 6 as if fully set forth herein; or
(c) any representation, warranty, certification or
statement made by the Company in this Agreement or in any certificate,
financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect
when made (or deemed made);
then, and in every such event, the Agent shall (i) if requested by the Required
Banks, by notice to the Company terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Required Banks, by notice to
the Company declare the Loans (together with accrued interest thereon) to be,
and the Loans shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company; PROVIDED that in the case of any of the Events of
Default specified in Section 8.01(j) or (k) of the Credit Agreement, without
any notice to the Company or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Loans (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Company.
SECTION 6.2. NOTICE OF DEFAULT. The Agent shall give
notice to the Company to the extent required under Section 6.1(b) promptly upon
being requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE 7
THE AGENT
SECTION 7.1. APPOINTMENT AND AUTHORIZATION. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as
are delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
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SECTION 7.2. AGENT AND AFFILIATES. Morgan Guaranty Trust
Company of New York shall have the same rights and powers under this Agreement
as any other Bank and may exercise or refrain from exercising the same as
though it were not the Agent, and Morgan Guaranty Trust Company of New York and
its affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Company or any Subsidiary or affiliate of the
Company as if it were not the Agent.
SECTION 7.3. ACTION BY AGENT. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article 6.
SECTION 7.4. CONSULTATION WITH EXPERTS. The Agent may
consult with legal counsel (who may be counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
SECTION 7.5. LIABILITY OF AGENT. Neither the Agent nor any
of its affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii)
in the absence of its own gross negligence or willful misconduct. Neither the
Agent nor any of its affiliates nor any of their respective directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the Company;
(iii) the satisfaction of any condition specified in Article 3, except receipt
of items required to be delivered to the Agent; or (iv) the validity,
effectiveness or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The Agent shall not
incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex,
facsimile transmission or similar writing) believed by it to be genuine or to
be signed by the proper party or parties.
SECTION 7.6. INDEMNIFICATION. Each Bank shall, ratably in
accordance with its Commitment, indemnify the
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Agent, its affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Company) against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees' gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection
with this Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.7. CREDIT DECISION. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
SECTION 7.8. SUCCESSOR AGENT. The Agent may resign at any
time by giving notice thereof to the Banks and the Company. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
SECTION 7.9. FEES. The Company shall pay to Morgan
Guaranty Trust Company of New York for its own account fees in such amounts and
at such time previously agreed upon between the Company and the Agent.
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ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1. BASIS FOR DETERMINING INTEREST RATE INADEQUATE
OR UNFAIR. If on or prior to the first day of any Interest Period for any CD
Loan or Euro-Dollar Loan:
(a) the Agent is advised by the Reference Bank that
deposits in dollars (in the applicable amounts) are not being offered
to the Reference Bank in the relevant market for such Interest Period,
or
(b) Banks having 50% or more of the aggregate principal
amount of the affected Loans advise the Agent that the Adjusted CD
Rate or the Adjusted London Interbank Offered Rate, as the case may
be, as determined by the Agent will not adequately and fairly reflect
the cost to such Banks of funding their CD Loans or Euro-Dollar Loans,
as the case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Company and the Banks,
whereupon until the Agent notifies the Company that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or to continue or
convert outstanding Loans as or into CD Loans or Euro-Dollar Loans, as the case
may be, shall be suspended and (ii) each outstanding CD Loan or Euro-Dollar
Loan, as the case may be, shall be converted into a Base Rate Loan on the last
day of the then current Interest Period applicable thereto. Unless the Company
notifies the Agent at least two Domestic Business Days before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be made
as a Base Rate Borrowing.
SECTION 8.2. ILLEGALITY. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, 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 Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Loans and such Bank shall so notify the
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Agent, the Agent shall forthwith give notice thereof to the other Banks and the
Company, whereupon until such Bank notifies the Company and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans, or to convert outstanding Loans into
Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank. If such notice is given, each Euro-Dollar Loan of such Bank then
outstanding shall be converted to a Base Rate Loan either (a) on the last day
of the then current Interest Period applicable to such Euro-Dollar Loan if such
Bank may lawfully continue to maintain and fund such Loan to such day or (b)
immediately if such Bank shall determine that it may not lawfully continue to
maintain and fund such Loan to such day.
SECTION 8.3. INCREASED COST AND REDUCED RETURN. (a) If on
or after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, 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 Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding (i) with respect to any CD Loan any such requirement included in
an applicable Domestic Reserve Percentage and (ii) with respect to any
Euro-Dollar Loan any such requirement with respect to which such Bank is
entitled to compensation during the relevant interest period under Section ?),
special deposit, insurance assessment (excluding, with respect to any CD Loan,
any such requirement reflected in an applicable Assessment Rate) or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Applicable Lending Office) or shall impose on any
Bank (or its Applicable Lending Office) or on the United States market for
certificates of deposit or the London interbank market any other condition
affecting its Fixed Rate Loans, its Note or its obligation to make Fixed Rate
Loans and the result of any of the foregoing is to increase the cost to such
Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate
Loan, or to reduce the amount of
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any sum received or receivable by such Bank (or its Applicable Lending Office)
under this Agreement or under its Note with respect thereto, by an amount
deemed by such Bank to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Company shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, 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 any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, (including any determination by any such authority, central
bank or comparable agency that, for purposes of capital adequacy requirements,
the Commitments hereunder do not constitute commitments with an original
maturity of one year or less) has or would have the effect of reducing the rate
of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent), the Company shall
pay to such Bank such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction.
(c) Each Bank will promptly notify the Company and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
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 under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
SECTION 8.4. TAXES. (a) For the purposes of this Section
8.4, the following terms have the following meanings:
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"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any
payment by the Company pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, EXCLUDING (i) in the case of each Bank and
the Agent, taxes imposed on its income, and franchise or similar taxes imposed
on it, by a jurisdiction under the laws of which such Bank or the Agent (as the
case may be) is organized or in which its principal executive office is located
or, in the case of each Bank, in which its Applicable Lending Office is located
and (ii) in the case of each Bank, any United States withholding tax imposed on
such payments but only to the extent that such Bank is subject to United States
withholding tax at the time such Bank first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or
documentary taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to this Agreement or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note.
(b) Any and all payments by the Company to or for the
account of any Bank or the Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; PROVIDED that, if the Company
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions, (iii) the
Company shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Company shall
furnish to the Agent, at its address referred to in Section 9.1, the original
or a certified copy of a receipt evidencing payment thereof.
(c) The Company agrees to indemnify each Bank and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be paid within 15 days after
such Bank or the Agent (as the case may be) makes demand therefor.
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(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank listed on the signature
pages hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in writing by
the Company (but only so long as such Bank remains lawfully able to do so),
shall provide the Company and the Agent with Internal Revenue Service form 1001
or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which exempts the Bank
from United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States.
(e) For any period with respect to which a Bank has failed
to provide the Company or the Agent with the appropriate form pursuant to
Section 8.4(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 8.4(b) or (c) with respect to Taxes imposed by the United States;
PROVIDED that if a Bank, which is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Company shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes.
(f) If the Company is required to pay additional amounts to
or for the account of any Bank pursuant to this Section, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the judgment of
such Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank.
SECTION 8.5. BASE RATE LOANS SUBSTITUTED FOR AFFECTED FIXED
RATE LOANS. If (i) the obligation of any Bank to make, or convert outstanding
Loans to, Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii)
any Bank has demanded compensation under Section 8.3 or 8.4 with respect to its
CD Loans or Euro-Dollar Loans and the Company shall, by at least five
Euro-Dollar Business Days' prior notice to such Bank through the Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
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unless and until such Bank notifies the Company that the circumstances giving
rise to such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as
(or continued as or converted into) CD Loans or Euro-Dollar Loans, as
the case may be, shall instead be Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the related
Fixed Rate Loans of the other Banks); and
(b) after each of its CD Loans or Euro-Dollar Loans, as the
case may be, has been repaid (or converted to a Base Rate Loan), all
payments of principal which would otherwise be applied to repay such
Fixed Rate Loans shall be applied to repay its Base Rate Loans
instead.
If such Bank notifies the Company that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable to the related CD
Loans or Euro-Dollar Loans of the other Banks.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (a) in the case of the Company or the Agent, at its address, facsimile
number or telex number set forth on the signature pages hereof, (b) in the case
of any Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (c) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Agent and the Company. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile
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transmission, when transmitted to the facsimile number specified in this
Section and confirmation of receipt is received, (iii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iv) if given by any other means,
when delivered at the address specified in this Section; PROVIDED that notices
to the Agent under Article 2 or Article 8 shall not be effective until
received.
SECTION 9.2. NO WAIVERS. No failure or delay by the Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.3. EXPENSES; INDEMNIFICATION. (a) The Company
shall pay (i) all out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent ,in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent and each Bank, including (without duplication) the fees and
disbursements of outside counsel and the allocated cost of inside counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom.
(b) The Company agrees to indemnify the Agent and each
Bank, their respective affiliates and the respective directors, officers,
agents and employees of the foregoing (each an "Indemnitee") and hold each
Indemnitee harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind, including, without limitation, the reasonable
fees and disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; PROVIDED that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
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SECTION 9.4. SHARING OF SET-OFFS. Each Bank agrees that if
it shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank,
the Bank receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; PROVIDED that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Company other than its indebtedness hereunder. The Company agrees, to the
fullest extent it may effectively do so under applicable law, that any holder
of a participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Company in the amount of such
participation.
SECTION 9.5. AMENDMENTS AND WAIVERS . Any provision of
this Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Company and the Required
Banks (and, if the rights or duties of the Agent are affected thereby, by the
Agent); PROVIDED that no such amendment or waiver shall, unless signed by all
the Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder or for any scheduled
reduction or termination of any Commitment or (iv) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this Agreement.
SECTION 9.6. SUCCESSORS AND ASSIGNS. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Company may
not
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assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice
to the Company and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Company and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Company hereunder including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement;
PROVIDED that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement described in
clause (i), (ii), or (iii) of Section 9.5 without the consent of the
Participant. The Company agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part
(equivalent to an initial Commitment of not less than $5,000,000) of all, of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit D hereto executed
by such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Company, which shall not be unreasonably withheld, and the
Agent; PROVIDED that if an Assignee is an affiliate of such transferor Bank or
was a Bank immediately prior to such assignment, no such consent shall be
required. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price
agreed between such transferor Bank and such Assignee, such Assignee shall be a
Bank party to this Agreement and shall have all the rights and obligations of a
Bank with a Commitment as set forth in such instrument
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of assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Agent and the Company shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Agent an administrative fee for processing such assignment in the
amount of $2,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Company
and the Agent certification as to exemption from deduction or withholding of
any United States federal income taxes in accordance with Section 8.4.
(d) Any Bank may at any time assign all or any portion of
its rights under this Agreement and its Note to a Federal Reserve Bank. No
such assignment shall release the transferor Bank from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under Section
8.3 or 8.4 than such Bank would have been entitled to receive with respect to
the rights transferred, unless such transfer is made with the Company's prior
written consent or by reason of the provisions of Section 8.2, 8.3 or 8.4
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
SECTION 9.7. COLLATERAL. Each of the Banks represents to
the Agent and each of the other Banks that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
SECTION 9.8. GOVERNING LAW; SUBMISSION TO JURISDICTION.
This Agreement and each Note shall be governed by and construed in accordance
with the laws of the State of New York. The Company hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
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such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 9.9. COUNTERPARTS; INTEGRATION; EFFECTIVENESS.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of
any party as to which an executed counterpart shall not have been received,
receipt by the Agent in form satisfactory to it of telegraphic, telex,
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
QUAKER STATE CORPORATION
By /s/ CONRAD A. CONRAD
------------------------
Conrad A. Conrad
Title: Vice Chairman and
Chief Financial Officer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ JAMES S. FINCH
------------------------
James S. Finch
Title: Vice President
COMMITMENTS
$45,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ JAMES S. FINCH
------------------------
James S. Finch
___________ Title: Vice President
$45,000,000
- -----------
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PRICING SCHEDULE
Each of "Euro-Dollar Margin", "CD Margin" and "Commitment
Fee Rate" means, for any date, the rates set forth below in the row opposite
such term and in the column corresponding to the "Pricing Level" that applies
at such date:
Level I Level II Level III Level IV Level V
CD Margin
For any day prior to
4/1/96 0.40% 0.475% 0.55% 0.625% 0.875%
For any day on or
after 4/1/96 0.525% 0.60% 0.675% 0.75% 1.0%
Euro-Dollar
Margin
For any day prior to
4/1/96 0.275% 0.35% 0.425% 0.50% 0.75%
For any day on or
after 4/1/96 0.40% 0.475% 0.55% 0.625% 0.875%
Commitment Fee
Rate
For any day prior to
4/1/96 0.10% 0.125% 0.15% 0.175% 0.25%
For any day on or
after 4/1/96 0.15% 0.175% 0.20% 0.225% 0.30%
For purposes of this Schedule, the following terms have the
following meanings, subject to the last paragraph of this Schedule:
"Level I Pricing" applies at any date if, at such date, the
Borrower's long-term debt is rated A or higher by S&P OR A1 or higher by
Moody's.
"Level II Pricing" applies at any date if, at such date, (i)
the Borrower's long-term debt is rated BBB+ or higher by S&P OR Baa1 or higher
by Moody's and (ii) Level I Pricing does not apply.
"Level III Pricing" applies at any date if, at such date, (i)
the Borrower's long-term debt is rated BBB or higher by S&P OR Baa2 or higher
by Moody's and (ii) neither Level I Pricing nor Level II Pricing applies
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"Level IV Pricing" applies at any date if, at such date, (i)
the Borrower's long-term debt is rated BBB- or higher by S&P OR Baa3 or higher
by Moody's and (ii) none of Level I Pricing, Level II Pricing and Level III
Pricing applies.
"Level V Pricing" applies at any date if, at such date, no
other Pricing Level applies.
"Moody's" means Moody's Investors Service, Inc.
"Pricing Level" refers to the determination of which of Level
I, Level II, Level III, Level IV or Level V applies at any date.
"S&P" means Standard & Poor's Ratings Group.
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Borrower
without third-party credit enhancement, and any rating assigned to any other
debt security of the Borrower shall be disregarded. The rating in effect at
any date is that in effect at the close of business on such date. In the case
of split ratings from S&P or Moody's, the rating to be used to determine which
Pricing Level is the higher of the two (e.g. BB+/Baa3 results in Level IV
Pricing); PROVIDED that if the split is more than one full rating category, the
intermediate (or the higher of the two intermediate ratings) will be used
(e.g., BBB+/Baa3 results in Level III Pricing).
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SCHEDULE I
Amendments
Amendment No. 1 dated as of September 30, 1992
Amendment No. 2 dated as of ______, 1993
Amendment No. 3 dated as of August 1, 1994
Amendment No. 4 dated as of September 30, 1994
Amendment No. 5 dated as of July 7, 1995
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EXHIBIT A - Note
NOTE
For value received, QUAKER STATE CORPORATION, a Delaware
corporation (the "Borrower"), promises to pay to the order of
______________________ (the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the maturity
date provided for in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types thereof and
all repayments of the principal thereof shall be recorded by the Bank and, if
the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; PROVIDED that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of September 29, 1995 among Quaker State Corporation, the
banks listed on the signature pages thereof and Morgan Guaranty Trust Company
of New York, as Agent (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein
with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
QUAKER STATE CORPORATION
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By____________________
Name:
Title:
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LOANS AND PAYMENTS OF PRINCIPAL
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Amount Type Amount of
of of Principal Notation
Date Loan Loan Repaid Made By
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EXHIBIT B - Opinion of Counsel for the Borrower
OPINION OF
COUNSEL FOR THE BORROWER
________________, 1995
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have acted as counsel for Quaker State Corporation (the
"Borrower") in connection with the Credit Agreement (the "Credit Agreement")
dated as of September 29, 1995 among the Borrower, the banks listed on the
signature pages thereof, and Morgan Guaranty Trust Company of New York, as
Agent. Terms defined in the Credit Agreement are used herein as therein
defined. This opinion is being rendered to you at the request of our client
pursuant to Section 3.1(b) of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
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2. The execution, delivery and performance by the Borrower of
the Credit Agreement and the Notes are within the corporate powers of the
Borrower, have been duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Borrower or of any agreement, judgment, injunction, order, decree or
other instrument binding upon the Borrower or any of its Subsidiaries or result
in the creation or imposition of any Lien on any asset of the Borrower or any
of its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding
agreement of the Borrower and each Note constitutes a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.
4. Except as set forth in the Company's reports filed with
the Securities and Exchange Commission, there is no action, suit or proceeding
pending against, or to the best of our knowledge threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official, in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole, or which in any manner draws into question the validity of the Credit
Agreement or the Notes.
5. Each of the Borrower's material corporate Subsidiaries is
a corporation validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
Very truly yours,
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EXHIBIT C - Opinion of Special Counsel for the Agent
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
________________, 1995
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Credit
Agreement (the "Credit Agreement") dated as of September 29, 1995 among Quaker
State Corporation, a Delaware corporation (the "Borrower"), the banks listed on
the signature pages thereof (the "Banks"), and Morgan Guaranty Trust Company of
New York, as Agent (the "Agent"), and have acted as special counsel for the
Agent for the purpose of rendering this opinion pursuant to Section 3.1(c) of
the Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
We have assumed that the execution, delivery and performance
by the Borrower of the Credit Agreement and the Notes are within the Borrower's
corporate powers and have been duly authorized by all necessary corporate
action.
Upon the basis of the foregoing, we are of the opinion that
the Credit Agreement constitutes a valid and
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binding agreement of the Borrower and each Note constitutes a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York and the
federal laws of the United States of America. In giving the foregoing opinion,
we express no opinion as to the effect (if any) of any law of any jurisdiction
(except the State of New York) in which any Bank is located which limits the
rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without our prior written consent.
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EXHIBIT D - Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among <NAME OF ASSIGNOR>
(the "Assignor"), <NAME OF ASSIGNEE> (the "Assignee"), QUAKER STATE CORPORATION
(the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent").
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Credit Agreement dated as of September 29, 1995
among the Borrower, the Assignor and the other Banks party thereto, as Banks,
and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor
has a Commitment to make Loans to the Borrower in an aggregate principal amount
at any time outstanding not to exceed $__________;
WHEREAS, Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Credit Agreement in respect of a
portion of its Commitment thereunder in an amount equal to $__________ (the
"Assigned Amount"), together with a corresponding portion of its outstanding
Loans, and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
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SECTION 2. ASSIGNMENT. The Assignor hereby assigns and sells
to the Assignee all of the rights of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Credit Agreement to the extent of the Assigned Amount, including the
purchase from the Assignor of the corresponding portion of the principal amount
of the Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee, [the Borrower and
the Agent] and the payment of the amounts specified in Section 3 required to be
paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed
to the rights and be obligated to perform the obligations of a Bank under the
Credit Agreement with a Commitment in an amount equal to the Assigned Amount,
and (ii) the Commitment of the Assignor shall, as of the date hereof, be
reduced by a like amount and the Assignor released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee. The assignment provided for herein shall be without recourse to the
Assignor.
SECTION 3. PAYMENTS. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between them.1
It is understood that commitment fees accrued to the date hereof are for the
account of the Assignor and such fees accruing from and including the date
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other party.
____________________
1 Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any
portion of any upfront fee to be paid by the Assignor to the Assignee. It
may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum.
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[SECTION 4. CONSENT OF THE BORROWER AND THE AGENT. This
Agreement is conditioned upon the consent of the Borrower and the Agent
pursuant to Section 9.06(c) of the Credit Agreement. The execution of this
Agreement by the Borrower and the Agent is evidence of this consent. Pursuant
to Section 9.6(c), the Borrower agrees to execute and deliver a Note payable to
the order of the Assignee to evidence the assignment and assumption provided
for herein.]
SECTION 5. NON-RELIANCE ON ASSIGNOR. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 7. COUNTERPARTS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
first above written.
<NAME OF ASSIGNOR>
By_________________________
Name:
Title:
<NAME OF ASSIGNEE>
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By__________________________
Name:
Title:
QUAKER STATE CORPORATION
By__________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Name:
Title:
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