1
[EXECUTION COPY]
EXHIBIT 4B
$200,000,000
CREDIT AGREEMENT
dated as of
December 20, 1995
among
The Lincoln Electric Company,
The Banks Listed Herein
and
Society National Bank,
as Agent
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TABLE OF CONTENTS*
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.03. Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.02. Notice of Committed Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.03. Notice to Banks; Funding of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.04. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.07. Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.08. Optional Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.09. Mandatory Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.10. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.11. General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.12. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.13. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.14. Alternative Currency Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.15. Money Market Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.16. Withholding Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.17. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.18. Foreign Withholding Taxes and Other Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.19. Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.20. Extension of Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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*The Table of Contents is not a part of this Agreement.
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ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.02. Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.03. First Borrowing by Each Eligible Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.02. Corporate and Governmental Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.04. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.05. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.06. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.07. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.08. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.09. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 4.10. Not an Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 4.11. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE V
COVENANTS
SECTION 5.01. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.02. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.03. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.04. Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.05. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.06. Inspection of Property, Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.07. Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.08. Funded Debt to Capital Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.09. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.10. Consolidations, Mergers and Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.11. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.02. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.02. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.03. Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.04. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.05. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.07. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.08. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.09. Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.02. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.03. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.05. HLT Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
SECTION 9.01. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.02. Corporate and Governmental Authorization; Contravention . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.03. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.04. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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ARTICLE X
GUARANTY
SECTION 10.01. The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.02. Guaranty Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.03. Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances . . . . . . . . . . . 64
SECTION 10.04. Waiver by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.05. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.06. Stay of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.02. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.03. Expenses; Documentary Taxes; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.04. Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.05. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.06. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.07. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.08. Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.09. Counterparts; Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.11. Existing Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.12. Eligible Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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Exhibit A - Note
Exhibit B - Form of Alternative Currency Quote Request
Exhibit C - Form of Invitation for Alternative Currency
Quote
Exhibit D - Form of Alternative Currency Quote
Exhibit E - Opinion of Frederick G. Stueber, Senior Vice
President and General Counsel for the Company
Exhibit F - Opinion of Davis Polk & Wardwell, Special
Counsel for the Agent
Exhibit G - Form of Election to Participate
Exhibit H - Form of Election to Terminate
Exhibit I-1 - Opinion of Counsel for the Borrower
(Borrowings by Eligible Subsidiaries)
Exhibit I-2 - Opinion of Counsel for the Company
(Borrowings by Eligible Subsidiaries)
Exhibit J - Assignment and Assumption Agreement
Exhibit K - Extension Agreement
Exhibit L - Form of Money Market Quote Request
Exhibit M - Form of Invitation for Money Market Quotes
Exhibit N - Form of Money Market Quote
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CREDIT AGREEMENT
AGREEMENT dated as of December 20, 1995 among THE LINCOLN ELECTRIC
COMPANY, the BANKS listed on the signature pages hereof and SOCIETY NATIONAL
BANK, as Agent.
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.15.
"Adjusted CD Rate" has the meaning set forth in Section 2.06(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth
in Section 2.06(c).
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Company) duly completed by such Bank.
"Agent" means Society National Bank in its capacity as agent for
the Banks hereunder, and its successors in such capacity.
"Alternative Currency" means any currency other than Dollars which
is freely transferable and convertible into Dollars.
"Alternative Currency Advance" means an advance made by a Bank to
any Borrower in an Alternative Currency pursuant to Section 2.14.
"Alternative Currency Advance Report" has the meaning set forth in
Section 2.14(f).
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"Alternative Currency Lending Office" means, as to each Bank with
respect to each Alternative Currency Advance made by such Bank, its office,
branch or affiliate identified in the Alternative Currency Quote relating to
such Alternative Currency Advance as its Alternative Currency Lending Office,
or such other office, branch or affiliate as such Bank may thereafter designate
as its Alternative Currency Lending Office by notice to the Company and the
Agent.
"Alternative Currency Outstandings" means at any time an amount
equal to the aggregate Dollar Equivalents of all Alternative Currency Advances
outstanding at such time.
"Alternative Currency Quote" means an offer by a Bank to make an
Alternative Currency Advance in accordance with Section 2.14.
"Applicable Alternative Currency Business Day" means, with respect
to any Alternative Currency Advance, a Euro-Dollar Business Day on which
commercial banks are open for international business (including the clearing of
currency transfers in the Alternative Currency of such Alternative Currency
Advance) in the principal financial center of the home country of such
Alternative Currency.
"Applicable Interest Coverage Ratio" means, on any day, the ratio
of EBIT to Consolidated Interest Expense for the period of four fiscal quarters
of the Company most recently ended prior to such day for which the Company has
delivered financial statements pursuant to Section 5.01(a) or 5.01(b), as the
case may be.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic 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 Alternative Currency Advances, its Alternative Currency Advance
Lending Office and (iv) in the case of its Money Market Loans, its Money Market
Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.06(b).
"Assignee" has the meaning set forth in Section 11.06(c).
"Bank" means each institution listed on the signature pages
hereof, each Assignee which becomes a Bank pursuant to Section 11.06(c), and
their respective successors.
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"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 Loan to be made by a Bank as a Base Rate
Loan in accordance with the applicable Notice of Committed Borrowing or
pursuant to Article VIII.
"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.
"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.
"CD Base Rate" has the meaning set forth in Section 2.06(b).
"CD Loan" means a Loan to be made by a Bank as a CD Loan in
accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in Section 2.06(b).
"CD Reference Banks" means Morgan Guaranty Trust Company of New
York and Society National Bank.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.08.
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01.
"Company" means The Lincoln Electric Company, an Ohio corporation,
and its successors.
"Company's 1994 Form 10-K" means the Company's annual report on
Form 10-K for 1994, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
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"Consolidated Interest Expense" means, for any period, the sum of
(i) the interest expense of the Company and its Consolidated Subsidiaries and
(ii) with respect of any Receivables Financing which constitutes Debt solely by
virtue of clause (vi) of the definition of Debt, interest-equivalent financing
charges, in each case determined on a consolidated basis for such 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.
"Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' equity (excluding the cumulative foreign currency
translation adjustment) of the Company and its Consolidated Subsidiaries MINUS
their consolidated Intangible Assets, all determined as of such date. For
purposes of this definition "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated stockholders' equity) of (i) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of assets of a going concern business made within twelve months
after the acquisition of such business) subsequent to September 30, 1995 in the
book value of any asset owned by the Company or a Consolidated Subsidiary, (ii)
all Investments in unconsolidated Subsidiaries and all equity investments in
Persons which are not Subsidiaries and (iii) all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, anticipated future benefit of tax loss carry-forwards,
copyrights, organization or developmental expenses and other intangible assets.
"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 non-contingent obligations of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) any Receivables Financing entered into by such Person as
transferor, (vii) all Debt secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such Person, and (viii)
all Debt of others
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Guaranteed by such Person. The aggregate amount of Debt described in clause
(vi) of this definition at any time shall be the aggregate Receivables
Financing Amount with respect to such Debt at such time.
"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.
"Dollar Equivalent" means in respect of any Alternative Currency
Advance the amount of Dollars that would be obtained by converting the
outstanding amount of currency of such Alternative Currency Advance, as
specified in the then most recent Alternative Currency Advance Report in
respect of such Alternative Currency Advance, into Dollars at the spot rate for
the purchase of Dollars with such currency as quoted by Society National Bank
at approximately 9:00 A.M. (Cleveland, Ohio time) on the second Applicable
Alternative Currency Business Day prior to the date of such Alternative
Currency Advance Report.
"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 Cleveland, Ohio, are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Company and the Agent; PROVIDED that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section
2.06(b).
"EBIT" means, for any period, the sum of (i) the consolidated net
income of the Company and its Consolidated
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Subsidiaries for such period PLUS (ii) to the extent deducted in determining
such consolidated net income, (A) Consolidated Interest Expense, (B)
consolidated income taxes, and (C) for any fiscal quarter ending on or before
December 31, 1994, redundancy costs and other non-recurring charges.
"Effective Date" means the date of effectiveness of this
Agreement, determined 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 Subsidiary" means any Wholly-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 Wholly-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.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute.
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"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 a Loan to be made by a Bank as a
Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section 2.06(c).
"Euro-Dollar Reference Banks" means the principal London offices
of Morgan Guaranty Trust Company of New York and Dresdner Bank and the Cayman
Islands office of Society National Bank.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.06(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreement" means the Credit Agreement dated as of
March 18, 1993 among the Company, the banks party thereto and Society National
Bank, as agent, as in effect immediately prior to the effectiveness of this
Agreement.
"Facility Fee Rate" has the meaning set forth in Section 2.07.
"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
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14
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 Society National Bank on such day on
such transactions as determined by the Agent.
"Fixed Rate Loans" means CD Loans, Euro-Dollar Loans, Alternative
Currency Advances or Money Market Loans (excluding Money Market LIBOR Loans
bearing interest at the Base Rate pursuant to Section 8.01(a)) or any
combination of the foregoing.
"Funded Debt" means at any date the Debt of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Funded Debt to Capital Ratio" means, at any date, the ratio of
(i) Funded Debt at such date to (ii) the sum of (A) Funded Debt at such date
PLUS (B) the stockholders' equity of the Company and its Consolidated
Subsidiaries at such date determined on a consolidated basis.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation 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 or other obligation (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 or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee 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 course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other
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hydrocarbons, or any substance having any constituent elements displaying any
of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 11.03(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months thereafter, as the Borrower may elect in the
applicable Notice of Committed Borrowing; PROVIDED that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Borrowing, the period commencing on
the date of such Borrowing and ending 30, 60, 90 or 180 days thereafter, as
the Borrower may elect in the applicable Notice of Committed Borrowing;
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; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days thereafter;
PROVIDED that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall
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16
be extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Alternative Currency Advance, the period
commencing on the day of such Alternative Currency Advance and ending on the
date specified by the Borrower in the Alternative Currency Quote Request
relating to such Alternative Currency Advance; PROVIDED that no Interest Period
shall end after the Termination Date.
(5) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of months
thereafter as the Borrower may elect in accordance with Section 2.15; PROVIDED
that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(6) with respect to each Money Market Absolute Rate Borrowing,
the period commencing on the date of such Borrowing and ending on such number
of days thereafter (but not less than 30 days) as the Borrower may elect in
accordance with Section 2.15; 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; and
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(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Investment" means any investment in any Person, whether by means
of share purchase, capital contribution, loan, time deposit or otherwise.
"Level I Pricing" exists on any day if (i) the Applicable Interest
Coverage Ratio for such day is greater than or equal to 5.0 to 1 AND (ii) the
Applicable Interest Coverage Ratio on four consecutive days (I.E., with respect
to four consecutive periods of four fiscal quarters) is or has been greater
than or equal to 5.0 to 1. The days on which the Applicable Interest Coverage
Ratio shall be measured for purposes of clause (ii) of the immediately
preceding sentence shall be the date on which delivery of financial statements
pursuant to Section 5.01(b) is required for the fiscal quarter ended September
30, 1995 and each day after the Effective Date on which the Company has
delivered financial statements as required pursuant to Section 5.01(a) or
5.01(b), as the case may be. For example, the Borrower will qualify for Level I
Pricing if the Applicable Interest Coverage Ratio with respect to each of
September 30, 1995, December 31, 1995, March 31, 1996 and June 30, 1996 is
greater than or equal to 5.0 to 1. Once Borrower qualifies for Level I Pricing,
Level IA Pricing shall be eliminated.
"Level IA Pricing" exists on any day if the Applicable Interest
Coverage Ratio for such day is greater than or equal to 5.0 to 1 and Level I
Pricing does not exist on such day. Once Borrower qualifies for Level I
Pricing, Level IA Pricing shall be eliminated.
"Level II Pricing" exists on any day if the Applicable Interest
Coverage Ratio for such day is greater than or equal to 4.0 to 1 but less than
5.0 to 1.
"Level III Pricing" exists on any day if none of Level I Pricing,
Level IA Pricing nor Level II Pricing exists on such day.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.15.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or
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18
encumbrance of any kind, or any other type of preferential arrangement that has
the practical effect of creating a security interest, 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" means a Domestic Loan or a Euro-Dollar Loan or an
Alternative Currency Advance or a Money Market Loan and "Loans" means Domestic
Loans or Euro-Dollar Loans or Alternative Currency Advances or Money Market
Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).
"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 $5,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $1,000,000.
"Money Market Absolute Rate" has the meaning set forth in Section
2.15(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market 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 Money Market Lending Office by notice to the Company
and the Agent; PROVIDED that any Bank may from time to time by notice to the
Company and the Agent designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate
Loans, on the other hand, in which case all references herein to the Money
Market Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made pursuant to a
LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant
to Section 8.01(a)).
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19
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
2.15(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.15.
"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 Money Market Borrowing (as defined in
Section 2.15).
"Original Credit Agreement" has the meaning set forth in the first
WHEREAS clause.
"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
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20
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 for employees of any Person which was at such time a member of the ERISA
Group.
"Prime Rate" means the rate of interest established from time to
time by Society National Bank in Cleveland, Ohio as its Prime Rate, whether or
not such rate is publicly announced; the Prime Rate may not be the lowest
interest rate charged by Society National Bank for commercial or other
extensions of credit.
"Receivables" means all accounts, contract rights, chattel paper,
instruments, general intangibles and other rights to payment arising out of a
sale or lease of goods or the rendering of services by the Company or any of
its Subsidiaries.
"Receivables Financing" means any transaction involving the
transfer (by way of sale, pledge or otherwise) by the Company or any of its
Subsidiaries of Receivables (or interest therein) and associated assets to any
Person other than the Company or any of its Subsidiaries (other than any such
transfer in bulk as part of a sale of a line or division of business).
"Receivables Financing Amount" means, at any time, (i) with
respect to any Receivables Financing that constitutes Debt (other than solely
pursuant to clause (vi) of the definition of Debt), the outstanding principal
amount thereof at such time and (ii) with respect to any Receivables Financing
that constitutes Debt solely pursuant to clause (vi) of the definition of Debt,
the amount of the proceeds received by the transferor to the extent the
transferee is entitled at such time to the recovery of such amount out of the
proceeds of the assets transferred.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Refunding Borrowing" means a Borrowing which, after application
of the proceeds thereof, results in no net increase in the outstanding
principal amount of Loans made by any Bank to any Borrower.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
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"Required Banks" means at any time Banks having at least 66 2/3%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 66 2/3% of the aggregate
unpaid principal amount of the Loans.
"Significant Subsidiary" means a "significant subsidiary" within
the meaning of Rule 1-02 of Regulation S-X promulgated by the Securities and
Exchange Commission.
"Subsidiary" means 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 the Company.
"Termination Date" means December 20, 2000 or such later date to
which the Commitments shall have been extended pursuant to Section 2.20 or, if
any such day is not a Euro-Dollar Business Day, the next succeeding Euro-Dollar
Business Day unless such succeeding Euro-Dollar Business Day falls in another
calendar month, in which case the Termination Date shall be 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.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except (i) all nominal and directors qualifying shares, (ii) shares of
such Consolidated Subsidiary owned by any Person who is or was a director, an
officer, an employee or is related by blood or marriage to any of the foregoing
PROVIDED that, the number of shares excepted pursuant to this clause (ii) shall
not exceed at any time in the aggregate 10% of the capital stock or other
ownership interests of such Consolidated Subsidiary, and (iii) with respect to
Messer-Lincoln GmbH, shares of Messer-Lincoln GmbH owned by Hans Messer or
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Messer-Griesheim GmbH) are at the time directly or indirectly owned by the
Company.
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 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 V 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 V for such purpose), then, with the
consent of the Required Banks, 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 II on a single date, for a single Interest Period and, if
applicable, in a single Alternative Currency. Borrowings are classified for
purposes of this Agreement 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 II 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 an "Alternative Currency Borrowing" is a Borrowing
under Section 2.14 in which the Bank participants are determined by the
Borrower on the basis of their bids in accordance therewith and a "Money Market
Borrowing" is a Borrowing under Section 2.15 in which the Bank participants are
determined by the Borrower on the basis of their bids in accordance therewith)
or by reference to both.
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ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND. Each Bank severally agrees,
on the terms and conditions set forth in this Agreement, to make loans in
Dollars to any Borrower from time to time in amounts such that the aggregate
principal amount of Committed Loans by such Bank at any one time outstanding to
all Borrowers shall not exceed the amount of its Commitment. Each Borrowing
under this Section 2.01 shall be in an aggregate principal amount of $5,000,000
or any larger multiple of $1,000,000 (except that any such Borrowing may be in
the aggregate amount available in accordance with Section 3.02(c)) and shall be
made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, a Borrower may borrow, repay, or, to
the extent permitted by Section 2.10, prepay Loans and reborrow at any time.
SECTION 2.02. NOTICE OF COMMITTED BORROWING. The relevant
Borrower shall give the Agent notice (a "Notice of Committed Borrowing") not
later than 10:00 A.M. (Cleveland, Ohio time) on (x) the date of each Base Rate
Borrowing, (y) the second Domestic Business Day before each CD Borrowing and
(z) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business
Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be CD
Loans, Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Committed Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
Notwithstanding the foregoing, no more than ten Committed Fixed
Rate Borrowings shall be outstanding at any one time, and any Borrowing that
would exceed such limitation shall be made as a Base Rate Borrowing.
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SECTION 2.03. NOTICE TO BANKS; FUNDING OF LOANS. (a) Upon
receipt of a Notice of Committed Borrowing, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's share of such Committed
Borrowing and such Notice of Committed Borrowing shall not thereafter be
revocable by any Borrower.
(b) Not later than 12:00 Noon (Cleveland, Ohio time) on the date
of each Committed Borrowing, each Bank shall (except as provided in subsection
(c) of this Section) make available its share of such Committed Borrowing, in
Federal or other funds immediately available in Cleveland, Ohio, to the Agent
at its address referred to in Section 11.01. Unless the Agent determines that
any applicable condition specified in Article III has not been satisfied, the
Agent will make the funds so received from the Banks available to the relevant
Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Committed Loan hereunder to a
Borrower on a day on which such Borrower is to repay all or any part of an
outstanding Loan from such Bank, such Bank shall apply the proceeds of its new
Committed 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) of this Section, or remitted by such Borrower to the
Agent as provided in Section 2.11, as the case may be.
(d) Unless the Agent shall have received notice from a Bank prior
to 12:00 Noon (Cleveland, Ohio time) on the date of any Committed Borrowing
that such Bank will not make available to the Agent such Bank's share of such
Committed Borrowing, the Agent may assume that such Bank has made such share
available to the Agent on the date of such Committed Borrowing in accordance
with subsections (b) and (c) of this Section 2.03 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 relevant 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 2.06 and (ii) in the case of such Bank,
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the Federal Funds Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's
Committed Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.04. 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 3.03(a), the Agent shall mail such Note to such Bank. Each Bank shall
record the date, amount, type, Alternative Currency (if applicable) 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 prior to any transfer
of its Note of any Borrower shall 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.
SECTION 2.05. MATURITY OF LOANS. Each Loan included in any
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 2.06. 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
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Rate for such day. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of or interest on any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the rate otherwise applicable to Base
Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day of the Interest Period applicable thereto, at a
rate per annum equal to the sum of the CD Margin for the first day of such
Interest Period plus the applicable Adjusted CD Rate. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than 90 days, at intervals of 90 days after the first day
thereof. Any overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the higher of (i) the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to such Loan and (ii) the rate applicable
to Base Rate Loans for such day.
"CD Margin" means for any day the percentage set forth below in
the applicable row under the column corresponding to the "Pricing Level" that
exists on such day:
Level I IA II III
CD Margin .325% .350% .375% .425%
; PROVIDED that (A) if the Company shall fail to timely deliver the information
required to be delivered by it pursuant to Section 5.01(a) or Section 5.01(b),
as the case may be (and such failure shall not have been waived by the Required
Banks in accordance with Section 11.05), Level III Pricing shall apply for each
day from and including the day on which such information is required to be
delivered to but excluding the day on which such information is delivered and
(B) the effective date of any increase or decrease in the CD Margin (other than
any increase pursuant to clause (A) of this proviso) shall be the fifth
Domestic Business Day after the Company shall have delivered financial
statements pursuant to Section 5.01(a) or 5.01(b), as the case may be, on the
basis of which statements any such increase or decrease is calculated.
The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:
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[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate
of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum
bid at 10:00 A.M. (Cleveland, Ohio time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such Interest
Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted
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automatically on and as of the effective date of any change in the Assessment
Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day of the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for the
first day of such Interest Period plus the applicable Adjusted London Interbank
Offered Rate. 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 for any day the percentage set forth
below in the applicable row under the column corresponding to the "Pricing
Level" that exists on such day:
Level I IA II III
Euro-Dollar Margin .20% .225% .25% .30%
; PROVIDED that (A) if the Company shall fail to timely deliver the information
required to be delivered by it pursuant to Section 5.01(a) or Section 5.01(b),
as the case may be (and such failure shall not have been waived by the Required
Banks in accordance with Section 11.05), Level III Pricing shall apply for each
day from and including the day on which such information is required to be
delivered to but excluding the day on which such information is delivered and
(B) the effective date of any increase or decrease in the Euro-Dollar Margin
(other than any increase pursuant to clause (A) of this proviso) shall be the
fifth Domestic Business Day after the Company shall have delivered financial
statements pursuant to Section 5.01(a) or 5.01(b), as the case may be, on the
basis of which statements any such increase or decrease is calculated.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the 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 Euro-Dollar Reference Banks in the London
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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
Euro-Dollar Reference Bank to which such Interest Period is to apply and for a
period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any Bank to
United States residents). The Adjusted London Interbank Offered Rate shall be
adjusted automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin for such day plus the Adjusted London Interbank Offered Rate
applicable to such Loan and (ii) 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 equal to such overdue
payment due to each of the Euro-Dollar Reference Banks are offered to such
Euro-Dollar Reference Bank in the London interbank market for the applicable
period determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8.01 shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal
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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 2.06(c) as if the related Money Market
LIBOR Borrowing were a Committed Euro-Dollar Borrowing) plus (or minus) the
Money Market Margin quoted by the Bank making such Loan in accordance with
Section 2.15. Each Money Market 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 Money Market Absolute Rate quoted by
the Bank making such Loan in accordance with Section 2.15. 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 Money
Market Loan shall bear interest, payable on demand, for each day until paid at
a rate per annum equal to the sum of 2% plus the Base Rate for such day.
(f) 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.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated hereby. 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 2.07. FACILITY FEE. The Company shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate
(determined daily as described below). 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, and shall be payable
quarterly in arrears on the last day of each March, June, September and
December and on the Termination Date (and, if applicable, such later date of
repayment).
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"Facility Fee Rate" means for any day the percentage set forth
below in the applicable row under the column corresponding to the "Pricing
Level" that exists on such day:
Level I IA II III
Facility Fee Rate .10% .105% .125% .15%
SECTION 2.08. OPTIONAL 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 of $1,000,000, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans. If the Commitments are terminated in their entirety, all accrued
facility fees shall be payable on the effective date of such termination.
SECTION 2.09. MANDATORY TERMINATION OR REDUCTION OF COMMITMENTS.
The Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
SECTION 2.10. OPTIONAL PREPAYMENTS. (a) The Borrower may (i)
upon at least one Domestic Business Day's notice to the Agent, prepay any Base
Rate Borrowing (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)), (ii) upon three Domestic Business Days' notice to
the Agent, subject to Section 2.12, prepay any CD Borrowing and (iii) upon at
least three Euro-Dollar Business Days' notice to the Agent, subject to Section
2.12, prepay any Euro-Dollar Borrowing, in each case in whole at any time, or
from time to time in part in amounts aggregating $5,000,000 or any larger
multiple of $1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Banks
included in such Borrowing.
(b) Except as provided in clause (i) of Section 2.10(a), no
Borrower may prepay all or any portion of the principal amount of any Money
Market Loan prior to the maturity thereof.
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(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 2.11. GENERAL PROVISIONS AS TO PAYMENTS. (a) The
Borrowers shall make each payment of principal of, and interest on, the
Committed Loans and of fees hereunder, not later than 12:00 Noon (Cleveland,
Ohio time) on the date when due, in Federal or other funds immediately
available in Cleveland, Ohio 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 Domestic Loans or of fees
shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or interest on, the Money
Market 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. If the date for any payment of principal is extended
by operation of law or otherwise, interest thereon shall be payable for such
extended time.
(b) All payments to be made by any Borrower hereunder or under
the Notes in an Alternative Currency pursuant to Section 2.14 shall be made in
such Alternative Currency in such funds as may then be customary for the
settlement of international transactions in such Alternative Currency for the
account of the relevant Bank, at such time and at such place as shall have been
notified by such Bank to the relevant Borrower by not less than four
Euro-Dollar Business Days' notice prior to the day on which any such payment is
due.
(c) 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 with respect to Committed Loans or any fees hereunder, that such
Borrower
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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 2.12. FUNDING LOSSES. If a Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article II, VI or
VIII or otherwise, (except pursuant to Section 2.14(g)) on any day other than
the last day of the Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.06(d), or if a Borrower fails to
borrow or prepay any Fixed Rate Loans after notice has been given to any Bank
in accordance with Section 2.03(a) or 2.10(c), the Company shall reimburse each
Bank within 15 days after demand for any resulting loss or expense incurred by
it (or by an existing or prospective Participant in the related Loan),
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after any such payment or failure to borrow, PROVIDED that such Bank
shall have delivered to the Company a certificate as to the amount of such loss
or expense, which certificate shall be conclusive in the absence of manifest
error.
SECTION 2.13. COMPUTATION OF INTEREST AND FEES. Interest based
on the Prime Rate hereunder shall be computed on the basis of a year of 365
days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and 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 2.14. ALTERNATIVE CURRENCY ADVANCES.
(a) ALTERNATIVE CURRENCY OPTION. From time to time prior to
the Termination Date any Borrower may, as set forth in this Section, request
the Banks to make offers to make Alternative Currency Advances to such
Borrower. Any Bank may, but shall have no obligation to, make such offers, and
such Borrower may, but shall have no obligation to, accept any such offers in
the manner set forth in this
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Section; PROVIDED that no Borrower may accept any offer if, after giving effect
to the Alternative Currency Advance to be made pursuant to such offer and any
other outstanding accepted offers, the Alternative Currency Outstandings would
exceed 40% of the aggregate Commitments at such time.
(b) ALTERNATIVE CURRENCY QUOTE REQUEST. When any Borrower
wishes to request offers to make Alternative Currency Advances under this
Section, it shall transmit to the Agent by telex or facsimile transmission an
Alternative Currency Quote Request substantially in the form of Exhibit B
hereto so as to be received no later than 10:00 A.M. (Cleveland, Ohio time) on
the fifth Applicable Alternative Currency Business Day prior to the date of
borrowing proposed therein of the Alternative Currency Advance requested
therein (or such other time or date as the relevant Borrower and the Agent
shall have mutually agreed and shall have notified to the Banks not later than
the date of the Alternative Currency Quote Request for the first Alternative
Currency Advance for which such change is to be effective) specifying:
(i) the proposed date of the Alternative Currency Advance,
which shall be an Applicable Alternative Currency Business Day with respect
to the Alternative Currency in which such Alternative Currency Advance is
requested;
(ii) the Alternative Currency in which such Alternative Currency
Advance is requested;
(iii) the aggregate principal amount of such Alternative Currency
Advance (in such Alternative Currency); and
(iv) the duration of the Interest Period applicable to such
Alternative Currency Advance, subject to the provisions of the definition
of Interest Period.
The relevant Borrower may request offers to make Alternative Currency Advances
with more than one Interest Period and in more than one Alternative Currency in
a single Alternative Currency Quote Request. No Alternative Currency 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 Alternative
Currency Quote Request.
(c) INVITATION FOR ALTERNATIVE CURRENCY QUOTES. Promptly upon
receipt of an Alternative Currency Quote Request, the Agent shall send to the
Banks by telex or
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facsimile transmission an Invitation for Alternative Currency Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the relevant Borrower to each Bank to submit to such Borrower
Alternative Currency Quotes offering to make the Alternative Currency Advances
to which such Alternative Currency Quote Request relates in accordance with
this Section.
(d) SUBMISSION AND CONTENTS OF ALTERNATIVE CURRENCY QUOTES.
Each Bank may submit to the Borrower an Alternative Currency Quote containing
an offer or offers to make Alternative Currency Advances in response to an
Invitation for Alternative Currency Quotes. Each Alternative Currency Quote
shall be in substantially the form of Exhibit D hereto and must be submitted to
the relevant Borrower by telex or facsimile transmission at its offices
specified in or pursuant to Section 11.01 not later than 2:00 P.M. (Cleveland,
Ohio time) on the fourth Applicable Alternative Currency Business Day prior to
the proposed date of the Alternative Currency Advance (or such other time or
date as the relevant Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Alternative
Currency Quote Request for the first Alternative Currency Advance for which
such change is to be effective).
(e) ACCEPTANCE AND NOTICE BY BORROWER. Not later than 10:00
A.M. (Cleveland, Ohio time) on the third Applicable Alternative Currency
Business Day prior to the proposed date of any Alternative Currency Advance (or
such other time or date as the relevant Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Alternative Currency Request for the first Alternative Currency Advance for
which such change is to be effective), the relevant Borrower shall notify the
Agent and each of the Banks which submitted an Alternative Currency Quote of
its acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (d). In the case of acceptance, such notice shall specify the
aggregate principal amount of offers for each Interest Period and each
Alternative Currency that are accepted. The relevant Borrower may accept any
Alternative Currency Quote in whole or in part; PROVIDED that:
(i) the aggregate principal amount of each may not exceed the
applicable amount set forth in the related Alternative Currency Quote
Request, and
(ii) no Borrower may accept any offer that would cause it to
violate the proviso to subsection (a) above.
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Each Bank whose Alternative Currency Quote has been accepted in whole or in
part by the relevant Borrower shall promptly notify the Agent of such
acceptance.
(f) REPORTS TO AGENT. The Company shall deliver to the Agent
and each of the Banks a report in respect of each Alternative Currency Advance
(an "Alternative Currency Advance Report") (i) on the date on which such
Alternative Currency Advance is made, (ii) on the date on which any principal
amount thereof is repaid, and (iii) on any other date required pursuant to
Section 3.02(b), specifying for such Alternative Currency Advance:
(A) the date such Alternate Currency Advance was or is being
made or on which such amount of principal is repaid;
(B) the Alternative Currency of such Alternate Currency
Advance;
(C) the principal amount of such Alternate Currency Advance or
principal payment (in such Alternative Currency); and
(D) the Dollar Equivalent of the Alternate Currency Advance
then made or remaining after such principal repayment and the Alternative
Currency Outstandings on such date after giving effect to such Alternate
Currency Advance or principal payment.
PROVIDED that, any Alternative Currency Advance Report delivered by the Company
pursuant to clause (iii) need only specify the Alternative Currency
Outstandings on the date of such Alternative Currency Advance Report.
(g) MANDATORY PREPAYMENTS. If on any date the sum of (i) the
aggregate principal amount of the Committed Loans outstanding on such date,
(ii) the Alternative Currency Outstandings on such date and (iii) the aggregate
principal amount of Money Market Loans outstanding on such date exceeds the
aggregate amount of the Commitments, the Borrower shall prepay Alternative
Currency Advances in an aggregate amount equal to such excess. Each such
prepayment shall be with respect to such Alternative Currency Advances as the
Borrower shall designate (or, failing such designation, as determined by the
Agent).
SECTION 2.15. MONEY MARKET BORROWINGS.
(a) THE MONEY MARKET OPTION. From time to time prior to the
Termination Date, any Borrower may, as set
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forth in this Section, request the Banks to make offers to make Money Market
Loans to such Borrower. Any Bank may, but shall have no obligation to, make
such offers and any Borrower may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section; PROVIDED that no Borrower
may accept any offer if, immediately after giving effect to the Money Market
Loan to be made pursuant to such offer and any other outstanding accepted
offers, the aggregate outstanding principal amount of Money Market Loans would
exceed 60% of the aggregate Commitments at such time.
(b) MONEY MARKET QUOTE REQUEST. When any Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit L hereto so as to be received no later
than 10:00 A.M. (Cleveland, Ohio time) on (x) the fifth Euro-Dollar 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 relevant Borrower and the Agent shall have mutually
agreed and shall have notified to the Banks not later than the date of the
Money Market 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
$5,000,000 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 Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
The relevant Borrower may request offers to make Money Market Loans for more
than one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days (or
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such other number of days as the Company and Agent may agree) of any other
Money Market Quote Request.
(c) INVITATION FOR MONEY MARKET QUOTES. Promptly upon receipt of
a Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit M hereto, which shall constitute an invitation by the
relevant Borrower to each Bank to submit Money Market Quotes offering to make
the Money Market Loans to which such Money Market Quote relates in accordance
with this Section.
(d) SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES. (i) Each
Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market 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 specified in or pursuant to Section 11.01 not later than (x) 2:00 P.M.
(Cleveland, Ohio time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or by (y) 9:30 A.M.
(Cleveland, Ohio time) in the case of an Absolute Rate Auction (or, in either
case, such other time or date as the relevant Borrower and the Agent shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is
to be effective); PROVIDED that Money Market 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 relevant
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 III and VI, any Money
Market Quote so made shall be irrevocable except with the written consent of
the Agent given on the instructions of the relevant Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit N hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each
offer is being made, which principal amount (w) may be greater than or less
than the
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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 Money Market
Loans for which offers were requested and (z) may be subject to an
aggregate limitation as to the principal amount of Money Market Loans for
which offers being made by such quoting Bank may be accepted,
(C) in the case of LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market 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 Base Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money
Market Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market 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 Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit N
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 Money Market Quote; or
(D) arrives after the time set forth in subsection (d)(i).
PROVIDED that a Money Market Quote shall not be disregarded pursuant to clause
(B) or (C) above solely because it contains an indication that an allocation
that might otherwise be made to such Bank pursuant to Section 2.15(g) would be
unacceptable.
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(e) NOTICE TO BORROWER. The Agent shall promptly notify the
relevant Borrower of the terms of (x) of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The Agent's notice to the
relevant Borrower shall specify (A) the aggregate principal amount of Money
Market Loans for which offers have been received for each Interest Period
specified in the related Money Market Quote Request, (B) the respective
principal amounts and Money Market Margins or Money Market Absolute Rates, as
the case may be, so offered and (C) if applicable, limitations on the aggregate
principal amount of Money Market Loans for which offers in any single Money
Market Quote may be accepted.
(f) ACCEPTANCE AND NOTICE BY BORROWER. Not later than 10:30 A.M.
(Cleveland, Ohio time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of the 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 relevant Borrower and the Agent
shall have mutually agreed and shall have notified to the Banks not later than
the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective), the relevant
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 Money Market Borrowing") shall specify
the aggregate principal amount of offers for each Interest Period that are
accepted. The relevant Borrower may accept any Money Market Quote in whole or
in part; PROVIDED that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market
Quote request,
(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the case
may be, and
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(iv) the relevant 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 Money Market Margins or Money Market 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 Money Market 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 amount of such offers. Determinations by the Agent of the
amounts of Money Market Loans shall be conclusive in the absence of manifest
error.
SECTION 2.16. WITHHOLDING TAX EXEMPTION. At least five Domestic
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated under
the laws of the United States of America or a state thereof agrees that it will
deliver to each of the Company and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in either
case that such Bank is entitled to receive payments from the Company under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes. Each Bank which so delivers a Form 1001 or 4224 further
undertakes to deliver to each of the Company and the Agent two additional
copies of such form (or a successor form) on or before the date that such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the Company
or the Agent, in each case certifying that such Bank is entitled to receive
payments from the Company under this Agreement and the Notes without deduction
or withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank advises the Company and the Agent that it is not capable of receiving
such payments without any deduction or withholding of United States federal
income tax.
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SECTION 2.17. 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 the currency expressed to be payable
herein or under the Notes (the "specified currency") 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 the specified currency with such
other currency at the Cleveland, Ohio office of Society National Bank on the
Euro-Dollar 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 the specified currency, be discharged only to the extent that on the
Euro-Dollar 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 the specified currency with such other currency; if the
amount of the specified currency so purchased is less than the sum originally
due to such Bank or the Agent, as the case may be, in the specified currency,
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
the specified currency 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 2.18. FOREIGN WITHHOLDING TAXES AND OTHER COSTS. (a)
Except as contemplated by the next sentence of this Section 2.18(a), all
payments by an Eligible Subsidiary of principal of and interest on its Notes
and of all other amounts payable under this Agreement are payable without
deduction for or on account of any present or future taxes, duties or other
charges levied or imposed by the government of any jurisdiction outside the
United States of America or by any political subdivision or taxing authority
thereof or therein through withholding or deduction with respect to any such
payments. If any such taxes, duties or other charges are so levied or imposed,
such Eligible Subsidiary will pay additional interest or will make additional
payments in such amounts so that every net payment of principal of and interest
on its Notes and of
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all other amounts payable by it under this Agreement, after withholding or
deduction for or on account of any such present or future taxes, duties or
other charges, will not be less than the amount provided for herein. Such
Eligible Subsidiary shall furnish promptly to the Agent official receipts
evidencing such withholding or deduction.
(b) If the cost to any Bank of making or maintaining any
Committed 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 of America, the Company shall indemnify
such Bank for such increased cost or reduction within 15 days after demand by
such Bank (with a copy to the Agent). 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.
(c) 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 2.19. MAXIMUM INTEREST RATE.
(a) Nothing contained in this Agreement or the Notes shall
require any Borrower to pay interest at a rate exceeding the maximum rate
permitted by applicable law. Neither this Section nor Section 11.08 is
intended to limit the rate of interest payable for the account of any Bank to
the maximum rate permitted by the laws of the State of New York if a higher
rate is permitted with respect to such Bank by supervening provisions of U.S.
federal law.
(b) If the amount of interest payable by any Borrower for the
account of any Bank on any interest payment date in respect of the immediately
preceding interest computation period, computed pursuant to Section 2.06, would
exceed the maximum amount permitted by applicable law to be charged to such
Borrower by such Bank, the amount of interest payable by such Borrower for its
account on such interest payment date shall be automatically reduced to such
maximum amount.
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(c) If the amount of interest payable by any Borrower for the
account of any Bank in respect of any interest computation period is reduced
pursuant to clause (b) of this Section and the amount of interest payable by
such Borrower for its account in respect of any subsequent interest computation
period, computed pursuant to Section 2.06, would be less than the maximum
amount permitted by applicable law to be charged to such Borrower by such Bank,
then the amount of interest payable by such Borrower for its account in respect
of such subsequent interest computation period shall be automatically increased
to such maximum permissible amount; PROVIDED that at no time shall the
aggregate amount by which interest paid by any Borrower for the account of any
Bank has been increased pursuant to this clause (c) exceed the aggregate amount
by which interest paid by such Borrower for its account has theretofore been
reduced pursuant to clause (b) of this Section.
SECTION 2.20. EXTENSION OF TERMINATION DATE.
The Termination Date may be extended, in the manner set forth in this Section,
on the 45th day after receipt, for each fiscal year of the Company, of the
financial statements referred to in Section 5.01(a), the certificate with
respect thereto referred to in Section 5.01(c) and the statement with respect
thereto referred to in Section 5.01(d) (each such date, as specified by the
Company in connection with the delivery of such items, an "Extension Date") for
a period of one year after the then current Termination Date. If the Company
wishes to request an extension of the Termination Date on any Extension Date,
it shall give written notice to that effect to the Agent not less than 45 nor
more than 120 days prior to such Extension Date, whereupon the Agent shall
notify each of the Banks of such notice. Each Bank will use its best efforts
to respond to such request, whether affirmatively or negatively, within 45 days
after receipt of the relevant financial statements referred to in Section
5.01(a), the certificate with respect thereto referred to in Section 5.01(c)
and the statement with respect thereto referred to in Section 5.01(d). If all
Banks respond affirmatively, then, subject to receipt by the Agent prior to
such Extension Date of counterparts of an Extension Agreement in substantially
the form of Exhibit K duly completed and signed by all of the parties hereto,
the Termination Date shall be extended, effective on such Extension Date, to
the date stated in such Extension Agreement.
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ARTICLE III
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 the
Company, the Banks and the Agent (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 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 2.04;
(c) receipt by the Agent of an opinion of Frederick G. Stueber,
Vice President, General Counsel and Secretary for the Company,
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 evidence reasonably satisfactory to
the Agent that the Company and the Prudential Insurance Company of America
shall have entered into an amendment to the Note Agreement dated as of
November 1, 1991 with respect to the $75,000,000 8.73% Senior Notes due
2003 of the Company in form and substance reasonably satisfactory to the
Agent;
(f) receipt by the Agent of evidence satisfactory to it that the
commitments under the Existing Credit Agreement have terminated, all loans
thereunder have been repaid in full (all Banks hereunder which are also
banks under the Existing Credit Agreement hereby agreeing that such
repayment may be made, whether at the end of interest periods under the
Existing Credit
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Agreement or not) or constitute Loans hereunder and all accrued fees and
other amounts payable thereunder have been paid in full; and
(g) 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;
PROVIDED that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later
than January 31, 1996.
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 Committed Borrowing as
required by Section 2.02, if such Borrowing is a Committed Borrowing;
(b) receipt by the Agent of an Alternative Currency Advance
Report dated no more than fourteen days prior to the date of such Borrowing
if, immediately after such Borrowing, the sum of (i) the aggregate
principal amount of the Committed Loans outstanding on such date, (ii) the
Alternative Currency Outstandings on such date and (iii) the aggregate
principal amount of Money Market Loans on such date would exceed 80% of the
aggregate amount of the Commitments;
(c) the fact that, immediately after such Borrowing, the sum of
(i) the aggregate principal amount of Committed Loans outstanding on such
date, (ii) the Alternative Currency Outstandings on such date and (iii) the
aggregate principal amount of Money Market Loans outstanding on such date
will not exceed the aggregate amount of the Commitments;
(d) the fact that, immediately before and after such Borrowing,
no Default shall have occurred and be continuing; and
(e) the fact that the representations and warranties of the
Borrowers contained in this Agreement (except, in the case of a Refunding
Borrowing, the representation and warranty set forth in Section
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4.04(c)) shall be true on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation
and warranty by the Company and the relevant Borrower on the date of such
Borrowing as to the facts specified in clauses (c), (d) and (e) 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 2.04;
(b) receipt by the Agent of opinions of counsel for the
Company and such Eligible Subsidiary (which may be in-house counsel for the
Company) acceptable to the Agent, substantially to the effect of Exhibit
I-1 or I-2 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.
ARTICLE IV
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 the State of Ohio, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
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SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. (a) 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 articles of incorporation or regulations of the Company
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Company or any of its Subsidiaries or result in the creation
or imposition of any Lien on any asset of the Company or any of its
Subsidiaries.
(b) The execution and delivery by each Eligible Subsidiary of its
Election to Participate and its Notes, and the performance by such Eligible
Subsidiary of this 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 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 (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.
SECTION 4.04. FINANCIAL INFORMATION.
(a) The statement of consolidated financial condition of the
Company and its Consolidated Subsidiaries as of December 31, 1994 and the
related statements of consolidated income, consolidated shareholders' equity
and consolidated cash flows for the fiscal year then ended, reported on by
Ernst & Young and set forth in the Company's 1994 Form 10-K, a copy of which
has been delivered to each of the Banks, fairly present in all material
respects, 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.
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(b) The unaudited statement of consolidated financial condition
of the Company and its Consolidated Subsidiaries as of September 30, 1995 and
the related unaudited statements of consolidated income and consolidated cash
flow for the nine months then ended, set forth in the Company's quarterly
report for the fiscal quarter ended September 30, 1995 as filed with the
Securities and Exchange Commission on Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with generally
accepted accounting principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section, the consolidated
financial position of the Company and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such nine
month period (subject to normal year-end adjustments).
(c) Since September 30, 1995 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Company and its Consolidated Subsidiaries, considered as a whole, and no
event has taken place which is reasonably likely to have such a material
adverse effect in the future.
SECTION 4.05. LITIGATION. There is no action, suit 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 which would reasonably
be expected to result in any material adverse change in the business,
consolidated financial position or consolidated results of operations of the
Company and its Consolidated Subsidiaries or which in any manner draws into
question the validity of this Agreement or the Notes.
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, which has resulted or 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
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under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
SECTION 4.07. ENVIRONMENTAL MATTERS. (a) In the ordinary course
of its business, the Company conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Company
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law
or as a condition of any license, permit or contract, any related constraints
on operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Company has reasonably concluded
that such associated liabilities and costs, including the costs of compliance
with Environmental Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Company and its Consolidated Subsidiaries, considered as a whole.
(b) No demand, claim, suit, order, citation, administrative
action, investigation or proceeding made, brought or initiated by any Person
arising under, relating to or in connection with Environmental Laws is pending
or threatened against the Company or any of its Subsidiaries which would
reasonably be expected to result in any material adverse change in the
business, consolidated financial position or consolidated results of operations
of the Company and its Consolidated Subsidiaries, taken as a whole.
SECTION 4.08. TAXES. United States Federal income tax returns of
the Company and its Subsidiaries have been examined and closed through the
fiscal year ended December 31, 1987. The Company and its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Company
or any Subsidiary. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Company, adequate.
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SECTION 4.09. SUBSIDIARIES. Each of the Company's corporate
Subsidiaries 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 now conducted.
SECTION 4.10. NOT AN INVESTMENT COMPANY. The Company is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.11. FULL DISCLOSURE. All information (other than
financial projections) heretofore furnished by any Borrower 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 (other than any financial
projections) hereafter furnished by any Borrower to the Agent or any Bank will
be, taken as a whole, true and accurate in all material respects on the date as
of which such information is stated or certified. All financial projections
heretofore furnished by any Borrower to the Agent or any Bank for purposes of
or in connection with this Agreement or any transaction contemplated hereby
have been, and all such financial projections hereafter furnished by any
Borrower to the Agent or any Banks will be, made in good faith and on the basis
of reasonable assumptions. Each Borrower 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 any Borrower to perform its obligations under this
Agreement.
ARTICLE V
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, an audited statement of
consolidated financial
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condition of the Company and its Consolidated Subsidiaries as of the end of
such fiscal year and the related audited statements of consolidated income,
consolidated shareholders' equity and consolidated 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 Ernst & Young 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, a statement of consolidated financial condition of the Company and
its Consolidated Subsidiaries as of the end of such quarter and the related
statements of consolidated income and consolidated cash flows for such
quarter and for the portion of the Company's fiscal year ended at the end
of such quarter, setting forth in each case 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 chief
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 chief accounting officer of the Company (i)
setting forth in reasonable detail the calculations required to establish
(i) whether the Company was in compliance with the requirements of Sections
5.07 to 5.08, inclusive, on the date of such financial statements and (ii)
stating whether any Default exists on the date of such certificate 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)
whether anything has come to their attention to cause them to believe that
any Default, with respect to any covenant contained in Sections 5.07 to
5.08, inclusive, existed on the date of such statements and (ii) confirming
the calculations set forth in the
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officer's certificate delivered simultaneously therewith pursuant to clause
(c) above;
(e) within two days after any officer of the Company obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief 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;
(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 reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) 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 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; (iv)
applies for a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) 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
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Benefit Arrangement which has resulted or could result in the imposition of
a Lien or the posting of a bond or other security, a certificate of the
chief financial officer or the chief accounting officer of the Company
setting forth details as to such occurrence and the action, if any, which
the Company or applicable member of the ERISA Group is required or proposes
to take;
(i) as soon as available and in any event within 30 days after
the beginning of each fiscal year of the Company, a projected statement of
consolidated financial condition of the Company and its Consolidated
Subsidiaries as of the end of such fiscal year and related projected
statements of consolidated income, consolidated shareholders' equity and
consolidated cash flows for such fiscal year, in each case based on the
Company's best estimates, information and assumptions at the time;
(j) promptly and in any event within five Domestic Business Days
after receipt thereof, copies of any notice of any demand, claim, suit,
order, citation, administrative action, investigation or proceeding made,
brought or initiated by any Person arising under, relating to or in
connection with Environmental Laws which would reasonably be expected to
result in any material adverse change in the business, consolidated
financial position or consolidated results of operations of the Company and
its Consolidated Subsidiaries, taken as a whole; and
(k) from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries
(including, without limitation, consolidating financial statements of the
Company or any of its Subsidiaries and projected statements of consolidated
income of the Company and its Subsidiaries) as the Agent, at the request of
any Bank, may reasonably request.
SECTION 5.02. PAYMENT OF OBLIGATIONS. The Company will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
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SECTION 5.03. MAINTENANCE OF PROPERTY; INSURANCE. (a) 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.
(b) The Company will maintain, and will cause each Subsidiary to
maintain, (i) insurance with respect to such risks and in amounts as specified
in the Existing Credit Agreement and (ii) such other insurance coverage in such
amounts and with respect to such risks as the Required Banks may reasonably
request. All insurance maintained pursuant to clause (ii) above shall be
provided by insurers having A.M. Best policyholders ratings comparable to
those of the insurers listed on Schedule I to the Existing Credit Agreement or
such other insurers as the Required Banks may approve in writing. The Company
will deliver to the Banks (i) upon request of any Bank through the Agent from
time to time full information as to the insurance carried, (ii) within five
days of receipt of notice from any insurer a copy of any notice of cancellation
or material change in coverage from that existing on the date of this Agreement
and (iii) forthwith, notice of any cancellation or nonrenewal of coverage by
the Company.
SECTION 5.04. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
The Company will continue, and will cause each Subsidiary to continue, to
engage in business of the same general type as now conducted by the Company and
its Subsidiaries, and will preserve, renew and keep in full force and effect,
and will cause each Subsidiary to preserve, renew and keep in full force and
effect their respective corporate existence and their respective rights,
privileges and franchises necessary or desirable in the normal conduct of
business; PROVIDED that nothing in this Section 5.04 shall prohibit (i) the
merger of a Subsidiary into the Company or the merger or consolidation of a
Subsidiary with or into another Person if the corporation surviving such
consolidation or merger is a Subsidiary and if, in each case, after giving
effect thereto, no Default shall have occurred and be continuing or (ii) the
termination of the corporate existence of any Subsidiary, so long as such
Subsidiary is not a Significant Subsidiary and so long as the Company in good
faith determines that such termination is in the best interest of the Company
and is not otherwise materially disadvantageous to the interests of the Banks
hereunder.
SECTION 5.05. COMPLIANCE WITH LAWS. The Company will comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances,
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rules, regulations, and requirements of governmental authorities (including,
without limitation, Environmental Laws and ERISA and the rules and regulations
thereunder), except where the necessity of compliance therewith is contested in
good faith by appropriate proceedings.
SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS. The
Company will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives of any Bank
at such Bank's expense to visit and inspect any of their respective properties,
to examine and make abstracts from any of their respective books and records
and to discuss their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.
SECTION 5.07. INTEREST COVERAGE RATIO. The ratio of EBIT to
Consolidated Interest Expense, in each case for the period of four fiscal
quarters of the Company then most recently ended, shall at all times exceed 2.5
to 1.
SECTION 5.08. FUNDED DEBT TO CAPITAL RATIO. The Funded Debt to
Capital Ratio will at no time exceed .55 to 1.
SECTION 5.09. 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 of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount
not exceeding $15,000,000;
(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;
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(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 clauses of this Section, PROVIDED that such Debt is not increased
and is not secured by any additional assets;
(g) Liens arising in the ordinary course of its business which
(i) do not secure Debt, (ii) do not secure obligations in amounts
exceeding, in the aggregate, $25,000,000 and (iii) 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;
(h) Liens on Receivables of the Company and its Subsidiaries in
connection with Receivable Financings with respect to such Receivables;
PROVIDED that the aggregate outstanding Receivables Financing Amount will
at no time exceed $50,000,000; and
(i) Liens (other than Liens on Receivables pursuant to a
Receivables Financing) not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal amount at any time
outstanding not to exceed 10% of Consolidated Tangible Net Worth.
SECTION 5.10. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. (a)
The Company will not consolidate or merge with or into any other Person unless
(i) the Company is the corporation surviving such merger and (ii) immediately
after giving effect to such merger, no Default shall have occurred and be
continuing.
(b) No Borrower will sell, lease or otherwise transfer, directly
or indirectly, all or any substantial part of the assets of such Borrower and
its Subsidiaries, taken as a whole, to any Person (other than the Company or
any of its Subsidiaries). For purposes of this Section 5.10(b), any
Significant Subsidiary and the assets of a business operation which if
separately counted, would constitute a Significant Subsidiary, shall be deemed
to
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constitute a "substantial part of the assets" of such Borrower and its
Subsidiaries, taken as a whole.
(c) Neither the Company nor any of its Subsidiaries will sell,
lease or otherwise transfer, directly or indirectly, any of its accounts
receivable to any Person (other than the Company or any of its Subsidiaries),
except (i) in connection with a Receivables Financing and (ii) if, immediately
after giving effect to any such Financing, the aggregate outstanding
Receivables Financing Amount does not exceed $50,000,000.
SECTION 5.11. USE OF PROCEEDS. The proceeds of the Loans made
under this Agreement will be used by the Borrowers for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
"margin stock" within the meaning of Regulation U.
ARTICLE VI
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, or any interest, any fees or any
other amount payable hereunder, shall not be paid when due;
(b) the Company shall fail to observe or perform any covenant
contained in Sections 5.07 to 5.11 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 10 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
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);
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(e) the Company or any Subsidiary shall fail to make any payment
in respect of any Material Debt 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
Material Debt or any Person acting on such holder's behalf to accelerate
the maturity thereof;
(g) the Company or any 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 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 shall be entered against
the Company or any 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 an
amount or amounts aggregating in excess of $1,000,000 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, to impose liability (other than for
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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 $1,000,000;
(j) a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Company or any Subsidiary and such
judgment or order shall continue unsatisfied and unstayed for a period of
30 days; or
(k) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 30% or more of
the outstanding capital stock of the Company having voting power in the
general election of directors, excluding any Person or group of Persons who
are officers, directors or employees of the Company or any Subsidiary as of
the date hereof or are related by blood or marriage to the descendants of
James F. or John C. Lincoln, including any trusts or similar arrangements
for any of the foregoing and any foundations established by any of the
foregoing;
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) 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)
shall become immediately due and payable without presentment, demand,
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protest, dishonor or other notice of any kind, all of which are hereby waived
by each Borrower.
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 VII
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. Society National 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 Society National 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 VI.
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 (ii)
in the absence of its own gross negligence or
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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 III, 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 or similar writing) believed by it to be genuine or to be
signed by the proper party or 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 this Agreement or in
connection with any action taken or omitted by such indemnitees hereunder.
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 any Bank or a
commercial
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bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
SECTION 7.09. 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 VIII
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 Borrowing:
(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 relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the
Commitments advise the Agent that the Adjusted CD Rate or the Adjusted
London Interbank Offered Rate, as the case may be, as determined by the
Agent will not adequately and fairly reflect the cost to such Banks of
funding their CD Loans or Euro-Dollar Loans, as the case may be, for such
Interest Period,
the Agent shall forthwith give notice thereof to the Company and the Banks,
whereupon until the Agent notifies the Company that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended and the
obligations of any Bank to make any Alternative Currency Advances pursuant to
an Alternative Currency Quote accepted by the relevant Borrower in accordance
with Section 2.14(e) and requiring such Alternative Currency Advance to bear
interest at a rate calculated on the basis of the Adjusted London Interbank
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Offered Rate shall be suspended. Unless the Borrower notifies the Agent at
least two Domestic Business Days before the date of any Committed Fixed Rate
Borrowing for which a Notice of Committed Borrowing has previously been given
that it elects not to borrow on such date, (i) if such Fixed Rate Borrowing is
a Committed Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market 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 of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Loans to any Borrower and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the other Banks and the
Company, whereupon until such Bank notifies the Company and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans to such Borrower 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 Bank shall determine that it
may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to such Borrower to maturity and shall so specify in such
notice, such Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Loan, such Borrower
shall borrow a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the
related Euro-Dollar Loans of the other Banks), and such Bank shall make such a
Base Rate Loan.
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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 Committed Loans or (y) the date of the related Alternative Currency
Quote, in the case of any Alternative Currency Advance or (z) the date of the
related Money Market Quote in the case of any Money Market 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:
(i) shall subject any Bank (or its Applicable Lending Office) to
any tax, duty or other charge with respect to its Fixed Rate Loans, its
Note or its obligation to make Fixed Rate Loans, or shall change the basis
of taxation of payments to any Bank (or its Applicable Lending Office) of
the principal of or interest on its Fixed Rate Loans or any other amounts
due under this Agreement in respect of its Fixed Rate Loans or its
obligation to make Fixed Rate Loans (except for changes in the rate of tax
on the overall net income of such Bank or its Applicable Lending Office
imposed by the jurisdiction in which such Bank's principal executive office
or Applicable Lending Office is located); or
(ii) 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 (A) with respect
to any CD Loan any such requirement included in an applicable Domestic
Reserve Percentage and (B) with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve Percentage),
special deposit, insurance assessment (excluding, with respect to any CD
Loan, any such requirement related in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank (or its Applicable Lending Office) or shall
impose on any Bank (or its Applicable Lending Office) or on the United
States market for certificates of deposit or the London interbank market
any other condition affecting its Fixed Rate Loans, its Note or its
obligation to make Fixed Rate Loans;
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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, 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, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Agent), the Company shall pay to
such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.
(c) Each Bank will promptly notify the Company and the Agent of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different 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 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. 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
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suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent, have elected that
the provisions of this Section shall apply to such Bank, then, unless and until
such Bank notifies the Company that the circumstances giving rise to such
suspension or demand for compensation no longer exist:
(a) all Loans to such Borrower which would otherwise be made by
such Bank as CD Loans or Euro-Dollar Loans, as the case may be, shall be
made instead as Base Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Fixed Rate Loans of the other
Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, to such Borrower has been repaid, all payments of principal which
would otherwise be applied to repay such Fixed Rate Loans shall be applied
to repay its Base Rate Loans instead.
SECTION 8.05. HLT CLASSIFICATION. If, after the date hereof, the
Agent determines that, or the Agent is advised by any Bank that such Bank has
received notice from any governmental authority, central bank or comparable
agency having jurisdiction over such Bank that, Loans hereunder are classified
as a "highly leveraged transaction" (an "HLT Classification"), the Agent shall
promptly give notice of such HLT Classification to the Company and the other
Banks. The Agent, the Banks and the Borrowers shall commence negotiations in
good faith to agree on the extent to which fees, interest rates and/or margins
hereunder should be increased so as to reflect such HLT Classification. If the
Borrowers and Banks having more than 50% in aggregate amount of the Commitments
agree on the amount of such increase or increases, this Agreement may be
amended to give effect to such increase or increases as provided in Section
11.05. If the Borrowers and Banks having more than 50% in aggregate amount of
the Commitments fail to so agree within 45 days after notice is given by the
Agent as provided above, then the Agent shall, if requested by Banks having 50%
or more in aggregate amount of the Commitments, by notice to the Borrowers
terminate the Commitments and they shall thereupon terminate and the Borrowers
shall repay each outstanding Loan at the end of the Interest Period applicable
thereto. The Banks acknowledge that an HLT Classification is not a Default or
an Event of Default hereunder.
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ARTICLE IX
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 (or, in the case of any Existing Eligible Subsidiary, as
defined in Section 11.12, represents and warrants as of the date hereof) 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 is a Wholly-Owned Consolidated Subsidiary of
the Company.
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 such Eligible
Subsidiary or result in the creation or imposition of any Lien on any asset of
such Eligible Subsidiary 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 (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
SECTION 9.04. TAXES. Except as disclosed in the opinions of
counsel delivered by such Eligible Subsidiary pursuant to Section 3.03(b),
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
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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 or of its Notes.
ARTICLE X
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 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 the occurrence, one or more times, of any of the following:
(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, 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 resulting release or discharge of any
obligation of any Eligible Subsidiary contained in this Agreement or any
Note;
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(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 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 the 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 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. SUBROGATION. Upon making any payment hereunder,
the Company shall be subrogated to the rights of the payee against an Eligible
Subsidiary with respect to such payment; PROVIDED that the Company shall not
enforce any payment by way of subrogation until all amounts
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of principal of and interest on the Notes and all other amounts payable by all
Borrowers under this Agreement have been paid in full.
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 its Notes is stayed upon 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 XI
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 or
facsimile 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 or telex number set forth in its Administrative Questionnaire or
(z) in the case of any party, such other address or telex or facsimile 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 or pursuant to this Section and the appropriate answerback
is received, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (iii) if given by any other means, when delivered at the address specified
in or pursuant to this Section; PROVIDED that notices to the Agent under
Article II or Article VIII 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.
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SECTION 11.03. EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION. (a)
The Company shall pay (i) all out-of-pocket expenses of the Agent, including
fees and disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent and each Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom. The Company shall
indemnify each Bank against any transfer taxes, documentary taxes, assessments
or charges made by any governmental authority by reason of the execution and
delivery of this Agreement, any Election to Participate or Election to
Terminate or any Note.
(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 any Committed Loan made by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Committed Loan made by such
other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Committed Loans made 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 Committed Loans shall be
shared by the Banks pro rata; PROVIDED that nothing in this Section shall
impair the right of any Bank
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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 Committed Loans. 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, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder, except as provided below, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan or any fees
hereunder or for the termination of any Commitment, (iv) amend any provision of
Article X hereof or (v) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement; PROVIDED FURTHER, that this
Agreement may be amended to give effect to any increased fees, interest rates
and/or margins agreed upon pursuant to Section 8.05 or to reduce or rescind any
such increases previously agreed upon pursuant to Section 8.05, if such
amendment is in writing and is signed by the Company and Banks having more than
50% in aggregate amount of the Commitments and PROVIDED FURTHER that no such
amendment, waiver or modification shall, 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
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or otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Company and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the 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 VIII, 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 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 the Agent and, unless such Assignee is a Bank or an affiliate of a
Bank, the Company; PROVIDED that, unless such Assignee is an affiliate of such
transferor Bank or is another Bank, no such assignment shall be in an amount
less than $10,000,000 and PROVIDED FURTHER that such assignment may, but need
not, include rights of the transferor Bank in respect of outstanding Money
Market 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
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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 each Borrower 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 $2,000. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, 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 2.16.
(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 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 or 8.03 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 11.07. 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 11.08. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. 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 the transactions contemplated hereby. Each Borrower irrevocably
waives, to the fullest extent permitted
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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.
SECTION 11.09. 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 11.10. 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.
SECTION 11.11. EXISTING CREDIT AGREEMENT. Each Borrower, Society
National Bank, as Agent hereunder and as agent under the Existing Credit
Agreement and each of the Banks, as a bank hereunder and as a bank party to the
Existing Credit Agreement (the banks party to the Existing Credit Agreement,
the "Existing Credit Agreement Banks"), agree that, notwithstanding anything to
the contrary herein or in the Existing Credit Agreement:
(i) the "Commitments" (as defined therein) of the Existing Credit
Agreement Banks under the Existing Credit Agreement shall terminate on the
Effective Date (any advance notice of such termination being hereby waived by
each Bank which is an Existing Credit Agreement Bank); and
(ii) on the Effective Date, the Banks shall, provided the
conditions to borrowing hereunder are met on such day, fund Loans hereunder or
shall continue to hold or purchase outstanding Loans under the Existing Credit
Agreement and the Borrower shall repay "Loans" under the Existing Credit
Agreement, in each case as set forth on Schedule 1 such that, effective as of
the Effective Date, the Loans of the Banks hereunder shall be as set forth on
Schedule 1.
Any "Loans" under the Existing Credit Agreement continued to be held or
purchased hereunder shall, effective on the Effective Date, be Loans hereunder,
bearing interest at the interest rates provided for in the Existing Credit
Agreement, except that the margin applicable to the pricing of any such Loan
shall be, for the period on or after the
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Effective Date, the margin applicable under this Agreement. If any purchase or
prepayment of "Loans" under the Existing Credit Agreement is made pursuant to
clause (ii) above, the Borrower agrees that it will reimburse each Existing
Credit Agreement Bank for any funding losses incurred in connection therewith
pursuant to the Existing Credit Agreement as if such "Loans" had been prepaid
on the Effective Date.
SECTION 11.12. ELIGIBLE SUBSIDIARIES. Any Person who was an
"Eligible Subsidiary" under the Existing Credit Agreement (an "Existing
Eligible Subsidiary") immediately prior to the effectiveness of this Agreement
shall, effective as of the Effective Date, without any further action, be an
Eligible Subsidiary under this Agreement, and the "Election to Participate"
executed by such Subsidiary under the Existing Credit Agreement shall
constitute the Election to Participate hereunder with respect to such
Subsidiary for all purposes hereunder. The notes of each Existing Eligible
Subsidiary held by each Existing Credit Agreement Bank shall, effective as of
the Effective Date, be amended by substituting the date "December 20, 1995" for
the date "March 18, 1993" set forth in the third paragraph of each such note
and shall, effective as of the Effective Date, be a "Note" hereunder. Upon
request of any Existing Credit Agreement Bank, each Existing Eligible
Subsidiary shall execute a Note substantially in the form of Exhibit A payable
to the order of such Bank. Upon receipt by such Bank of such new Note, such
Bank shall cancel its original Note (if any) and return it to the appropriate
Existing Eligible Subsidiary promptly. No failure of an Existing Credit
Agreement Bank so to cancel and return its original Note shall affect the
validity of its new Note.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
THE LINCOLN ELECTRIC COMPANY
By /s/ D.F. Hastings
----------------------------
Title: Chairman and
Chief Executive Officer
By /s/ H. Jay Elliott
----------------------------
Title: Vice President,
Chief Financial Officer
and Treasurer
22801 St. Clair Avenue
Cleveland, Ohio 44117-1199
U.S.A.
Telephone: (216) 383-2201
Fax: (216) 486-6476
Attention: Michael J. O'Connor
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79
Commitments
$42,000,000 SOCIETY NATIONAL BANK
By /s/ William J. Kysela
-------------------------
Title: Vice President
$20,000,000 ABN AMRO BANK N.V.
By /s/ R.W. Hasbrook
--------------------------
Title: Group Vice President
By /s/ Kathryn C. Toth
--------------------------
Title: Vice President
$20,000,000 DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ D Slusanczyk
--------------------------
Title: Vice President
By /s/ J. Curtin Beaudouin
--------------------------
Title: First Vice President
$20,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Timothy S. Broadbent
--------------------------
Title: Vice President
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80
$20,000,000 NBD BANK
By /s/ Winfred S. Pinet
-----------------------
Title: Vice President
$20,000,000 NATIONAL CITY BANK
By /s/ A.J. DiMare
-----------------------
Title: Vice President
$14,500,000 BANK OF AMERICA ILLINOIS
By /s/ Lynn W. Stetson
-----------------------
Title: Vice President
$14,500,000 CIBC INC.
By /s/ John Mach
-----------------------
Title: Director
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$14,500,000 CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By /s/ Mary Ann Klemm
-------------------------
Title: Vice President and
Group Head
CREDIT LYONNAIS CHICAGO BRANCH
By /s/ Mary Ann Klemm
-------------------------
Title: Vice President and
Group Head
$14,500,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ Christopher S. Helmeci
-------------------------
Title: Assistant Vice
President
Total Commitments
$200,000,000
=================
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SOCIETY NATIONAL BANK,
as Agent
By /s/ William J. Kysela
-------------------------
Title: Vice President
127 Public Square
Cleveland, Ohio 44114-1306
U.S.A.
Telephone: (216) 689-5654
Fax: (216) 689-4981
Attention: William J. Kysela
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Schedule 1
EXISTING AND CONTINUING LOANS
None
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EXHIBIT A
NOTE
New York, New York
, 199_
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 last day of the
Interest Period relating to such Loan. 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 or pursuant to the Credit Agreement. All such
payments of principal and interest with respect to Committed Loans shall be
made in lawful money of the United States in Federal or other immediately
available funds at the office of Society National Bank, 127 Public Square,
Cleveland, Ohio 44114-1306 U.S.A. All such payments of principal and interest
with respect to Alternative Currency Advances shall be made in the Alternative
Currency in which such Alternative Currency Advance was made, in funds
customary for the settlement of international transactions in such Alternative
Currency at the time of any such payment, at the time and place notified by the
Bank to the Borrower.
All Loans made by the Bank, the respective types, maturities and
Alternative Currencies (if applicable) thereof and all repayments of the
principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding shall 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.
85
This note is one of the Notes referred to in the Credit Agreement
dated as of December 20, 1995 among The Lincoln Electric Company, the banks
listed on the signature pages thereof and Society National 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 Lincoln Electric 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.]*
[NAME OF BORROWER]
By____________________
Name:
Title:
[By_____________________
Name:
Title:]**
__________________________________
*To be deleted in case of Notes executed and delivered by The Lincoln
Electric Company.
**To be included in case of Notes executed and delivered by The Lincoln
Electric Company.
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86
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________________
Amount Type Alternative Amount of
of of Currency Principal Maturity Notation
Date Loan Loan (if applicable) Repaid Date Made By
- --------------------------------------------------------------------------
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
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87
EXHIBIT B
Form of Alternative Currency Quote Request
------------------------------------------
[Date]
To: Society National Bank
(the "Agent")
From: [Name of Borrower]
Re: Credit Agreement (the "Credit Agreement") dated as of December 20,
1995 among The Lincoln Electric Company, the Banks listed on
the signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.14 of the Credit
Agreement that we request Alternative Currency Quotes for the following
proposed Alternative Currency Advance(s):
Date of Alternative Currency Advance(s): _________________
Principal Amount Alternative Currency Interest Period
- ---------------- -------------------- ---------------
88
Terms used herein have the meanings assigned to them in the Credit Agreement.
[NAME OF BORROWER]
By __________________________
Name:
Title:
[By __________________________
Name:]
Title: *
__________________________________
*To be included in case of an Alternative Currency Quote Request delivered
by The Lincoln Electric Company.
2
89
EXHIBIT C
Form of Invitation for Alternative Currency Quote
-------------------------------------------------
To: [Name of Bank]
Re: Invitation for Alternative Currency Quotes to [Name of Borrower]
(the "Borrower")
Pursuant to Section 2.14 of the Credit Agreement dated as of
December 20, 1995 among The Lincoln Electric Company, the Banks parties thereto
and the undersigned, as Agent, we are pleased on behalf of the Borrower to
invite you to submit Alternative Currency Quotes to the Borrower for the
following proposed Alternative Currency Advance(s):
Date of Alternative Currency Advance(s): _______________
Principal Amount Alternative Currency Interest Period
- ---------------- -------------------- ---------------
Please respond to this invitation to the Borrower by no later than
2:00 P.M. (Cleveland, Ohio time) on [date].
SOCIETY NATIONAL BANK
By _________________________
Authorized Officer
90
EXHIBIT D
Form of Alternative Currency Quote
To: [Name of Borrower]
(the "Borrower")
Re: Alternative Currency Quote
In response to the invitation by Society National Bank on your
behalf dated ____________, 199_, we hereby make the following Alternative
Currency Quote on the following terms:
1. Quoting Bank: ________________________
2. Person to contact at Quoting Bank:
________________________
3. Date of Alternative Currency Advance(s):
______________*
4. Alternative Currency Lending Office:
________________**
__________________________________
*As specified in the related Invitation.
** Specify Alternative Currency Lending Office with respect to each
Alternative Currency.
91
5. We hereby offer to make Alternative Currency Advance(s) in the
following principal amounts, for the following Interest Periods and
at the following rates:
Principal Alternative Interest Interest
--------- ----------- -------- --------
Amount* Currency Period Rate
------ -------- ------ ----
Very truly yours,
[NAME OF BANK]
Dated: ___________________
By: ___________________
Authorized Officer
__________________________________
*Principal amount bid for each Interest Period and each Alternative
Currency 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.
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92
EXHIBIT E
OPINION OF
FREDERICK G. STUEBER
COUNSEL FOR THE COMPANY
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Society National Bank
127 Public Square
Cleveland, Ohio 44114-1306
U.S.A.
Re: The Lincoln Electric Company
Ladies and Gentlemen:
I have acted as counsel for The Lincoln Electric Company, an
Ohio corporation (the "Company"), in connection with the Credit Agreement (the
"Credit Agreement") dated as of December 20, 1995 among the Company, the banks
listed on the signature pages thereof and Society National Bank, as Agent,
providing for the establishment of a revolving credit facility in the aggregate
principal amount of $200,000,000. This opinion letter is furnished to you at
the request of the Company pursuant to Section 3.01(c) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
I have examined such documents, records and matters of law as
I have deemed necessary for purposes of this opinion. Upon the basis of the
foregoing and subject to the qualifications, limitations, exceptions and
assumptions hereinafter set forth, I am of the opinion that:
1. The Company is a corporation duly formed,
validly existing and in good standing under the laws of the
State of Ohio, with corporate power and authority to own its
own properties and conduct its business as now conducted.
2. The Credit Agreement has been duly
authorized, executed, and delivered by the Company,
93
is a valid and binding agreement of the Company and is
enforceable against the Company in accordance with its terms.
3. The Notes have been duly authorized,
executed, and delivered by the Company, are valid and binding
obligations of the Company and are enforceable against the
Company in accordance with their terms.
4. No registration with or approval by any
governmental agency is required of the Company as a condition
to the valid execution and delivery or the performance of the
Credit Agreement, including the issuance of the Notes.
5. Neither the execution and delivery by the
Company of the Credit Agreement nor the performance of the
transactions therein contemplated, including the issuance of
the Notes, will result in the violation of any statute or
regulation or any order or decree known to us of any court or
governmental authority binding upon the Company or its
property, or conflict with or result in a default under any of
the provisions of the Company's Amended Articles of
Incorporation, as amended, or Regulations or any indenture,
loan agreement or other agreement known to us by which the
Company or any of its Subsidiaries is bound, or result in the
creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries.
6. The Credit Agreement constitutes a valid and
binding agreement of each Subsidiary Borrower and is
enforceable against each Subsidiary Borrower, respectively, in
accordance with its terms and the Notes of each Subsidiary
Borrower constitute valid and binding obligations under New
York law of such Subsidiary Borrower and are enforceable
against each Subsidiary Borrower, respectively, in accordance
with their terms.
7. The choice of New York law to govern the Credit
Agreement and the Notes in which such choice is stipulated is
a valid and effective choice of law under the laws of the
State of Ohio and adherence to existing judicial precedents
would require a court sitting in the State of Ohio to abide by
such choice of law.
2
94
My opinion that the Credit Agreement and the Notes are
enforceable against the Company and the Borrower Subsidiaries in accordance
with their terms, is subject to the qualification that enforceability is
subject to, and may be limited or affected by (i) bankruptcy, insolvency,
reorganization and other similar laws affecting the rights or remedies of
creditors generally and (ii) general principles of equity regardless of whether
such enforceability is considered in a proceeding in equity or at law.
My opinions herein are limited to the laws of the State of
Ohio and the federal laws of the United States. This opinion letter is
furnished by me, as counsel for the Company, to you solely for your benefit in
connection with Loans made under the Credit Agreement upon the understanding
that we are not hereby assuming any professional responsibility to any other
person whatsoever.
Very truly yours,
3
95
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 Society National Bank
127 Public Square
Cleveland, Ohio 44114-1306
U.S.A.
Ladies and Gentlemen:
We have participated in the preparation of the Credit
Agreement (the "Credit Agreement") dated as of December 20, 1995 among The
Lincoln Electric Company, an Ohio corporation (the "Company"), the banks listed
on the signature pages thereof (the "Banks") and Society National 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
the Credit Agreement constitutes a valid and binding agreement of the Company
and its Notes constitute valid and binding obligations of the Company, in each
case enforceable in accordance with their respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
96
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York and the
federal laws of the United States of America. In giving the foregoing opinion,
(i) we have relied, without independent investigation, as to all matters
governed by the law of the State of Ohio, on the opinion of Frederick G.
Stueber, Vice President, General Counsel and Secretary for the Company, dated
today's date, copies of which have been delivered to you and, (ii) 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 or furnished to any other person without our prior written
consent.
Very truly yours,
2
97
EXHIBIT G
FORM OF ELECTION TO PARTICIPATE
, 199__
SOCIETY NATIONAL BANK, as Agent for
the Banks named in the
Credit Agreement dated as of December 20, 1995
among The Lincoln Electric Company,
such Banks and such Agent (the
"Credit Agreement")
Ladies and Gentlemen:
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 IX of the Credit
Agreement (other than the representation and warranty set forth in Section
9.04) 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 Section 11.08 thereof, as if the
undersigned were a signatory party thereto.
98
The address to which all notices to the undersigned 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. This instrument 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.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By____________________________
Name:
Title:
The undersigned hereby confirms that (i) [name of Eligible
Subsidiary] is an Eligible Subsidiary for purposes of the Credit Agreement
described above and (ii) the representation and warranty set forth in Section
4.02(b) of the Credit Agreement is true and correct as to [name of Eligible
Subsidiary] as of the date hereof.
THE LINCOLN ELECTRIC COMPANY
By____________________________
Name:
Title:
By____________________________
Name:
Title:
2
99
Receipt of the above Election to Participate is hereby
acknowledged on and as of the date set forth above.
SOCIETY NATIONAL BANK,
as Agent
By____________________________
Name:
Title:
3
100
EXHIBIT H
FORM OF ELECTION TO TERMINATE
, 199_
SOCIETY NATIONAL BANK, as Agent for
the Banks named in the Credit
Agreement dated as of __________ __, 1995
among The Lincoln Electric Company,
such Banks and such Agent (the
"Credit Agreement")
Ladies and Gentlemen:
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.
101
This instrument shall be construed in accordance with and
governed by the laws of the State of New York.
This instrument 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.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By___________________________
Name:
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 LINCOLN ELECTRIC COMPANY
By__________________________
Name:
Title:
By__________________________
Name:
Title:
Receipt of the above Election to Terminate is hereby
acknowledged on and as of the date set forth above.
SOCIETY NATIONAL BANK,
as Agent
By____________________________
Name:
Title:
2
102
EXHIBIT I-1
OPINION OF
COUNSEL FOR THE BORROWER
(BORROWINGS BY ELIGIBLE SUBSIDIARIES)
[Dated as provided
in Section 3.03 of
the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Society National Bank,
as Agent
127 Public Square
Cleveland, Ohio 44114-1306
U.S.A.
Ladies and Gentlemen:
I am counsel to [name of Eligible Subsidiary], a [jurisdiction
of incorporation] corporation (the "Borrower"), and give this opinion at the
request of the Borrower pursuant to Section 3.03(b) of the Credit Agreement
(the "Credit Agreement") dated as of December 20, 1995 among The Lincoln
Electric Company (the "Company"), the banks listed on the signature pages
thereof and Society National 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 duly incorporated, validly
existing and in good standing under the laws of [jurisdiction of
incorporation], and is a Wholly-Owned Consolidated Subsidiary of the Company.
103
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 or any of its Subsidiaries or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
3. The Credit Agreement constitutes a valid and binding
agreement of the Borrower and its Notes constitute valid and binding
obligations of the Borrower.
4. [Other than as set forth in paragraph 5 hereof,] there is
no income, stamp or other tax of [jurisdiction of incorporation and, if
different, principal place of business], 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 the Borrower pursuant to the Credit
Agreement or its Notes, or is imposed on or by virtue of the execution,
delivery or enforcement of its Election to Participate or of its Notes.
[5. Tax disclosure]
Very truly yours,
2
104
EXHIBIT I-2
OPINION OF
COUNSEL FOR THE COMPANY
(BORROWINGS BY ELIGIBLE SUBSIDIARIES)
[Dated as provided
in Section 3.03 of
the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Society National Bank,
as Agent
127 Public Square
Cleveland, Ohio 44114-1306
U.S.A.
Ladies and Gentlemen:
I am counsel to The Lincoln Electric Company, an Ohio
corporation (the "Company"), and give this opinion at the request of the
Company pursuant to Section 3.03(b) of the Credit Agreement (the "Credit
Agreement") dated as of December 20, 1995 among the Company, the banks listed
on the signature pages thereof and Society National 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 the
execution and delivery by the [name of Eligible Subsidiary] (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
or result in the creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries.
Very truly yours,
105
EXHIBIT J
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 199_ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), [THE LINCOLN ELECTRIC COMPANY (the
"Company")] and SOCIETY NATIONAL 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 Credit Agreement dated as of December 20, 1995
among [The Lincoln Electric Company (the "Company")]/[the Company], the
Assignor and the other Banks party thereto, as Banks, and the Agent (as
amended, 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.
106
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 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.
__________________________________
* 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
107
Pursuant to Section 11.06(c) the Company 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 financial or other
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.
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_________________________
Name:
Title:
[ASSIGNEE]
By__________________________
Name:
Title:
3
108
[THE LINCOLN ELECTRIC COMPANY
By__________________________
Name:
Title:
By__________________________
Name:
Title:]
SOCIETY NATIONAL BANK,
as Agent
By__________________________
Name:
Title:
4
109
EXHIBIT K
EXTENSION AGREEMENT
The Lincoln Electric Company
22801 St. Clair Avenue
Cleveland, Ohio 44117-1199
Society National Bank, as Agent
under the Credit Agreement
referred to below
Gentlemen:
The undersigned hereby agree to extend, effective [Extension
Date], the Termination Date under the Credit Agreement dated as of December 20,
1995 among The Lincoln Electric Company, the Banks listed therein and Society
National Bank, as Agent (as amended, the "Credit Agreement") for one year to
[date to which the Termination Date is extended]. Terms defined in the Credit
Agreement are used herein as therein defined.
This Extension Agreement shall be construed in accordance with
and governed by the law of the State of New York.
[NAME OF BANK]
By_________________________
Title:
Agreed and accepted:
THE LINCOLN ELECTRIC COMPANY
By__________________________
Title:
SOCIETY NATIONAL BANK, as Agent
By_____________________________
Title:
110
EXHIBIT L
Form of Money Market Quote Request
[Date]
To: Society National Bank (the "Agent")
From: [Name of Borrower]
Re: Credit Agreement (as amended, the "Credit Agreement") dated as
of December 20, 1995 among The Lincoln Electric Company, the
Banks listed on the signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.15 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: ______________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
__________________________________
*Amount must be $____________ or a larger multiple of $______________.
**Not less than one month (LIBOR Auction or not less than 30 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period.
111
Terms used herein have the meanings assigned to them
in the Credit Agreement.
[NAME OF BORROWER]
By_____________________________
Title:
2
112
EXHIBIT M
Form of Invitation for Money Market Quotes
------------------------------------------
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [Name of Borrower] (the
"Borrower")
Pursuant to Section 2.15 of the Credit Agreement dated as of December
20, 1995 among The Lincoln Electric Company, the Banks parties thereto and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you
to submit Money Market Quotes to the Borrower for the following proposed Money
Market Borrowing(s):
Date of Borrowing: ______________________
Principal Amount Interest Period
- ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [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.]
(Cleveland, Ohio time) on [date].
SOCIETY NATIONAL BANK
By_____________________
Authorized Officer
113
EXHIBIT N
Form of Money Market Quote
--------------------------
To: Society National Bank
Re: Money Market Quote to [Name of Borrower] (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19___, we hereby make the following Money Market 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 Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
------ ------ ------- --------------
$
$
[Provided, that the aggregate principal amount of Money Market
Loans for which the above offers may be accepted shall not exceed
$_______________.]**
__________________________________
*As specified in the related Invitation.
**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.