Exhibit 10(r)
EXECUTION COPY
$1,650,000,000
364-DAY CREDIT AGREEMENT
dated as of
October 16, 2001
among
The Gillette Company,
The Banks Listed Herein
and
The Chase Manhattan Bank,
as Agent
--------------------
J.P. Morgan Securities Inc.,
Arranger
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions ................................................ 1
SECTION 1.02. Accounting Terms and Determinations ........................ 10
SECTION 1.03. Types of Borrowings ........................................ 11
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend ........................................ 11
SECTION 2.02. Notice of Committed Borrowing .............................. 11
SECTION 2.03. Competitive Bid Borrowings ................................. 12
SECTION 2.04. Notice to Banks; Funding of Loans .......................... 15
SECTION 2.05. Notes ...................................................... 16
SECTION 2.06. Maturity of Loans .......................................... 17
SECTION 2.07. Interest Rates ............................................. 17
SECTION 2.08. Facility Fee ............................................... 18
SECTION 2.09. Termination or Reduction of Commitments .................... 19
SECTION 2.10. Scheduled Termination of Commitments ....................... 19
SECTION 2.11. Optional Prepayments ....................................... 19
SECTION 2.12. General Provisions as to Payments .......................... 19
SECTION 2.13. Funding Losses ............................................. 20
SECTION 2.14. Computation of Interest and Fees ........................... 20
SECTION 2.15. Judgment Currency .......................................... 20
SECTION 2.16. Foreign Subsidiary Costs ................................... 21
SECTION 2.17. Regulation D Compensation .................................. 21
SECTION 2.18. Method of Electing Interest Rates .......................... 21
SECTION 2.19. Increased Commitments; Additional Banks .................... 23
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness .............................................. 24
SECTION 3.02. Borrowings ................................................. 25
SECTION 3.03. First Borrowing by Each Eligible Subsidiary ................ 25
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Corporate Existence and Power .............................. 26
SECTION 4.02. Corporate and Governmental Authorization; Contravention .... 26
SECTION 4.03. Binding Effect ............................................. 26
SECTION 4.04. Financial Information ...................................... 26
SECTION 4.05. No Material Adverse Change ................................. 26
SECTION 4.06. Compliance with ERISA ...................................... 27
SECTION 4.07. Litigation ................................................. 27
PAGE
SECTION 4.08. Taxes ...................................................... 27
SECTION 4.09. Full Disclosure ............................................ 27
ARTICLE 5
COVENANTS
SECTION 5.01. Information ................................................ 28
SECTION 5.02. Maintenance of Property; Insurance ......................... 30
SECTION 5.03. Conduct of Business and Maintenance of Existence ........... 30
SECTION 5.04. Compliance with Laws ....................................... 30
SECTION 5.05. Earnings to Interest Expense Ratio ......................... 30
SECTION 5.06. Negative Pledge ............................................ 30
SECTION 5.07. Consolidations, Mergers and Sales of Assets ................ 31
SECTION 5.08. Material Subsidiary Cash Flow .............................. 31
SECTION 5.09. Use of Proceeds ............................................ 31
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default .......................................... 32
SECTION 6.02. Notice of Default .......................................... 34
ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization .............................. 34
SECTION 7.02. Agent and Affiliates ....................................... 34
SECTION 7.03. Action by Agent ............................................ 34
SECTION 7.04. Consultation with Experts .................................. 34
SECTION 7.05. Liability of Agent ......................................... 34
SECTION 7.06. Indemnification ............................................ 35
SECTION 7.07. Credit Decision ............................................ 35
SECTION 7.08. Successor Agent ............................................ 35
SECTION 7.09. Agent's Fee ................................................ 35
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair ... 35
SECTION 8.02. Illegality ................................................. 36
SECTION 8.03. Increased Cost and Reduced Return .......................... 36
SECTION 8.04. Taxes ...................................................... 38
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans .. 39
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES
SECTION 9.01. Corporate Existence and Power .............................. 40
SECTION 9.02. Corporate and Governmental Authorization; Contravention .... 40
SECTION 9.03. Binding Effect ............................................. 40
ii
PAGE
SECTION 9.04. Taxes ...................................................... 40
ARTICLE 10
GUARANTY
SECTION 10.01. The Guaranty ............................................... 40
SECTION 10.02. Guaranty Unconditional ..................................... 41
SECTION 10.03. Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances .................... 41
SECTION 10.04. Waiver by the Company ...................................... 42
SECTION 10.05. No Subrogation ............................................. 42
SECTION 10.06. Stay of Acceleration ....................................... 42
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices .................................................... 42
SECTION 11.02. No Waivers ................................................. 42
SECTION 11.03. Expenses; Indemnification .................................. 43
SECTION 11.04. Sharing of Set-offs ........................................ 43
SECTION 11.05. Amendments and Waivers ..................................... 43
SECTION 11.06. Successors and Assigns ..................................... 44
SECTION 11.07. Designated Lenders ......................................... 45
SECTION 11.08. Collateral ................................................. 46
SECTION 11.09. Governing Law; Submission to Jurisdiction;
Service of Process ........................................ 46
SECTION 11.10. Counterparts; Integration .................................. 47
SECTION 11.11. WAIVER OF JURY TRIAL ....................................... 47
COMMITMENT SCHEDULE
EXHIBIT A - Note
EXHIBIT B - Competitive Bid Quote Request
EXHIBIT C - Invitation for Competitive Bid Quotes
EXHIBIT D - Competitive Bid Quote
EXHIBIT E - Opinion of Counsel for the Company
EXHIBIT F - Opinion of Special Counsel for the Agent
EXHIBIT G - Election to Participate
EXHIBIT H - Election to Terminate
EXHIBIT I - Opinion of Counsel for an Eligible Subsidiary
EXHIBIT J - Assignment and Assumption Agreement
iii
EXHIBIT K - Designation Agreement
iv
CREDIT AGREEMENT
AGREEMENT dated as of October 16, 2001 among THE GILLETTE COMPANY, the
BANKS listed on the signature pages hereof and THE CHASE MANHATTAN BANK, as
Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"ABSOLUTE RATE AUCTION" means a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Absolute Rates pursuant to Section 2.03.
"ADDITIONAL BANK" has the meaning set forth in Section 2.19(b).
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent duly completed by such Bank.
"AGENT" means The Chase Manhattan Bank in its capacity as
administrative 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 Base Rate Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Competitive Bid Loans, its Competitive Bid Lending Office.
"ASSIGNEE" has the meaning set forth in Section 11.06(c).
"BANK" means each bank or other financial institution listed on the
signature pages hereof, each Assignee which becomes a Bank pursuant to Section
11.06(c), and their respective successors. "BANK" includes each Additional Bank
which becomes a Bank pursuant to Section 2.19.
"BASE RATE" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"BASE RATE LOAN" means a Committed Loan which bears interest at the
Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or the provisions of Article 8.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group and not excepted by Section 4(b) of ERISA.
"BORROWER" means the Company or any Eligible Subsidiary, as the context
may require, and their respective successors, and "BORROWERS" means all of the
foregoing.
"BORROWING" has the meaning set forth in Section 1.03.
"COMMITMENT" means (i) with respect to each Bank listed on the
Commitment Schedule, the amount set forth opposite the name of such Bank on the
Commitment Schedule and (ii) with respect to any Assignee, the amount of the
transferor Bank's Commitment assigned to it pursuant to Section 11.06(c), in
each case as such amount may be changed from time to time pursuant to Section
2.09 or 11.06(c). "COMMITMENT" includes, with respect to each Additional Bank
which becomes a Bank pursuant to Section 2.19, the amount of the Commitment
thereby assumed by it, in each case, as such amount may be changed from time to
time pursuant to Sections 2.09 and 2.19.
"COMMITMENT SCHEDULE" means the Commitment Schedule attached hereto.
"COMMITTED LOAN" means a loan made by a Bank pursuant to Section 2.01;
provided that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term Committed
Loan shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision, as the case may be.
"COMPANY" means The Gillette Company, a Delaware corporation, and its
successors.
"COMPANY'S LATEST FORM 10-Q" means the Company's quarterly report on
Form 10-Q for the quarter ended June 30, 2001, as filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
"COMPANY'S 2000 FORM 10-K" means the Company's annual report on Form
10-K for 2000, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
"COMPETITIVE BID ABSOLUTE RATE" has the meaning set forth in Section
2.03.
"COMPETITIVE BID ABSOLUTE RATE LOAN" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"COMPETITIVE BID LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Competitive Bid Lending Office by notice to the
Borrower and the Agent; provided that any Bank may from time to time by notice
to the Borrower and the Agent designate separate Competitive Bid Lending Offices
for its Competitive Bid LIBOR Loans, on the one hand, and its
2
Competitive Bid Absolute Rate Loans, on the other hand, in which case all
references herein to the Competitive Bid Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may require.
"COMPETITIVE BID LIBOR LOAN" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 8.01).
"COMPETITIVE BID LOAN" means a Competitive Bid LIBOR Loan or a
Competitive Bid Absolute Rate Loan.
"COMPETITIVE BID MARGIN" has the meaning set forth in Section
2.03(d)(ii)C.
"COMPETITIVE BID QUOTE" means an offer by a Bank, in substantially the
form of Exhibit D hereto, to make a Competitive Bid Loan in accordance with
Section 2.03.
"COMPETITIVE BID QUOTE REQUEST" means the notice, in substantially the
form of Exhibit B hereto, to be delivered by the Borrower in accordance with
Section 2.03 in requesting Competitive Bid Quotes.
"CONSOLIDATED ASSETS" means at any date the consolidated assets of the
Company and its Consolidated Subsidiaries determined as of such date.
"CONSOLIDATED EARNINGS BEFORE INTEREST AND TAXES" means, for any fiscal
period, the sum of (i) Consolidated Net Income plus (ii) Gross Interest Expense
plus (iii) to the extent deducted in determining Consolidated Net Income,
provision for taxes on income, all determined on a consolidated basis for the
Company and its Consolidated Subsidiaries for such fiscal period.
"CONSOLIDATED NET INCOME" means, for any fiscal period, the net income
(before preferred and common stock dividends) of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis for such fiscal
period.
"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.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person, and (vi) all Debt of others Guaranteed
by such Person.
3
"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.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions,
excluding any amounts which the Borrower is entitled to set-off against its
obligations under applicable law.
"DESIGNATED LENDER" means, with respect to any Designating Bank, an
Eligible Designee designated by it pursuant to Section 11.07(a) as a Designated
Lender for purposes of this Agreement.
"DESIGNATING BANK" means, with respect to each Designated Lender, the
Bank that designated such Designated Lender pursuant to Section 11.07(a).
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City or Boston, Massachusetts
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.
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 3.01.
"ELECTION TO PARTICIPATE" means an Election to Participate
substantially in the form of Exhibit G hereto.
"ELECTION TO TERMINATE" means an Election to Terminate substantially in
the form of Exhibit H hereto.
"ELIGIBLE DESIGNEE" means a special purpose corporation that (i) is
organized under the laws of the United States or any state thereof, (ii) is
engaged in making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and (iii) issues (or the parent of which issues)
commercial paper rated at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody's.
4
"ELIGIBLE SUBSIDIARY" means any Substantially-Owned Consolidated
Subsidiary of the Company as to which an Election to Participate shall have been
delivered to the Agent and as to which an Election to Terminate shall not have
been delivered to the Agent. Each such Election to Participate and Election to
Terminate shall be duly executed on behalf of such Substantially-Owned
Consolidated Subsidiary and the Company in such number of copies as the Agent
may request. The delivery of an Election to Terminate shall not affect any
obligation of an Eligible Subsidiary theretofore incurred. The Agent shall
promptly give notice to the Banks of the receipt of any Election to Participate
or Election to Terminate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Company, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"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 any Committed Loan in respect of which
interest is to be computed on the basis of a Euro-Dollar Rate.
"EURO-DOLLAR MARGIN" has the meaning set forth in Section 2.07(b).
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.07(b) on the basis of a London Interbank Offered Rate.
"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).
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
5
"EXISTING CREDIT AGREEMENTS" means the 364-Day Credit Agreement and the
Multi-Year Credit Agreement, each dated as of December 20, 1996, among the
Company, the bank parties thereto and Morgan Guaranty Trust Company of New York,
as agent, each as amended and/or restated prior to the Effective Date.
"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 The Chase Manhattan Bank on such day on
such transactions as determined by the Agent.
"FINAL MATURITY DATE" means the first anniversary of the Termination
Date or, if such day is not a Euro-Dollar Business Day, the preceding
Euro-Dollar Business Day.
"FIXED RATE LOANS" means Euro-Dollar Loans or Competitive Bid Loans
(excluding Competitive Bid LIBOR Loans bearing interest at the Base Rate
pursuant to Section 8.01(b)(ii)) or any combination of the foregoing.
"GROSS INTEREST EXPENSE" means, for any fiscal period, the consolidated
interest expense of the Company and its Consolidated Subsidiaries for such
period (calculated without deducting or otherwise netting consolidated interest
income of the Company and its Consolidated Subsidiaries).
"GROUP OF LOANS" means at any time a group of Loans consisting of (i)
all Committed Loans to any single Borrower which are Base Rate Loans at such
time or (ii) all Euro-Dollar Loans to any single Borrower having the same
Interest Period at such time, provided that, if a Committed 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.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions, by "comfort letter" or other similar
undertaking of support or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the holder of such Debt of the payment thereof or
to protect such holder against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary
6
course of business. The term "Guarantee" used as a verb has a corresponding
meaning.
"INCREASED COMMITMENTS" has the meaning set forth in Section 2.19(a).
"INDEMNITEE" has the meaning set forth in Section 11.03(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 Borrower 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; and
(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 the further proviso below, end on the last
Euro-Dollar Business Day of a calendar month;
(2) with respect to each Competitive Bid LIBOR Loan, the
period commencing on the date of borrowing specified in the applicable
Notice of Borrowing and ending such whole number of months thereafter
as the Borrower may elect in accordance with Section 2.03; 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; and
(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 the further proviso below, end on the last
Euro-Dollar Business Day of a calendar month;
(3) with respect to each Competitive Bid Absolute Rate Loan,
the period commencing on the date of borrowing specified in the
applicable Notice of Borrowing and ending such number of days
thereafter (but not less than fifteen days) as the Borrower may elect
in accordance
7
with Section 2.03; provided that 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; and
provided further that:
(x) any Interest Period which begins before the Termination
Date and would otherwise end after the Termination Date shall end on
the Termination Date; and
(y) any Interest Period which would otherwise end after the
Final Maturity Date shall end on the Final Maturity Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"LIBOR AUCTION" means a solicitation of Competitive Bid Quotes setting
forth the Competitive Bid Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Company or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"LOAN" and "LOANS" mean and include each and every loan made by a Bank
under this Agreement.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.07(b).
"MATERIAL DEBT" means Debt (other than the Notes) of the Company and/or
one or more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal amount exceeding $50,000,000.
"MATERIAL FINANCIAL OBLIGATIONS" means a principal amount of Debt
and/or payment obligations in respect of Derivatives Obligations of the Company
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, exceeding in the aggregate $50,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $50,000,000.
"MATERIAL SUBSIDIARY" means any Subsidiary which either (A) is an
Eligible Subsidiary or (B) has consolidated assets, together with its
Subsidiaries, exceeding 5% of Consolidated Assets at the date of determination
of its status hereunder.
"MOODY'S" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.
8
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NOTES" means promissory notes of a Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of such Borrower to repay the
Loans made to it, and "Note" means any one of such promissory notes issued
hereunder.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing (as defined
in Section 2.02) or a Notice of Competitive Bid Borrowing (as defined in Section
2.03(f)).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.18.
"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARTICIPANT" has the meaning set forth in Section 11.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group.
"PRIME RATE" means the rate of interest publicly announced by The Chase
Manhattan Bank in New York City from time to time as its Prime Rate.
"QUARTERLY DATE" means the last day of March, June, September and
December in each year, commencing December 31, 2001.
"REFERENCE BANKS" means the principal London offices of Citibank, N.A.,
Bank of America, N.A. and The Chase Manhattan Bank. "REFERENCE BANK" means any
one of such Reference Banks.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
9
"REQUIRED BANKS" means at any time Banks having more than 50% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding more than 50% of the aggregate unpaid principal amount of
the Loans.
"REVOLVING CREDIT LOAN" means a loan made or to be made by a Bank
pursuant to Section 2.01(a).
"REVOLVING CREDIT PERIOD" means the period from and including the
Effective Date to but excluding the Termination Date.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., and any successor thereto that is a nationally recognized rating agency.
"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.
"SUBSTANTIALLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated
Subsidiary not less than 90% of the outstanding shares of each class of capital
stock or other ownership interests of which are at the time directly or
indirectly owned by the Company.
"TERM LOAN" means a loan made or to be made by a Bank pursuant to
Section 2.01(b).
"TERMINATION DATE" means October 15, 2002, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Company's
independent public accountants) with the most recent audited consolidated
financial statements of the
10
Company and its Consolidated Subsidiaries delivered to the Banks; provided that,
if the Company notifies the Agent that the Company wishes to amend any covenant
in Article 5 to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or if the Agent
notifies the Company that the Required Banks wish to amend Article 5 for such
purpose), then the Company's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Company and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "BORROWING" denotes the
aggregation of Loans of one or more Banks to be made to a single Borrower
pursuant to Article 2 on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by reference to
the pricing of Loans comprising such Borrowing (e.g., a "EURO-DOLLAR BORROWING"
is a Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions
of Article 2 under which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all Banks participate in
proportion to their Commitments, while a "COMPETITIVE BID BORROWING" is a
Borrowing under Section 2.03 in which the Bank participants are determined on
the basis of their bids in accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) Revolving Credit Loans. 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 or any
Eligible Subsidiary pursuant to this subsection 2.01(a) from time to time in
amounts such that the aggregate principal amount of Revolving Credit Loans by
such Bank at any one time outstanding to all Borrowers shall not exceed the
amount of its Commitment. Within the foregoing limits, a Borrower may borrow
under this subsection, prepay Loans to the extent permitted by Section 2.11 and
reborrow at any time during the Revolving Credit Period under this subsection
2.01(a).
(b) Term Loans. Each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make loans to the Company or any Eligible
Subsidiary on the Termination Date in an aggregate principal amount to all
Borrowers up to but not exceeding the amount of its Commitment.
(c) Minimum Borrowing. Each Borrowing under this Section shall be in an
aggregate principal amount of $15,000,000 or any larger multiple of $1,000,000
(except that any such Borrowing may be in the aggregate amount available in
accordance with Section 3.02(b)) and shall be made from the several Banks
ratably in proportion to their respective Commitments.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall give
the Agent notice (a "NOTICE OF COMMITTED BORROWING") not later than 11:00
11
A.M. (New York City time) on (x) the date of each Base Rate Borrowing and (y)
the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(a) 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,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate or a Euro-Dollar Rate, and
(d) in the case of a Euro-Dollar Borrowing, the duration of the initial
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period.
SECTION 2.03. Competitive Bid Borrowings.
(a) The Competitive Bid Option. In addition to Committed Borrowings
pursuant to Section 2.01, any Borrower may, as set forth in this Section,
request the Banks during the Revolving Credit Period to make offers to make
Competitive Bid Loans to such Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
(b) Competitive Bid Quote Request. When a Borrower wishes to request
offers to make Competitive Bid Loans under this Section, it shall transmit to
the Agent by telex or facsimile transmission a Competitive Bid Quote Request
substantially in the form of Exhibit B hereto so as to be received no later than
10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day next preceding the date of Borrowing proposed therein,
in the case of an Absolute Rate Auction (or, in either case, such other time or
date as the Company and the Agent shall have mutually agreed and the Agent shall
have notified to the Banks not later than the date of the Competitive Bid Quote
Request for the first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$15,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Competitive Bid Quotes requested are to set
forth a Competitive Bid Margin or a Competitive Bid Absolute Rate.
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The Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period in a single Competitive Bid Quote Request. No Competitive Bid
Quote Request shall be given within five Euro-Dollar Business Days (or such
other number of days as the Company and the Agent may agree) of any other
Competitive Bid Quote Request.
(c) Invitation for Competitive Bid Quotes. Promptly upon receipt of a
Competitive Bid Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Competitive Bid Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Competitive Bid Quotes offering to make the
Competitive Bid Loans to which such Competitive Bid Quote Request relates in
accordance with this Section.
(d) Submission and Contents of Competitive Bid Quotes. (i) Each Bank
may submit a Competitive Bid Quote containing an offer or offers to make
Competitive Bid Loans in response to any Invitation for Competitive Bid Quotes.
Each Competitive Bid Quote must comply with the requirements of this subsection
(d) and must be submitted to the Agent by telex or facsimile transmission at its
offices referred to in or pursuant to Section 11.01 not later than (x) 2:00 P.M.
(New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New
York City time) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction (or, in either case, such other time or date as the Company and the
Agent shall have mutually agreed and the Agent shall have notified to the Banks
not later than the date of the Competitive Bid Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective);
provided that Competitive Bid Quotes submitted by the Agent (or any affiliate of
the Agent) in the capacity of a Bank may be submitted, and may only be
submitted, if the Agent or such affiliate notifies the Borrower of the terms of
the offer or offers contained therein not later than (x) one hour prior to the
deadline for the other Banks, in the case of a LIBOR Auction or (y) 15 minutes
prior to the deadline for the other Banks, in the case of an Absolute Rate
Auction. Subject to Articles 3 and 4, any Competitive Bid Quote so made shall be
irrevocable except with the written consent of the Agent given on the
instructions of the Borrower.
(ii) Each Competitive Bid Quote shall be in substantially the
form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Competitive Bid Loan
for which each such offer is being made, which principal
amount (w) may be greater than or less than the Commitment of
the quoting Bank, (x) must be $5,000,000 or a larger multiple
of $1,000,000 (y) may not exceed the principal amount of
Competitive Bid Loans for which offers were requested and (z)
may be subject to an aggregate limitation as to the principal
amount of Competitive Bid Loans for which offers being made by
such quoting Bank may be accepted,
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(C) in the case of a LIBOR Auction, the margin above
or below the applicable London Interbank Offered Rate (the
"COMPETITIVE BID MARGIN") offered for each such Competitive
Bid Loan, expressed as a percentage (specified to the nearest
1/10,000th of 1%) to be added to or subtracted from such base
rate,
(D) in the case of an Absolute Rate Auction, the rate
of interest per annum (specified to the nearest 1/10,000th of
1%) (the "COMPETITIVE BID ABSOLUTE RATE") offered for each
such Competitive Bid Loan, and
(E) the identity of the quoting Bank.
A Competitive Bid Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Competitive Bid Quotes.
(iii) Any Competitive Bid Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D
hereto or does not specify all of the information required by
subsection (d)(ii);
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to those
set forth in the applicable Invitation for Competitive Bid
Quotes; or
(D) arrives after the time set forth in
subsection(d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the Borrower of
the terms (x) of any Competitive Bid Quote submitted by a Bank that is in
accordance with subsection (d) and (y) of any Competitive Bid Quote that amends,
modifies or is otherwise inconsistent with a previous Competitive Bid Quote
submitted by such Bank with respect to the same Competitive Bid Quote Request.
Any such subsequent Competitive Bid Quote shall be disregarded by the Agent
unless such subsequent Competitive Bid Quote is submitted solely to correct a
manifest error in such former Competitive Bid Quote. The Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of Competitive Bid
Loans for which offers have been received for each Interest Period specified in
the related Competitive Bid Quote Request, (B) the respective principal amounts
and Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may
be, so offered and (C) if applicable, limitations on the aggregate principal
amount of Competitive Bid Loans for which offers in any single Competitive Bid
Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New
York City time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Company and the Agent shall have mutually agreed and
the Agent shall have notified to the Banks not later than the date of the
14
Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), the Borrower shall notify the
Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (a "Notice of
Competitive Bid Borrowing") shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The Borrower may accept any
Competitive Bid Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Competitive Bid
Borrowing may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request,
(ii) the principal amount of each Competitive Bid Borrowing
must be $15,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Competitive Bid Margins or Competitive Bid Absolute Rates, as
the case may be, and
(iv) the Borrower may not accept any offer that is described
in subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks with
the same Competitive Bid Margins or Competitive Bid Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which such offers are accepted for the related Interest Period, the principal
amount of Competitive Bid Loans in respect of which such offers are accepted
shall be allocated by the Agent among such Banks as nearly as possible (in
multiples of $1,000,000, as the Agent may deem appropriate) in proportion to the
aggregate principal amounts of such offers. Determinations by the Agent of the
amounts of Competitive Bid Loans shall be conclusive in the absence of manifest
error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's share (if any) of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its 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 11.01. Unless the Agent determines that any
applicable condition specified in Article 11.01 has not been satisfied, the
Agent will make the funds so received from the Banks available to the Borrower
at the Agent's aforesaid address.
(c) If any Bank makes a Term Loan hereunder to a Borrower on a day on
which such Borrower is to repay all or any part of an outstanding Revolving
15
Credit Loan from such Bank, such Bank shall apply the proceeds of its Term Loan
to make such repayment and only an amount equal to the difference (if any)
between the amount being borrowed by such Borrower and the amount being repaid
shall be made available by such Bank to the Agent as provided in subsection (b),
or remitted by such Borrower to the Agent as provided in Section 2.12, as the
case may be.
(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 subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Borrower 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 Borrower 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 Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, a rate per annum equal to the higher of the Federal Funds
Rate and the interest rate applicable thereto pursuant to Section 2.07 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 2.05. Notes. (a) The Loans of each Bank to each Borrower shall
be evidenced by a single Note of such Borrower payable to the order of such Bank
for the account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans to such Borrower.
(b) Each Bank may, by notice to a Borrower and the Agent, request that
its Loans of a particular type to such Borrower be evidenced by a separate Note
of such Borrower 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 a "Note"
or the "Notes" 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 3.01(b) or
3.01(a), the Agent shall forward such Note to such Bank. Each Bank shall record
the date, amount, type and maturity of each Loan made by it to each Borrower and
the date and amount of each payment of principal made with respect thereto, and
may, if such Bank so elects in connection with any transfer or enforcement of
its Note of any Borrower, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to each
such Loan to such Borrower then outstanding; provided that the failure of any
Bank to make any such recordation or endorsement shall not affect the
obligations of any Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by each Borrower so to endorse its Notes and to attach to
and make a part of any Note a continuation of any such schedule as and when
required.
16
SECTION 2.06. Maturity of Loans. (a) Each Revolving Credit Loan shall
mature, and the principal amount thereof shall be due and payable, on the
Termination Date.
(b) Each Term Loan shall mature, and the principal amount thereof shall
be due and payable, on the Final Maturity Date.
(c) Each Competitive Bid Loan included in any Competitive Bid Borrowing
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. 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 at maturity, quarterly in
arrears on each Quarterly Date prior to maturity and, with respect to the
principal amount of any Base Rate Loan converted to a Euro-Dollar Loan, on the
date of such conversion. 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 1% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) 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 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.
"EURO-DOLLAR MARGIN" means a rate per annum equal to (x) for Revolving
Credit Loans, 0.135% and (y) for Term Loans, 0.26%.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Reference Banks 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 such Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
(c) 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 1% plus the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to the Interest Period for
such Loan immediately before such payment was due and (ii) the sum of 1% 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 average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective
rates 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 six months as the Agent may select) deposits in dollars in an amount
approximately
17
equal to such overdue payment due to each of the Reference Banks are offered to
such 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
8.01 shall exist, at a rate per annum equal to the sum of 1% plus the rate
applicable to Base Rate Loans for such day).
(d) Subject to Section 8.01(b)(ii), each Competitive Bid LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in accordance
with Section 2.07(b) as if the related Competitive Bid LIBOR Borrowing were a
Committed Euro-Dollar Borrowing) plus (or minus) the Competitive Bid Margin
quoted by the Bank making such Loan in accordance with Section 2.03. Each
Competitive Bid Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the Competitive Bid Absolute Rate quoted by the Bank making
such Loan in accordance with Section 2.03. 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. Any overdue principal of or interest on any Competitive Bid Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 1% plus the Base Rate for such day.
(e) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.08. Facility Fee. (a) The Company shall pay to the Agent for
the account of the Banks ratably, a facility fee at the rate of 0.040% per
annum. Such facility fee shall accrue (i) from and including the Effective Date
to but excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused) and (ii) from and including the Termination Date or
such earlier date of termination to but excluding the date the Loans shall be
repaid in their entirety, on the daily aggregate outstanding principal amount of
the Loans.
(b) Payments. Accrued facility fees under this Section shall be payable
quarterly on each Quarterly Date, and upon the date of termination of the
Commitments in their entirety (and, if later, the date the Loans shall be repaid
in their entirety).
18
SECTION 2.09. Termination or Reduction of Commitments. The Company may,
upon at least three Domestic Business Days' notice to the Agent, (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 $25,000,000 or any
larger multiple thereof, the aggregate amount of the Commitments in excess of
the aggregate outstanding principal amount of the Loans. Promptly after
receiving a notice pursuant to this subsection, the Agent shall notify each Bank
of the contents thereof.
SECTION 2.10. Scheduled Termination of Commitments. The Commitments
shall terminate on the Termination Date.
SECTION 2.11. Optional Prepayments. (a) Subject in the case of
Euro-Dollar Loans to Section 2.13, the Borrower may, upon at least one Domestic
Business Day's notice to the Agent, prepay any Group of Base Rate Loans (or any
Competitive Bid Borrowing bearing interest at the Base Rate pursuant to Section
8.01(b)(ii)) or 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 $15,000,000 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 (or Borrowing).
(b) Except as provided in subsection (a) above, the Borrower may not
prepay all or any portion of the principal amount of any Competitive Bid Loan
prior to the maturity thereof.
(c) 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 (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The Borrowers
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 Dollars in Federal or other funds immediately available in New York City, to
the Agent at its address referred to in Section 11.01. 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 Base Rate 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 Business Day. Whenever any payment of
principal of, or interest on, the Competitive Bid 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. If the date for any
payment of
19
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 a Borrower prior
to the date on which any payment is due from such Borrower to the Banks
hereunder that such Borrower will not make such payment in full, the Agent may
assume that such Borrower 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 such Borrower 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 2.13. Funding Losses. If a Borrower 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 2.07(c), or if a Borrower fails to
borrow, prepay, convert or continue any Fixed Rate Loans after notice has been
given to any Bank in accordance with Section 2.04(a), 2.11 or 2.18, such
Borrower shall reimburse each Bank on demand for any resulting loss or expense
incurred by it (or by any 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
Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 2.14. 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 all
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).
SECTION 2.15. Judgment Currency. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due from any Borrower
hereunder or under any of the Notes in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase Dollars with such other currency at
the Agent's New York office on the Domestic Business Day preceding that on which
final judgment is given. The obligations of each Borrower in respect of any sum
due to any Bank or the Agent hereunder or under any Note shall, notwithstanding
any judgment in a currency other than Dollars, be discharged only to the extent
that on the Domestic Business Day following receipt by such Bank or the Agent
(as the case may be) of any sum adjudged to be so due in such other currency
such Bank or the Agent (as the case may be) may in accordance with normal
banking procedures purchase Dollars with such other currency; if the amount of
Dollars so
20
purchased is less than the sum originally due to such Bank or the Agent, as the
case may be, in Dollars, each Borrower agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Agent, as the case may be, against such
loss, and if the amount of Dollars so purchased exceeds (a) the sum originally
due to any Bank or the Agent, as the case may be, and (b) any amounts shared
with other Banks as a result of allocations of such excess as a disproportionate
payment to such Bank under Section 11.04, such Bank or the Agent, as the case
may be, agrees to remit such excess to the appropriate Borrower.
SECTION 2.16. Foreign Subsidiary Costs. (a) If the cost to any Bank of
making or maintaining any Loan to an Eligible Subsidiary is increased, or the
amount of any sum received or receivable by any Bank (or its Applicable Lending
Office) is reduced by an amount deemed by such Bank to be material, by reason of
the fact that such Eligible Subsidiary is incorporated in, or conducts business
in, a jurisdiction outside the United States, such Borrower shall indemnify such
Bank for such increased costs or reduction within 15 days after demand by such
Bank (with a copy to the Agent and the Company). A certificate of such Bank
claiming compensation under this subsection (b) and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error.
(b) Each Bank will promptly notify the Company and the Agent of any
event of which it has knowledge that will entitle such Bank to additional
interest or payments pursuant to subsection (b) and will designate a different
Applicable Lending Office, if, in the judgment of such Bank, such designation
will avoid the need for, or reduce the amount of, such compensation and will not
be otherwise disadvantageous to such Bank.
SECTION 2.17. Regulation D Compensation. Each Bank may require any
Borrower to pay, contemporaneously with each payment of interest on the
Euro-Dollar Loans to such Borrower, additional interest on the related
Euro-Dollar Loan to such Borrower of such Bank at a rate per annum determined by
such Bank up to but not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify such
Borrower and the Agent, in which case such additional interest on the
Euro-Dollar Loans to such Borrower of such Bank shall be payable to such Bank at
the place indicated in such notice with respect to each Interest Period
commencing at least three Euro-Dollar Business Days after the giving of such
notice, and (y) shall notify such Borrower at least five Euro-Dollar Business
Days prior to each date on which interest is payable on the Euro-Dollar Loans to
such Borrower of the amount then due it under this Section.
SECTION 2.18. Method of Electing Interest Rates. (a) The Loans included
in each Committed Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower 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 and the last sentence of this subsection(a)), as
follows:
21
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest Period,
subject to Section 2.13 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.
Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Agent not later than 11:00 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. 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 $15,000,000 or any larger multiple of $1,000,000. If no such
notice is timely received prior to the end of an Interest Period, the Borrower
shall be deemed to have elected that all Loans having such Interest Period be
converted to Base Rate Loans at the end of such Interest Period.
(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
Euro-Dollar Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as 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
Borrower 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 Borrower.
(d) An election by the Borrower 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 3.02.
22
SECTION 2.19. Increased Commitments; Additional Banks. (a) Subsequent
to the Effective Date (but not more than twice in any calendar year), the
Company may, upon at least 30 days' notice to the Agent (which shall promptly
provide a copy of such notice to the Banks), propose to increase the aggregate
amount of the Commitments by an amount which (i) is a multiple of $50,000,000
and (ii) when combined with the aggregate amount by which the Commitments have
theretofore been increased pursuant to this Section 2.19, does not exceed
$550,000,000 (the amount of any such increase, the "INCREASED COMMITMENTS");
provided that no Default shall have occurred and be continuing. Each Bank party
to this Agreement at such time shall have the right (but no obligation), for a
period of 15 days following receipt of such notice, to elect by notice to the
Company and the Agent to increase its Commitment by a principal amount which
bears the same ratio to the Increased Commitments as its then Commitment bears
to the aggregate Commitments then existing.
(b) If any Bank party to this Agreement shall not elect to increase its
Commitment pursuant to subsection (a) of this Section, the Company may, within
10 days of the Banks' response, designate one or more of the existing Banks or
other financial institutions acceptable to the Agent and the Company (which
consent of the Agent shall not be unreasonably withheld) which at the time agree
to (i) in the case of any such Person that is an existing Bank, increase its
Commitment and (ii) in the case of any other such Person (an "ADDITIONAL BANK"),
become a party to this Agreement, provided that the Commitment of such
Additional Bank is not less than $25,000,000. The sum of the increases in the
Commitments of the existing Banks pursuant to this subsection (b) plus the
Commitments of the Additional Banks shall not in the aggregate exceed the
unsubscribed amount of the Increased Commitments.
(c) An increase in the aggregate amount of the Commitments pursuant to
this Section 2.19 shall become effective upon the receipt by the Agent of an
agreement in form and substance satisfactory to the Agent signed by the Company,
by each Additional Bank and by each other Bank whose Commitment is to be
increased, setting forth the new Commitments of such Banks and setting forth the
agreement of each Additional Bank to become a party to this Agreement and to be
bound by all the terms and provisions hereof, together with such evidence of
appropriate corporate authorization on the part of the Company with respect to
the Increased Commitments and such opinions of counsel for the Company with
respect to the Increased Commitments as the Agent may reasonably request.
(d) Upon any increase in the aggregate amount of the Commitments
pursuant to this Section 2.19 that is not a pro rata amount among all Banks,
within five Domestic Business Days, in the case of any Group of Base Rate Loans
then outstanding, and at the end of the then current Interest Period with
respect thereto, in the case of any Group of Euro-Dollar Loans then outstanding,
the relevant Borrower shall prepay such Group in its entirety and, to the extent
such Borrower elects to do so and subject to the conditions specified in Article
3, such Borrower shall reborrow Committed Loans from the Banks in proportion to
their respective Commitments after giving effect to such increase, until such
time as all outstanding Committed Loans are held by the Banks in such
proportion.
23
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective on
the date that each of the following conditions shall have been satisfied (or
waived in accordance with Section 11.05):
(a) 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 transmission or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note of the Company dated on or before the Effective Date complying
with the provisions of Section 2.05;
(c) receipt by the Agent of an opinion of the General Counsel of the
Company (or other counsel for the Company reasonably satisfactory to the Agent),
substantially in the form of Exhibit E hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required Banks
may reasonably request;
(d) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit F hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(e) receipt by the Agent of all documents it 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; and
(f) receipt by the Agent of evidence satisfactory to it of the payment
of all principal and interest on any loans outstanding under, and of all other
amounts payable under, the Existing Credit Agreements;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied no later than
October 16, 2001. The Agent shall promptly notify the Company and the Banks of
the Effective Date, and such notice shall be conclusive and binding on all
parties hereto. The Banks that are parties to either or both of the Existing
Credit Agreements, comprising the "REQUIRED BANKS" as defined in both of the
Existing Credit Agreements, and the Company agree to eliminate the requirement
under Section 2.09 of the each of the Existing Credit Agreements that notice of
optional termination of the commitments thereunder be given three Domestic
Business Days in advance, and further agree that the commitments under each of
the Existing Credit Agreements shall terminate in their entirety simultaneously
with and subject to the effectiveness of this Agreement and that the Company
shall be obligated to pay the accrued facility fees thereunder to but excluding
the date of such effectiveness.
24
SECTION 3.02. 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) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate amount
of the Commitments;
(c) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Company and
the Borrower (if other than the Company) contained in this Agreement (except for
the representations and warranties set forth in Sections 4.05 and 4.07 as to any
matter which has theretofore been disclosed in writing by the Company to the
Banks) shall be true in all material respects on and as of the date of such
Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Company and the Borrower (if other than the Company) on the date of such
Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section.
SECTION 3.03. First Borrowing by Each Eligible Subsidiary. The
obligation of each Bank to make a Loan on the occasion of the first Borrowing by
each Eligible Subsidiary is subject to the satisfaction of the following further
conditions:
(a) receipt by the Agent for the account of each Bank of a duly
executed Note of such Eligible Subsidiary, dated on or before the date of such
Borrowing complying with the provisions of Section 2.05;
(b) receipt by the Agent of an opinion of counsel for such Eligible
Subsidiary acceptable to the Agent, substantially in the form of Exhibit I
hereto and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request; and
(c) receipt by the Agent of all documents which it may reasonably
request relating to the existence of such Eligible Subsidiary, the corporate
authority for and the validity of the Election to Participate of such Eligible
Subsidiary, this Agreement and the Notes of such Eligible Subsidiary, and any
other matters relevant thereto, all in form and substance satisfactory to the
Agent.
The documents referred to in this Section 3.03 shall be delivered to the Agent
by an Eligible Subsidiary no later than the date of the first Borrowing by such
Eligible Subsidiary.
25
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Company 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.
SECTION 4.02. Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Company of this Agreement and its
Notes are within the Company's corporate powers, 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 Company or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the Company
or result in the creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Company and its Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Company, in each case enforceable in accordance with their respective terms
except as the same may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general principles of equity.
SECTION 4.04. Financial Information. (a) The consolidated balance sheet
of the Company and its Consolidated Subsidiaries as of December 31, 2000 and the
related consolidated statements of income and cash flows for the fiscal year
then ended, reported on by KPMG Peat Marwick LLP and set forth in the Company's
Annual Report to Shareholders for 2000 incorporated by reference in the
Company's 2000 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, 2001 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, 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).
SECTION 4.05. No Material Adverse Change. Since June 30, 2001, there
has been no material adverse change in the business, operations or financial
26
condition of the Company and its Consolidated Subsidiaries, considered as a
whole.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
if such failure or amendment has resulted, or there is a reasonable possibility
that it could result, in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Internal Revenue Code or (iii) incurred any
liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
SECTION 4.07. Litigation. Except as disclosed in the Company's 2000
Form 10-K and the Company's Latest Form 10-Q, there is no action, suit,
investigation or proceeding pending against, or to the knowledge of the Company
threatened against or affecting, the Company 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, operations or financial condition of the Company
and its Consolidated Subsidiaries, taken as a whole, or which in any manner
draws into question the validity of this Agreement or the Notes.
SECTION 4.08. Taxes. The Company has filed (or has obtained extensions
of the time by which it is required to file) all United States federal income
tax returns and all other material tax returns required to be filed by it and
has paid all taxes shown due on the returns so filed as well as all other
material taxes, assessments and governmental charges which have become due,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided.
SECTION 4.09. Full Disclosure. All information heretofore furnished by
the Company to the Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such information
hereafter furnished by the Company to the Agent or any Bank will be, true and
accurate in all material respects on the date as of which such information is
stated or certified. The Company has disclosed to the Banks in writing any and
all facts which materially and adversely affect or may affect (to the extent the
Company can now reasonably foresee), the business, operations or financial
condition of the Company and its Consolidated Subsidiaries, taken as a whole, or
the ability of the Company to perform its obligations under this Agreement.
27
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:
SECTION 5.01. Information. The Company will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after the end
of each fiscal year of the Company, a consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on in a manner acceptable to the Securities and
Exchange Commission by KPMG Peat Marwick LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Company, (i) a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
of the end of such quarter, (ii) the related consolidated statements of income
for such quarter and for the portion of the Company's fiscal year ended at the
end of such quarter and (iii) the related consolidated statement of cash flows
for the portion of the Company's fiscal year ended at the end of such quarter,
setting forth in cases (ii) and (iii) in comparative form the figures for the
corresponding quarter and the corresponding portion of the Company's previous
fiscal year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, generally accepted accounting principles and
consistency by the chief financial officer or the principal accounting officer
of the Company;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the principal accounting officer of the Company (i) setting
forth in reasonable detail the calculations required to establish whether the
Company was in compliance with the requirements of Section 5.05 on the date of
such financial statements and (ii) stating whether there exists on the date of
such certificate any Default and, if any Default then exists, setting forth the
details thereof and the action which the Company is taking or proposes to take
with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) stating
whether anything has come to their attention to cause them to believe that there
existed on the date of such statements any Default and (ii) confirming the
calculations set forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;
(e) forthwith upon the occurrence of any Default, a certificate of the
chief financial officer or the principal accounting officer of the Company
setting forth the details thereof and the action which the Company is taking or
proposes to take with respect thereto;
28
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and annual, quarterly or monthly reports which the
Company shall have filed with the Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section 4043
of ERISA) with respect to any Plan which might reasonably constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; or (iv) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement, if such failure or amendment has
resulted, or there is a reasonable possibility that it could result, in the
imposition of a Lien or the posting of a bond or other security under ERISA or
the Internal Revenue Code, a certificate of the chief financial officer, the
principal accounting officer or the treasurer of the Company setting forth
details as to such occurrence and action, if any, which the Company or
applicable member of the ERISA Group is required or proposes to take;
(i) promptly upon any change in the rating by Standard & Poor's Ratings
Services or Moody's Investors Service, Inc. of the Company's outstanding public
senior unsecured long-term debt securities or the Company's outstanding
commercial paper, a notice reporting such change and stating the date on which
such change was announced by the relevant rating agency; and
(j) from time to time such additional information regarding the
business, operations or financial condition of the Company and its Subsidiaries
as the Agent, at the request of any Bank, may reasonably request.
Information required to be delivered pursuant to clauses 5.01(a), 5.01(b),
5.01(f) or 5.01(g) above shall be deemed to have been delivered on the date on
which the Company provides notice to the Banks that such information has been
filed with the Securities and Exchange Commission and is available at
www.sec.gov. Such notice may be included in a certificate delivered pursuant to
clause 5.01(c); provided that the Company shall deliver paper copies of the
information referred to in clauses 5.01(a), 5.01(b), 5.01(f) or 5.01(g) to any
Bank which specifically requests such delivery.
29
SECTION 5.02. Maintenance of Property; Insurance. The Company will
keep, and will cause each Subsidiary to keep, all property useful and necessary
in its business in good working order and condition, ordinary wear and tear
excepted; will maintain, and will cause each Subsidiary to maintain (either in
the name of the Company or in such Subsidiary's own name) with financially sound
and reputable insurance companies, insurance on all their property in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies of established repute engaged in the same or
a similar business; and will furnish to the Banks, upon written request from the
Agent, such information as may be reasonably requested as to the insurance
carried.
SECTION 5.03. Conduct of Business and Maintenance of Existence. The
Company will preserve, renew and keep in full force and effect its corporate
existence and its rights, privileges and franchises necessary or desirable in
the normal conduct of business.
SECTION 5.04. Compliance with Laws. The Company will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is contested in good faith by
appropriate proceedings.
SECTION 5.05. Earnings to Interest Expense Ratio. At the end of each
fiscal quarter of the Company, the ratio of (x) Consolidated Earnings Before
Interest and Taxes for the four fiscal quarters then ended to (y) Gross Interest
Expense for the four fiscal quarters then ended will not be less than 6.50:1.
SECTION 5.06. Negative Pledge. Neither the Company nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) Liens existing on the date hereof securing Debt outstanding on the
date hereof in an aggregate principal amount not exceeding $25,000,000;
(b) any Lien existing on any asset of any corporation at the time such
corporation becomes a Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset concurrently with or within 90
days after the acquisition thereof;
(d) any Lien on any asset of any corporation existing at the time such
corporation is merged or consolidated with or into the Company or a Subsidiary
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof by
the Company or a Subsidiary and not created in contemplation of such
acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
30
clauses of this Section, provided that such Debt is not increased and is not
secured by any additional assets;
(g) any Lien arising pursuant to any order of attachment or similar
legal process arising in connection with court proceedings so long as the
execution or other enforcement thereof is effectively stayed and the claims
secured thereby are being contested in good faith by appropriate proceedings;
(h) Liens incidental to the conduct of its business or the ownership of
its assets which (i) do not secure Debt or Derivatives Obligations and (ii) do
not in the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business;
(i) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash equivalents
subject to such Liens may at no time exceed $25,000,000; and
(j) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal amount at any time outstanding
not to exceed 5% of Consolidated Assets.
SECTION 5.07. Consolidations, Mergers and Sales of Assets. The Company
will not (i) consolidate or merge with or into any other Person or (ii) sell,
lease or otherwise transfer, directly or indirectly, all or substantially all of
the assets of the Company and its Subsidiaries, taken as a whole, to any other
Person; provided that the Company may merge with a Subsidiary if (A) the Company
is the corporation surviving such merger and (B) immediately after giving effect
to such merger, no Default shall have occurred and be continuing.
SECTION 5.08. Material Subsidiary Cash Flow. The Company will not, and
will not permit any Material Subsidiary to, enter into any arrangement which
restricts the ability of any Material Subsidiary, directly or indirectly, to
make funds available to the Company, whether by way of dividend or other
distribution, advance or otherwise.
SECTION 5.09. Use of Proceeds. The proceeds of Loans hereunder will be
used by the Borrowers for their general corporate purposes, including without
limitation, any purchase, redemption, retirement or acquisition of outstanding
shares of capital stock of the Company ("Stock Repurchases"). Except for
permitted Stock Repurchases referred to in the immediately preceding sentence,
none of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any "margin
stock" within the meaning of Regulation U.
31
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) any principal of any Loan shall not be paid when due, or any
interest, any fees or any other amount payable hereunder shall not be paid
within five days of the due date thereof;
(b) the Company shall fail to observe or perform any covenant
contained in Sections 5.05 to 5.09, inclusive;
(c) any Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 30 days after written notice thereof has been given to the
Company by the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made
or deemed to have been made by any Borrower 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);
(e) the Company or any Subsidiary shall fail to make any payment
in respect of any Material Debt or any Material Financial Obligations when due
or within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of such Debt
or any Person acting on such holder's behalf to accelerate the maturity thereof;
(g) the Company or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Company or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief
32
shall be entered against the Company or any Material Subsidiary under the
federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due
(including any approved extensions) an amount or amounts aggregating in excess
of $50,000,000 which it shall have become liable to pay under Title IV of ERISA;
or notice of intent to terminate a Material Plan shall be filed under Title IV
of ERISA by any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any Material Plan
must be terminated; or there shall occur a complete or partial withdrawal from,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which could cause one or more members of the
ERISA Group to incur a current payment obligation in excess of $50,000,000;
(j) a judgment or order for the payment of money in excess of
$50,000,000 shall be rendered against the Company or any Material Subsidiary and
such judgment or order shall continue unsatisfied and unstayed for a period of
30 days; or
(k) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
30% or more of the outstanding shares of voting stock of the Company; or, during
any two-year period, the individuals who were serving on the board of directors
of the Company at the beginning of such period or who were nominated for
election or elected to such board during such period with the affirmative vote
of at least two-thirds of such individuals still in office cease to constitute a
majority of such board;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Company
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans, by notice to the Company declare the Notes (together with
accrued interest thereon and all accrued fees and other amounts payable by any
Borrower hereunder) to be, and the Notes shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower; provided that in the case of
any of the Events of Default specified in clause (g) or (h) above with respect
to any Borrower, without any notice to any Borrower or any other act by the
Agent or the Banks, the Commitments shall thereupon terminate and the Notes
(together with accrued interest thereon and all accrued fees and other amounts
payable by any Borrower hereunder) shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Borrower.
33
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Company under Section 6.01(c) promptly upon being requested to do so by any Bank
and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENT
SECTION 7.01. 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.
SECTION 7.02. Agent and Affiliates. The Chase Manhattan Bank 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 The Chase Manhattan Bank and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with any Borrower or any
Subsidiary or affiliate of any Borrower as if it were not the Agent hereunder.
SECTION 7.03. 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 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for any Borrower), 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 7.05. 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 when expressly
required hereby, all the 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 any Borrower; (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. Without limiting the generality
of the foregoing, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or
34
other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrowers) 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 its role as Agent hereunder or any action
taken or omitted by such indemnitees in connection therewith.
SECTION 7.07. 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 7.08. 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 or of any State thereof and having
a combined capital and surplus of at least $500,000,000. 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 7.09. Agent's Fee. The Company shall pay to the Agent for its
own account fees in the amounts and at the times previously agreed upon between
the Company and the Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Fixed Rate Loans:
35
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference Banks
in the London Interbank market for such Interest Period, or
(b) in the case of a Euro-Dollar Borrowing, Banks having 50% or more
of the aggregate amount of the Commitments advise the Agent that the London
Interbank Offered Rate as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their Euro-Dollar Loans for such
Interest Period,
the Agent shall forthwith give notice thereof to the Borrowers and the Banks,
whereupon until the Agent notifies the Borrowers that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make Euro-Dollar Loans or to continue or convert outstanding Loans as or into
Euro-Dollar Loans shall be suspended and (ii) each outstanding Euro-Dollar Loan
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless a Borrower notifies the Agent at
least one Domestic Business Day 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, (i) if such Fixed Rate Borrowing is a Euro-Dollar
Borrowing, such Borrowing shall instead be made as a Base Rate Borrowing and
(ii) if such Fixed Rate Borrowing is a Competitive Bid LIBOR Borrowing, the
Competitive Bid LIBOR Loans comprising such Borrowing shall bear interest for
each day from and including the first day to but excluding the last day of the
Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. 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 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 to any Borrower
and such Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and such Borrower, whereupon until such Bank notifies
such Borrower and the Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans to such Borrower, 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 such 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 8.03. Increased Cost and Reduced Return. (a) If on or after (x)
the date hereof, in the case of any Committed Loan or any obligation to make
36
Committed Loans or (y) the date of the related Competitive Bid Quote, in the
case of any Competitive Bid Loan, 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 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 2.17), special deposit, insurance assessment 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 London interbank market any
other condition affecting its Fixed Rate Loans, its Notes 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 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, on or 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, which shall be deemed to be a change in the
interpretation and administration of such requirements), 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 on or after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable 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
37
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 8.04. Taxes. (a) For the purposes of this Section 8.04, the
following terms have the following meanings:
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by any
Borrower or 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 up to the rate (if any) at which United States
withholding tax would apply to such payments to such Bank 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 any Borrower or 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 any Borrower
or 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) any Borrower or the Company shall make such
deductions, (iii) any Borrower or the Company shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law and (iv) any Borrower or the Company shall furnish to the Agent,
at its address referred to in Section 11.01, 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.
(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
38
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 W-8BEN or W-8ECI, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
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 8.04(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 8.04
(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 Borrowers shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.
(f) If any Borrower or 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 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans to any
Borrower has been suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03(a) or 8.04 with respect to its
Euro-Dollar Loans and a Borrower shall, by at least three 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, unless and until such
Bank notifies such Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:
(a) all Loans to such Borrower which would otherwise be made by such
Bank as Euro-Dollar Loans shall be made instead as Base Rate Loans (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans to such Borrower has been
repaid, all payments of principal which would otherwise be applied to repay such
Euro-Dollar Loans shall be applied to repay its Base Rate Loans to such Borrower
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 Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other Banks.
39
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES
Each Eligible Subsidiary shall be deemed by the execution and delivery
of its Election to Participate to have represented and warranted as of the date
thereof that:
SECTION 9.01. Corporate Existence and Power. It is a corporation duly
incorporated, 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 then conducted.
SECTION 9.02. Corporate and Governmental Authorization; Contravention.
The execution and delivery by it of its Election to Participate and its Notes,
and the performance by it of this Agreement and its Notes, are within its
corporate powers, 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 its certificate of incorporation
or by-laws or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or such Eligible Subsidiary or result in the
creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries.
SECTION 9.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of such Eligible Subsidiary and its Notes, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of such Eligible Subsidiary, in each case enforceable in accordance
with their respective terms except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and by general
principles of equity.
SECTION 9.04. Taxes. Except as disclosed to the Banks in writing prior
to the delivery of such Election to Participate, there is no income, stamp or
other tax of any country, or any taxing authority thereof or therein, imposed by
or in the nature of withholding or otherwise, which is imposed on any payment to
be made by such Eligible Subsidiary pursuant hereto or on its Notes, or is
imposed on or by virtue of the execution, delivery or enforcement of its
Election to Participate, this Agreement or its Notes.
ARTICLE 10
GUARANTY
SECTION 10.01. The Guaranty. The Company hereby unconditionally
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on each Note issued
by any Eligible Subsidiary pursuant to this Agreement, and the full and punctual
payment of all other amounts payable by any Eligible Subsidiary under this
Agreement. Upon failure by any Eligible Subsidiary to pay punctually any such
40
amount, the Company shall forthwith on demand pay the amount not so paid at the
place and in the manner specified in this Agreement.
SECTION 10.02. Guaranty Unconditional. The obligations of the Company
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of any Eligible
Subsidiary under this Agreement or any Note, by operation of law or
otherwise;
(ii) any modification or amendment of or supplement to
this Agreement or any Note;
(iii) any release, impairment, non-perfection or invalidity
of any direct or indirect security for any obligation of any Eligible
Subsidiary under this Agreement or any Note;
(iv) any change in the corporate existence, structure or
ownership of any Eligible Subsidiary, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Eligible
Subsidiary or its assets, or any resultant release or discharge of the
obligations of any Eligible Subsidiary hereunder or under any Note;
(v) the existence of any claim, set-off or other rights
which the Company may have at any time against any Eligible Subsidiary,
the Agent, any Bank or any other Person, whether in connection herewith
or any unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim;
(vi) any invalidity or unenforceability relating to or
against any Eligible Subsidiary for any reason of this Agreement or any
Note, or any provision of applicable law or regulation purporting to
prohibit the payment by any Eligible Subsidiary of the principal of or
interest on any Note or any other amount payable by it under this
Agreement; or
(vii) any other act or omission to act or delay of any kind
by any Eligible Subsidiary, the Agent, any Bank or any other Person or
any other circumstance whatsoever which might, but for the provisions
of this paragraph, constitute a legal or equitable discharge of or
defense to the Company's obligations hereunder.
SECTION 10.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. The Company's obligations hereunder shall remain in full
force and effect until the Commitments shall have terminated and the principal
of and interest on the Notes and all other amounts payable by the Company and
each Eligible Subsidiary under this Agreement shall have been paid in full. If
at any time any payment of any principal of or interest on any Note or any other
amount payable by any Eligible Subsidiary under this Agreement is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of any Eligible Subsidiary or otherwise, the Company's
obligations hereunder with
41
respect to such payment shall be reinstated at such time as though such payment
had been due but not made at such time.
SECTION 10.04. Waiver by the Company. The Company irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any Eligible Subsidiary or any other Person.
SECTION 10.05. No Subrogation. If the Company makes any payment under
this Article 10 in respect of any obligation of an Eligible Subsidiary, the
Company shall not be subrogated to the rights of the holder of such obligation
against such Eligible Subsidiary with respect to such payment.
SECTION 10.06. Stay of Acceleration. In the event that acceleration of
the time for payment of any amount payable by any Eligible Subsidiary under this
Agreement or the Notes is stayed upon the insolvency, bankruptcy or
reorganization of such Eligible Subsidiary, all such amounts otherwise subject
to acceleration under the terms of this Agreement shall nonetheless be payable
by the Company hereunder forthwith on demand by the Agent made at the request of
the Required Banks.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. 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: (x)
in the case of any Borrower or the Agent, at its address, facsimile number or
telex number set forth on the signature pages hereof (or, in the case of an
Eligible Subsidiary, its Election to Participate), (y) in the case of any Bank,
at its address, facsimile number or telex number set forth in its Administrative
Questionnaire or (z) 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 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 11.02. 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.
42
SECTION 11.03. Expenses; Indemnification. (a) The Company shall pay (i)
all out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of special counsel for the Agent, in connection with the
preparation 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 or any Bank,
including (without duplication) the reasonable 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.
SECTION 11.04. 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 the Note of any Borrower 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 the Note of such Borrower held by
such other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Notes of such Borrower 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 of such
Borrower 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 a Borrower other than its
indebtedness hereunder. Each Borrower 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 such Borrower in the amount of such participation.
SECTION 11.05. 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:
(a) unless signed by all the Banks, (i) increase or decrease the
Commitment of any Bank (except as contemplated by Section 2.19 or for a ratable
43
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 termination of any Commitment,
(iv) change the definition of Required Banks, the percentages specified in
Sections 6.01 and 8.01 or this Section 11.05 or (v) change the provisions of
Article 10;
(b) unless signed by a Designated Bank or its Designating Bank, (i)
subject such Designated Bank to any additional obligation, (ii) affect its
rights hereunder (unless the rights of all the Banks hereunder are similarly
affected) or (iii) change this clause 11.05(b), 11.05(c); or
(c) unless signed by an Eligible Subsidiary, (w) subject such Eligible
Subsidiary to any additional obligation, (x) increase the principal of or rate
of interest on any outstanding Loan of such Eligible Subsidiary, (y) accelerate
the stated maturity of any outstanding Loan of such Eligible Subsidiary or (z)
change this proviso.
SECTION 11.06. 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 no Borrower may 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
Borrowers and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrowers 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
Borrowers 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 11.05 without the consent of the Participant. The
Borrowers agree 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 J hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of
44
the Agent and (so long as at the time no Event of Default exists) the Company,
which consents shall not be unreasonably withheld or delayed; 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, but the Assignee
and the transferor Bank shall provide prompt notice of such assignment, together
with information concerning addresses and related information with respect to
the Assignee, to the Agent; and provided further that such assignment may, but
need not, include rights of the transferor Bank in respect of outstanding
Competitive Bid Loans. 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 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 Borrowers shall make
appropriate arrangements so that, if required, new Notes are 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 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 2.18.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Notes 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 8.03 or 8.04 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 8.02, 8.03 or 8.04 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.
(f) If any Reference Bank transfers its Notes to an unaffiliated
institution, the Agent shall, in consultation with the Company and with the
consent of the Required Banks, appoint another Bank to act as a Reference Bank
hereunder.
SECTION 11.07. Designated Lenders. (a) Subject to the provisions of
this subsection (a), any Bank may at any time designate an Eligible Designee to
provide all or a portion of the Loans to be made by such Bank pursuant to this
Agreement; provided that such designation shall not be effective unless the
Company and the Agent consent thereto (which consents shall not be unreasonably
withheld). When a Bank and its Eligible Designee shall have signed an agreement
substantially in the form of Exhibit K hereto (a "DESIGNATION AGREEMENT") and
the Company and the Agent shall have signed their respective consents thereto,
such Eligible Designee shall become a Designated Lender for purposes of this
Agreement. The Designating Bank shall thereafter have the right
45
to permit such Designated Lender to provide all or a portion of the Loans to be
made by such Designating Bank pursuant to Section 2.01 or 2.03, and the making
of such Loans or portion thereof shall satisfy the obligation of the Designating
Bank to the same extent, and as if, such Loans or portion thereof were made by
the Designating Bank. As to any Loans or portion thereof made by it, each
Designated Lender shall have all the rights that a Bank making such Loans or
portion thereof would have had under this Agreement and otherwise; provided that
(x) its voting rights under this Agreement shall be exercised solely by its
Designating Bank and (y) its Designating Bank shall remain solely responsible to
the other parties hereto for the performance of such Designated Lender's
obligations under this Agreement, including its obligations in respect of the
Loans or portion thereof made by it. No additional Note shall be required to
evidence the Loans or portion thereof made by a Designated Lender; and the
Designating Bank shall be deemed to hold its Note as agent for its Designated
Lender to the extent of the Loans or portion thereof funded by such Designated
Lender. Each Designating Bank shall act as agent for its Designated Lender and
give and receive notices and other communications on its behalf. Any payments
for the account of any Designated Lender shall be paid to its Designating Bank
as agent for such Designated Lender and neither the Company nor the Agent shall
be responsible for any Designating Bank's application of such payments. In
addition, any Designated Lender may, with notice to (but without the prior
written consent of) the Company and the Agent, (i) assign all or portions of its
interest in any Loans to its Designating Bank or to any financial institutions
consented to by the Company and the Agent that provide liquidity and/or credit
facilities to or for the account of such Designated Lender to support the
funding of Loans or portions thereof made by it and (ii) disclose on a
confidential basis any non-public information relating to its Loans or portions
thereof to any rating agency, commercial paper dealer or provider of any
guarantee, surety, credit or liquidity enhancement to such Designated Lender.
(b) Each party to this Agreement agrees that it will not institute
against, or join any other person in instituting against, any Designated Lender
any bankruptcy, insolvency, reorganization or other similar proceeding under any
federal or state bankruptcy or similar law, for one year and a day after all
outstanding senior indebtedness of such Designated Lender is paid in full. The
Designating Bank for each Designated Lender agrees to indemnify, save, and hold
harmless each other party hereto for any loss, cost, damage and expense arising
out of its inability to institute any such proceeding against such Designated
Lender. This subsection (b) shall survive the termination of this Agreement.
SECTION 11.08. 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 11.09. Governing Law; Submission to Jurisdiction; Service of
Process. This Agreement, each Election to Participate, each Election to
Terminate and each Note shall be governed by and construed in accordance with
the laws of the State of New York. Each Borrower 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
46
the transactions contemplated hereby. Each Borrower 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 such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum. Each Borrower hereby appoints CT Corporation System
its authorized agent to accept and acknowledge service of any and all processes
which may be served in any suit, action or proceeding of the nature referred to
in this Section 11.09 and consents to process being served in any such suit,
action or proceeding upon CT Corporation System in any manner or by the mailing
of a copy thereof by registered or certified mail, postage prepaid, return
receipt requested, to such Borrower's address referred to in Section 11.01; and
(d) agrees that such service (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and (ii)
shall, to the fullest extent permitted by law, be taken and held to be valid
personal service upon and personal delivery to it. A copy of any summons or
complaint served on an Eligible Subsidiary pursuant to the foregoing shall be
sent to the Company by registered or certified mail. Each Eligible Subsidiary
represents and warrants that CT Corporation System has agreed in writing to
accept such appointment and that true copies of such acceptance will be
furnished to the Agent prior to or concurrently with delivery of such Eligible
Subsidiary's Election to Participate. Nothing in this Section 11.09 shall affect
the right of any Bank to serve process in any manner permitted by law or limit
the right of any Bank to bring proceedings against the Company or any Eligible
Subsidiary in the courts of any jurisdiction or jurisdictions.
SECTION 11.10. Counterparts; Integration. 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.
SECTION 11.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENT
AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
47
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.
THE GILLETTE COMPANY
By:
---------------------------------
Name:
Title:
Address: Prudential Tower Bldg
Suite 4800, Boston, MA 02199
Facsimile Number: (617) 421-7699
THE CHASE MANHATTAN BANK, as Agent
By:
---------------------------------
Name:
Title:
Address: Loan & Agency Services
1 Chase Manhattan Plaza - 8th Floor
New York, New York 10081
Facsimile Number: (212) 552-5662
MANAGING AGENTS
BANK OF AMERICA, N.A.
By:
---------------------------------
Name:
Title:
CITIBANK, N.A.
By:
---------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By:
---------------------------------
Name:
Title:
INTESABCI, NEW YORK BRANCH
By:
---------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
---------------------------------
Name:
Title:
BANK ONE, N.A., CHICAGO BRANCH
By:
---------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By:
---------------------------------
Name:
Title:
HSBC BANK USA
By:
---------------------------------
Name:
Title:
DEUTSCHE BANK AG, NEW YORK
BRANCH
By:
---------------------------------
Name:
Title:
PARTICIPANTS
STATE STREET BANK & TRUST
COMPANY
By:
---------------------------------
Name:
Title:
SOCIETE GENERALE
By:
---------------------------------
Name:
Title:
BANCO SANTANDER CENTRAL
HISPANO, S.A., NEW YORK
BRANCH
By:
---------------------------------
Name:
Title:
MELLON BANK, N.A.
By:
---------------------------------
Name:
Title:
UBS AG, STAMFORD BRANCH
By:
---------------------------------
Name:
Title:
ING BARINGS (US) CAPITAL LLC
By:
---------------------------------
Name:
Title:
THE ROYAL BANK OF SCOTLAND
By:
---------------------------------
Name:
Title:
COMMITMENT SCHEDULE
BANK COMMITMENT
ADMINISTRATIVE AGENT
The Chase Manhattan Bank $ 175,000,000
MANAGING AGENTS
Bank of America, N.A $ 125,000,000
Citibank, N.A $ 125,000,000
Credit Suisse First Boston $ 125,000,000
IntesaBci, New York Branch $ 125,000,000
Fleet National Bank $ 125,000,000
Bank One, N.A., Chicago Branch $ 125,000,000
ABN AMRO Bank N.V $ 125,000,000
HSBC Bank USA $ 125,000,000
Deutsche Bank AG, New York Branch $ 125,000,000
PARTICIPANTS
State Street Bank & Trust Company $ 50,000,000
Societe Generale $ 50,000,000
Banco Santander Central Hispano, S.A., New York $ 50,000,000
Branch
Mellon Bank, N.A $ 50,000,000
UBS AG, Stamford Branch $ 50,000,000
ING Barings (US) Capital LLC $ 50,000,000
The Royal Bank of Scotland $ 50,000,000
--------------
TOTAL: $1,650,000,000
==============
EXHIBIT A
NOTE
New York, New York
, 200_
For value received, [name of Borrower], a [jurisdiction of
incorporation] 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 The Chase
Manhattan Bank, 1 Chase Manhattan Plaza, New York, New York.
All Loans made by the Bank, the respective types and maturities 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 364-Day Credit
Agreement dated as of October 16, 2001 among The Gillette Company, the Banks
listed on the signature pages thereof and The Chase Manhattan Bank, 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.
The Gillette Company has, pursuant to the provisions of the Credit
Agreement, unconditionally guaranteed the payment in full of the principal of
and interest on this note.*
- ----------
1 To be deleted in case of Notes executed and delivered by the
Company.
[NAME OF BORROWER]
By:
---------------------------------
Title:
A-2
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
AMOUNT OF
AMOUNT OF TYPE OF PRINCIPAL MATURITY NOTATION
DATE LOAN LOAN REPAID DATE MADE BY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-3
EXHIBIT B
Form of Competitive Bid Quote Request
[Date]
To: The Chase Manhattan Bank (the "Agent")
From: [Name of Borrower]
Re: 364-Day Credit Agreement (the "Credit Agreement") dated as of
October 16, 2001 among The Gillette Company, the Banks listed
on the signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Competitive Bid Quotes for the following proposed Competitive
Bid Borrowing(s):
Date of Borrowing:
------------------------------
Principal Amount* Interest Period** Maturity Date
- ----------------- ----------------- -------------
$
Such Competitive Bid Quotes should offer a Competitive Bid [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
[NAME OF BORROWER]
By:
---------------------------------
Title:
- ----------
1 Amount must be $15,000,000 or a larger multiple of $1,000,000.
2 Not less than one month (LIBOR Auction) or not less than 15 days
(Absolute Rate Auction), subject to the provisions of the definition of Interest
Period.
EXHIBIT C
Form of Invitation for Competitive Bid Quotes
To: [Name of Bank]
Re: Invitation for Competitive Bid Quotes to [Name of Borrower] (the
"Borrower")
Pursuant to Section 2.03 of the 364-Day Credit Agreement dated as of
October 16, 2001 among The Gillette Company, the Banks parties thereto and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you to
submit Competitive Bid Quotes to the Borrower for the following proposed
Competitive Bid Borrowing(s):
Date of Borrowing:
-----------------------
Principal Amount Interest Period Maturity Date
- ---------------- --------------- -------------
$
Such Competitive Bid Quotes should offer a Competitive Bid [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30
A.M.] (New York City time) on [date].
THE CHASE MANHATTAN BANK
By:
---------------------------------
Authorized Officer
EXHIBIT D
Form of Competitive Bid Quote
To: The Chase Manhattan Bank, as Agent
Re: Competitive Bid Quote to [Name of Borrower] (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 20__, we hereby make the following Competitive Bid Quote on the
following terms:
1. Quoting Bank:______________________________________________
2. Person to contact at Quoting Bank:
___________________________________________________________
3. Date of Borrowing:____________________*
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
COMPETITIVE
INTEREST BID [ABSOLUTE
PRINCIPAL AMOUNT** PERIOD*** [MARGIN]**** RATE]*****
$
[Provided, that the aggregate principal amount of Competitive Bid Loans for
which the above offers may be accepted shall not exceed $____________.]**
__________
1 As specified in the related Invitation.
2 Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids must be
made for $5,000,000 or a larger multiple of $1,000,000.
3 Not less than one month or not less than 15 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
4 Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (to the nearest 1/10,000 of
1%) and specify whether "PLUS" or "MINUS".
5 Specify rate of interest per annum (to the nearest 1/10,000 of 1%).
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the 364-Day Credit
Agreement dated as of October 16, 2001 among The Gillette Company, the Banks
listed on the signature pages thereof and yourselves, as Agent, irrevocably
obligates us to make the Competitive Bid Loan(s) for which any offer(s) are
accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated: By:
----------------- -------------------------------
Authorized Officer
D-2
EXHIBIT E
OPINION OF
COUNSEL FOR THE COMPANY
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o The Chase Manhattan Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
I am Senior Attorney of The Gillette Company (the "Company"), and I am
rendering this opinion pursuant to Section 3.01(c) of the 364-Day Credit
Agreement dated as of October 16, 2001 among the Company, the banks parties
thereto and The Chase Manhattan Bank, as Agent (the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein as therein defined.
I have examined or caused to be examined by counsel retained by or on
the staff of the Company, among other things, originals or copies, certified or
otherwise identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted or
have had conducted such other investigations of fact and law as I have deemed
necessary or advisable for purposes of this opinion.
I am admitted to practice in The Commonwealth of Massachusetts. No
opinion is expressed herein with respect to or as to the effect of any laws
other than the laws of The Commonwealth of Massachusetts, the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware.
Upon the basis of the foregoing, I am of the opinion that:
1. The Company 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.
2. The execution, delivery and performance by the Company of the Credit
Agreement and the Notes issued by it are within the Company's corporate powers,
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 Company
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Company and known to me or, to the best of my knowledge, result
in the creation or imposition of any Lien on any asset of the Company or any of
its Subsidiaries.
3. The provision in Section 11.09 of the Credit Agreement that the
Credit Agreement and each Note shall be construed in accordance with and
governed by the law of the State of New York is a valid choice of law provision
under Massachusetts law and should be respected by a court sitting in
Massachusetts.
4. If a court sitting in Massachusetts were to apply Massachusetts law
as the law governing the Credit Agreement and the Notes, the Credit Agreement
would constitute a valid and binding agreement of the Company and the Notes
issued by it would constitute valid and binding obligations of the Company, in
each case enforceable in accordance with their respective terms.
5. Except as disclosed in the Company's 2000 Form 10-K and the
Company's Latest Form 10-Q, there is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against or affecting, the
Company 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, operations or financial condition of the Company 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.
My opinion in paragraph 4 above as to the enforceability of the Credit
Agreement and the Notes issued by the Company is subject to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights in general, usury laws and the general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). With respect to the foregoing, I express no
opinion, however, as to the enforceability of Section 11.03(b) of the Credit
Agreement to the extent the rights to indemnification provided for therein are
violative of any law, rule or regulation (including any federal or state
securities law, rule or regulation) or public policy.
To the extent that the obligations of the Company may be dependent upon
such matters, I assume for purposes of this opinion that each Bank is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation; and that the Credit Agreement has been duly
authorized, executed and delivered by the Banks and constitutes the legal, valid
and binding obligation of the Banks, enforceable against the Banks in accordance
with its terms. I do not express any opinion as to the effect of the compliance
by any of the Banks with any state or federal laws or as to the regulatory
status or nature of the business of any of the Banks.
E-2
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 my prior written consent.
Very truly yours,
E-3
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o The Chase Manhattan Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
We have participated in the preparation of the 364-Day Credit Agreement
(the "Credit Agreement") dated as of October 16, 2001 among The Gillette
Company, a Delaware corporation (the "Company"), the Banks parties thereto (the
"Banks") and The Chase Manhattan Bank, as Agent (the "Agent"), and have acted as
special counsel for the Agent for the purpose of rendering this opinion pursuant
to Section 3.01(d) 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.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Company of the Credit
Agreement and its Notes are within the Company's corporate powers and have been
duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement of
the Company and each Note issued by it constitutes a valid and binding
obligation of the Company, 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, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware. 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.
Very truly yours,
F-2
EXHIBIT G
FORM OF ELECTION TO PARTICIPATE
[Date]
THE CHASE MANHATTAN BANK, as Agent
for the Banks named in the 364-Day
Credit Agreement dated as of October 16, 2001
among The Gillette Company,
such Banks and such Agent (as amended
from time to time, the "Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a [jurisdiction of
incorporation] corporation, hereby elects to be an Eligible Subsidiary for
purposes of the Credit Agreement, effective from the date hereof until an
Election to Terminate shall have been delivered on behalf of the undersigned in
accordance with the Credit Agreement. The undersigned confirms that the
representations and warranties set forth in Article 9 of the Credit Agreement
are true and correct as to the undersigned as of the date hereof, and the
undersigned hereby agrees to perform all the obligations of an Eligible
Subsidiary under, and to be bound in all respects by the terms of, the Credit
Agreement, including without limitation Sections 11.09 and 11.11 thereof, as if
the undersigned were a signatory party thereto.
[Tax disclosure pursuant to Section 9.04, if any]
The address to which all notices to the undersigned Eligible Subsidiary
under the Credit Agreement should be directed is: . This
instrument shall be construed in accordance with and governed by the laws of the
State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By:
---------------------------------
Title:
The undersigned hereby confirms that [name of Eligible Subsidiary] is
an Eligible Subsidiary for purposes of the Credit Agreement described above.
THE GILLETTE COMPANY
By:
---------------------------------
Title:
Receipt of the above Election to Participate is hereby acknowledged on
and as of the date set forth above.
THE CHASE MANHATTAN
BANK, as Agent
By:
---------------------------------
Title:
G-2
EXHIBIT H
FORM OF ELECTION TO TERMINATE
[Date]
THE CHASE MANHATTAN BANK, as
Agent for the Banks named in the
364-Day Credit Agreement dated as of
October 16, 2001 among The Gillette
Company, such Banks and such Agent
(as amended from time to time,
the "Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a [jurisdiction of
incorporation] corporation, hereby elects to terminate its status as an Eligible
Subsidiary for purposes of the Credit Agreement, effective as of the date
hereof. The undersigned hereby represents and warrants that all principal and
interest on all Notes of the undersigned and all other amounts payable by the
undersigned pursuant to the Credit Agreement have been paid in full on or prior
to the date hereof. Notwithstanding the foregoing, this Election to Terminate
shall not affect any obligation of the undersigned under the Credit Agreement or
under any Note heretofore incurred.
This instrument shall be construed in accordance with and governed by
the laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE
SUBSIDIARY]
By:
---------------------------------
Title:
The undersigned hereby confirms that the status of [name of Eligible
Subsidiary] as an Eligible Subsidiary for purposes of the Credit Agreement
described above is terminated as of the date hereof.
THE GILLETTE COMPANY
By:
---------------------------------
Title:
Receipt of the above Election to Terminate is hereby acknowledged on
and as of the date set forth above.
THE CHASE MANHATTAN
BANK, as Agent
By:
---------------------------------
Title:
H-2
EXHIBIT I
OPINION OF
COUNSEL FOR THE BORROWER
(BORROWINGS BY ELIGIBLE SUBSIDIARIES)
[date]
To the Banks and the Agent
Referred to Below
c/o The Chase Manhattan Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
I am counsel to [name of Eligible Subsidiary, jurisdiction of
incorporation] (the "Borrower") and give this opinion pursuant to Section
3.03(b) of the 364-Day Credit Agreement (as amended to the date hereof, the
"Credit Agreement") dated as of October 16, 2001 among The Gillette Company (the
"Company"), the banks parties thereto and The Chase Manhattan Bank, as Agent.
Terms defined in the Credit Agreement are used herein as therein defined.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation validly existing and in good standing
under the laws of [jurisdiction of incorporation] and is a Substantially-Owned
Consolidated Subsidiary of the Company.
2. The execution and delivery by the Borrower of its Election to
Participate and its Notes and the performance by the Borrower of the Credit
Agreement and its Notes are within the Borrower's corporate powers, 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.
3. The execution and delivery by the Borrower of its Election to
Participate and its Notes and the performance by the Borrower of the Credit
Agreement and its Notes do not contravene, or constitute a default under, any
provision of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or any of its Subsidiaries and known to me
or, to the best of my knowledge, result in the creation or imposition of any
Lien on any asset of the Company or any of its Subsidiaries.(1)
4. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and its Notes constitute valid and binding obligations of the
Borrower, in each case enforceable in accordance with their respective terms,
except as the same may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general principles of equity.
Very truly yours,
- ----------
(1) The opinion in this paragraph may be given by Counsel for the
Company.
I-2
EXHIBIT J
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of_________, 200_ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), [THE GILLETTE COMPANY (the "Company")
and THE CHASE MANHATTAN BANK, as Agent (the "Agent").]
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the 364-Day Credit Agreement dated as of October 16,
2001 among the Company, the Assignor and the other Banks party thereto, as
Banks, and the Agent (as amended and in effect on the date hereof, the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans in an aggregate principal amount at any time
outstanding not to exceed $__________;
WHEREAS, Committed Loans made 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 Committed
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.
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 Committed
Loans made by the Assignor outstanding at the date hereof. Upon the execution
and delivery hereof by the Assignor, the Assignee, the Company 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.* It is
understood that commitment and/or facility 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.
[SECTION 4. Consent of the Company and the Agent. This Agreement is
conditioned upon the consent of the Company and the Agent pursuant to Section
11.06(c) of the Credit Agreement. The execution of this Agreement by the Company
and the Agent is evidence of this consent. Pursuant to Section 11.06(c) the
Borrower agrees to execute and deliver a Note [and to cause each Eligible
Subsidiary 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 any
Borrower, or the validity and enforceability of the obligations of any 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 Borrowers.
- ----------
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.
2 Consent is required if the Assignee is not an affiliate of the
Assignor and was not a Bank immediately prior to the assignment. Consent of the
Company is not required if an Event of Default exists.
J-2
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.
[ASSIGNOR]
By:
---------------------------------
Title:
[ASSIGNEE]
By:
---------------------------------
Title:
[THE GILLETTE COMPANY]
By:
---------------------------------
Title:
THE CHASE MANHATTAN
BANK, as Agent
By:
---------------------------------
Title:
J-3
EXHIBIT K
DESIGNATION AGREEMENT
dated as of________________,_____
Reference is made to the 364-Day Credit Agreement dated as of October
16, 2001 (as amended from time to time, the "CREDIT AGREEMENT") among THE
GILLETTE COMPANY, a Delaware corporation (the "COMPANY"), the Lenders party
thereto, THE CHASE MANHATTAN BANK, as Agent (the "AGENT"). Terms defined in the
Credit Agreement are used herein with the same meaning.
_________________ (the "DESIGNATOR") and________________ (the
"DESIGNEE") agree as follows:
1. The Designator designates the Designee as its Designated Lender
under the Credit Agreement and the Designee accepts such designation.
2. The Designator makes no representations or warranties and assumes
no responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Designee (i) confirms that it is an Eligible Designee; (ii)
appoints and authorizes the Designator as its administrative agent and
attorney-in-fact and grants the Designator an irrevocable power of attorney to
receive payments made for the benefit of the Designee under the Credit Agreement
and to deliver and receive all communications and notices under the Credit
Agreement, if any, that the Designee is obligated to deliver or has the right to
receive thereunder; (iii) acknowledges that the Designator retains the sole
right and responsibility to vote under the Credit Agreement, including, without
limitation, the right to approve any amendment or waiver of any provision of the
Credit Agreement, and (iv) agrees that the Designee shall be bound by all such
votes, approvals, amendments and waivers and all other agreements of the
Designator pursuant to or in connection with the Credit Agreement, all subject
to Section 11.05(b) of the Credit Agreement.
4. The Designee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements referred
to in Article 4 or delivered pursuant to Article 5 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Designation Agreement and (ii) agrees
that it will, independently and without reliance upon the Agent, the Designator
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 it may be permitted to take under the Credit Agreement.
5. Following the execution of this Designation Agreement by the
Designator and the Designee and the consent hereto by the Company, it will be
delivered to the Agent for its consent. This Designation Agreement shall become
effective when the Agent consents hereto or on any later date specified on the
signature page hereof.
6. Upon the effectiveness hereof, the Designee shall have the right to
make Loans or portions thereof as a Bank pursuant to Section ? or ? of the
Credit Agreement and the rights of a Bank related thereto. The making of any
such Loans or portions thereof by the Designee shall satisfy the obligations of
the Designator under the Credit Agreement to the same extent, and as if, such
Loans or portions thereof were made by the Designator.
7. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Designation Agreement
to be executed by their respective officers hereunto duly authorized, as of the
date first above written.
Effective Date:______ ,____
[NAME OF DESIGNATOR]
By:
---------------------------------
Name:
Title:
H-2
[NAME OF DESIGNEE]
By:
---------------------------------
Name:
Title:
The undersigned consent to the foregoing designation.
<NAME OF BORROWER>
By:
---------------------------------
Name:
Title:
<NAME OF ADMINISTRATIVE AGENT>,
as Administrative Agent
By:
---------------------------------
Name:
Title:
H-3